The Grain Futures Act of 1922 and the Dominance of the CBOT

Saleuddin, Rasheed

doi:10.1007/978-3-319-93184-5_3

Rasheed Saleuddin⁶

Part of the book series: Palgrave Studies in the History of Finance ((PSHF))

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Abstract

Congress passed the Grain Futures Act in 1922 soon after the Crisis of 1921, when wheat prices fell more than half. Contrary to the accepted view that the regulation was a failed attempt to control the markets, the legislation was almost fully ‘captured’ by the Chicago Board of Trade (CBOT). The Chicago futures markets benefited substantially from the legislation, gaining legitimacy in the Courts and in Congress, while cementing a protected monopoly that would not be broken until late in the twentieth century. On the other hand, the US government gained the right to obtain hitherto unavailable information about the markets, publish such data and perform in-depth analysis for use by the regulators, Congress and the futures market participants, themselves.

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Notes

1.
John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656; John V. Rainbolt, “Regulating the Grain Gambler and His Successors,” Hofstra Law Review 6 (1977): 1–27; Jerry W. Markham, The History of Commodity Futures Trading and Its Regulation (Westport, CT: Praeger, 1987).
2.
Jake Keaveny, “In Defense of Market Self-Regulation: An Analysis of the History of Futures Regulation and the Trend Toward Demutualization,” Brooklyn Law Review 70 (2004): 1419–1452. See also William G. Ferris, The Grain Traders (East Lansing: Michigan State University Press, 1988); and John Rainbolt as quoted in John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982), p. 636.
3.
Robert E. Gallman, “Commentary,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Tanja H. Peterson (Washington, DC: Howard University Press, 1980), p. 274.
4.
US Congress, Senate, Cong. Rec. Remarks of Senator Tom Connally, 75th Cong. 3rd Sess., 8 April 1938, p. 5036.
5.
Quote from Northwestern Miller, 17 May 1922 in Wayne Broehl, Cargill, Trading the World’s Grain (Hanover, NH: University Press of New England, 1992), p. 274. See Chapter One for a detailed description of this literature.
6.
Ibid.
7.
James Olson and Abraham Mendoza, American Economic History: A Dictionary and Chronology (Greenwood: ABC-CLIO, 2015), p. 92.
8.
William Falloon and Patrick Arbor, Market Maker: A Sesquicentennial Look at the Chicago Board of Trade (Chicago: Chicago Board of Trade, 1998), p. 127.
9.
Wayne D. Rasmussen, “The People’s Department: Myth or Reality,” Agricultural History 64 (1990): 291–299.
10.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), pp. 88–92.
11.
Alfred Marshall, Industry and Trade: A Study of Industrial Technique and Business Organization and of Their Influences on the Conditions of Various Classes and Nations (London: Macmillan, 1920). See also Henry Crosby Emery, “Legislation Against Futures,” Political Science Quarterly 10 (1895); James E. Boyle, Speculation and the Chicago Board of Trade (New York: Macmillan, 1920).
12.
James Grant, The Forgotten Depression: 1921: The Crash That Cured Itself (New York: Simon & Schuster, 2014).
13.
Jeremy Atack and Peter Passell, A New Economic View of American History: From Colonial Times to 1940 (New York: W. W. Norton, 1994), p. 565.
14.
US Department of Agriculture, Annual Report of the Secretary of Agriculture 1922–1923 (Washington, DC: Government Printing Office, 1923), p. 9.
15.
Ibid.
16.
Copy of speech, Arthur Capper, National Wheat Conference Program, 19–20 June 1923. CME III.657.1.
17.
Memo, Griffin to the Finance Committee, 6 February 1922. CME III.2.640.5
18.
Letter, J. Mauff to H. Robbins, 15 March 1922. CME III.2.641.1.
19.
Letter, H. Robbins to J. Mauff, 28 January 1922. CME III.2.641.2.
20.
Letter, J. Mauff to H. Robbins, 30 December 1921. CME III.2.642.3.
21.
Ibid.
22.
US Congress, 67th Congress, 2nd Sess., House of Representatives, Report No. 1095, 13 June 1922. CME III.ss2.663.3.
