make is going to be reported to the Secretary of Agriculture there are a great many people that are not going to trade.

Mr. KINCHELOE. Do you not think you would be exaggerating if you told that fellow that every transaction was going to be reported to the Secretary? Would it not be better to say that every transaction may be reported to the Secretary?

Mr. GATES. Well, one has the same effect as the other.

Mr. KINCHELOE. I do not believe that the Secretary of Agriculture in administering this law is going to demand any report from any grain exchange in the country unless he thinks there is something wrong. Why should he continually want reports from you fellows with no object in view?

Mr. GATES. The statement was made when the other bill was under consideration that they wanted it as a means of gathering information. Fragmentary information, gathered one day here and one day there, would not be satisfactory. You would have to have the information continuously if it were going to be of value in drawing conclusions.

Mr. KINCHELOE. Do you not think that the Secretary would not want to harass the business of the Nation unless he was of the opinion, unadvised at least, that there was something wrong with the transaction?

Mr. GATES. No; I do not think that. We had some experience with this matter of getting daily reports during the war. Unless you had those reports you could not tell what was going on from day to day.

Mr. KINCHELOE. But during the war those continuous reports were to enable the Government to keep up the supply of grain in this country.

Mr. GATES. No, indeed; the Government did not ever see the reports.

Mr. JONES. Mr. Gates, you made the statement a while ago that the grain exchanges had seriously considered outright closing, and then you significantly added "for a time "

Mr. GATES. I did not mean officially.

Mr. JONES. Well, officially or unofficially, it is important. Then you added "for a time." You recognize that if they were to close the worst period would be immediately after they are closed, before other machinery were devised for handling the distribution of grain, do you not?

Mr. GATES. Yes.

Mr. JONES. So that when you added "for a time" you meant you would close just for the purpose of throwing the thing into confusion, and you realized that the worst confusion that could possibly result would be the confusion that immediately followed the closing?

Mr. GATES. Why, I am not advocating that, you understand.
Mr. JONES. But you said you seriously considered doing that?

Mr. GATES. Yes; it was seriously considered.

Mr. JONES. Now, what would be your purpose in closing just for a time?

Mr. GATES. It would be to get away from this continual annoyance of having to come to Washington to discuss legislation that was more or less intelligent in regard to the grain business.

Mr. JONES. You hoped that there would be unusual confusion immediately following the closing

Mr. GATES. There was not any hope about it at all, Mr. Jones.

Mr. JONES. You never seriously considered closing permanently, did you? Mr. GATES. Closing the board; whether it was ever opened again would be another question.

Mr. CLARKE, Mr. Gates, would you furnish, to put into the record, the transactions of the last two years in comparison with other years?

Mr. GATES. No; I would not. As a matter of fact, you can not get them. Mr. VOIGHT. You say you think this agitation for this sort of legislation has caused a falling off in speculative business?

Mr. GATES. I do not think there is any doubt about it.

Mr. VOIGT. But do you not think that some of it might be traced to other causes?

Mr. GATES. There may be contributing causes.

Mr. VOIGT. Well, there has been a general depression in business in this country during the past two years, and business men generally have not transacted as much business as they did before. Do you not think that that same condition would apply to the grain exchanges?

Mr. GATES. No. I will tell you why. It is our experience that when general business is good our trade, the general speculative trade, is lighter, because people are busy with their own business; and when business is depressed in other

lines there is usually a larger volume of speculative business, because the people are trying to supplement their inadequate income with a little speculative profit.

Mr. VOIGT. And that, translated into other language, means that when people are not doing a satisfactory business in their own line they go out and do a little gambling?

Mr. GATES. You might so interpret it. I would not put it that way.

Mr. VOIGT. I want to ask you another question. It was reported generally in the newspapers of this country immediately after this law was declared unconstitutional by the Supreme Court that wheat had, I believe, gone up 4 cents a bushel, and the news items attributed the rise in the price of wheat to the fact that this legislation had been gotten out of the way by the Supreme Court decision. Do you believe that is true?

Mr. GATES. No; I do not think that had anything to do with it. I do not think you can hold the grain trade responsible for what the newspapers print, even about this bill. I do not think that is a fact.

Mr. VOIGT. Do you not think the thought was inspired?

Mr. GATES. No; I do not think so at all. I did not hear any talk of that kind around the exchange.

Mr. TINCHER. Mr. Chairman, I move that we adjourn until to-morrow morning at 10 o'clock, and close the hearings in opposition to the bill to-morrow. (The motion, being duly seconded, was put and carried.)

