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AN INTENSIVE and costly pub- 

 licity campaign will shortly 

 be launched by leading grain 

 interests connected with the Chicago 

 Board of Trade against the enact- 

 ment of the Commodity Exchange Bill 

 in the next session of Congress, ac- 

 cording to press reports. 



One of the chief provisions of the 

 Exchange Bill is that grain cooper- 

 atives be allowed full privileges on 

 the grain exchanges while exchange 

 officials are appealing decisions of 

 the Grain Futures Administration to 

 the federal courts. V- J ^V'^v^ K 



Many Illinois grain producers will 

 recall that the Chicago Board of 

 Trade suspended the Updike Grain 

 Company, owned by the Farmers Na- 

 tional Grain Corporation, from both 

 the Board and the Clearing Corpora- 

 tion on charges which it never was 

 able to prove. Farmers National 

 then made a second application for 

 membership direct in the Clearing 

 Corporation, and when this was de- 

 nied, petitioned the Grain Futures 

 Administration to suspend the Board 

 of Trade as a contract market for 

 violation of the Grain Futures Act. 



A Little History r ^ 



^ The Federal Commission issued an 

 order for such suspension for a period 

 of 60 days from which the Board of 

 Trade appealed to the United States 

 Circuit Court of Appeals. ^ ..: 



Not until October 31, 1933, did the 

 court return a decision on that ap- 

 peal. It sustained the grain co-op- 

 erative in every major contention 

 with respect to its eligibility to full 

 trading privileges on the Chicago 

 Board of Trade and in the Clearing 

 Corporation, but remanded the case 

 back to the Commission for a de- 

 termination whether grain handled by 

 the co-operative for the Grain Stabili- 

 zation Corporation, a government in- 

 strumentality, should be classed as 

 member or non-member grain under 

 co-operative statutes. Hearing on 

 this matter has been set for next 

 October 3. 



Sought Full Protection 



In January of this year Farmers 

 National again applied for member- 

 ship in the Clearing Corporation, and 

 although this time the application 

 was granted, it was realized that with 

 the issue still awaiting definite settle- 

 ment, the security of the grain co- 

 operatives in their trading rights was 

 far from being assured. 



Farmers National and its affiliates, 

 therefore, sought full protection 

 through the Code for Grain Ex- 

 changes. This move having been sue-* 

 cessfully opposed by the grain ex- 

 changes, on the ground that such 

 matters were legislative in character, 

 the co-operatives and general farm 

 organizations, aided by the officials of 

 the U. S. Department of Agriculture, 

 the Grain Futures Administration and 

 others, sought from the Seventy-third 

 Congress amendments to the Grain 

 Futures Act definitely establishing 

 the rights of farmer co-operatives on 

 commodity exchanges. This legisla- 

 tion, known as H. R. 8829, passed the 

 House, was favorably reported by the 

 Senate Committee on Agriculture, but 

 did not come to a vote in the Senate 

 because of the rush of business as 

 the hour of adjournment approached. 



Recent newspaper clippings clearly 

 show the justification, if any was 

 needed, for certain statements made 

 by proponents of H. R. 8829 at hear- 

 ings on the legislation, held in Wash- 

 ington last April. vV;' . :: 



Wendell Berge, a special assistant 

 to the Attorney-General, clearly fore- 

 saw what might happen in the event 

 the legislation failed. "It is quite 

 possible for a Board of Trade," he 

 said, "under the cumbersome pro- 

 cedure now existing, effectually to de^ 

 feat the purpose of Section 5e (of the 

 Grain Futures Act, establishing the 

 rights of co-operatives on Exchanges) 

 by successively raising new charges 

 of unlawful conduct against a co-op- 

 erative association, thereby keeping 

 such association out indefinitely while 

 the respective charges are successful- 

 ly litigated" (by the co-operative). 



Huflf Forecasts 



During the course of these hear- 

 ings. President C. E. Huff of the 

 Farmers National sent a telegram to 

 Chairman Jones, of the House Com- 

 mittee, in which, among other things, 

 he said: 



"I invite your attention and that of 

 the Committee to the extreme im- 

 portance to grain producers and their 

 co-operatives of enacting these 

 amendatory proposals into law at this 

 session of Congress. For example, 

 charges of violation of certain rules 

 of the Chicago Board of Trade have 

 been filed against Farmers National 

 Grain Corporation regarding our op- 

 erations in Iowa. For months past, 

 hearings, conferences, and reports 

 have continued and we have been un- 



able either to bring the matter 

 promptly to issue or to have the ■ 

 charges dismissed. It may not be - 

 true that action on these charges 

 awaits the adjournment of Congress 

 in the hope that the protective pro- 

 posals now before your Committee 

 will fail of enactment. If, however, 

 these proposals should not be enacted / 

 into law, and if, following adjourn- 

 ment, these or other charges of the ; . 

 Chicago Board of Trade should be ; 

 brought to a decision unfavorable to 

 Farmers National, it would again 

 probably take us two years to vindi- 

 cate our position in the courts and to r 

 re-establish market privileges wrong- 

 fully denied us. Meantime, nearly 

 300,000 organized growers wowld suf- 

 fer very substantial loss for lack of < 

 protection proposed in amendments 

 now before you. 



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Eloquent Reminders 7 



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''Recent newspaper clippings are 

 eloquent reminders of these state- 

 ments before the House Committee," 

 Mr. Huff said in a recent letter to G. 

 C. Johnstone, president of Illinois 

 Grain Corp. "With members of the 

 Congress hardly back in their own dis- 

 tricts, the Chicago Board of Trade filed 

 new charges against the national co- 

 operative, with hearing set for July 

 24, H. R. 8829 having failed of pas- 

 sage. At the same time the Chicago 

 Board of Trade announces a plan to 

 begin at once a campaign to prevent 

 future enactment of the Comm®dity 

 Exchange Bill. Extensive newspaper 

 " and other advertising is to be used, -^ 

 the associations of private traders and 

 brokers, and, as well, the railroads 

 and millers, are to be swung into line, 

 if possible, to help raise the hundreds 

 of thousands of dollars that will be ; ; 

 necessary to finance such a campaign. 



"Farmers co-operatives have no 

 such funds to spend for such propa- ,; 

 ganda; but the intent and purpose of 

 this grain trade campaign must be 

 made clear to every grain farmer and 

 to the membership of every farmer 

 organization. The intent and pur- 

 pose is to defeat the development of 

 farmer marketing, to shut co-opera- 

 tives off the commodity exchanges 

 and to subject them to every possible 

 disadvantage in the marketing of 

 their commodities through their own 

 facilities. 



— "It is to be hoped that every per- 

 son interested in the welfare of agri- 

 culture will recognize the imperative 

 necessity that the legislation em- 

 bodied in H. R. 8829 be enacted at 

 the next session of the Congress." 



As we go to press, word comes that the 

 hearing set for July 24 has been postponed for 

 90 days. Perhaps a recent private conference . 

 between AAA and srrain trade officials had 

 something to do with it. — Editor. 



AUGUST, 1934 



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