23.
US Federal Trade Commission, Report of the Federal Trade Commission on the Grain Trade, 7 vols. (Washington, DC: U.S. Government Printing Office, 1920–1926).
24.
Edward L. Schapsmeier and Frederick H. Schapsmeier, Henry A. Wallace of Iowa: The Agrarian Years, 1910–1940 (Ames: Iowa State University Press, 1968), p. 57; Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), p. 64.
25.
Edward L. Schapsmeier and Frederick H. Schapsmeier, Henry A. Wallace of Iowa: The Agrarian Years, 1910–1940 (Ames: Iowa State University Press, 1968), p. 54.
26.
Logrolling is the advance agreement of legislators to vote on each other’s initiatives. For example, see Douglas A. Irwin and Randall S. Kroszner, “Log-Rolling and Economic Interests in the Passage of the Smoot-Hawley Tariff,” Carnegie-Rochester Conference Series on Public Policy 45 (1996); Christian Joerges, Bo Stråth, and Peter Wagner, The Economy as a Polity: The Political Constitution of Contemporary Capitalism (Hove: Psychology Press, 2005), p. 117.
27.
For examples of such exaggeration, see Roberta Romano, “The Political Dynamics of Derivative Securities Regulation,” Yale Journal on Regulation 14 (1997): 279–406, p. 286; William G. Ferris, The Grain Traders (East Lansing: Michigan State University Press, 1988), p. x.
28.
For an example of the former, see Letter, Mauff to Patten, 12 July 1921. CME III.2.640.1 For an example of the latter, see Letter, CBOT President to Senator Sherman, 29 June 1921. CME III.2.641.7.
29.
Letter from F.C. Stevens to L.F. Gates, 7 February 1920. CME III.ss.1.6.
30.
Letter from F.C. Stevens to L.F. Gates, 7 February 1920. CME III.ss.1.6.
31.
Telegram, Representative Rainey to Griffin, 3 June 1921. CME III.2.640.4.
32.
Kansas Historical Society, Biography of Arthur Capper. Available at http://www.kshs.org/kansapedia/arthur-capper/12001. Accessed 1 March 2017.
33.
Letter, L.C. Stevens to L.F. Gates, 7 October 1920. CME III.ss1.6.
34.
Archive Clipping, Washington Star, 5 April 1923. CME III.2.650.4.
35.
House Calendar No. 205, 66th Congress, 2nd Sess., HR 13931. ‘A BILL: To authorise association of producers of agricultural products.’ For an excellent history of the Capper-Volstead Act and the justification in it being the famers’ Magna Carta, see James L. Guth, “Farmer Monopolies, Cooperatives , and the Intent of Congress: Origins of the Capper-Volstead Act,” Agricultural History 56 (1982).
36.
CME III.ss1.6, letter from L.C. Stevens to Gates, 7 October 1920.
37.
Arthur Capper, “Option Trading Must Be Eliminated,” Mississippi Valley Magazine (September 1920).
38.
Letter, Mauff to MacMillan from Mauff, undated but likely September or October 1922. CME III.652.5.
39.
CME III.657.1, Capper’s Speech, National Wheat Conference Program, 19–20 June 1923.
40.
Open letter to CBOT members, J.F. Lamy, chairman, public relations committee, quoting Capper from his Capper’s Weekly, 26 July 1923. NARA/KC, 101-1.
41.
John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656, p. 647.
42.
‘A BILL Taxing contracts for the sale of grain for future delivery , and options for such contracts, and providing for the regulation of Boards of Trade, and for other purpose.’
43.
Memo, Executives of the Grain Exchange National Committee to the Boards of each of the exchanges, undated, 1921. CME III.2.650.5.
44.
A private wire is a branch office of a broker where futures business could be transacted. Internal memorandum re: Future Trading Legislation, no date. NARA/KC, Box 37; 35-9.
45.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), p. 66.
46.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), p. 71.
47.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), p. 84. In one case, Morrill attended eighteen hearings in nineteen days.
48.
Letter, J. Griffin to L.F. Gates c/o Battle Greek Sanitarium, 17 April 1921. CME III.ss1.7.
