The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1920-12-20
CANNOT CHECK
WHEAT IMPORT
into COUNTRY
Trade Commission Says Will
son, However, Has Certain
Powers to Stop Future
Trading in Wheat.
DISCUSSES PROBLEM
CBy Associated Press)

WASHINGTON, Dec. 20.-The presi-
dent is without power under existing
law ito shut out wheat imports" but
he apparently has certain powers un-
der the Lever act to stop future trad
ing in wheat in federal trade COM
mission says in a special report to
President Wilson, made public today
at the white house.
The commission says that while
evidence is not available that future
trading is responsible for the decline
in wheat prices, it does not appear
that future trading in wheat as at pres
ent operating, is of indisputable serv-
ice to the grain trade"
1t suggests, however, that If regu-
latory action is to be employed, the
question be considered by congress
and that legislation mot connected
with war powers be enacted"
Information Lacking.
The commission tells the president
that because of the failure of the Chi.
cago Board of Trade to cooperate it
was unable to obtain necessary infor-
nation as TO whether there had been
large transactions in wheat futures oil
manipulative character
AS to the concentrated purchases Of
wheat in this country by foreign gov
ernments which have undertaken TO
regulate at home flour prices irrespec-
tive of the price of wheat, the COM
mission declares that if these pur-
n a 70 IN
ity of the United States meeting them
through a selling organization should
be carefully considered"
The commissions report is based
upon an investigation of the wheat sit
uation, which the president requested
ii to make last October after Governor
Henry ]. Allen, of Kansas, and others
had urged him to bar Canadian wheat
importations and take such other ac-
tion as necessary to stabilize the then
! rapidly declining whaet market.
Gives Seven Causes.
Declaring the decline of wheat
prices would appear to be in part due
to countrywide and worldwide con-
ditions," the commission assigns sev-
en- specific causes: The outlook for
an increased world supplying: concen-
trated buying by foreign governments
! unprecedented" importations from
Canada, following IAN unprecedented
yield and a discount in rate of ex-
change" the record breaking yield OF
corn in this country; the slackening
of demand for flour; the general tend
ency to decline in many commodities.
and the change in credit conditions
with resulting disposition OF distribut-
ers to refrain from accommodating usual
stocks
Discussing the barring of Canadian
wheat, the commission says: 1T is
questionable whether such a proceed
ing would have the effect its advo-
Gates expect because the United States
and Canada both have surpluses TO
export and will meet each other in
competition either here or in Europe"
Postpone Action.
While the committe devotes consd-
cradle space to trading in wheat fu-
ture, it asserts that it is not now ex
pressing an opinion on this subject as
it would give it extended treatment
in forthcoming report.
Future contracts may have legiti-
mate use for hedging the commits
sion says. In this connection it is
claimed that future trading performs
an insurance function where ordinary
insurance methods would not be prac-
ticable and that undue restriction OF
future trading such as would deprive
the grain trade of this service might
result in grain dealers requiring larger
/ margins and consequently result
either in lower prices to the farmer
| or higher prices to the consumer.
Without now expressing an opinion
on this subject, it appears that there
is a large volume of future trading
i that is mere gambling, and involves
| a great economic waste. The remedy
for this lies in congressional action TO
prevent trading which is essentially
! gambling. A limitation on the vol
ume of open speculative trades in
wheat, similar to the limitations placed
on corn speculation during the period
of government control would probably
| tend to reduce the possibility Of man
1