504 AGRICULTURAL APPROPRIATION BILL, 1924. 



I 



operation of which was virtually susponded before its effective date. 

 In May, 1921, the Supreme Court held that that act. which was passed 

 under the taxing powers of Congress, was unconstitutional as to its 

 regulatory provisions, leaving in effect the tax on puts and calls and 

 leaving in effect the section authorizing the .Secretary of Agriculture 

 to carry on investigational work, without power, however, to compel 

 members of exchanges to disclose their books or to make reports. 

 Immediately after that a new bill was introduced in Congress under 

 the interstate commerce power, based upon the theory that those 

 transactions on the Chicago and other boards of trade are so closely 

 inteilockcd with interstate commerce that they are inseparable from 

 it ill effect and that anything whicli operates adversely upon the 

 price on a futures exchange — and by "adverse" I do not mean 

 necessarily downward, but either downward or upward, contrary to 

 tlie normal operations of the law of supply and demand — would 

 necessarily operate adversely upon the cash grain business of the 

 country. Upon that theory the bill was reintroduced and was passed 

 the bill containing,' as to its substantial provisions, virtually a 

 repetition of the provisions in the act that was declared to be 

 unconstitutional. 



Mr. Anderson. Did the second act repeal the taxing provision 

 of the first' act ? 



Mr. Morrill. No, sir. 



Mr. Anderson. That is still in force ? 



Mr. Morrill. Yes, sir. That section of the first act was not ^ 



affected by the decision of the Supreme Court. That has been 

 virtually self-operating, because the exchanges have stopped that 

 practice so far as we know. If they are doing anything of that 

 kind now, it is under cover. 1 



Mr. Anderson. I judge they have, because they are making such 

 an awful holler about it. 



§ 



CONSTITUTIONALITY OP NEW LAW BEFORE COURTS. 



Mr. Morrill. By reason of the similarit}^ of the provisions of the 

 two laws, outside of the legal question, the same exchanges are sub- 

 ject to the new law that were subject to the old one. There are 11 of 

 them — 2 at Chicago, and 1 each at Milwaukee, Duluth, Minne- 

 apolis, Kansas City, St. Louis, Toledo, Baltimore, Los Angeles, and 

 San Francisco. Not all of them deal in all kinds of grain, and some 

 are more limited than others. The Chicago, Milwaukee, Duluth, 

 Minneapolis, Kansas City, and St. Louis exchanges brought suits 

 to test the constitutionalit}' of the new law, but all of them have 

 been suspended in the lower courts now, remaining in their original 

 status as a temporary stay against the Government, except the 

 Chicago suit, where, when the question of granting a temporary 

 restraining onh^r came up before the district court a few weeks ago, 

 the court on its own motion (Usmissed tlu' bill of complaint of the 

 Chicago Board of Tijuk', dcnicil the injunction, and granted au 

 appeal to the Supreme Court of the United States, and on Monday 

 of tiiis week a motion was presented to the Supremo Court to advance 

 the lieaiing of that case. Tlie Govenunent, oi couise, is very anxious 

 to C()()])erate in getting it (h'cided ])r()nipt y. The other cases will 

 await the disposition of the Chicago Board of Trade case. 



