Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-12
Hoover Hits Short Selling.

demned spectators who are selling
short in the wheat market today. "The
intent" said the President, "is to take
q profit from the losses Of other people"
Obviously the President referred to the
producers of wheat, the American
farmers. The President complained
particularly of the efforts Of the specu-
lators to depress the market prices at
this time Of depression, for their own
benefit. The spectators, he insisted,
are retarding q return Of public con-
fidence and prosperity.
The President, however, has merely
called attention to q condition which
has existed for years in the grain mar
kets Of the country, a condition which
is found particularly at q time when
the grain is being harvested and SOLD
by the farmers themselves. The effort,
unfortunately for the farmers, has been
made almost uniformly to beat down
price Of the grain until 1t has passed
out of the hands of the producer. After
that has happened the price may De
allowed to go higher. That Is business.
It is the kind of business that has
made the American farmer see req 1or
wears. It is the kind Of business winch
has brought a stronger and stronger de-
mand for the organization OF farm CO.
operatives, so that the farmers might
finally be in a position to sell at prices
which were fair. 1t is the kind OF ousi-
ness that brought at last the passage OF
a law creating the Federal Farm Board
with large resources to aid the farm CO.
operatives, an act which has been bit
terly resented by the grain trade.
With the country still wallowlng IN
the midst Of a business depression, the
attitude of the grain spectators VINO
are forcing down the price OF wheat is
brought more forcibly to the attention
not only Of the Chief Executive. but OF
the entire country. Better prices 1or
the farmers mean in the end better
business of all kinds, when better ousl-
ness is the great need Of the whole Ma
ton. The President did not strengthen
his statement Of the case when, after
leveline his criticism at the spectators
who are now selling the market short,
he added: IT am not expressing any
views upon the economics Of short SELL
ing in normal times" Short selling is
selling in the hope Of reduction IN
the price Of grain. 1t is intended to
bring about a lowering Of prices, SC
that the SPECTATORS may make profit
thereby. 1t is, finally, the selling oil
commodities which the seller does not
possess. He hopes to go into falling
market later and purchase enough OF
the commodity to make deliveries at
the higher price for which he sold.
President Hoover, having charged
that there is a group Of spectators in
the wheat market today selling short
Is already importuned to make public
their names. He called attention in
his statement to the fact that as a
public oficial he is not permitted to
make these names public. 1t is I'M
fortunate that the head of the execu-
tive branch of the Government under
the existing law is prohibited from act
ing in the interest Of the public in this
matter. The grain futures act compels
the filing with the Department OF Ag-
riculture of statements of short selling
of grain, but does not permit the names
Of the operators to be revealed to the
public. The Government has in its
hands today all the facts regarding
short selling of the wheat market, but
its hands are tied. The law should be
amended.
Perhaps the statement issued by the
President will bring a halt to the
manipulation of the wheat market by
the spectators who are selling short.
They have at least been warned that II
there is any step the Government may
take to reach them 1t will be taken.
From the public point Of view, it would
appear that for once a White House
leak" might be justified.