Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-20
DECLINE IN WHEAT
CHARGED TO SOVIET
BY SECRETARY HYDE
Washington Awaits Outcome
of Blunt Telegram to Chi
cago Board of Trade.
PRESIDENT INTERESTS
HIMSELF IN SITUATION
State Department Watches Devel-
opments, but Has Taken
No Action in Matter.
By the Associated Press.

BY the Associated Press.
The outcome Of Secretary I,yde's blunt
telegram to the Chicago Board of Trade
concerning bearish speculation in wheat
there ''by the Russian government" was
being awaited eagerly today in Wash
ington.
President Hoover has interested him
self in the situation, but held the view
today that the matter was departmental
and consequently was not expected to
make any move. The Secretary Of
Agriculture conferred with him before
asking John A. Bunnell, president of
the Chicago board, what provision
your exchange has made or can make
for the protection of our American
farmers from such activities"
Mr.. Hyde declined today to supple
n1ent the information contained in the
telegram sent last night pending a
reply from Mr.. Bunnell. DR.. j. w. T.
Duvel, administrator of the grain fu-
lures act who directed the inquiry
into reports of Russian activity, like
wise refused to talk.
While watching developments, the
State Department said it had taken no
action in the matter. Whether it will
interest itself in the problems presented
remains to be seen.
Charges Short Selling.
Hyde's telegram said the Russian gov
eminent had engaged in heavy short
selling" of grain, and that this had
contributed to the fall in wheat's price
and injured the farmers.
Secretary Hyde informed the Presi-
dent the Russians recently had sold at
least 100000 bushels of wheat for
December delivery.
Short selling is the term ordinarily
applied to a transaction in which a
person not possessed of wheat under
takes TO sell it for future delivery. on
the prospect that the price will fall in
the future and enable a profit on the
transaction.
Government officials and other per-
sons familiar with the trade pointed
out today that in addition to spectators,
flour milling concerns and other ham
dlers of grain continuously sell short"
as a matter of insuring a reasonable
margin on their operations.
Whether the Russian government,
which itself is a large handler and
producer of grain, might not have been
engaged in short selling in Chicago as
a method of hedging" against its
actual transaction was raised. Secre-
tary Hyde's communication to the Chi
cago Exchange authorities assumed that
the purposes of the Soviet action were
speculative entirely.
Must Close Up Account.
No Russian wheat ever moves into
the United States on a commercial
basis, Commerce Department records
disclosed and it is not possible in sound
economics that any Russian wheat
should be delivered here during the
present Fall. If Russia has sold short"
on the Chicago Exchange, the experts
said, her agents must eventually close
up that account--if they have not done
so already-by the purchase of Ameri-
can wheat 70 deliver against their
short" contracts. The hope of a profit
in their transactions rests in the chance
of a fall of prices, which has already
occurred.
1t will be literally impossible for Rus
sian wheat to move against ocean
freight and American tariff barriers to
be delivered in settlement of the ac-
count.
Representative Hamilton Fish of New
York, chairman of the special House
committee investigating Communist
activities in this country, said he in
tended to discuss the situation with
President Hoover and Secretary Hyde
this afternoon.
He said he would discuss with them
the advisabiility Of his committee going
into the wheat selling matter in Chicago
after 1t concludes an investigation OF
Soviet lumber in New York Septem-
Der 81.
BroOkhsrt Charges Gambling.
Meanwhile Senator Brookhart of Iowa
expressed the opinion at the Capitol
that blame was attached to the Chicago
Trade Board as well as to the Russians
in the incident. He said it proved 1.-The
wheat market is largely in the hands OF
gamblers"
ut seems to me-" he added that
even more blame attaches to the Board
Of Trade than the Russians, since the
former should have taken steps to pre-
vent such a situation as has been re-
ported"
Brookhart said he would like to know
what the Farm Board had been doing
while the Soviet selling was going on.
1T seems they were gambling WITT
the rest" he continued They have
funds at their disposal to purchase
enough wheat outright to really helT
the farmers. That is the purpose fol
which the board was created"
Board Has Full Control.
Samuel r. McKelyie, grain member
of the Farm Board, expressed confidence
that the Chicago Board of Trade coulc
promulgate regulations to prevent
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