(Whereupon, at 12.30 o'clock p. m. the committee adjourned to meet at 10 o'clock a. m. to-morrow, Friday, June 9, 1922.)

COMMITTEE ON AGRICULTURE,
HOUSE OF REPRESENTAIVES,
Friday, June 9, 1922.

The committee met at 10 o'clock a. m., Hon. Gilbert N. Haugen (chairman) presiding.

There were present: Mr. Haugen, Mr. McLaughlin of Michigan, Mr. Purnell, Mr. Voigt, Mr. McLaughlin of Nebraska, Mr. Riddick, Mr. Tincher, Mr. Williams, Mr. Hays, Mr. Thompson, Mr. Gernerd, Mr. Clague, Mr. Clarke, Mr. Rainey, Mr. Aswell, Mr. Kincheloe, and Mr. Jones.

ADDITIONAL STATEMENT OF HON. WALTER H. NEWTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNE

SOTA.

Mr. NEWTON. Mr. Chairman, I would like to make a request of the committee. Since I appeared before the committee yesterday morning it has come to my attention that of the Minnesota commissioners, three in number, all but one have been out of the city, and among them is Mr. O. P. B. Jacobson, who is in charge of the grain and warehouse division of the commission. Mr. Jacobson has been up in northern Minnesota, and his first knowledge of this matter was yesterday when he returned to St. Paul. He is of the opinion that the bill as it is drawn, and based upon the commerce clause, will absolutely do away with the very elaborate machinery that the State of Minnesota has enacted and put into effect for the handling of this matter and the regulating of the exchanges. Their last bit of legislation was passed at the legislative session of one or two years ago, I do not recall which, but I have a copy of the law here.

Mr. KINCHELOE. Does he mean the way the bill is drawn or that it can not be drawn in any way to meet the situation?

Mr. NEWTON. That I do not know. I know the objection is to the bill as it is drawn. I had the impression that he might be against the whole bill, but it is difficult to tell. He has requested the general solicitor of the associated railway and warehouse commissioners here in the city to appear against it, but Mr. Benton, of course, has no technical knowledge at all of this matter of trading in grain futures.

Mr. VOIGT. Mr. Newton, have you read the decision of the Supreme Court in the Dakota Grain case?

Mr. NEWTON. The Lempke case?

Mr. VOIGT. Yes.

Mr. NEWTON. No; I have not.

Mr. VOIGT. If you will read that case, you will probably come to the conclusion that no State legislation can be valid in the face of this legislation. Mr. NEWTON. That certainly is true as to the transactions involved in the Lempke case. It is a question, of course, of whether trading in futures is a question of commerce such as was involved in the Lempke case, but the request I wanted to make of the committee, in order to make it possible for Mr. Jacobson to appear here, if he can come, is to request that he be heard Monday, if he can get here on Monday. Of course, he would have to leave Minneapolis to-night. That would get him here Sunday, so that Monday would be the earliest he could possibly appear here.

Mr. CLAGUE. Has he telegraphed you that he wants to come?

Mr. NEWTON. No; he simply telegraphed Mr. Benton that he wanted him to be heard, and I have heard from the governor's office on it.

Mr. ASWELL. It would be safer to agree to hear him Tuesday, would it not? Mr. NEWTON. I think he could get here Monday. I do not see why he could not. He can leave Saturday night and get here Monday. I suppose all the members of the committee want to dispose of this matter just as quickly as it can be disposed of, and I have not any desire to not cooperate with them to that end.

Mr. KINCHELOE. What position do you say he holds?

Mr. NEWTON. He holds that the law as now drawn

Mr. KINCHELOE (interposing). I mean what official position does he hold? Mr. NEWTON. He is the commissioner in charge of grain matters. We have a commission of three members.

Mr. KINCHELOE. Is he a State officer or commissioner?
Mr. NEWTON. He is a State officer.

The CHAIRMAN. Mr. Jacobson has appeared before this committee several times before. I presume he is one of the best informed men in the country on the matter of inspection and weighing service in reference to grain grading. The question is whether the committee wants to extend the time for hearing. Mr. RAINEY. I move that if he wants to come here to be heard and can come here Monday or Tuesday, that he be heard at that time by the committee.

Mr. ASWELL. I second the motion.

