Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-12-20
DENY BAN POSSIBLE
. ON WHEAT IMPORTS
Trade Commission Members
Say Lever Act Governs
Future Trading.
By the Associated Press.

The President is without power
under existing law ITO shut out wheat
imports" but he apparently has Ger
tain powers under the Lever act to
stop future trading in wheat" the
Federal Trade Commission 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, rs al
present operating, is of indisputabls
service to the grain trade" 8
It suggests. however. that il regu.
latory action is to be employed the
question be considered by Congress.
and that. Legislation mot connectsi
with war powers be enacted
Lack Of Cs-0peratBsa.
that because Of the failure Of tn
Chicago Board Of Trade to cooper.
ate. It was unable to obtain necessary
Information as to whether there had
been large transactions in wheat fu.
lures, OF a manipulative character.
AS to the concentrated purchases OF
wheat In this country by foreign gov
ernments which have undertaken tc
regulate at home -four prices. IRE
commission declares that if these pur-
chaseS are to continue the deSira-
bility of the United States meeting
them through a selling organization
should be carefully considered
The commissions report is based
ffcr, >f a
situation which the President re-
Quested it to make last October, after
Gov. Henry j. Allen Of Kansas and
others had urged him to bar Canadian
wheat importations and take such
other action as necessary to stabilize
ket.
Declaring "the decline of wheat
prices would appear to be in part due
to countrywide and worldwide con.
ditions." the commission assigns seven
specific causes: The outlook for an
buying by foreign governments last
spring and slack purchases later;
unprecedented" importations from
Canada, following "an unprecedented
yield and a discount in rate Of ex-
change; the record breaking yield of
Of demand for -four; the general tend.
ENJOY to decline in many commodities.
and the change in credit conditions
with resulting disposition of dis
tributerS to refrain from accumulatins
usual stocks"
Competition Inevitable.
Discussing the barring of Canada n
wheat the commission says: cit is
questionable whether such a proceed
ing would have the effect its adyo-
Gates expect. because the IInffed
States and Canada both have sur-
pluses to export. and will meet each
other in competition either here or in
Europe"
While the commission devotes con.
siderable space to discussion OF
trading in wheat futures, it asserts
that it is not now expressing an
opinion on this subject, as II would
give it extended treatment" in a
report.
future contracts may have a lesit-
imate use for hedging" the com.
mission says. "In this connection il is
claimed that future trading performs
an insurance function where ordinary
insurance methods would not be nrac.
ticable, and that undue restriction NJ
future trading. such as would deprive
the grain trade OF this service. might
result in grain dealers reoufrinr
larger margins and consequently re-
suit either in lower prices tn tbe
farmer or higher prices to the con.
sumner
without now expressing an opinion
on this subject. it appears that there
is large volume of future trading
that is mere gambling. and involves
4 greater economic waste. The remedy
for this lies in congressional action to
prevent trading which is essenfianv
"A limitation on the volume of onen
speculative trades in wheat. similar
to the limitations placed on corn
speculation during the period of gov
ernment control. would probably tend
to reduce the possibility Of maninula-
tive trading"