The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1923-05-31
CAPPER-TINCHER ACT
IS CONSTITUTIONAL
supreme Court Decision Declares
Trading in Futures hflu.
ences Prices.

The farmers were right. Agricul-
ture has scored another great victory.
The United States Supreme court In
a decision handed down recently, with
only two votes Justices Sutherland
and McReynolds) dissenting, upheld
the constitutionality of the new Cap
per-Tincher act regulating grain ex-
changes and admitting cooperative
marketing associations to seats On
boards of trade.
The opinion Of the Supreme court
as handed down by Chief Justice VIII
liam H. Taft, completely overrules the
attack made on the constitutionaiity
Of the Capper- Tincher act by the Chi
cago Board of Trade and fully uphods
the contentious of the Department of
Agriculture, the farm bloc, and the
Farm Bureau.
In this decision the entire system
Of grain marketing Is made subject
to regulation by the secretary of agrl-
culture as interstate commerce; and
1t Is made mandatory on the grain ex-
change to provide seat to any farm
ers' cooperative grain marketing asso-
citation which applies.
The decision as read by Chief JUS
tice Taft Is quoted as follows;
1T Is clear from the citations in
the statement Of the case of evidence
before committees of Investigation as
to manipulation of the futures market
and their effects, that we would be
unwarranted In rejecting the findings
OF congress as unreasonable, and that
In our inquiry as to the validity of the
legislation, we must accept the view
that such manipulation does work to
the detriment Of producers, consumers,
shippers and legitimate dealers In in
terstate commerce In grain and that
It Is real abuse.
"But 1t is contended that 1t Is too
remote in Its effects on Interstate COM
merce, and that 1t is not like the d.
rect addition to the cost to the pro-
Queer Of marketing cattle by exorbi-
tant charges and discrimination Of
commission men and dealers. This Is
hardly consistent with the affidavits
the plaintiffs presented from the lead
ing economists, who say that dealing
In futures stabilizes cash prices.
More than this, prices Of grain
futures are those upon which an own.
er and intending seller of cash grain
Is Influenced to sell or not to sell as
they offer good opportunity to him
to hedge comfortably against future
fluctuations. :
"Manipulations of grain futures fol-
speculative profit, though not carried
to the extent of corner or complete
monopoly, exert a vicious influence
and produce abnormal and disturblns
temporary fluctuations Of prices thai
are not responsible to actual supply
and demand and discourage not only
this justifiable hedging but disturb thu
normal flow of actual consIgnments
A futures market lends itself to sucl
manipulation much more readily thai
cash market
Chief Justice Taft said that tn
previous decision constituted an al
gument In favor of the validity OF tn
new act, since congress had met tn
objections which the Supreme cour
had pointed out In It's decision agains
the legality of the first act. The cour
declared that the grain exchang
merely was gateway through whicl
grain flowed from the west to east an,
to Europe. II Is impossible to dis
tinguish between transactions in casl
grain and In grain to arrive from stool
shipments. The latter transaction
constituted interstate commerce.
The court upheld the government
contention that futures trading affectl
the cash price Of grain. The relation
between cash grain and future deal
ings Is evidenced by the fact that thu
corners In grain have resulted from
dealings In futures.
Last fall the American Farm Blu
reau federation petitioned Fedora
Judge Carpenter In Chicago to be per
mitted to Intervene in the case as co
defendant with the government. This
petition was denied on November IL
I1Q22. Nevertheless Attorneys Newton