Evening star., 1923-04-19

are burden and obstruction to inter
J state commerce in grain. Manipulations
of grain futures for speculative profit.
! though not carried to the extent of
a corner or complete monopoly. ex-
! ert a vicious influence and produce
| abnormal and disturbing temporary
fluctuations Of prices that are not re-
| sponsive to actual supply and demand
aud discourage not only this 1usti-
fable hedging. but disturb the normal
lures market lends itself to such
! manipulation much more readily than
a cash market"
Sherman Act Cited.
The foregoing opinion was. OF
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 OF
the Wilson tariff act which prohibit
combinations and conspiracies with
respect to import purchases and also
on the famous provision OF the Sher-
man antitrust law. which makes 1t
an offense to engage in operations
'in restraint OF trade.
Although transactions occurred on
the Sugar Exchange during Feoruary
of this year involving l,515.05O tons,
there were actually delivered, accord.
ing to government records, only soo
tons. All the rest were paper sales.
The government claims that these
speculative transactions tend TO keep
up the price of sugar to the oetri-
inent of the consumer and wants the
operations OF the Sugar Exchange
ing the war-from 1917 to 1s2o-the
operations of the exchange were sus-
pended by the United States food ad-
Ininistrator and that throughSSut S
been carried out without the Sugar
Exchange and the Sugar Clearing
Association, except Tor the three
years preceding ard three years fol-
lowing the world war, and that its
economic utility is therefore open to
grave doubt.
Cost OF Rise Heavy.
Every advance in the price of sugar
of 1 cent pound costs consumers
approximately s2.O0o,00e week. ac-
cording to the Department of JUS
tice statistics, and ANY artificial
manipulation Of the price of sugar
interferes with, burdens and restrains
the interstate and foreign commerce
of. the United States"
Naturally the democrats who have
been insisting that the Fordney tariff
act was IN measure responsible Tor
the high price of sugar Will keep on
Contending that the tariff wall was
factor In stimulating speculation
and that the speculative process did
the rest but the administration hopes
by it's legal action to put an end to
speculation altogether so far as 1t
relates to sugar. Criminal prosecu.
tion is under consideration, too. and
the strategy of the government is
to obtain a drop in sugar prices
by psychological il not by court
action, for the argument 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 boards of trade
in Chicago. that dealings in futures
should not be fnterfered with because
a large part of future trading Is done
by spectators who make study
of market conditions affecting prices
and trade to profit by their judg-
ment as to future prices.
Injunction Often Used.
The evolution OF the injunction in
Americas economic and Industrial
history ever since the Sherman law
was put on the statute books in 1890
is significant. First, the injunction
was used to stop the Pullman railway
strike of 1894. Then Attorney Gen
eral Palmer used the injunction to
get coal for the American people,
basing his action on the wartime
Lever law. Attorney General Daugh-
erty went back to the Sherman law
to stop the shopnen's strike and in
sure transportation for the American
public.
Now he Is trying to use the in
junction to give the consumer food
at a reasonable price. The govern
ment enters court on behalf of tho
whole people with petition IN
equity. In other words, the power of
the federal government in the last
generation is gradually being used to
get for the people their necessities of
life-transportation, fuel and food
any group Of individuals or corpora
tions, trusts. employers, merchants.
employees or traders who interfere
are being fought by the United
States government itself. The sugar
Injunction is the latest and most
radical step of all and If sustained
will have ramifications throughout
other lines of business, for the price
of sugar is important not merely to
the householder for use in coffee and
tea but in many industries having to
do with the canning and preserva-
ton of fruits, confections and other
foodstuffs.
Copyright, 1929