49.
Ibid.
50.
Letter, J. Griffin to G.F. Ewe, The Van Dusen Harrington Co., Minneapolis, MN, 4 June 1921. CME III.ss1.7.
51.
Letter, J. Griffin to L.F. Gates, 17 April 1921. CME III.ss1.7.
52.
US Congress, Senate, Futures Trading: Hearings of the Senate Committee on Agriculture and Forestry, 67th Cong. 1st Sess., p. 90.
53.
New York Times, 19 August 1921.
54.
Telegram, Gates to Griffin, 6 July 1921. CME III.ss1.7; Letter, Committee of Hoyt et al. to Honourable Geo W. Norris, chairman, Senate Committee on Agriculture, 8 June 1921.
55.
Ibid.
56.
Ibid.
57.
Handwritten letter, J.J. Guild & Son, Illinois, to the CBOT President, 15 April 1921. CME III.ss1.7.
58.
Letter, Griffin to Gates, Hotel Washington, 1 July 1921. CME III.ss1.7.
59.
Letter, Gates to Senate Committee on Agriculture and Forestry, United States Senate, 6 July 1921. CME III.ss1.7.
60.
Ibid.
61.
Ibid.
62.
Telegram, Gates to Griffin, 7 July 1921. CME III.ss1.7. Details in Letter, Gates, 1020 Munsey Building, Washington, DC, to Griffin, 7 July 1921. CME III.ss1.7.
63.
Newspaper clipping, Associated Press, “O.K. Given to ‘Futures’ Bill,” CME III ss1.7.
64.
Letter, L.F. Gates to J. Griffin, 7 July 1921. CME III.ss1.7.
65.
Letter, F.B. Wells, Chamber of Commerce , Minneapolis, MN, to Gates, 1020 Munsey Building, Washington, DC, 8 July 1921. CME III.ss.1.8.
66.
Letter, Gates to F.B. Wells, copies to J. Griffin, and preceded by similar telegram to Griffin, 8 July 1921. CME III.ss1.7.
67.
Letter, Mauff to Patten, 12 July 1921. CME III.2.640.1.
68.
Ibid.
69.
Letter, Gates to F.B. Wells, copies to J. Griffin, and preceded by similar telegram to Griffin, 8 July 1921. CME III.ss1.7. Letter, Gates to Griffin, 12 July 1921. CME III.ss1.7.
70.
Letter, certain members of the Toledo Produce Exchange to Board of Directors, CBOT, 2 December 1921. CME III.ss1.8.
71.
Ibid.
72.
Roberta Romano, “The Political Dynamics of Derivative Securities Regulation,” Yale Journal on Regulation 14 (1997): 279–406, p. 293.
73.
Supporters included John Rainey of Illinois, though Marvin Jones from Texas was later an adversary.
74.
Internal Memorandum re: Future Trading Legislation, undated. NARA/KC, Box 37; 35-9. Later Caraway turned anti-futures.
75.
Letter, Mauff to MacMillan, 26 November 1922. CME III.652.5.
76.
Letter, C.B. Miller to Griffin, 25 June 1921. CME III.ss1.7.
77.
Ibid.
78.
Ibid.
79.
Letter, Griffin to Gates, response to 7 July 1921 letter, 9 July 1921. CME III.ss1.7.
80.
Ibid.
81.
Letter, Gates to Griffin, 12 July 1921. CME III.ss1.7; Letter, Griffin to Gates, response to 7 July 1921 letter, 9 July 1921. CME III.ss1.7.
82.
Letter, Gates to Griffin, 12 July 1921. CME III.ss1.7.
83.
CME III.ss1.7; Letter, Griffin to Gates, response to 7 July 1921 letter, 9 July 1921. CME III.ss1.7.
84.
Letter, John Fennelly, KBOT, to Mr. Manefield, chairman, Legislative Committee, 30 June 1921. CME III.ss1.7.
85.
Ibid.
86.
Ibid.
87.
Ibid.
88.
Handwritten highly confidential letter, L.F. Gates, Washington Hotel, to Griffin, 7 July 1921. CME III.ss1.7.
89.