Mr. TINCHER. Let us see if this suggestion will not work out all right. I want to please everybody we can, but still I want to close these hearings. If Mr. Jacobson comes here Monday and proposes that the committee amend this bill, I would be perfectly willing to invite him before the committee, but at this time to adopt a motion providing for hearings as late as Monday or Tuesday will probably defeat our purpose of getting a day on this bill in the House next week. We have had Mr. Jacobson before the committee and we have a copy of the Minnesota law and have heard several witnesses from the State of Minnesota in reference to that law. So far as I am personally concerned, I think my views on your State laws have been expressed in the hearings as well as the views of a number of others, but if Mr. Jacobson gets here on Monday I would be in favor of calling him before the committee on the subject of a committee amendment to the bill, but not to open up the hear ings now and continue them until Tuesday, which would mean that we would not get this bill up for consideration next week at all, and I would be dead against that.

Mr. CLAGUE. Our day is Thursday, is it not?

Mr. TINCHER. Yes; but if we do not close the hearings this week and begin to consider committee amendments, we will not get through by Thursday; but I want to treat Mr. Jacobson perfectly fairly and would be in favor of hearing him in reference to any amendment.

Mr. NEWTON. He may have objections to the bill that he does not feel can be corrected by an amendment, in which event I would not want him to be foreclosed from appearing here.

Mr. TINCHER. I do not want to foreclose him, but I do not propose now, unless you do it over my protest, to have a motion adopted to continue these hearings until next Tuesday or Monday.

Mr. RAINEY. Without any motion at all, let us have an understanding that if he comes here Monday or Tuesday we will hear him.

Mr. TINCHER. That we will hear him either on a committee amendment or in opposition to the bill, if he wants to be heard.

Mr. KINCHELOE. I think in view of the fact that this is a new procedureMr. CLARKE. Who is the gentleman you are referring to?

Mr. NEWTON. Mr. O. P. B. Jacobson. He is one of the three railway and warehouse officials of the State of Minnesota, and is in direct charge of the division pertaining to grain, so he is an expert on that proposition.

Mr. ASWELL. I think in view of this position and necessarily his interest in this matter, that the motion should carry, and we should give him a hearing in the regular order next Monday.

Mr. NEWTON. We have a very elaborate machinery and an extensive law, and the State commission are of the opinion that this proposed bill will just simply wipe them out. Now, it is a legislative act they are called upon to administer, and they feel they owe an obligation to the people of the State to come down here and present their views. They have been away, and Mr. Jacobson just arrived back in St. Paul from up in the northern part of the State, where he has been on grain-inspection work, and so on, so that this is the first knowledge he has had of the detailed provisions of the proposed act.

Mr. JONES. Did he specify any particular portion of the bill that he thought was especially objectionable?

Mr. NEWTON. No.

Mr. JONES. Did he mention any part of the bill?

Mr. NEWTON. No; but preceding that, we heard from other members; that is, employees of the commission who were there in St. Paul, which I set forth yesterday.

Mr. TINCHER. I think Mr. Rainey's suggestion is a good one, and there is no question if he comes here Monday or Tuesday but what we will hear him, but I do not want to prevent the committee from going ahead and considering the bill in the meantime. That is the proposition involved. These gentlemen are going to close this morning, and I think the committee ought to go ahead and consider the bill, but not close up or preclude him from being heard if he comes here on Monday.

Mr. NEWTON. I do not want, of course, the members of the committee to foreclose their minds on what he has to say, neither do I have any desire to unduly delay your actions in the matter.

Mr. KINCHELOE. In view of the fact that this bill is a new departure, I would like to have whatever information this gentleman has in regard to the matter. Mr. CLAGUE. Mr. Jacobson is the best posted man in the Northwest on grain and grain futures, and I think that is conceded by all.

Mr. KINCHELOE. Can he get here Monday?

Mr. NEWTON. Yes; I should, of course, telegraph him to come here on Monday. Mr. MCLAUGHLIN of Michigan. Mr. Jacobson has been before the committee several times and as Mr. Clague has said, he is one of the best-posted men in the country on these matters, and if it is at all convenient I think he ought to be heard. Of course, I would not like to do anything that would be discourteous to him or foreclose us from getting the opinion of a man like Mr. Jacobson.

Mr. ASWELL. You do not want to go ahead and consider the bill before he gets here, do you?

Mr. MCLAUGHLIN of Michigan. I would not like to foreclose him by any definite action. If he is coming here at all it would not be courteous for him to come here and find everything closed against him. I would like to have the committee accommodate itself to Mr. Tincher's suggestion, but he suggests that we let Mr. Jacobson come here only to be heard on an amendment. It is difficult for us to tell now what we shall let Mr. Jacobson say, because we can not, of course, indicate to him what he is going to say.

