Evening star., 1933-07-21
j. s. READY TO ACT
ON MARKET RAIDS
Wallace Moves to Prevent
Widespread Shift in
Grain Prices.
Continued From First Page;

Continued From First Page
October by former Secretary Hyde at
the suggestion of President Hoover.
Wallace said Chicago Board Of Trade
executives had co-operated in restor-
ing the requirement. He added that
he had suggested the Board of Trade
place a limit on daily fluctuations for
various grains. Several days ago he
proposed that a limit on the daily
fiuctuation CT barley of cents bushel
be established.
Wallace said that it was up to the
Board of Trade to decide whether a
limit on other grains should be fixed.
Wallace added: ''It is rather obvious
that there have been some Swirling
currents in the market" saying "a great
deal of wild gossip at Chicago mad
come to his attention regarding spec
ulation in grain.
No Sympathy for Spectators.
The story is that day or two ago
people in the Board of Trade thought
the margin requirements should be
Widened," he continued.
Some folks say this is preliminary
to shaking cut the public. 1t is all
common knowledge that, on the strength
OF imitation reports and other factors.
the public has come into the market
Wallace said he had no more SYM
pathy for the small Speculator than
for the large one"; that the public gen.
orally lost when it engaged IN specuia-
ton. He explained the moral prln-
ciple' was the same in speculation
largo small
but that his interest in determining the
existence of large accounts was to es-
tablish whether there was "manlpula-
ton" in grain prices.
Wallace said his manner of procedure,
If it were established that there was
"lerge-scalc speculation" on the part OF
any individual. would be to call 1t to
the attention of the Business Conduct
Committee of the Chicago Board OF
Trade.
When an individual holds long or
short interest Ct "a figure somewhat In
excess of 1000 900 bushels he said. the
committee attention would be directed
to the individual and the committee
would be asked to employ moral sua-
sion" to have the individuals interest
reduced.
He said there was a definite limit
= to powers under the grain futures act,
but called attention to his authority TO
issue a blanket license covering grain
trading.
Wheel Rise Held Speculative.
Under this power, provided by the
farm act. wallace might establish reg
ulations covering price shifts and any
violation CT his rules by brokers or
others would make it possible for him to
order the cancellation of their license.
Operation without a license under the
farm act is punishable by daily fine
of 81 600.
Wallace said the rapid rise in wheat
prices recently was speculative, that at
its high point wheat sold about 80 per
cent over Liverpool and that con-
tinuance of the rise by 3 to cents mere
would have made possible importation
of wheat from Argentina despite the
Accent a bushel tariff.
Asked what he considered a fair
price" for wheat. Wallace replied.
The fair exchange value, the goal
of the farm act"
By fair exchange value. the act aims
to bring the price of wheat to the pro-
ducer to a point where buShel of it
will have the same purchasing power as
the average during the years 1909 to
1914.
Wallace said that after the reporting
requirements were suspended last Octo-
ber. reports as to the short position of
any individual in excess of 100000 BUSH
els were made directly to the Business
Conduct Committee at the Chicago
Board of Trade and that recently the
committee also had been receiving re-
ports of heaVy buyers.
Federal Pegulation Forecast
Meantime. Senator Thomas. Demo-
crat, OF Oklahoma. said. in discussing
the market fluctuations that the man
ner in which the exchanges had been
operating seemed to be leading to some
form of Government regulation.
We arc now preparing to control by
codes the production of cotton and
grains, fiE the minimum wages and
limits of work" he said. Il can see no
reason why codes should not be ex-
tended to exchanges dealing in securi-
ties of corporations covered by codes
and in the sale of commodities pru-
duced under codes
In my judgment the Federal Gov
ernment should compel exchanges deal
ing in ;tocks and other securities, in
cotton and grains, to require members
to obey rules prescribed for the public
welfare. TleIe must be some control
CT activ. les on the exchanges to pre-
vent rect rrenceS CT recent bear raids.
"Unde- codes the exchanges could be
required to suspend offending members
and on failure to do so the exchanges
could be closed.
Committee Action Sought.
"The Banking and Currency Commit
tee of the Senate has authority under
the resolution under which it is now
operating to inquire into such matters.
holding such hearings as it thought de-
sirabe.
The committee could call before IL
officers of the exchanges and require
them to submit reports showing lists of
customers of their members, including
their customers transactions in each
particular market
This information could we'll be re-
quired by the committee, I think, to
decide what future legislation Congress
should enact to prevent repetition OF
the bear raids of the last few DAYS.
l intend to call the matter to the
attention of the committee and am
confident it will take such action as in
It's good Judgment seems necessary to
control the exchanges in the pubic
welfare
GRAIN TRADING SUSPENDED.