Letter, F.B. Wells, Minneapolis Chamber of Commerce , to Gates, Washington, DC, 8 July 1921. CME III.ss.1.8.
90.
Letter to M.R. Myers, manager, American Cooperative Publishing Co., from Griffin, 19 July 1921. CME III.ss.1.7.
91.
Letter to M.R. Myers, manager, American Cooperative Publishing Co., from Griffin, 19 July 1921. CME III.ss.1.7.
92.
Letter, Hargis to Griffin, 13 July 1921. CME III.ss1.7.
93.
Ibid.
94.
Telegram, C.B. Miller to Griffin, 12 July 1921. CME III.ss1.7.
95.
Letter Gates to F.B. Wells, copies to Griffin and preceded by similar telegram to Griffin, 8 July 1921. CME III.ss1.7.
96.
Letter, Wells to Gates, Washington, DC, 9 July 1921. CME III.ss1.8.
97.
Letter, Gates to Griffin, 12 July 1921. CME III.ss1.7.
98.
Ibid.
99.
Ibid.
100.
See, for example, Hill v. Wallace, 259 US 44.
101.
“Chicago Board of Trade Gets Friendly,” American Cooperative Journal (March 1923).
102.
HR 5676, Calendar No 224; Telegram, Griffin to L.F. Gates, Washington Hotel, 15 July 1921. CME III.ss1.7.
103.
Letter, Gates to J. Griffin, 13 July 1921. CME III.ss1.8.
104.
Telegram, Griffin to B.L. Hargis, KBOT, 15 July 1921. CME III.ss1.8.
105.
Letter, Hargis to Senator James A. Reed, 15 July, 1921. CME III.ss1.7.
106.
Ibid.
107.
Telegram, Griffin to Gates, Washington Hotel, 15 July 1921. CME III.ss1.7.
108.
Telegram, Griffin to Hargis, 1 August 1921. CME III.ss1.7.
109.
The agreement that the Bill was fine other than ‘minor changes [in] Section E, Paragraph 5 [the cooperative clause] which [we] hope to adjust in conference’ is documented in a note, Griffin to Mauff, 9 August 1921. CME III.ss2.653.3.
110.
Ibid.
111.
Future Trading Act. 67th Cong. 1st Sess., chs. 85, 86, Stat. 187.
112.
Grain Futures Act 68th Cong. 2nd Sess., ch. 369.
113.
Roberta Romano, “The Political Dynamics of Derivative Securities Regulation,” Yale Journal on Regulation 14 (1997): 279–406, p. 327.
114.
Leon Kendall, “The Chicago Board of Trade and the Federal Government” (PhD diss., Indiana University, 1956), p. 259.
115.
Letter, R. Magill to Mauff, 19 March 1923. CME III.2.650.4.
116.
Ibid.
117.
On 24 August 1921, HR 14657 was passed as the Future Trading Act (Capper-Tincher Act) . 67th Cong. 1st Sess., chs. 86, 42, Stat. 187.
118.
John H. Stassen, “The Commodity Exchange Act in Perspective—A Short and Not-So-Reverent History of Futures Trading Legislation in the United States,” Washington & Lee Law Review 39 (1982): 825–844, p. 829.
119.
US Congress, Remarks of Senator Capper, Cong. Rec., 67th Cong. 1st Sess., 9 August 1921, p. 4761.
120.
John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656, pp. 635, 641.
121.
Letter, H.S. Robbins, counsel of the CBOT, to Mauff, 22 June 1923. CME III.659.1.
122.
Letter, MacMillan to Mauff, 22 November 1922. CME III.652.5.
123.
Ibid.
124.
See, for example, letter, Mauff to editor, The Chicago Daily News, 23 February 1923. CME III ss2.645.7; Letter, Mauff to Mr. Charles Dennis, Managing Editor, Chicago Daily News, 24 April 1923. CME III ss2.645.7.
125.
Ibid. Many letters between press representatives and the CBOT executive in CME III ss2.645.7.
126.
Chicago Tribune , “Board of Trade Raises Fund to Educate the Public,” 10 June 1922.
127.
