Full text of Grain Futures Act of 1922

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SIXTY-SEVENTH CONGRESS.

998
Resratonsite.

Septembr 21, 1922
[Public No. 33.

L , p. i. Ae
Terms onrued.
A

s

sitpefp

xe:

SESS. II.

CHS. 368,369.

1922.

(d) Description of reservation site, situated in Kalawao and
Makanalua, Molokai, Territory of Hawaii, selected by Surgeon
General Walter Wyman, Public Health and Marine Hospital Service,
as portion of Federal leprosarium:
Beginning at Hawaiian government survey trigonometry station
Kaukaho, on the southwest rim of Kauhako Crater near graves, the
true azimuth and distance to Hawaiian government survey trigonometry station Kalawao, being one hundred and seventy-five
degrees forty-five minutes eight thousand and eighty-eight and ninetenths feet; to Hawaiian government survey trigonometry station
Leinaopapio, being two hundred and ninety-one degrees fifteen
minutes nine seconds fourteen thousand four hundred and sixty-one
and six-tenths feet, as shown on Government survey registered map
numbered seventeen hundred and twenty-eight, and running by
true azimuths:
(1) One hundred and thirty-seven degrees twenty-one minutes
one thousand six hundred and ninety-two feet; (2) two hundred and
twenty-seven degrees twenty-one minutes six thousand nine hundred
and forty-two feet high-water mark at seacoast; (3) thence along
seacoast along high-water mark, the direct azimuth and distance
being three hundred and thirty-six degrees ten minutes three thousand
seven hundred and sixty-two feet; (4) forty-seven degrees twentyone minutes three hundred and fifty feet to Hawaiian government
survey trigonometry station Kaupikiawa, the true azimuth and
distance to Leinaopapio A, being three hundred and twelve degrees
twelve minutes seven seconds eleven thousand one hundred and
sixty-four and five-tenths feet; (5) forty-seven degrees twenty-one
minutes five thousand three hundred and seventy-eight feet to an
iron bolt on the north side of main government road; (6) one hundred
and thirty-seven degrees twenty-one minutes one thousand eight
hundred and sixty-nine feet to the point of beginning. Area, five
hundred and two and six-tenths acres.
Approved, September 21, 1922.
CHAP. 369.-An Act For the prevention and removal of obstructions and burdens

upon interstate commerce in grain, by regulating transactions on grain future ex-

changes, and for other purposes.

Be in enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, This Act shall be known by

the short title of "The Grain Futures Act."
SEC. 2 (a) For the purposes of this Act "contract of sale" shall be
held to include sales, agreements of sale, and agreements to sell. The
word " person " shall be construed to import the plural or singular, and
shall include individuals, associations, partnerships, corporations,
and trusts. The word "grain" shall be construed to mean wheat,
corn, oats, barley, rye, flax, and sorghum. The term"future delivery,"
as used herein, shall not include any sale of cash grain for deferred
shipment or delivery. The words "board of trade shall be held to
include and mean any exchange or association, whether incorporated
or unincorporated, of persons who shall be engaged in the business of
buying or selling grain or receiving the same for sale on consignment.
The act, omission, or failure of any official, agent, or other person

acting for any individual, association, partnership, corporation, or
trust within the scope of his employment or office shall be deemed
the act, omission, or failure of such individual, association, partner-

ship, corporation, or trust, as well as of such official, agent, or other
ao ",lnter-

state camr.

person. The words "interstate commerce" shall be construed to

mean commerce between any State, Territory, or possession, or the

SIXTY-SEVENTH CONGRESS.

SESS. II.

CH. 369.

999

1922.

