Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-20
DECLINE IN WHEAT
CHARGED TO SOVIET
BY SECRETARY HYDE
Continued From First Page.)


continuation of "short" selling by the
Russian agencies.
The Government licenses the grain
exchanges, requiring assurance that
manipulation of prices by speculation
will be prevented. Whsther it can re-
woke the licenses if this qualification is
not respected is a question which has
never been put to the Department of
Justice.
McKelvie doubted the Farm Board
had any legal authority in the matter
The better way" to control the situ-
alton, he said would be through the
Board of Trade He said he did not
believe the Farm Board should advance
money to the Grain Sterilization Cor
poration for the purpose of combating
such short selling.
McKelvie said Russia may have had
an Interior motive in selling wheat
short. He cited furtherance of unrest
among American farmers, and added
that "for one thing the Russian gov
eminent is buying wheat from Canada
at the same time that it is selling
wheat"
Selling Wheat in Europe.
He explained the Russians were ex-
porting wheat from the southern part
of the country and selling it into South
ern Europe, with exports to France and
Italy. At the same time, he continued,
they were purchasing wheat and i'm
porting it through the north to get away
from an impractical transportation by
rail of the wheat from the south into
the north.
McKelvie said the estimated grain
exports from Russian for this year were
placed at 100000 bushels. as COM
urff
a year ago of 6,440,000.
The Farm Board member revealed
that information as to the short selling
of wheat by the Russians had been OBJ
tanned from the Farmers National
Grain Corporation a week ago. The
Farm Board turned the matter over to
the Department of Agriculture, which
in turn proceeded with an investiga-
ton through the Grain Futures Ad-
ministration.
Senator Frazier. North Dakota, said
the Soviet agency. if the report of its
manipulations were true was not the
only one that had used the exchanges
TO injure the farmer.
"In my opinion the biggest 'bolshe-
vistS,' he said, ARE the gamblers who
used the Grain and Cotton Exchanges
for years to manipulate prices for their
own benefit"
He said the incident proved gambling
on Grain and Cotton Exchanges should
be prohibited.
"The Caraway bill, which was OPP
posed at the last session by the Depart
ment of Agriculture and the Farm
Board" he said would have accom-
plished that purpose. But Secretary
Hyde, who is now complaining about
the Russians, and other governmental
agencies threw their weight against it
and IL got nowhere"
Short Selling Revealed.
The text of the Secretarys tele-
gram follows:
An inquiry was undertaken by the
Department of Agriculture in conse-
Quence of certain runners. This inquiry
revealed beyond all question of doubt
the heavy short selling of wheat upon
the Chicago market by the Russian
government.
There can be no question that this
selling has contributed TO the fall in the
price Of wheat and to the injury OF
American farmers now engaged in their
intensive marketing season.
obviously 1t would be impossible for
Soviet Russia to deliver grain in Chi
cago over our tariff of AZ cents a
bushel. 1 should be glad to know from
you what provision your exchange has
made or can make for the protection
of our American farmers from such
activities"
Peter A. Bogdanov, chairman of the
board of the Amtorg declared in New
York, however, the textile concern was
not a subsidiary. He said he knew
nothing of wheat futures trading ac-
tivity by the Soviet government.
Secretary Hyde refrained from say
ing what action might be taken by the
Government until he heard from the
Chicago exchange. Means of blocking
such imports are furnished by the
tariff law, and the Government has
extensive control of the grain ex-
changes through the grain futures act.
Whether the terms of this act could be
invoked to prevent the placing of SELL
ing orders from the Russian organiZa-
ton was not Immediately made APP
parent
determined attack on Russian i'm
ports has been made in recent months
from several angles. but so far unsuc-
cessfully. Importations of lumber and
pulp wood were suspended under the
clause prohibiting the importation of
conVict-made goods, but the orders were
rescinded on the ground that the evil
dence was not conclusive. The anti
dumping provisions which permit an
embargo OF goods sold below cost are
available, but so far great difficulty
has been met in ascertaining Russian
costs of production in view OF the
absence of diplomatic relations between
the two countries.
The textile syndicate admitted the
short selling, Hyde said, after an ex-
tended investigation by the Agriculture
Department set in motion by rumors
which gained circulation in newspaper
articles.
While foreign dealing ON American
exchanges is net uncommon entry OF
the market by foreign government Is
unprecedented However, Russian for
eign business is government monopoly.
Hyde expressed the hope that the
Chicago. Exchange itself would be able
to make regulations guaranteeing o
fair aYied~Snf the American crOp."