James C. Murray, Politics and the Grain Trade, Address of the President, Board of Trade at Chicago (1931). CME III.23.1.
128.
G.O. Virtue, “Legislation for the Farmers : Packers and Grain Exchanges,” The Quarterly Journal of Economics 37 (1923), p. 703.
129.
William G. Ferris, The Grain Traders (East Lansing: Michigan State University Press, 1988), p. x.
130.
Ibid.
131.
Leon Kendall, “The Chicago Board of Trade and the Federal Government” (PhD diss., Indiana University, 1956), p. 4.
132.
Letter, Griffin to Gates, Washington, DC, 4 June 1921. CME III.ss1.7.
133.
Ibid.
134.
Telegram, Griffin to Gates, 11 July 1921. CME III.ss1.7.
135.
Letter, CBOT President to J. Mauff, 16 August 1921. CME.III.ss2.658.2.
136.
See, for example, letter, Carey to Gates, 7 May 1924. CME III.11.9.
137.
Letter, F.L. Carey to L.J. Keating, Graceville, Minnesota, 4 February 1924. CME III.ss1.9.
138.
Chicago Tribune , “World’s Grain Market News,” 25 March 1921.
139.
Letter, H.S. Robbins, counsel of the CBOT, to Mauff, 22 June 1923. CME III.659.1.
140.
Letter, Fones to Mr. C. Vincent, President, Vincent Grain Company, Omaha, Nebraska, 23 July 1923. CME III.ss2.664.6.
141.
Letter, Capper to Mehl, 28 July 1931. NARA/KC, Box 12, 14-6.
142.
US Congress, Senate Committee on Agriculture, Hearings on Future Trading, 67th Cong. 1st Sess., 1921, pp. 98–99.
143.
US Congress, Senate Committee on Agriculture Hearings on Future Trading, 67th Cong. 1st Sess., 1921, p. 149.
144.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), pp. 243–244.
145.
Hill v. Wallace (1922), 259 US 44, 45.
146.
John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656, p. 642.
147.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), pp. 252–253.
148.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), p. 254.
149.
Letter, Gates to Carey, 23 February 1924. CME III.11.9.
150.
Ibid.
151.
Chicago Tribune , “One More Such Victory and We Are Lost,” 20 May 1922.
152.
Letter, Chester Morrill, Assistant to the Secretary, USDA, to Griffin, 17 October 1921. CME III.ss1.8.
153.
Letter, Griffin to Morrill, response to letter of the 17th, 20 October 1921. CME III.ss1.8.
154.
Letter, Griffin to Hargis, 19 October 1921. CME III.ss1.8.
155.
Letter, Griffin to F.C. Van Dusen, Minneapolis, 19 October 1921. CME III.ss1.8.
156.
Amendments for a ballot vote, record: CBOT, undated—Sections 1 and 2 of Rule XXIII-A. CME III.2.655.1; Telegram, Griffin to Morrill, 19 December 1921. CME III.ss1.8; Telegram, Morrill to Griffin, 12 December 1921. CME III.ss1.8; Telegram, Morrill to Griffin, December 1921. CME III.ss1.8.
157.
US Congress, Congr. Rec., Grain Futures Act , 67th Cong. 2nd Sess., ch. 369, 42 Stat. 858.
158.
Telegram, Congressman L.E. Wheeler, 6 June 1922. CME III.ss2.654.
159.
Letter, MacMillan to Mauff, 15 September 1922. CME III.652.5; Letter, MacMillan to Robert McDougal, 21 September 1922. CME III.652.5.
160.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), p. 71.
161.
Article I, Section 8, Clause 1 of the US Constitution. See Board of Trade of the City of Chicago v. Olsen, 262 U.S. 1 (1923), p. 1.
162.
Letter, Mauff to Robbins, regarding FTC hearings, 22 April 1919. CME III.2.641.3.
163.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), p. 77.
164.
Letter, MacMillan to Wells, copy to all exchanges, 24 June 1922. CME III.655.5.
165.
Letter, Duvel to Morrill, 15 September 1922. NARA/KC, 101-1-1.
166.
Attempt to purchase most of the underlying supply of a commodity in order to force the price up at delivery time. See Chapter 1.
