The Washington herald., 1921-10-03
GRAIN EXCHANGES
CONCLUDE PUT
ANDCALL' SYSTEM
Board of Trade Leads
Move, Anticipating
Federal Restriction.
FORMERLY ILLEGAL
Body Passed Rule. in 1865 Dis
countenancing Plan, in Eff
feet Until IL Years Ago.

Especial correspondsnce Of The washingtsn
He-sid and the New York Evening Pest.)
Chicago. Oct. Trading in bids
and offers" generally known as
privileges or puts and calls" has
ceased in Chicago and In the lead
ing markets of the United States,
under agreement among the differ
ent exchanges. although the Cap
rer-Tincher bill which taxes the
sale or purchase of privileges. or
puts and calls, at 20 cents a bushel
IL not effective until December "a.
Puts and calls are legal in Canada,
and are traded In moderately at
Winnipeg. There has been discus
sion among the trade here as to
the advisability of placing their
orders in the future In the Winni-
peg market.
A few OF the Winnipeg grain
men think IL would be g good thing
10 have the privilege trading
brought to their market, while
others have claimed of late that
the trade there is not large enough
to permit an extensive privilege
business without causing big hue-
tuations in values. Another point
made by those who have looked
into the situation closely is that the
Canadian authorities may take the
same view concerning future trad
ing as those who passed the Cap
per-Tincher bill in the United
States and shut down the business
on the Winnipeg exchange. or even
possibly close the exchange. Regu-
lations Of exchanges is different in
Canada from that in the United
States, the authorities having more
power.
Official Ruling Asked.
A request for a ruling from the
Commissioner of Internal Revenue
has been asked as to the liability
OF those who send orders for privi-
leges to Winnipeg under the Cap
per-Tincher bill for the payment
of the 2o-cent tax on all orders
originating in the Unietd States
and executed in Canada or any for
eign market The head of one of
the largest private wire houses
says that he is not in favor of
trading in Winnipeg, even though
favorable ruling should come
from the Commissioner or Attor-
ney General. as their successor
might reverse tselr decision and
make the tax retroactive. the same
as was done In the tax on trans
fer trades a few years ago.
Trading in puts and calls" was
carried on in Chicago in good vol
ume as early as 1853, and to a linn
tied extent prior to that time. The
civil war resulted in largely in
creasing the transactions, and they
have been continued in Chicago
with several Interruptions ever
since.
Were Formerly Illegal
The Board OF Trade directors in
1866 passed a rule discountenancing
puts and calls, and they remained
illegal in Illinois until some IL
years ago, when the law of the
State of Illinois was amended to
legalize them. They have always
been known as options" although
for years trading in futures have
been termed by some as options"
Beard of Trade officials, however.
many years ago. drew a distinction
between options" and futures"
an option" being termed a put
or call"
1t is expected that speculative
trading in grains will be reduced 20
per cent in Chicago through elimi-
nation of privilege trading. This
may be overcome somewhat by a
change in the hours OF trading.
lengthening them Is to 30 minutes.