Mr. TINCHER. No; and I never have had any notion of that kind. You know just as well as I do that if we adopt a motion setting hearings for some time next week what the effect will be. Mr. Newton said he could be here Monday, if at all. It is now suggested that somebody make a motion that we hear him Tuesday. If we are going to get this matter up next Thursday we will have to begin considering the bill at once, and, of course, everybody knows that if we do not pass this bill before the recess of the House it will not be passed so as to affect this year's wheat crop at all.

Mr. KINCHELOE. I think we ought to accommodate the gentleman and hear him on Monday, because if he can get here at all he can get here at that time. Mr. NEWTON. I can not conceive of his not coming immediately, just as soon as he receives my wire, which means that he would be here in time to be heard on Monday.

Mr. MCLAUGHLIN of Michigan. You can wire him to come here as soon as he can and then we can hear him on Monday.

Mr. RAINEY. I submit the motion then that we hear the gentleman from Minnesota on Monday.

The CHAIRMAN. Mr. Rainey, do you couple with that a motion that the hearingse be closed definitely on Monday?

Mr. RAINEY. No; I would not, because I do not want to preclude anyone from having a chance to be heard, who can give information on the matter. Mr. TINCHER. Then I move to amend the motion by moving that the hearings be closed on Monday. I do not want to preclude the Congress from having a chance to consider this bill at this session.

Mr. MCLAUGHLIN of Michigan. Are you going to do that in face of the fact that you do not know what Mr. Jacobson is going to say on Monday, and he is one of the most interested men in this matter in the country.

Mr. TINCHER. No; but if we postpone the hearings, somebody will be here Monday and want the committee to hear somebody else the following week.

The CHAIRMAN. It ought to be definitely known just what the committee is going to do, and everybody should be given an opportunity to be heard. So far, there have been no requests of this sort, but Mr. Jacobson represents a big and important State and is entitled to be heard.

Mr. ASWELL. Suppose Mr. Jacobson comes here Monday and opposes the bill and then it becomes necessary for somebody to appear in favor of the bill. I think it would be unwise to shut out anybody from being heard in this way.

Mr. TINCHER. We could have another motion made at that time. If it is the understanding that we are going to close the hearings Monday, they will all be here, and if it is the understanding we are going to kill this bill from time to time by continuing it over another week, that is another thing.

Mr. MCLAUGHLIN of Michigan. I think everybody knows that it is the feeling of the committee that they want to close these hearings as soon as possible, but without knowing what Mr. Jacobson is going to say, the committee itself may want to hear some one besides Mr. Jacobson.

The CHAIRMAN. You have heard the question.

Mr. PURNELL. What is the question?

The CHAIRMAN. State your amendment, Mr. Tincher.

Mr. TINCHER. That we hear Mr. Jacobson Monday and that we close the hearings on Monday.

Mr. ASWELL. The motion is to hear Mr. Jacobson and Mr. Tincher's amendment and to close the hearings Monday.

The CHAIRMAN. The amendment of Mr. Tincher comes up first, to close the hearings on Monday. All those who are in favor of the motion say aye and those opposed, no. The noes have it.

Mr. TINCHER. I will ask a roll call on that.

Mr. KINCHELOE. I am like Mr. McLaughlin, and I do not think there is any doubt but what we will close the hearings on Monday, and I want the bill to be passed on as soon as possible, but I am frank to say that so far as I am concerned, I am seeking all the light I can get in view of the fact that this is a new departure.

Mr. TINCHER. And I want to know whether we are going to get the bill out or not.

Mr. VOIGT. If the committee should decide Monday that further time is necessary, we could take that matter up then.

Mr. TINCHER. But if we do not have an understanding that we are going to close the hearings, we will not get the bill out.

Mr. RIDDICK. I think we all want to close the hearings on Monday unless something should develop that would make it inadvisable to do that.

Mr. TINCHER. Yesterday, with all the grain trade here, we asked them how much time they needed and they said they could close to-day. I am perfectly willing to be fair in this matter, but I do not want to have the legislation cut off. (A roll call having been ordered, the clerk announced there were 8 ayes and 6 noes, so the amendment was carried.)

The CHAIRMAN. The question is on the motion as amended.

(The question having been put, the chairman announced that the motion as amended was adopted.)

The CHAIRMAN. Who is the next witness?

STATEMENT OF MR. FREDERICK B. WELLS, VICE PRESIDENT OF F. H. PEAVEY & CO., MINNEAPOLIS, MINN.

Mr. WELLS. Mr. Chairman and gentlemen, of necessity I will have to cover more or less of the ground covered by Mr. Gates yesterday, but I think that