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Commodity Futures Trading Commission 

CEA CASES 

NAME: CARGILL, INCORPORATED, AND ERWIN E. KELM 

CITATION: 13 Agric. Dec. 483 

DOCKET NUMBER: 58 

DATE: MAY 4, 1954 

DOCUMENT TYPE: DECISION AND ORDER 

(No. 3884) 

In re CARGILL, INCORPORATED, AND ERWIN E. KELM. CEA Docket No. 58. Decided May 

4, 1954. 

Denial of Trading Privileges -- Violations of Act -- Manipulation of Market 

Price of Oats -- Engaging in Unauthorized Speculative Trading in Oats Futures -- 

Submitting False Reports to Commodity Exchange Authority -- Consent Order

Where complainant charged that respondent attempted to manipulate and did 

manipulate the market price of oats from June 1951 to June 1952 in violation of 

the act, that the respondent carried on speculative trading in oats futures in 

excess of the maximum quantities permitted, and that respondent submitted false 

reports to the Commodity Exchange Authority, and where respondent consented to 

the entry of an order, it is ordered that all contract markets shall refuse to 

Cargill, Incorporated all trading privileges in oats futures for its own 

account, and the complaint against Erwin E. Kelm should be dismissed. 

Waiver of Hearing -- Stipulation of Parties -- Jurisdiction of Secretary -- 

Issuance of Order

The facts admitted by respondent as set forth in the Findings of Facts 

herein, held, are sufficient to subject respondent to the jurisdiction of the 

Secretary, and his waiver of hearing should be accepted and the order to which 

respondent has consented should be issued. 

Mr. Benj. W. Holstein for Commodity Exchange Authority. Mr. James E. Dorsey of 

Dorsey, Colman, Barker, Scott & Barber, of Minneapolis, Minnesota, Mr. Leo F. 

Tierney of Mayer, Meyer, Austrian & Platt, of Chicago, Illinois, and Mr. Weston 

B. Grimes, of Washington, D. C., for respondent Cargill, Incorporated. Mr. 

Philip Neville of Neville, Hachey & Johnson, of Minneapolis, Minnesota, for 

respondent Erwin E. Kelm. Mr. John Curry, Referee. 

Decision by Thomas J. Flavin, Judicial Officer

PRELIMINARY STATEMENT

This is a proceeding under the Commodity Exchange Act (7 U.S.C. Chapter 1) 

instituted by a complaint issued under section 6(b) of the act (7 U.S.C. 9) on 

June 11, 1953, by the Acting Secretary of Agriculture. 

The respondents filed answers denying the material allegations of the 

complaint and denying that there was any violation of or intent to violate the 

act, or the rules, regulations, or orders issued thereunder. 

On May 3, 1954, Cargill, Incorporated, filed a document entitled "Waiver of 

Hearing, Consent to Entry of Order, and Stipulation," in which said respondent 

admitted the facts hereinafter set forth under "Findings of Fact," and 

stipulated as follows: 
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"2. Cargill, Incorporated, waives hearing on the charges in the complaint and 

consents to the entry of an order directing all contract markets to refuse all 

trading privileges in oats futures to Cargill, Incorporated, for its own 

account, for the period beginning on the tenth day after issuance of the order 

and ending December 31, 1954. Cargill, Incorporated, hereby stipulates and 

agrees that such refusal of trading privileges in oats futures on all contract 

markets shall apply to trading done and positions held by Cargill, Incorporated, 

directly, and also to trading done and positions held indirectly by or through 

any person, as defined by the Commodity Exchange Act, owned wholly or in 

substantial part or otherwise directly or indirectly controlled by, or under a 

common control with, Cargill, Incorporated, or by any other means: Provided,

that any position in May 1954 oats futures held by Cargill, Incorporated, on the 

effective date of the order herein may be liquidated by means of futures 

transactions or deliveries at any time prior to the expiration of trading in 

such May 1954 oats futures; and provided that, the order herein shall not be 

construed to prohibit the execution of bona fide orders 

received by Cargill, Incorporated, or any person, as defined in the Commodity 

Exchange Act, owned wholly or in substantial part or otherwise directly or 

indirectly controlled by, or under a common control with Cargill, Incorporated, 

from its or their customers in its or their capacities as registered futures 

commission merchants under the Commodity Exchange Act. 

