Arizona republican., 1915-08-14
Estimated That Orders for lore Than 2,000, LOCO Bushels of Wheat Were Cancelled Within Twenty four Hours
CAUSES WILD
 MARKET DROP
Believed to Have Been Re- suit of Italian Govern ment's Effort to Fix Maximum Price to Cir cumvcnt Speculation
[Assoc1ArEp PRESS pIsPArcHI

CHICAGO, Aug 13.-An authorita- tive explanation was obtained tonight for the sensational action of exporters in suddenly cancelling during the last forty-eight hours contracts for large amounts of wheat purchased in the United States, roundly estimated at 100000 bushels The announcement Of the cancellations caused wheat prices to break wildly, the downward plunge at one time amounting to as
 much as four to four and one-eighth cents 8 bushel, and smashing the mar ket to $107 for September delivery
 Most of the contracts were cancelled on wheat intended for Italy. The buy CTS. however according to one of the largest exporters here, found all the prospective buyers cut off by the plan of the Italian government to fix mini mum prices or to otherwise circumvent speculation.
 A careful statement of the situation resulting was made tonight by the ex- porter referred to. He did so after con sultfng prominent Italian here who is in a position to know the facts. The statement said the high rate of eN- change between the United States and Italy. which is now about twenty two per cent over normal, was also likely to prevent large purchases of wheat in the United States for Italy He said the basis between Italy and Argentine was about normal, and if there was no substantial decline in North America before winter, the italian demand would probably fall on Argentine.
 The statement follows:
 Tt has been said the Italian govern ment has authorized the repudiation of onerous outstanding purchase of wheat While there seems no doubt that cancellations have ben effected, the occasion thereof should no doubt be laid to a different cause.
 Tn the first place, the Italian gov ernment could not lawfully authorize such procedure, and even if such au- thority were vested in the officials at Rome to exercise it would be the be- gaming of the destruction of her credit with the United States. What happened is very probably this:
 "There has been the last few weeks large amount of wheat bought by Italian firms or private individuals. and to such parties the Italian govern ment may have issued an order prOhib- iting or regulating speculation by Italian grain dealers with millers and consumers throughout the kingdom. and on this account the Italian inn porter may have figured there was greater advantage in sacrificing the profit on purchases from the United Statse than letting the contracts to be shipped showing good paper profits bur on which more might be lost by effort of the Italian government to give tn consumer as cheap wheat as possible Much wheat bought by Italy last win ter was resold to the consumer at cost.
 Just now the government of Italy is not likely to buy wheat from the United States. not only because they think our prices are too high, but on account of the high exchange. The exchange between the United States and Italy is about P per cent over nor mal. The basis between Argentine and Italy is approximately normal. Some of the well known Italians pre- dict there will be no buying of wheat by their government until January. If there is no substantial demand then it probably will fall to Argentina"