District of Columbia, and anyplace outside thereof; or between points
within the same State, Territory, or possession, or the District of
Columbia, but through any place outside thereof, or within any Territory or possession, or the District of Columbia.
(b) For the purposes of this Act (but not in any wise limiting the strucdatoficles in
foregoing definition of interstate commerce) a transaction in respect interstate commerce.

to any article shall be considered to be in interstate commerce if
such article is part of that current of commerce usual in the grain
trade whereby grain and grain products and by-products thereof are
sent from one State with the expectation that they will end their
transit, after purchase, in another, including, in addition to cases
within the above general description, all cases where purchase or
sale is either for shipment to another State, or for manufacture
within the State and the shipment outside the State of the products
resulting from such manufacture. Articles normally in such current
of commerce shall not be considered out of such commerce through
resort being had to any means or device intended to remove transactions in respect thereto from the provisions of this Act.

For the

.purpose of this paragraph the word "State" includes Territory, the
District of Columbia, possession of the United States, and foreign
nation.
SEC. 3. Transactions in grain involving the sale thereof for future

Territorylcudedby
S

tate.

inDerest

affected

by

delivery as commonly conducted on boards of trade and known as salesonboardsoftrade
for future delivery.

"futures" are affected with a national public interest; that such
transactions are carried on in large volume by the public generally
and by persons engaged in the business of buying and selling grain
and the producand nd by-products thereof in interstate commerce;
that the prices involved in such transactions are generally quoted

volume of transa-

o

ti ns.

preterinepridcoumer

and disseminated throughout the United States and in foreign countries as a basis for determining the prices to the producer and the
consumer of grain and the products and by-products thereof and to
facilitate the movements thereof in interstate commerce; that such ftilized by handlers
transactions are utilized by shippers, dealers, millers, and others ofgraet

engaged in handling grain and the products and by-products thereof
in interstate commerce as a means of hedging themselves against
possible loss through fluctuations in price; that the transactions and laStinuepne of spec
prices of grain on such boards of trade are susceptible to speculation, fiuctuations, etc.. o-

manipulation, and control, and sudden or unreasonable fluctuations commerce.
in the prices thereof frequently occur as a result of such speculation,
manipulation, or control, which are detrimental to the producer or
the consumer and the persons handling grain and products and byproducts thereof in interstate commerce, and that such fluctuations
in prices are an obstruction to and a burden upon interstate commerce in grain and the products and by-products thereof and render
regulation imperative for the protection of such commerce and the
national public interest therein.
SEC. 4. It shall be unlawful for any person to deliver for transmis- sale
Ori"ng contract of
of grain for future
sion through the mails or in interstate commerce by telegraph, tele- delivery,unlawful.

phone, wireless, or other means of communication any offer to make
or execute, or any confirmation of the execution of, or any quotation
or report of the price of, any contract of sale of grain for future delivery on or subject to the rules of any board of trade in the United
States, or for any person to make or execute such contract of sale,
which is or may be used for (a) hedging any transaction in interstate priced sisor delivery
commerce in grain or the products or by-products thereof, or (b) of grain in interstate

determining the price basis of any such transaction in interstateommerce.
commerce, or (c) delivering grain sold, shipped, or received in inter- Exceptions.
state commerce for the fulfillment thereof, except(a) Where the seller is at the time of the making of such contract owner or

the owner of the actual physical property covered thereby, or is the

pgrowical.

SIXTY-SEVENTH CONGRESS.

SESS. II.

CH. 369.

1922.

