Evening star., 1923-07-30
ASK DAILY REPORT
!; ON GRAIN OPTIONS
sFederaI Trade Body Also
. Urges Deliveries to Pre-
g vent Corner at Chicago.

Concluding its report on the methods
and operations of grain exporters. the
Federal Trade Commission recommended
legislation to require the Chicago Board
OF Trade to make public daily the total
volume of the preceding days opera
tions in futures in each option of grain.
The report, made In compliance with a
Senate resolution introduced by Senator
Ladd, republican, of North Dakota,
also recommended that the Chicago
Board of Trade be required to permit
delivery of grain on future contracts at
important markets. under proper safe
guards and equitable terms. whenever
necessary to prevent squeeze or cor
ner at Chicago.
The commission also proposed that all
brokers and commission men. or off,
GERS or large stockholders of companies
doing brokerage or commission business
in futures for customers. be prohibited
from Speculating in grain futures for
their own account. Under present con-
ditions, il was said. abuses and risks
are possible due TO the same person act
ing as agent ard as principal in trading
on the exchange.
Free Storage Urged
Reiteration was made of a previous
reconln endation that the railroads or
e the state or federal government furnish
adequate storage elevator capacity at
convenient market points. especially
Chicago, free from control or operation
by any grain dealer. broker or COM
mission house. This, the commission
declared, would remove the artificial
conditions frequently developing at
Chicago, and would enable the grain
farmer or merchant to store grain in
competition with elevator merchandise.
With negotiable warehouse receipts,
II was also pointed out, the farmer
would be aided in borrowing money 10
finance his crop until he was willing to
sell.
The report contained detailed ailega-
tons of the efforts of certain large ex-
rnrt grain merchants in the Kansas
CITY territory and the Pacific north
west to agree upon prices bid for
wheat. 1t also described as unsatis-
factory the present method of grading
grain and suggested closer federal
supervision of Canadian grain export
ed in bond, in order 10 forestalI com
plants from England that wheat grown
In the United States was mixed with
the Dominion's product exported
through this country on Canadian GER
tlHcates of inspection.
Asks Impartial Tribunal.
The car delivery rule and the settle
nent rule for defaulted futures con
j
the commission asserts. should be in
terpreted and applied by an impartial
person or tribunal. These rules. IL was
explained, involve complex questions of
fact and require unprejudiced judg-
lnent. while the present practice of
placing decisions up TO the boards
president and directors make il possible
for them to be called upon to decide
questions affecting their own or their
customers interests.
The commission found that the de-
cline in prices of the contract grade
of wheat at Chicago from an aver
age of about S2.S5 d bushel July IL
1920. to d fraction over 81 September
II, 1922, was due chiefly to various
adverse factors in the general sit
uatlon OF the world market, such as
large crops at home and abroad,
business depression. unfavorable ex-
change rates and limited purchasing
power and credit IN foreign markets
rather than to speculation or manipu-
lation.
Can Run Up Prices
"SpeCulatorS and hedges" the re-
port said. "are especially able to run
up prices during the delivery month
and. when this occurs, after their fu-
ture interests are closed out. prices
inevitably fall. In general, however.
il appears that. although the fire.
quent and temporary fluctuations in
grain prices may be attributed
largely to speculation, the relative
lN tnfrcquent. but long time fluctua-
tons may be attributed almost en-
t'rcly TO other causes, including ac-
tual supply and demand conditions
l'Ae heavy decline in wheat prices
from July to December. 1920. oc-
curred IN period Of compa ra lively
Ilght futures trading"
Price declines can be brought
about the commission set forth.
through operation of the car delivery
rule permitting delivery OF grain on
futures contracts in care on track in
stead of in regular elevators. which
mas been invoked only twice since its
adoption in 1915. Its operation in
creases the deliverable supply of
Srain and this, with the demurrape
charges and the difficulty of insuring
or borrowing money on grain de-
llVered on track. the report said.
tends to force prices to Tower
level than would be the case if de-
tors"
The commission found only one
striking case of undue influence of
futures trading on corn prices" and
sI1ncluded that Speculation in corn