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Commodity Futures Trading Commission 

CEA CASES 

NAME: GENERAL FOODS CORPORATION, CHARLES W. METCALF, DANIEL F. RICE AND COMPANY, 

DANIEL F. RICE, LAWRENCE J. RYAN, AND PHILIP R. O'BRIEN 

CITATION: 6 Agric. Dec. 652 

DOCKET NUMBER: 34 

DATE: JULY 11, 1947 

DOCUMENT TYPE: DECISION AND ORDER ON PETITIONS FOR RECONSIDERATION 

(A. D. 1535) 

 

In re GENERAL FOODS CORPORATION ET AL. CEA DOC. NO. 34. Decided July 11, 1947. 

Denial of Further Argument on Petitions for Reconsideration on Question of 

Respondents' Violation of Act -- Modification of Prior Order -- Effective 

Suspension of Respondents' Registrations not Required

Upon consideration of the respondents' petitions for reconsideration of the 

order of April 28, 1947, it is concluded that there should be no further 

argument 

 

 

or no change in the findings and conclusions of the decision and order of April 

28, 1947, with reference to respondents' violation of the act, but, examining 

again the ordered sanctions, it is determined that the effective suspension of 

the respondents' registrations as futures commission merchants and as floor 

broker in addition to suspension of the trading privileges of respondents for 

their own accounts is not required and, accordingly, that part of the decision 

and order of April 28, 1947, inconsistent herewith, is modified as ordered 

herein.* 

* Reference to other points involved in this case will be found in 

Index-Digest in this issue of Agriculture Decisions. -- Ed. 

Rooks and Freeman, of Chicago, Illinois, for respondents Daniel F. Rice and 

Daniel F. Rice & Company. Bowden, Taylor & Norville, of Chicago, Illinois, for 

.Lawrence J. Ryan. Messrs. Howard W. Vesey and William A. Clineburg, of 

Washington, D. C., for Philip R. O'Brien. Mr. Ben Ivan Melnicoff for Commodity 

Exchange Authority. 

 

Decision by Thomas J. Flavin, Judicial Officer.

DECISION AND ORDER ON PETITIONS FOR RECONSIDERATION

On April 28, 1947 6 Agric. Dec. 288 (6 A. D. 288), a decision and order were 

entered in this disciplinary proceeding under the Commodity Exchange Act (7 U. 

S. C. Chapter 1) finding and concluding mainly (1) that respondents Daniel F. 

Rice, Daniel F. Rice and Company, Philip R. O'Brien, and Lawrence J. Ryan in 

violation of the act collectively and individually attempted to manipulate the 

price of rye futures on the Chicago Board of Trade and actual rye on and subject 

to the rules of the Chicago Board of Trade and to corner such futures and actual 

rye and (2) that all respondents in violation of the act collectively and 

individually attempted to and did manipulate the price of rye futures on the 

Chicago Board of Trade and actual rye on or subject to the rules of the Chicago 

Board of Trade by virtue of a two-million bushel transaction in rye in May 1944. 
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All contract markets were ordered to refuse Daniel F. Rice and Daniel F. Rice 

and Company all trading privileges thereon for a period of six months, to refuse 

all trading privileges to General Foods Corporation, Charles W. Metcalf, and 

Philip R. O'Brien for a period of 30 days, and to refuse all trading privileges 

to Lawrence J. Ryan for a period of 10 days. The registration of Daniel F. Rice 

and Company as a futures commission merchant was ordered suspended for a period 

of six months, the registration of Philip R. O'Brien as a floor broker for 30 

days, and the registration of Lawrence J. Ryan as a futures commission merchant 

for 10 days. 

All respondents filed petitions for reconsideration except General Foods 

Corporation and Metcalf who sought immediate judicial review. The effective 

date of the order of April 28, 1947, was postponed as to the respondents who 

filed petitions for reconsideration pending 

 

 

action upon the petitions 6 Agric. Dec. 415, 416 (6 A. D. 415, 416). n1 

Complainant filed answers to the petitions for reconsideration. The Rice 

respondents and O'Brien filed replies to complainant's answers. 

n1 As to General Foods and Metcalf the Circuit Court of Appeals for the 

Seventh Circuit entered a stay order on May 9, 1947. See 6 Agric. Dec. 

417, 418 (6 A. D. 417, 418). 

In general, the petitions for reconsideration, as well as the Rice 

respondents' replies to the complainant's answers to the petitions for 

reconsideration, attempt to isolate, to examine separately and to give a 

possible and legitimate explanation for each of the facts and circumstances that 

led to the findings and conclusions of violations of the act. While it may be 

that our findings and conclusions are not beyond controversy, it was not only 

the facts and circumstances but their combination and concatenation that 

resulted in the findings and conclusions made. I am not persuaded by the 

petitions for reconsideration that there should be any other further argument or 

that any change should be made in the findings and conclusions of the decision 

and order of April 28, 1947, to the effect that respondents violated the act. 

However, prior to that decision and order, the question as to what sanctions 

should be imposed for violations found was subordinated by the parties to the 

principal issues as to whether respondents violated the act. Examining again 

the ordered sanctions in the light of the nature and history of the case, the 

sanctions ordered in other proceedings under the Commodity Exchange Act and the 

Grain Futures Act, and the far reaching effects of the suspension of 

respondents' registrations, it is concluded that effective suspension of the 

respondents' registrations in addition to suspension of the trading privileges 

of respondents (who appear to be active and sizable traders on their own 

accounts) is not required. 

Accordingly, that part of the decision and order of April 28, 1947, 

inconsistent herewith is modified and that the order as modified may be clear, 

the following is substituted for the heading "Order" that appeared in the 

decision and order of April 28, 1947: 

ORDER

1. All contract markets shall refuse respondents Daniel F. Rice and Daniel 

F., Rice and Company trading privileges thereon for a period of six months and 

shall refuse respondents General Foods Corporation, Charles W. Metcalf and 

Philip R. O'Brien trading privileges thereon for a period of 30 days and shall 

refuse respondent Lawrence J. Ryan trading privileges thereon for a period of 10 

days. The refusal of trading privileges ordered extends only to the trading 

privileges of respondents for their own accounts and does not order refusal of 

trading privileges of Daniel F. Rice and Company and Lawrence J. Ryan as futures 

commission merchants or Philip R. 

 
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O'Brien as floor broker, acting on behalf of bona-fide customers who will not 

include, of course, any of respondents during the period for which trading 

privileges for their own accounts are ordered to be refused by the contract 

markets. 

2. The registration of Daniel F. Rice and Company as a futures commission 

merchant is suspended for a period of six months, the registration of Philip R. 

O'Brien as a floor broker is suspended for 30 days, and the registration of 

Lawrence J. Ryan as a futures commission merchant is suspended for 10 days, but 

these suspensions are suspended. However, in the event any of these respondents 

is found after notice and opportunity for hearing to have violated the act or 

regulations during the period of suspension ordered for him but suspended, such 

suspension of registration may be taken into account in evaluating the sanction 

for any such subsequent violation. 

3. The refusals of trading privileges prescribed shall begin on the 40th day 

after this date. 

4. All charges contained in the complaint not found to be established are 

dismissed as far as this proceeding is concerned. 

5. Copies hereof shall be served on the parties or their counsel of record 

and on each contract market. 

 

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