The morning call., 1894-03-20
ment of business On Change is one sew
eral sections OF which read as follows:


eral sections of which read as follows:
In determining the value Of property under
this rule, Its value in other markets, or for
manufacturing or consumpilve purposes 10 this
market. or for shipment 10 customary import
ing maI kels, together with such other facts as
may Justly enIer into the determination of its
value, shall be cunsid rtd, irrespective OF any
fictitious, inflated or manipulated pIlce tile
cash article OF futures may al the time be sell.
ing for "On call" or in This market. Such value
for marginal purposes, In case OF disag cement,
or on the petition of ten members, shall be de-
termined by thr directors and communica ed 10
the parties in interest through the secretary.
But IN no case shall the value Of spot wheat
here. as the basis for marginal purposes, differ
by more than three dollars (S3) per ton from ITS
sale value, for prompt shipment by mod raIe
sized iron ship (. o. b. To United Kingdom, usual
of directors Valnes of other options
TO be based on spot prices, with
interest and charges added. Pending the
action Of the board OF directors In such cases
the president shall instruct the caller not TO
buy in or sell out for account OF whom 1t may
concern any article or future affected by such
that any delinquent for other causes than dis
agreement growing out of call for additional
margins can be bought In or sold out under
the terms of Rules Xl aud XIV.
future Is higher or lower than the marginal
value, as determined by The board OF directors
under tn foregoing section, neither party TO a
contract can collect addItional margins on con-
tracts standing al the figure named by the
board; but OD other contracts made al or stand
ing al a price different 10 the marginal value as
above determined. The buyer or seller. as the
case may be, can d mand that the difference
between said price and said value shall lmine-
diately be made good as In the case OF other
additional margins and under the rules govern
ing the collection OF other additional margins,
except that amounts so called must be deposit-
ed III the same manner with the San Francisco
Produce Exchange as original deposits; pro-
Vided. that no amount less than S1OO or null
tiples thereof can be called for.
This rule was adopted as a protective
measure, but no effort was made TO
strictly enforce il until last Saturday.
Then the directors, believing that the time
had arrived when decisive action became
necessary, decided TO place reduced mar
ginal value on May wheat and to call upon
the "longs" to put up an amount equal to
the difference between the inflated and the
established real value.
When this decision became known to
NEG aufln and his partner, Eugene
Bresse, they entered an emphatic protest
and questioned the authority of the direc-
tors in the matter
In CONSEQUENCE of this protest the attor-
neys of the exchange were called urOD TO
interpret the disputed rule, and yesterday
they submitted an opinion which sus-
tanned the directors.
The opinion reads:
Wbebey + the board has determined on a
marginal value in accordance with rules of the
association, all co1trhc standing al higher
or lower figure than the marginal value so de-
LEI mined u,son are subject to 'caP' 10 the
marginal value. and after such call has
been made and complied with, such contracts
stand at the marginal value, and are not sub
ject 10 further call by either parry, unless the
marginal value so determined upon by the
board OF di ectors is changed.
For example take the recent condltlon OF tne
MARI Ell. Wheat started at 81 10, rose to 81 10 ;
the buyer calls upon the seller 10 MAKE gnod
the differ ence be- ween 81 10 and 81 10. IhIs
call Is complied with, and The contract tnrrr-
fore STANDS at 81 O5. The boaid OF directors
then established maFginal value OF 81 %:
The seller calls upon the luyer 10 maze goou
the difference between 81 15, the price At wnicl
the contract stands, and 81 %, The maj glnal
value established by tIr board. Under these
good tile difference beiween 81 15 and 81 %,
and after The marginal diffeienc has been
made good tie cODIiac StaudS al the marginal
value determined upon by the board, and the
buyer Is not entitled. ID case OF a rise IN the
marker, TO make fur her call upon the seller
Should McGlat fin, who Is really the
man on change who is the heaviest
''loDg" on May wheat, accept the opinion
of the attorneys as being final il would
become necessary for him TO Immediately
place on depos in the Exchange BANK no
less than 100000 in addition to an equal
amount which ne has already deposited.
There is no likelihood. however, that he
will allow the views EXPRESSED by the
lawyers 10 govern him. When he read the
decision yesterday be Immediately ex-
pressed his disapproval of 1t.
Il am willing 10 abide by anything that
is fair and reasonable" said he, "but this
is too one-sided to satisfy me-" Then he