167.
Memorandum, May Wheat on the Chicago Board of Trade in 1922, 28 June 1922. NARA/KC, 101-1-1.
168.
Ibid.
169.
Ibid.
170.
Attachment to Memorandum: US Congress, House, Report No. 1095—Views of the Minority, 67th Cong. 2nd Sess., 13 June 1922. CME III.ss2.663.3.
171.
Letter, Washington counsel to Mauff, 8 April 1922. CME III.655.2.
172.
Letter, Robbins to Robert McDougal, 25 September 1922. CME III.659.4.
173.
Ibid.
174.
Letter, McDougal to Henry C. Wallace, 10 October 1922. CME III.s22.663.7.
175.
John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656, pp. 642, 650; See Hill v. Wallace, 259 US 44 (1922), pp. 61, 74.
176.
Roberta Romano, “The Political Dynamics of Derivative Securities Regulation,” Yale Journal on Regulation 14 (1997), p. 296.
177.
Letter, Mauff to Plumb, secretary of Milwaukee Chamber of Commerce . CME III.2.650.5.
178.
Letter, Mauff to Gates, 13 July 1923. CME III.2.650.5.
179.
Press release, CBOT, 10 October 1921. CME III.650.5.
180.
Excerpt of speech, J. Stream, 1923. CME III.660.8.
181.
262 U.S. 1 (1923).
182.
Telegram, J.J. Fones to H.J. Smith, president KBOT and others, 20 April 1923. CME III.2.650.5.
183.
Copy of US Department of Agriculture Press Release, “Grain Futures Trading to Continue,” 20 April 1923. CME III.667.6.
184.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952), p. 73.
185.
Copy of speech, Arthur Capper, National Wheat Conference Program, 19–20 June 1923. CME III.657.1.
186.
Wayne Broehl, Cargill, Trading the World’s Grain (Hanover, NH: University Press of New England, 1992), p. 270. Broehl cites the Northwestern Miller, 13 April 1923.
187.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), p. 252.
188.
Roberta Romano, “The Political Dynamics of Derivative Securities Regulation,” Yale Journal on Regulation 14 (1997): 279–406, p. 297.
189.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), pp. 254–255.
190.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), pp. 240–241.
191.
For an excellent summary of the amendment, see Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), pp. 249–251.
192.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), pp. 243–244. Yet Tincher, himself, according to Lurie (p. 237), ‘admitted the [original tougher] bill fell far short of [that] called for by more militant agrarian spokesmen’.
193.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), p. 244 citing a Wallace letter to Tincher 24 May 1921.
194.
Robert E. Gallman, “Commentary,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Tanja H. Peterson (Washington, DC: Howard University Press, 1980), p. 274.
195.
See, for example, Letter, Barnes to Carey, 2 January 1930. CME III.14.13.
196.
Robert Baldwin, “Why Rules Don’t Work,” The Modern Law Review 53 (1990): 321–337; Jerry W. Markham, Law Enforcement and the History of Financial Market Manipulation (London: Routledge, 2014).
197.
Chester Morrill with Dean Albertson, Oral History (New York: Transcript from Columbia University, 1952); Letter, J. Mauff to Robbins, 22 April 1919. CME III.2.641.3.
198.
Letter, Robbins to W.S. Blowney, CBOT assistant secretary, 29 April 1920. CME II.91.2.
199.
Letter, Morris Townley to James K. Riordon, acting chairman, Legal Advice Committee, CBOT, 29 April 1925. CME III 16.7; Letter, Robbins to Mauff, 17 June 1920. CME II.91.2.
200.
Telford Taylor, “Trading in Commodity Futures: A New Standard of Legality?” The Yale Law Journal 43 (1933): 63–106.
201.
Letter from Mauff to Robbins, 28 April 1923. CME III.659.2.
202.
Letter, Mauff to Duvel, 13 June 1923, CME III.667.4.
203.
Chicago Evening Post, “Decision Clears Grain Trade Sky,” 17 April 1923.
204.
Clipping, Rudolf A. Clemen, Economist, Illinois Merchants Trust Company, “Is the Grain Trade Changing?” (November 1924). CME VII.ss2.57.34.
