ADMINISTRATIOX OF GRAIN FUTURES ACT. 691 



denied to lawfully formed and conducted cooperative associations 

 of producers, having adequate financial responsibility, engaged in 

 the cash grain business, which comply and agree to comply with the 

 rules of such boards applicable to other members, with a special 

 proviso to the effect that rules against rebating commissions shall 

 not prevent the distribution of net receipts of such associations to 

 the bona fide members thereof on a patronage basis. 



Section 9 authorizes the Secretary of Agriculture to make investi- 

 gations regarding the operations of the boards of trade and the mar- 

 keting conditions of grain and grain products and by-products and 

 to publish the results thereof. 



There are other provisions of the statute which, however, are inci- 

 dental to its main provisions. 



The statute does not prohibit or prevent the use of futures for 

 hedging or ordinary speculation, but is designed to prevent the dis- 

 semination of false or misleading information about crop or market 

 ■conditions, to stop manipulations and controls or attempted corners 

 of the market, and to enable the Secretary of Agriculture to procure 

 and publish authentic information regarding the business conducted 

 on grain-future exchanges and its effect upon the cash grain trade, 

 including the producers and consumers of grain and grain products. 



The funds for carrying out the provisions of the future trading 

 tict of August 24, 1921, were made available by Congress for carrying 

 out the provisions of the grain futures act. 



During the period of litigation involving the constitutionality of 

 this legislation a skeleton organization has been maintained with 

 offices at Chicago and Minneapolis in charge of grain-exchange super- 

 visors (Dr. J. W. T. Duvel at Chicago and J. R. Mathewson at 

 Minneapolis) devoted to the purpose of becoming familiar as far 

 as possible without mandatory authority with the trading organiza- 

 tions and the methods of doing business in the various future mar- 

 kets. An analysis was made of records in the possession of the 

 Government showing purchases and sales of each kind of grain for 

 ■each delivery month on each of the boards of trade, and this infor- 

 mation has been tabulated and to a considerable extent placed in 

 chart form for reference purposes and as a basis for comparison with 

 additional information gained in the active administration of the 

 law. 



Tentative regulations under the grain futures act, which had been 

 held in abeyance pending the decision of the Supreme Court, were 

 given out promptl}^ to all interested persons for criticism and, after 

 suggestions and expressions of views had been obtained both in 

 writing and orally, the final regulations were promulgated by the 

 Secretary of Agriculture on June 22, 1923. These regulations con- 

 tain, among other things, provision for the making of daily reports 

 by clearing members of the exchanges to the Grain Futures Admin- 

 istration, showing their total purchases and sales of each kind of 

 grain for each delivery month, their net positions, the aggregate of 

 their " long " and the aggregate of their " short " open accounts mak- 

 ing up such net positions, their receipts and deliveries of grain on 

 future contracts, and the net positions of open accounts on their 

 books for customers, amounting, in practice, in the case of wheat at 

 Chicago, to 500,000 bushels or more, and varving :i mounts for other 

 kinds of grain and the different marl^ets. These figures are subject 



