Evening star., 1952-05-08
Big Grain Firm
Rugged Market,
GAO Reports
CoreiII Clipped U. S
For Extra Million,
Senate Group Told
By jones E. Roper

The General Accounting Office
reported today that Cargill, Inc,
the country's biggest grain dealers,
manipulated wheat markets in
1949 and otherwise clipped the
Government for an unjustified
profit of between $500,000 and 81
million.
GAO said Washington officials
knew about the shenanigans, but
Just laughed at them.
William Ellis, chief GAO inves-
tigator. told the story to the SEN
ate Agriculture Committee.
He related that the Agriculture
Department bought wheat from
Cargil lat spot prices in February,
March and April, 1949, but did not
arrange to accept delivery until
May. Mr.. Ellis said the Agricul-
Iture Department could have
bought May futures at 18 to 20
cents per bushel less than the spot
price.
During heavy Government buy
ing for export, Mr.. Ellis said,
Cargill helped manipulate prices
so the Government would pay the
most for the wheat it bought.
Mr.. Ellis said that on February
y, 1949, H. G. Sundahl of the
Agriculture Departments Mime
apolis Office. telephoned William
Macarthur, deputy director of the
departments grain branch I'M
Washington.
Mr.. Ellis quoted Mr.. Sundahl as
saying: There are shenanigansI
going on here-there is no ques-
ton about it."
Mr.. Ellis said after that a series
of chuckles and laughs were heard
on the telephone.
BIameS Washington.
Mr.. Ellis said Agriculture Off
cials in Minneapolis, where the
purchases were made, generally
understood their business. He
blamed Washington for failing to
stop the unjustified profits.
Frank H. Weitzel, assistant to
the Controller General, told the
committee:
Officials in Washington must
have known of the facts and the
significance of them"
The GAO officials said the Gov
ernment, in buying wheat in 1949.
required all sellers except CargillI
to deliver promptly. Cargill. how
ever, was allowed to arrange toI
deliver its wheat in Albany, N. Y,
in May instead Of Duluth, Mimi,
during the first three months of
the year.
The market manipulation, Mr.
Ellis said, was just a sideline to
the big profit Cargill scored by
selling at spot prices but deliver
ing in the future.
Mr.. Ellis said wheat sellers fig
ured out that the Agriculture De-
partment bought wheat only after
the first hour of trading on the
Chicago commodity exchange. The
department made individual deals
with grain sellers, but paid the
latest spot price quoted in Chicago.
Describes Tactics.
Mr.. Ellis said the tactic was for
a big grain dealer at the second
hour of trading to buy few car
loads of grain through the Chi
cago exchange at new high prices.
The grain dealer then quickly
would telephone the Agriculture
Department with an offer to sell
up to 100000 bushels of wheat.
The Agriculture Department, Mr..
Ellis said, often bought this at the
artlflcially high price just quoted
on the Chicago exchange.
"Cargill was able to manipulate
the market?" asked Senator
Young, Republican, Of North
Dakota.
"Oh, there's no doubt about
that" replied Mr.. Ellis.
Mr.. Ellis said that if market
manipulators were able to keep
the wheat price up an average of
l cent per bushel during Govern
ment purchases in Minneapolis in
the spring OF 1949. it cost the Gov
ernment $250.000.
IF you investigated" said Sen
ator Young, you probably would
find that Cargill also was manipu-
lating the rye market at about the
same time and for a couple of