205.
US Congress, Senate, Futures Trading: Hearings of the Senate Committee on Agriculture and Forestry, 67th Cong. 1st Sess., 1921, p. 397. F.B. Wells and Julius Barnes made similar statements in these hearings.
206.
Telford Taylor, “Trading in Commodity Futures: A New Standard of Legality?” The Yale Law Journal 43 (1933). See also US Department of Agriculture, Annual Report of the Secretary of Agriculture for the Year Ended June 20, 1924 (Washington, DC: Government Printing Office, 1924).
207.
Letter, Mauff to counsel Townley, 6 July 1923. CME III.659.1.
208.
Letter, Townley to James K. Riordon, acting chairman, Legal Advice Committee, CBOT, 29 April 1925. CME III.16.17.
209.
Ibid.
210.
Ibid.
211.
Attachment to memorandum: US Congress, House, Report No. 1095—Views of the Minority, 67th Cong. 2nd Sess., 13 June 1922. CME III.ss2.663.3.
212.
Gary Gerstle, Liberty and Coercion: The Paradox of American Government from the Founding to the Present (Princeton: Princeton University Press, 2015). For contemporary examples of the transfer of powers from the State to the federal level, see Thomas McCraw, Prophets of Regulation (Cambridge: Harvard University Press, 2009).
213.
John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 636–656, p. 655.
214.
J.A. Pattern and Boyden Sparkes, “In the Wheat Pit,” Saturday Evening Post. Reprint Curtis Publishing Company, 1927.
215.
Hill v. Wallace, 259 US 44, 1922.
216.
John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656, pp. 645–647, though Stassen’s reading of the Act and its effects is not supported by his own footnotes.
217.
Chicago Mercantile Exch. v. Tieken, 177 F. Supp. 660, 666.
218.
American Elevator and Grain Trade (15 October 1921), p. 293. Available at https://archive.org/details/usda-americanelevatorandgraintrade. Accessed 1 March 2017.
219.
US Congress, House Committee on Agriculture, Hearings on Future Trading, 67th Cong. 1st Sess., 1921, 11 May 1921.
220.
Letter, Robbins to Mauff, 2 March 1923. CME III.659.2.
221.
Statement of L.F. Gates, House Committee on Agriculture, 13 January 1921. CME VII.ss3.65.2.
222.
Ibid.
223.
Letter, B.L. Hargis, KBOT president, to Griffin, 5 September 1921. CME III.ss1.7.
224.
Letter, Hargis to T.E. Cunningham, c/o Harris, Winthrop & Co, 1 October 1921. CME III.ss1.8.
225.
Ibid.
226.
Ibid.
227.
Ibid.
228.
US Congress, House Committee on Agriculture, Hearings on Future Trading, 67th Cong. 1st Sess., 1921, p. 332.
229.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), p. 237; Copy of US Department Agriculture Press Release, “Bills: HR 11843,” 21 September 1922. CME III.667.6.
230.
Copy of US Department Agriculture Press Release, “Grain Futures Trading to Continue,” 20 April 1923. CME III.667.6.
231.
Letter, Mauff to Robbins, 11 January 1922. CME III.2.641.3.
232.
Letter, Market Report Committee, CBOT, to S.C. Christopher & Co, 18 May 1923. CME III.666.9; Letter, J. Mauff to R.W. McKinnon, 4 January 1923. CME III.662.4; Letter, Mauff to H.S. Robbins, 13 April 1922. CME III.2.541.1.
233.
Philip K. Howard, “The Crippling Hold of Old Law,” Wall Street Journal, 2 April 2016. Available at https://www.wsj.com/articles/the-crippling-hold-of-old-law-1459536718. Accessed 1 March 2017.
234.
Frank Norris, The Pit (New York: Penguin, 1994 [1903]).
235.
Jonathan Lurie, The Chicago Board of Trade, 1859–1905: The Dynamics of Self-Regulation (Urbana: University of Illinois Press, 1979).
236.
Jerry W. Markham, The History of Commodity Futures Trading and Its Regulation (Westport, CT: Praeger, 1987), pp. 10–11.
237.
