Evening star., 1951-06-06
Thomas [. Stokes:

Undue increases in the price
Of things you eat and wear can
come from speculation Of the
gambling sort in the commodity
markets which deal in food
grains Of all kinds and the max
ings Of clothing-cotton, wool
and the like.
This aspect of imitation often
is overlooked-and the refer
ence here is to gambling" and
not normal trading operations.
It was called to the attention
Of the Senate Banking Com
mittee by Stanley Ruttenberg.
c. I. O. economist, who pointed
to the speculation that followed
the outbreak Of the Korean war
last year and sent many COM
modify prices skyrocketing.
Immediately Senator Maybank,
Democrat, Of South Carolina.
committee chairman, had the
usual reaction that there should
be an investigation, and said
he would have his staff make
an inquiry.
An investigation would be
salutary to inform the public,
though as far as last years
spree Is concerned it would be
largely q refresher. For the
Agriculture Departments Com
modify Exchange Authority In
vestigated that furry then,
particularly the great soybean
roulette which it described,
solemnly. as "of an almost
frenzied character" The CEA
could supply facts to bring the
Senators up to date.
But, rather than investigating
past speculation again which
everybody should know about,
1t would seem wiser and more
to the point to act and put In
the defense production bill nov
being considered by both Sem
ate and House Banking Com
mittees q weapon against specu-
lative orgies Of an infiationary
character In the future. That
is what Mr.. Ruttenberg and
others are advocating.
This could be done by giving
the Secretary Of Agriculture
power TO fix margins In COM
modify trading. as recommended
by President Truman, so that
this sort Of speculation can be
curbed. just as the Federal Re-
serve Board fixes margins for
trading In stocks. The board
was delegated to do that 16
years ago, after the Senate
Banking Committees investiga-
ton Of the wild stock specula-
ton Of the late 1920s.
For several years, similar au-
thority has been sought in vain
for the Secretary Of Agriculture.
1t would be designed to check
inhationary gambling type spec
ulation. and would not AFFECT
normal hedging operations to
stabilize the market.
This check Is badly needed to
close q big gap In the inflation-
ary circle. and would be In keep
ing with present restraints on
bank and installment credit and
stock exchange transactions. It
Is q big gap. The volume Of
trading on the commodity mar
kets is almost double that on
the securities exchanges-its
dollar volume. for example, be-
ing over $32 billion in the
year ending June 30, 1850, as
compared with SIT billion for
all stock and bonds transac-
t1ons on registered security ex-
changes.
The margin required for
stock exchange transactions
now Is rs per cent. while on
commodity exchanges it runs
from 8 to Is per cent. Mar
gins for commodity exchanges
trading are fixed by the ex-
changes. themselves. And, in
general. these apply only to
outsiders" so that members
on the Chicago Board Of Trade,
for instance, who trade for
themselves. are not required to
deposit speculative margins and
members who operate through
the clearing house need deposit
only the lower clearing house
margins.
Usually. in speculative sprees,
the hue and cry goes up for the
"big gamblers, a hangover from
the free and easy days when big
operators Of the bold, dashing
| type became legends. But the
simple and perhaps embarrass-
ing truth Is that wide fiuctua
tions In these days come from
the pell-mell rush for quick
profits by smaller fry, non-pro-
fessionals. who don't. flguratiye-