Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1920-12-21
CALL TRADING IN
WHEAT FUTURES
MERE GAMBLING

WASHINGTON, Dec. 20.--A "large
volume" Of future trading in wheat
is mere gambling" involving great
| economic waste and should be
stopped by congressional legislation
the federal trade commission wrote
| president Wilson today.
The commissions communication
constituted it's report in reply to
the presidents request of study
for the causes of falling wheat
prices. The commission advised the
president it has no power to prevent
Importation Of foreign wheat as de-
manded by farmers hit by falling
prices.
The commission also recommended
that government selling machinery
wheat buying agencies now main
tanned in the United States by for
eign governments to protect the far
mer against possible price manipu-
lation by the agencies.
Seven factors combine to reduce
prices in the United States, the COM
mission reported. These factors were
given as % a world wheat crop
bigger than in 1919; CD concentra-
ton of foreign government buying
in one commission which bought
heavily in the spring but later re-
duced it's demands; 60 unprecedented
importations from Canada this fall
coupled with a discount rate of ex-
change; (4) the record breaking
yield of corn and oats which helped
to depress wheat prices; 60 slack
ening of the domestic demand for
flour this fall; CO. general decline of
all commodity prices, and CD change
in credit conditions with the result
ing disposition of distributors to
refrain from accommodating or MAIN
tanning usual Stocks" until conditions
are stabilized.
wheat has declined in price less
than many commodities" the COM
mission wrote, land less than most
agricultural products, on the basis
of wholesale prices"
1.-THE decline in prices would ap-
pear to be in part due to country
wide and worldwide conditions.
Abrupt changes in prices and COM
paratively low prices have occurred
following changes in volume of pro-
duction, variations in demand from
year to year and marketing uneven
ly distributed through the seasons.
An improvement in the situation
would follow from greater regularr
ity of production from year 20 year
insofar as such regularity is SUBJ
ject to human achievement and
more even marketing of grain
through the year.
while the commission believes
that speculation in wheat futures
is not an indispensable part of the
marketing process and may some
time be highly injurious, the COM
mission is not in this respect pass
ing upon the whole subject of fu-
ture trading. Future contracts may
have a legitimate use for "hedging."
In this connection it is claimed that
future trading performs an insurance
function where ordinary insurance
methods would not be practicable and
that undue restriction of future tra-
ding such as would deprive the
grain trade of this service might re-
suit in grain dealers requiring larger
and consequently result |
either in lower prices to the farmer
or higher prices to the consumer.
"Without now expressing an opin- |
ion on this subject, it appears that |
there is a large volume of future |
trading that is mere gambling and |
involves great economic waste. The |
remedy for this lies in congression- |
al action to prevent trading which is |
essentially gambling"