Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-12-16
SPECULATION CURB
IN CLEARING HOUSE
Grain Board to Complete Its
Program Soon to Guard
Chicago Trading.
By the Associated Press.

CHICAGO. December 16.-The reor-
ganlZation program Of the Chicago
Board Of Trade is now ready to be
rounded out with the establishment of
clearing house early in January.
This Is the last of the changes in Off.
cial supervision Of grain trading which
came with passage Of the grain fu-
lures act. the boards own internal
house cleaning and the suggestions
OF the Secretary Of Agriculture.
The clearing house, advocated by
many OF the members OF the board, es-
pecially those out Of town. was adopt
I'd on the suggestion of the Secretary
u Agriculture, and the boards COM
mittee has been working out plans Tor
several months. The machinery liz now
ready to function, starting early in
January. beginning with one of the
lesser commodities on the board and
gradually working up to the corn and
wheat transactions. Experience with
the smaller volume of less active
grains is expected to perfect the sys-
tenn for handling trades In wheat
which in periods Of great activity
sometimes run AS high as $50, 0O0, 900
bushels day on the books of all the
members Of the board. Joseph Simons.
former vice president of the board.
Is the president of the clearing house.
VIII Show Position.
While the clea ring house method
VIII show at the close of each day the
net position of each clearing member
long or short of the market, many of
the members feel that their own bust
ness conduct committee will be in a
better position to go behind these re-
turns TO uncover attempted market
manipulation.
TIA to- 1.
measures adopted by the board this
Fall to stabilize the market and check
frenZied speculation such as set the
wheat pit wild last Winter was the
appointment Of "A business conduct
committee which has been at work for
two months.
The business conduct committee has
unlimited powers to investigate con-
troll or discipline members of the board
and Is backed by the new rule vesting
in the board of directors the power 10
declare an emergency during which
price ranges shall be restricted to a
specified price above or below the last
sale of the previous day
Pledged Against Speculation.
The three members of this commit
tee, who are pledged not to speculate
Tor themselves, work in close cooper
alton with the grain futures admins.
tration officials in endeavoring 10 keen
the market really representative of
supply and demand. The president of
the board and the president Of the
clearing house are eX-officio members
of the committee.
The privilege of voting by mail given
out-of.town members of the board is
the third OF the trio of measures
adopted by the board in the hone of
widening the circle of sound business
Judgment on which the grain trades
policies might be founded.
IN so tar as by human means il is
possibie to stabilize the grain market.
these measures will do IT." said l.. F.
Gates. former president Of the board
ana chairman of the committee which
'TN"'"ned the three measures adopted
by the exchange. NO one can tell
whether II is possible TO stop such q
frenzy OF public speculation as oc.
Cured last Winter in wheat. Profes-
sional spectators we're first to recog-
nize the possibilities of world wheat
famine and began buying when prices
We're low in Midsummer Later these
developed a public frenzy of specuIa.
ton, largely by the UNIFORMED.
Committee Is Active.
The business conduct committee is
-" fuicI's active IN cooperation with
the grain futures administration to
prevent abuses whether by members
pr non-menbers OF the board
The power to declare an emergen-
cy when trading must cease for that
day. after prices pass d certain fixed
range, is the second line of defense
vested in the board of directors. The
right to declare such an emergency. il
$ thought. will not be needed fire.
quently. 1t is not an effort to fix a
limit beyond which prices shall not go.
but to curb wild fiutuations and steady
the market.
The mail votes privilege brings in
the advice Of some of the most ex-
perienced men in the grain trade, mill
ers, elevator men, export dealers and
so on. who seldom had q chance to
vote in person.
We have just experienced a very
active market in wheat, which has
tested out our own provisions of stab
'lizing the market. \ rapid advance
at Liverpool, due to conditions in the
Argentine, was followed by advances
In the American and Winnipeg mar
kets. The American wheat supply is
on almost a domestic basis this year,
so conditions We're all the more try
ing. But the business conduct com
mittee Is doing all that can be done to
make the market reflect the laws of,
supply and demand instead of fren-
zied snecula fiou