The Chattanooga news. [volume] (Chattanooga, Tenn.) 1891-1939, 1920-12-20
U. S. Trade Commission Com
. pleteS Investigation at Re-
quest of President.

washington, Doc, 20-Q, n. So
falllng, wheat prices which farmers
complain 70 congress are costing them
untold millions, are due to natural
causes and not to any appreciable ex-
tent due TO market manipuIatIo9e. ne
cording 10 the federal trade O Asss.
sion, which has Just completed Gin
vestlgatlon of the situation tA ) res
ident Wilson.
The president ON oct l2l ~. di-
rected the trade commission 4 1nves-
sest s%'T possible ssS wRs% rsmedal dTl"&3 ms STS %Ss
report today outlined - cogent
reasons for the MARKET sclne and
In the matter OF posf @tt remedies
made three suggostionsS
First. the oommissAS lieves. sub
lect, of course, to IT, ,nion OF the
attoorney,-general, that'~.aae president
OF the United States l(as no power un-
der existing law TO shut out wheat I'm
ports in the present situation by em-
barge, import duties or otherwise,
second, the president OF the
United States apparently has certain
future trading in wheat, In view OF
the divergence OF opinions on the pos
sihle efficacy OF such action and OF the
failure of the wheat futures market to
perform satisfactorily the functions OF
stabilization and insurance which It's
u
ulatory or other action Is to be en-
ployed In the matter OF future trading,
consideration OF the question by CON
gress and legislation not connected
with war powers, are indicated.
Third, II foreign governments are
to maintain, for some time to come,
buying commissions with concentrated
purchases. the desirabllity OF the
United States meeting them through
selling organization should be seriously
considered"
seven Reasons for Drop.
The seven reasons assigned for the
recent price declines were listed by the
commission as follows:
|. The world yield for the crop year
1920 will be larger than 1919
2. Foreign governmental buying,
which previously met a single seller
in the United States and does not now.
has been characterized by heavy buy
ing In the spring Of 1920 and by slack
purchases later, and is thus involved
In the decline.
g. Unprecedented importations OF
wheat from Canada into the American
market
4. The record breaking yield OF corn
and oats have been factors In the de-
pression of wheat.
&. Slackening in the domestic de-
mand for flour during the latter half OF
1920.
6. Tendency to decline in many
commodities has had It's effect
z The change in credit conditions
with the resulting disposition of dis
tributors to refrain from accumulating
or maintaining usual stocks has had
its bearing.
Regarding Speculation.
on the subject OF speculation, the
commission said:
prices of wheat futures, the decline
in which has been especially the SUB
ject of criticism, are susceptible 10 ma
nipulation. Wide fluctuations In prices
and in large discounts OF the future
price below the cash price have pre-
vailed Wheat futures are not rune
tloning well.
''The wheat futures market Is com
paratvely narrow. There ~ rela
and speculation and also probably
smaller qu antity, though larger pro-
portion of hedging"
The investigation, developed, now
ever. that there has bee ma decline IN
cliSs Nina IN ths eosp sf producing Il taus-
Ing great hardship to farmers.
NUnder the lever act" continued the
report "the president has certain pow
ers regarding the grain exchahstS, ma s
to stop future trading in wheat. While
evidence is not available that future
trading Is responsible for the decuhe
in wheat prices. 1t does not appear thAt
future trading as at present 3pehrualiin
Is OF indIsputable service to the grain
trade
"A limitation on the volume OF open
trades in wheat would |
probably tend to reduce the possibility
Of manipulative trading"
The report concludes with a severe
of grain gambling SAYING
"Without now expressing an OPINION
on this subject, II appears thnt there
s a large volume Of future trading that
Is mere gambling and involves great
economic waste The remedy for TINS
lies in congressional action to prevent
trading which Is essential to gambling