, EEPORT OF THE SECRETARY OF AGRICULTURE. 57 



GRAIN FUTURES ACT, 



The grain futures act, after a contest by the Chicago Board of 

 Trade, on April 16, 1923, was held constitutional by the Supreme 

 Court of the United States. The necessary action has been taken by 

 this department and the grain future exchanges, including the Chi- 

 cago Board of Trade, to continue their operations under this law 

 without interruption. The law requires the prevention of the dis- 

 semination of false and misleading information regarding crop or 

 jnarket conditions and prohibits attempts to manipulate or corner the 

 market. It forbids discrimination against cooperative associations 

 of producers in the matter of membership. It gives the Government 

 an opportunity to ascertain the facts of the business through reports 

 and actual inspection of the records and transactions. 



Yet when this department, following the Supreme Court's de- 

 cision, issued regulations to carry into effect these provisions by 

 requiring daily reports and access to the records, propaganda imme- 

 diately developed from within the exchanges that the grain futures 

 administration was responsible for the decline in the price of wheat. 

 It was contended that the new regulations had decreased the volume 

 of trading and, therefore, the price of wheat, on the gi-ound that in 

 effect the regulations placed a limit on trading and that speculative 

 buyers were frightened away because their names and volume of 

 business transactions might become known, notwithstanding that 

 this would be at least equally discouraging to speculative sellers. 

 As a matter of fact, no limit upon trading was specified and neither 

 the law nor the regulations interfere with the volume of either 

 hedging or speculation, so long as there is no attempt to manipulate 

 or corner the market. No satisfactory explanation was given by 

 those responsible for the propaganda as to why the price of corn 

 rose under the same law and administration. They did not attribute 

 a later rise in the price of wheat to the law or its administration, 

 notwithstanding the fact that there had been no change in either. 



Steps have been taken to coordinate governmental sources of 

 information so as to combat the dissemination of false and mislead- 

 ing information about crop and market conditions. Supervisors 

 are stationed at Chicago and Minneapolis and contacts arranged 

 with the other markets to enable the department to keep in touch 

 Avith current business operations. The administration is informing 



