Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-28
j. S. FARM BOARD
DEFENDS ACTION
Holds Operations in Cotton
and Wheat Futures Neces-
Sary to Prevent Losses.
BY the Associated Press.

BY the Associated Press.
Defending its operations in the cot
ton and grain futures markets, the
Farm Board yesterday wrote Chairman
McNary of the Senate Agriculture Com
mittee that they were necessary to
prevent large financial losses and to
avoid seriously disturbing" market
conditions.
The letter was reply to congressional
criticism of the board for allowing its
agents to deal in futures and laid the
groundwork for defending the boards
policies against attacks which may
come after Congress reconvenes.
Meanwhile Senator Steiwer, Oregon,
Republican. advocated q higher tariff
on wheat, rather than imposition of
temporary embargo as suggested by
Chairman Legge of the board.
ut is absolutely essential that ade-
Quate steps be taken at once to exclude
imports of wheat" Steiwer said, DE
cause the Farm Board has pegged the
price and if the foreign market goes
down to a point where they can i'm
port over the duty we would be buying
Canadian wheat at the pegged price"
Fears Foreign Objection.
Steiwer said he feared an embargo
on wheat would disturb our foreign
relations and he saw no reason why the
Tariff Commission should require much
time to investigate the adequacy Of the
present Accent tariff.
The Farm Board letter to McNary
said the wheat and cotton marketing
associations had been forced to use
the futures markets because of the Sys-
tenn which had been set up by private
operators.
THE cooperative marketing asso-
Citations in wheat and cotton are
agencies set up by farmers to market
their products in competition with
to compete for business on even terms
these co-operatives must be in posi-
ton to give the same services and en-
JOY the same advantages as a private
merchant.
Ito do this they have found it nee
esSary to make use of existing market
ing facilities, of which, under existing
conditions, futures trading operations
are an integral part.
far as they find it possible and desir-
abel to do so, greatly reduces their
problem OF financing their operations.
Hedging Prevented Losses.
"In the past six months, when wheat
prices have been almost constantly de-
Ginning, the Farmers National Grain
Corporation would have suffered dis
astrously heavy losses If it had not
hedged its wheat supplies.
The board has not deemed it wise
70 insist that co-operatives should
abandon these practices; on the con-
trary, the board Is of the opinion that,
under present conditions, appropriate
use OF the futures market by the CO.
operatives is essential to their success
ful operation and is even q means of
minimizing speculation"
The letter said the only alternative
to operating in the futures market
would be for the sterilization corpo-
ration to assume the burden of a
much greater portion of the market
supply" 1t pointed out, however,
this might easily result in tying up.
In grain operations alone, an amount
exceeding the entire revolving fund
authorized by the agricultural market
ing act"
while the position with respect to
cotton is somewhat different" the let
ter continued, "the same general prin-
cipleS apply
Please do not consider this as a
recommendation on our part in support
OF the present system Of future trading"