US Congress, House, Hearings Before the Committee on Rules: HR 424, 63rd Cong. 2nd Sess., 5–7 March 1914, p. 3.
238.
Georde Hall Miller, Railroads and the Granger Laws (Madison, WI: University of Wisconsin Press, 1971).
239.
Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities, 1877–1920 (Cambridge: Cambridge University Press, 1982), p. 126.
240.
John Mark Hansen, Gaining Access: Congress and the Farm Lobby 1919–1981 (Chicago: University of Chicago Press, 1991), p. 20.
241.
Representative Ellis in 62 Cong. Rec. 9420 (1922) as quoted in John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656, p. 647.
242.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), p. 237.
243.
Capper’s Speech, National Wheat Conference Program, 19–20 June 1923. CME III.657.1.
244.
Robert E. Gallman, “Commentary,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), p. 274.
245.
B. Peter Pashigian, “The Political Economy of Futures Market Regulation,” The Journal of Business 59 (1986): S55–S84, p. 556.
246.
Donald L. Winters, “The Persistence of Progressivism: Henry Cantwell Wallace and the Movement for Agricultural Economics,” Agricultural History 41 (1967): 109–120.
247.
For example, see Charles R. Geisst, Wheels of Fortune: The History of Speculation from Scandal to Respectability (Hoboken: Wiley, 2002), p. 39.
248.
For example, see John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 635–656, p. 652; Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980).
249.
Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980), pp. 237, 256.
250.
William E. Akin, Technocracy and the American Dream: The Technocrat Movement, 1900–1941 (Berkeley: University of California Press, 1977).
251.
B. Peter Pashigian, “The Political Economy of Futures Market Regulation,” The Journal of Business 59 (1986): S55–S84, p. S56 He limits regulation reasons to (1) investor protection, (2) prohibiting or limiting ‘gambling’ or (3) opposition to free futures markets by ‘interest groups’.
252.
Ibid. Jerry W. Markham, “Manipulation of Commodity Futures Prices—The Unprosecutable Crime,” Yale Journal on Regulation 8 (1991): 281–305.
253.
Christopher Hood and Martin Lodge, “Pavlovian Innovation, Pet Solutions and Economizing on Rationality?: Politicians and Dangerous Dogs,” in Regulatory Innovation: a Comparative Analysis, ed. Julia Black et al. (Cheltenham: Edward Elgar Publishing Ltd., 2009).
254.
See John H. Stassen, “Propaganda as Positive Law: Section 3 of the Commodity Exchange Act (A Case Study of How Economic Facts Can Be Changed by Act of Congress),” Chicago-Kent Law Review 58 (1982): 636–656, pp. 248–249.
255.
Letter, Barnes to Fred Uhlmann, 24 December 1929. CME III.13.34; Letter, Capper to Jardine, 19 July 1928 l. NARA/KC, 14-6; Letter, Duvel to Capper, 28 July 1924. NARA/KC, 14-61.
256.
Jonathan Lurie, The Chicago Board of Trade, 1859–1905: The Dynamics of Self-Regulation (Urbana: University of Illinois Press. 1979); Jonathan Lurie, “Regulation of the Commodity Exchanges in the 1920s: The Legacy of Self-Government,” in Farmers , Bureaucrats, and Middlemen: Historical Perspectives in American Culture, ed. Trudy H. Peterson (Washington, DC: Howard University Press, 1980).
257.
Roberta Romano, “The Political Dynamics of Derivative Securities Regulation,” Yale Journal on Regulation 14 (1997): 279–406, pp. 292–294.
258.
Copy of speech, Arthur Capper, National Wheat Conference Program, 19–20 June 1923. CME III.657.1.
259.
Jerry W. Markham, “Manipulation of Commodity Futures Prices —The Unprosecutable Crime,” Yale Journal on Regulation 8 (1991): 281–305, p. 304.
260.
Letter, Duvel to Mauff, 25 May 1923. CME III.667.4.

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Saleuddin, R. (2018). The Grain Futures Act of 1922 and the Dominance of the CBOT. In: The Government of Markets. Palgrave Studies in the History of Finance. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-93184-5_3

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