The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-09-14
CONTRACTS DO
NOT HOLD GOOD
Chicago Board Of Trade Gets a
Black Eye.
IMPORTANT COURT DECISION
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VERY EXISTENCE OF BOARD
is IN GRAVE DANGER.

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CHICAGO. Sept. ia most import
ant decision against the Chicago
board of trade was rendered to-
day by Judge AXel Chytraus in the
"July oats corner injunction cases.
Not only does the opinion OF the court,
If sustained by higher tribunals, put
an end 70 all corners IN commodities
ON this exchange. but 1t strikes at the
very life Of the institution as now or
glnizcd. The directors for all time
have had their powers so curtailed
that they cannot longer adjudicate
upon property rights OF the members
Of the association. Judge Chytraus
goes even farther and says that under
the charter of the board Of trade, there
Is DO provision for succession OF mem
hershlp. and asks the pertinent ques-
ton. What should become of the
corporation when persons now compos-
ing the original board would be dead?'
Asked Court to Set Price.
The case in question was one brought
by the commission firm OF Waite. Thor
burn q co. against the Chicago board
of trade. the Bank OF Montreal and
several prominent members of the
board Of trade. in which a temporary
Injunction was granted 10 prevent
margins that were put up by the COM
plalnants from being handed down 10
the contracting defendants. The claim
was made that the defendants had run
a corner in July standard" oats. The
cOmpialnants. who had sold short" 70
the defendants. while not denying their
contracts and while declaring their
purpose 10 make good these same con-
tracts. made protest against having the
ease adiudicated by the board Of trade,
AS provided by the bylaws OF the as
ISOLATION. The standard" oats in
question we're OF a grade and fineness
almost impossible 10 obtain in sufficient
quantities 20 nh contracts during July,
because OF delay 20 crops by rainy
weather. In the pit on change highly
fictitious prices had been put on this
commodity. and the compliments
asked the court % set "A fair price be-
tween which price and the one at
which they had contracted the differ
ence might be paid This was filed
July 80. one day before settlements
were required. Shortly after this
twenty three other cases were filed by
the same cOmplainants against Vari-
GUS defendants; ten cases by Pratt
Buckley q Co.; six cases by II. c.
Avery a. Co. and one case by j. Henry
Norton. BY common consent an cases
were affected by the same ruling.
The Courts Ruling.
The court said In ruling that as far
cerned, II did not matter whether there
was a corner. for II was taken for
granted that an honest price was in
teaded. This part OF the matter can be
decided at a further hearing, which
will be had. The decision makes the
injunction in force until this hearing
OF facts is had. The losing parties
have appealed. but this does not pre-
Vent further hearing.
The gist Of the decision Is that a
special committee which, according to
the board rules, should be appointed by
the president 20 adjudlcate such diff
ferences. has no authority to act in
matters where property rights are In
volved. The rights OF the directors OF
the board 10 preserve the integrity OF
its rules so far as disciplining MEM
bers j. concerned by fine, suspension
or expulsion. Is upheld by the court
as their proper rights. but he rules
against the question that against the
viii Of tn compiainants. the power Of
disposal over that money which In a
sense has been placed In trust or es-
crow exists In a select committee Of
three disinterested persons, members
OF the association. to be appointed by
the president. l. e.. whether the money
can be appropriated by such a COM
mittee TO the contracting defendants"
Complaiuants Not Bound.
Regardless OF the fact that the COM
plainants agreed to be bound by the
rules which provide for settlements Of
disagreements, the court ruled that
they were not bound; that the arrOgat-
ing OF such power TO such body was
against public policy, and that IL
would be introducing sovereigntles
within a sovereignty for the function
OF constituting the law
The court goes into great detail 10
learn the merits Of the ease. speaks at
some length of the opera tons upon
the board OF trade. Of the benefits 10
The community from the institution
and the great influence IL eXerts on the
as a corporation not for profit it pos
seSses governmental and disciplinary
powers over the members that are not
possessed by stock corporations. where
money or property rights are directly
involved. The general power TO pass
upon the right of property in the mar
gins In question. however, is held
judicial power. which never can be
considered TO have been delegated or
confirmed by dubious Implication.
The ordinary courts Of justice" said
the court constituting one OF the
branches OF our government ought not
90 De. and should not submit 20 being,
excluded or ousted OF jurisdiction by
lnien3meut"
With some sarcasm the court adds;
'Tht mastery ingenuity of the plan
t1utrlNrd % prevent appeal 10 the
common law courts of the state COM
mards our admiration. Think OF the
long time " operation that has proved
The scheme a successful one. The loser
"ho may feel himself aggrieved and
DO may know himself 20 have been
Wronged 10y the operation 81 a corner,
ur otherwise, az law, can only sue to
Get his money back.
Even that remedy is by the re
sauryetulnvss OF the scheme abridged.
For 10 is possible for him 20 do even
mat only after he has an award or
adjudication against him by this board
Of trade committee or tribunal"
HOPE OF RECOVERY.
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