Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1923-04-21
SUGAR SUIT BASED
ON COURTS RULING
ON GRAIN FUTURES
BY DAVID LAWRENCE
Ueased Wire Service to The Journalo
Copyright, 1929

to become as historic as the famous
process employed to get transporta-
ton for the American people year
ago, has just been filed to enable
the consumer to get lower price
for sugar.
This marks a departure in the use
Of the injunction process and while
the department of justice feels that
it's case rests on solid ground, the
federal judiciary will have to de-
termine whether relief for the pub
lie from speculation in sugar can be
afforded through the courts.
The action taken by Attorney Cen
eral Daugherty through his assist
ants in New York and Washington
was, OF course, thoroughly approx
ed by President Harding and the
cabinet and represents the admins
tration's answer to the cry of the
La Toilette group and the Demo
Gratis who lately have insisted that
the Fordney- McCumber tariff or the
speculative operations Of sugar trad
ers were sending the prices of sugar
skyward.
spurred on by the decision of the
supreme court of the United States
few days ago UNFOLDING the con-
stitutionality Of the act of congress
relating to speculation in grain flu
lures, the department Of justice
feels that it's petition to stop sugar
speculation is based upon logic and
law equally forceful.
Paralleled in Grain Decision
"Jt is the contracts Of sales OF
grain for future delivery" SAID
Chief Justice Taft in his opinion
''most Of which do not result in &C.
tual delivery but are settled by Off
setting them with other contracts
of the same kind or by what is call
ed ringing The question is wheth-
er the conduct of such sales Is sub
iect to constantly recurring abuses
which are a burden and obstruction
to interstate commerce nj grain.
Manipulations of grain futures for
speculative profit, though not car
ried to the extent of a corner or
complete monopoly, exert vicious
influence and produce abnormal and
disturbing temporary fluctuations
Of prices that are not responsive TO
actual supply and demand and dis
courage not only this justif1able
hedging but disturb the normal
flow of actual consignments. A fu-
lures market lends itself to such
manipulation much more readily
than a cash market"
The foregoing opinion was, or
course, rendered upon specific law
prohibiting trading in grain futures
and there is no special law On the
books covering speculation in sugar.
The injunction just filed, however,
is predicated on certain provisions
! g the Wilson tariff act which pro-
! hibit combinations and conspiracies
with respect to import purchases
and also on the famous provision of
the Sherman antitrust law, which
makes it an offense to engage in op'
erations "in restraint of trade"
Although transactions occurred on
the Sugar exchange during Febru-
! airy Of this year, involving 1,515,-
$50 tons, there were actually deliv-
cred, according to government rec
ords, only nine hundred tons. All
the rest. were paper sales.
Exchange Held UnessentiR
The government claims that these
speculative transactions tend to keep
up the price Of sugar to the detri-
ment of the consumer and wants
the operations of the sugar eX-
change brought to an end, arguing
that during the war-from 1917 to
1920-the operations of the exchange
were suspended by the United
States food administrator and
throughout American history trade
in sugar has been carried out with
out the sugar exchange and the
sugar clearing association except for
the three years preceding and three
years following the World war and
that it's economic utility is therefore
| open to grave doubt.
Every advance in the price Of
sugar of one cent a pound costs con-
sumers approximately two million
dollars a week, according to the de-
partment of justice statistics, and
"any artificial manipulation of the
price of sugar interferes with, bur
dens and restraints the interstate and
foreign commerce of the United
! States"
Naturally the Democrats who have
been insisting that the Fordney
! tariff act was in a measure respon-
sible for the high price of sugar
will keep on contending that the
tariff wall was a factor in stimulat-
| ing speculation and that the specu'
lative process did the rest, but the
| administration hopes by its legal ac-
ton to put an end to speculation al
| together so far as it relates to sugar.
Criminal prosecution is under con-
sideration, too, and the strategy OF
| the government is to obtain a drop
in sugar prices by psychological, If
not by court, action, for the argu'
ment over the latter will take many
months and may ultimately have to
be carried to the highest court in
the land as, no doubt, the sugar
spectators will contend as did the
board of trade in Chicago that deal
ings in futures should not be inter
ferred with because a large part of
future trading is done by spectators
who make a study of market condi-
tions affecting prices and trade TO
Profit by their judgment as TO fu