"3. Cargill, Incorporated, hereby further stipulates and agrees that in all 

future reports to the Commodity Exchange. Authority it will refrain from using 

contracts or agreements with or commitments to any person, as defined by the 

Commodity Exchange Act, owned wholly or in substantial part or otherwise 

directly or indirectly controlled by, or under a common control with, Cargill, 

Incorporated, as a basis for classifying transactions or positions in commodity 

futures as hedging: and that in submitting such reports and in complying with 

the orders issued by the Commodity Exchange Commission under section 4a of the 

Commodity Exchange Act, it will treat all commodity transactions and positions 

of any such person as the transactions and positions of Cargill, Incorporated. 

"4. Cargill, Incorporated, further stipulates and represents that it has not, 

since February 16, 1954, engaged in any transactions in oats futures on contract 

markets in the United States for its own account except for transactions 

necessary to transfer positions in March 1954 oats futures to May 1954 oats 

futures and except for transactions and deliveries in liquidation of its March 

1954 short oats futures positions and transactions in partial liquidation of its 

May 1954 short oats futures position." 

FINDINGS OF FACT

1. Cargill, Incorporated, is a corporation organized under the laws of the 

state of Delaware, with its principal office and place of business in 

Minneapolis, Minnesota and branch offices throughout the United States. The 

said corporation conducts various commercial enterprises throughout the United 

States, including the business of grain importing and merchandising, and was so 

engaged during 1951 and 1952, the period covered by the complaint in this 

proceeding. 

2. During 1951 and 1952 and continuously since that time, Cargill, 

Incorporated, was registered as a futures commission merchant under the 

Commodity Exchange Act, and was the holder of membership trading privileges on 

various boards of trade designated as contract markets under the Commodity 

Exchange Act. 

3. During 1951 and 1952, Cargill, Incorporated, engaged in futures trading 

for its own account on boards of trade in the United States and Canada, and 

futures trades for its account were executed by others on the Board of Trade of 

the City of Chicago, a contract market. 

CONCLUSION
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Section 0.4(b) of the Rules of Practice under the Commodity Exchange Act (17 

CFR 0.4 (b)) provides as follows: 

"(b) Consent Order. At any time after the issuance of the complaint and prior 

to the hearing in any proceeding, the Secretary, in his discretion, may allow 

the respondent to consent to an order. In so consenting, the respondent must 

submit, for filing in the record, a stipulation or statement in which he admits 

at least those facts necessary to the Secretary's jurisdiction and agrees that 

an order may be entered against him. Upon a record composed of the complaint 

and the stipulation or agreement consenting to the order, the Secretary may 

enter the order consented to by the respondent, which shall have the same force 

and effect as an order made after oral hearings." 

The facts admitted by the respondent and set forth in the Findings of Fact, 

above, are sufficient to subject it to the jurisdiction of the Secretary, and it 

is concluded that its waiver should be accepted and that the order to which it 

has consented should be issued. 

The complainant has recommended that upon the issuance of the consent order 

with respect to respondent Cargill, Incorporated, the complaint against 

respondent Erwin E. Kelm be dismissed. 

ORDER

Effective on the 10th day after the date of this order, all contract markets 

shall refuse to Cargill, Incorporated, all trading privileges in oats futures 

for its own account, either directly or indirectly, for the period beginning on 

the tenth day after the 

date of this order to December 31, 1954, both inclusive: Provided, that any 

position in May 1954 oats futures on any contract market held by Cargill, 

Incorporated, on the effective date of this order may be liquidated by means of 

futures transactions or deliveries at any time prior to the expiration of 

trading in such May 1954 oats futures; and provided that, this order shall not 

be construed to prohibit the execution of bona fide orders received by Cargill, 

Incorporated, or any person, as defined in the Commodity Exchange Act, owned 

wholly or in substantial part or otherwise directly or indirectly controlled by, 

or under a common control with, Cargill, Incorporated, from its or their 

customers in its or their capacities as registered futures commission merchants 

under the Commodity Exchange Act. 

The complaint against respondent Erwin E. Kelm is dismissed. 

Copies hereof shall be served upon the parties by registered mail or in 

person and upon each contract market. 

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