The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1933-07-26
'YECUL
IN GRAINS Will
|BE ABANDONED
sweeping Reforms Are De-
eided Upon By Heads
OF Exchange
ROOSEVELT DICTATES
FLUCTUATION LIMITS
Q. JOHN A. REICHMANN
r.asd Press Staff Correspondent

2, JOHN A. REICHMANN
r,itcd Press Staff Correspondent
TASHINGTON. July 26. (UP)
=, grain pit heads of the nation,
.,-ss-ened with the whip of gov
,,-~srt control. moved quickly
,s night to remove the gambling
r.,u'a.or from control of the
81 rrr,ry's bread basket.
They left the city with the
cords of Chief Farm Act Admin
xra,or George n. Peek ringing
a their ears:
"You should not lose any time
n getting your codes in here.
Y,r had better do this yourselves.
4 Fro.. il may be done for you"
Peek had told the grain men,
wen ne hastily summoned them
here Yesterday that if they did
i ~, %. their "hOuse in order" the
gr.rnment might do it for them.
y The results were Forthcoming
WEN the grain exchange heads
r-ornced they had decided on a
yr.; Of sweeping reforms. They
Il rcal permanently limit daily
f1t.a.ions in all grains and thus
nass it virtually impossible for
\ ya1latOrs to control prices.
As an immediate step the re-
FIRMS proposed frightened the
present. daily limit on grain fluc-
nations. They now prohibit
change Of more than eight cents
day in wheat, five cents day
N corn and three cents a day in
cats.
The new fluCtuatiOn would be
limited to FIVE cents a day for
wheat. four cents day for corn
and three cents a day for oats.
The lower figure represents a
victory for President Roosevelt
who has been closely watching the
grain conference, prompted by his
view that the restoration of com.
modify prices is the keystone of
his recovery program. When the
sight-cent limitation was fixed ne
, protested that it was too high and
Urged that it be no more than five
rerS.
The permanent reform of the
cram markets would first be writ
Ten into the rules of the eX-
changes. Later they will become
the codes Of fair practice which
Inc government insists shall be
written. With these codes estab-
IlSned, it was considered likely
that the stringent licensing prOvi-
SONS Of the recovery laws will be
lnToEed in order to give the eX-
ehange rules the force of law.
The reforms were set forth yes
er1ay as follows:
L A permanent limitation on
ne daily price fluctuations of all
NaInS. This would tend to make
sa;het movements less erratic.
With a fve-cent limitation, it
''l,d take three days of trading
" accomplish a 15-cent change in
2e market quotations. In this way
PanlcEy conditions such as pre-
'alIed last week would be largely
alIayed
Z Permanent elimination of
indemnity trading" This device,
SIMILAR to the put and CALF trad
ing Of the stock exchanges, is
Practically a pure gambling de-
.He through it the trader prOm-
res 10 buy or sell a given guam
.'y Of grain on some future date
price below or above the cur
snt price. These trades need not
reported 10 the exchange heads
I'd were a major factor in the
5cent speculative market, it was
sad.
j. Writing into the permanent
.4shange rules specifications Of
Wis amount of margin to be re-
ql'Jed Of traders. These margins
sya.a be increased in the case Of
Sa.Iser speculative commitments.
S'nce increasingly more margin
Is,uIa thus be required as a speCu-
sa.'r activity grew, lack of SUI
Jss'sht cash is expected to prevent
!, e@ertlng as much influence on
"e market as he has in the past.
Limitations of open lines Of
speculative commitments. This
.olId by rule. prohibit any trader
.ntrolllug more than a limited
mount of grain. This limitation
"a. .SS been in effect in the past
trough a SOcallcd "gentleman's
Is,eement" that no trader would
T =, more than 100000 bushels.
= 'ue Tact that it was not generally
oDSeryed was indicated by recent
...'e,atlonS that one trader alone
vas long on 100000 bushels of
E;orn' BY writing the limitation
mo the rules traders who violate
sne agreement will be subject to
>"PenSlOn from the board.
Inc grain men proposed that in
arriving out its rules governing
IpeeulatiOn proper consideration
gwen legitimate hedging op-
To,onS whereby users of grain
S'.y protect themselves against
-'ure market fluctuations.