The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1933-08-04

blanket the nation
Answering with voluntary
fbe Sk.nt,.. agreement on bust
ness conduct might
cause many persons In the country to
become skeptical that things were not
going so well. 1t was feared that
those without complete Information as
to the plans and purposes of the gov
eminent might look upon the far
reaching action as meaning that new
crisis was impending. The suggestions
were not altogether without support
ing reason. In the deluge of visitors
who have come here to draft new
codes in conference with General
Johnson, many have come with doubt
in their mind as to the value or the
Justice of the whole scheme. They
were honest in their judgment and
simply viewed the program as unwork-
able and as forcing them into unnec-
essary hardships. 1t seems, therefore
that an analysis of some of the rea-
sons for the national code should be
made after it has been stated with
some emphasis that there is no new
crisis, nothing more serious than be-
fore, to be seen on the horizon of the
immediate future.
1t will be remembered that the an
nounced program of the President
when he started the recovery plan was
to boost commodity prices. He wanted
to see the farmers get more for their
products as means of saving agri-
culture from the inevitable bow-wows
dustrial life to profit. AS long as
prices were so low, there could be no
restoration Of normal business activity,
in the Presidents view.
Carrying out this line of reasoning,
there came the farm aid laws, the in
flation authority, the farm and city
home refinancing bills and other pow
ers. The President withdrew govern
ment support of the dollar in foreign
exchange by saying there could be no
gold exported. Obviously, prices went
up. They moved in a hurry. Specu-
lation crept into the picture in a big
way. The net result of this was that
the cost of living moved rapidly high
er but wages and salaries Jagged be-
hind.
The recovery administration thought
the problem could be met by the indus
trial codes, but the codes were slow
in getting started and numerous con-
troversies have arisen between units
of particular industries and between
whole industries and the recovery ad-
ministration. Delays were serving
only to widen the margin between the
two basic factors of wages and prices,
and so General Johnson and the Presi-
dent put their heads together on the
code which we have been discussing.
The recent nose dive in grain prices
occasioned quite bit of talk in Wash
ington officialdom,
Break in especially around the
Hro;, Prize. Department of Agri-
culture. Secretary
man of the lot. He did not let the fact
disturb him that wheat dropped off %
cents a bushel in one day for the rea-
son, he said. that Mr.. John Q. Public
was gambling in the market. Sooner
or later, the secretary said, John Q.
had to take licking.
Mr.. Wallace said, however, that pub
lie participation in the grain market
was not the sole reason for the sudden
decline. He thought the rise in price
had been too rapid and that a reac-
ton had set in. Another man in the
Department of Agriculture likened the
price rise to the growth of bean stalks
in over-rich soil. 1t went all to top.
But the secretary said the members
of the Board of Trade in Chicago saw
the break coming and they sought to
protect themselves by calling for more
collateral or cash from those who
were trading on margins. That nat
urally had the effect of frightening
many spectators, according to Mr..
Wallace, but he did not blame the
Board of Trade members. 1t was
something of combination of circum-
stances, then, that broke the grain
markets.
Nevertheless, the Department of Ag-
riculture is watching the grain trading
through numerous pairs of eyes. One
of the things it already has done is to
invoke the provisions of the grain flu
lures law which requires the Board of
Trade at Chicago to make daily re-
ports of individual trading where the
amounts are 100000 bushels or more
The purpose of that is to keep the de-
partment informed as to who the big
spectators are, since 1t is conceived
that Spectator can influence the
market seriously with lots of about
100000 bushels.
The thing works out this way ac-
cording to the secretary: while days
trading on the Board of Trade may
run into millions of bushels, one per-
son could cause a quick upset in nor
NAL buying and selling by suddenly
dumping half million bushels on the
market. The wheat pit or the corn pit
or the trading posts for other grains
would be thrown into furore because
none could foretell what. the effect
would be had the action come without
warning. By requiring that the names
of the spectators be forwarded to
Washington, officials here place them
selves in position to know what the
possibilities are. IF, for example, they
would find one person accommodating
several hundred thousand bushels
daily over short period of time, it
would be only natural to figure out
that an attempt was being made to
force the price out of line upward. If
a Spectator were found to be selling
short in the same fashion. crash
of some kind could be looked for