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TO PREVENT SALE OF COTTON AND GRAIN IN FUTURE MARKETS 9
re contemplated rather than actually assured. In rejecting these
bills, it seems that Congress wisely refused to deprive the producers,
the merchants, and the manufacturers of these farm products of the
benefit of this insurance against price fluctuations. However, con-
ressional study of the subject matter led to the passage of laws de-
signed to regulate and supervise future trading in cotton and grain
or the purpose of eliminating excessive speculation, market manipu-
lation, dissemination of false information, and other known injurious
ractices which attended the operation of exchanges in the conduct
of their business in future trading. The legislative thought on thig
act.
Since the passage of the cotton futures act in 1914, its reenact-
ment in 1916, and its amendment in 1919, it may fairly be claimed
hat the quotations for cotton have more accurately reflected ihe
alue of spot cotton than was previously the case. As the future
uotations have functioned on the value of spot cotton, the market
has offered a better opportunity for the making of hedges than was
reviously the case when futures sold at a much larger discount com-
ared with spots. The requirement which the act makes of settle-
ent on ascertained commercial differences rather than on arbitrary,
ifferences which were fixed by the exchange rules has resulted in
settlements of such contracts which are much fairer to the buyer.
ince ascertainment of commercial differences and the classification
f cotton by the department, there has been much less opportunit
for unfair manipulation of the future market by powerful traders.
Practically all interests directly concerned in future trading in cotton
gree that the laws has been of great benefit, and many of those
which formerly strenuously opposed the enactment of the law have
accepted it and are operating under it without complaint. .ouiie
The grain futures act of September 21, 1922, comprehensively
laces under the supervision of the Secretary of Agriculture the ex-
hange whereon there is future trading in grain. It prohibits the
issemination by an exchange of any of its members of false, mis-
eading, or inaccurate reports concerning crop or market informa-
ion or conditions that affect or tend to affect the price of commod:
ities, and prohibits manipulation of prices or the cornering of grain
y the dealers or operators on the exchanges. This requires the keep-
ing of memoranda and the filings of reports with the Secretary oF
griculture showing the details and terms of all transactions entered
into on the board. The Secretary now requires that such reports be
ade daily. The law has not been in force long enough fully to
demonstrate its effect. It is apparent, however, that it has resulted
in restraining the dissemination of false or misleading market in-
ormation, the manipulation of prices and corners, and has had and
is having a stabilizing influence upon the price of grain in that it
eems that violent price fluctuations have disappeared. The law has
been very helpful notwithstanding exchange resentment which has
hindered and delayed the full accomplishment of its purpose. While
his act permits the buying and selling of contracts for the future
elivery of grain under the rules of the exchange which do not pro-
ide for actual delivery, nevertheless it has and will restrain the ex-