grower thereof, or in case either party to the contract is the owner or
renter of land on which the same is to be grown, or is an association
of such owners, or growers of grain, or of such owners or renters of
land; or
(b) Where such contract is made by or through a member of a
Made by member of
contract maret, etc. board of trade which has been designated by the Secretary of Agriculture as a "contract market," as hereinafter provided, and if such
contract is evidenced by a record in writing which shows the date,
the parties to such contract and their addresses, the property covered
Pervaon of rec- and its price, and the terms of delivery: Provided, That each board
member shall keep such record for a period of three years from the
ordso saleso
date thereof, or for a longer period if the Secretary of Agriculture
open to inspection, shall so direct, which record shall at all times be open to the inspection of any representative of the United States Department of
etc.
Agriculture or the United States Department of Justice.
SC. 5. The Secretary of Agriculture is hereby authorized and
contract markets.
f directed to designate any board of trade as a "contract market"
o~%
re9T9of
when, and only when, such board of trade complies with and carries
Condions.
out the following conditions and requirements:
(a) When located at a terminal market where cash grain of the
nl
et.
cmarkets,
kind specified in the contracts of sale of grain for future delivery to
be executed on such board is sold in sufficient volumes and under
such conditions as fairly to reflect the general value of the grain and
the differences in value between the various grades of such grain, and
where there is available to such board of trade official inspection
service approved by the Secretary of Agriculture for the purpose.
(b) When the governing board thereof provides for the making
mentsfor detailedecounting of transac- and filing by the board or any member thereof, as the Secretary of
tions,etc.
Agriculture may direct, of reports in accordance with the rules and
regulations, and in such manner and form and at such times as may
be prescribed by the Secretary of Agriculture, showing the details
and terms of all transactions entered into by the board, or the members thereof, either in cash transactions consummated at, on, or in a
board of trade, or transactions for future delivery, and when such
governing board provides, in accordance with such rules and reguRecordsotf al trans- rations, for the keeping of a record by the board or the members of
the board of trade, as the Secretary of Agriculture may direct,
acns,
showing the details and terms of all cash and future transactions
entered into by them, consummated at, on, or in a board of trade,
such record to be in permanent form, showing the parties to all such
transactions, including the persons for whom made, any assignments
or transfers thereof, with the parties thereto, and the manner in
which said transactions are fulfilled, discharged, or terminated.
n,isPc- Such record shall be required to be kept for a period of three years
uoPnr
from the date thereof, or for a longer period if the Secretary of Agriculture shall so direct, and shall at all times be open to the inspection
of any representative of the United States Department of Agriculture
or United States Department of Justice.
(c) When the governing board thereof provides for the prevention
reenrt pmisetcdng
of granin interstate of dissemination by the board or any member thereof, of false or misleading or knowingly inaccurate reports concerning crop or market
information or conditions that affect or tend to affect the price of
grain in interstate commerce.
(d) When the governing board thereof provides for the prevention
r
¶iPrePip~
of manipulation of prices or the cornering of any grain by the dealers
or operators upon such board.
(e) When the governing board thereof does not exclude from
soinpe
tio
membership in, and all privileges on, such board of trade, any duly
not excuded.
authorized representative of any lawfully formed and conducted cooperative association of producers having adequate financial respon-

SIXTY-SEVENTH CONGRESS.

SESS. II.

CH. 369.

1001

1922.

sibility which is engaged in cash grain business, if such association
has complied, and agrees to comply, with such terms and conditions
as are or may be imposed lawfully on other members of such board: Pm
Provided, That no rule of a contract market shall forbid or be construed to forbid the return on a patronage basis by such cooperative

Return of
bimembe

earnings
not for-

association to its bona fide members of moneys collected in excess of
the expense of conducting the business of such association.
(f) When the governing board provides for making effective the

barred

rmebiie to

final orders or decisions entered pursuant to the provisions of paragraph (b) of section 6 of this Act.
SEC. 6. Any board of trade desiring to be designated a "contract

ontract maret.

market" shall make application to the Secretary of Agriculture for ignatonsas.
such designation and accompany the same with a showing that it
complies with the above conditions, and with a sufficient assurance
Commission
that it will continue to comply with the above requirements.

author-

(a) A commission composed of the Secretary of Agriculture, the =edto susped,
Secretary of Commerce, and the Attorney General is authorized to quirements.

etc.,

suspend for a period not to exceed six months or to revoke the designation of any board of trade as a "contract market" upon a showing
that such board of trade has failed or is failing to comply with any of
the above requirements or is not enforcing its rules of government
made a condition of its designation as set forth in section 5. Such
suspension or revocation shall only be after a notice to the officers of
the board of trade affected and upon a hearing: Provided, That such
suspension or revocation shall be final and conclusive unless within
fifteen days after such suspension or revocation by the said commis-

Pbonconcisive

ii

noappealfSed'ndrcui

coart of appeals to set
aside, etc.

sion such board of trade appeals to the circuit court of appeals for
the circuit in which it has its trincipal place of business by filing
with the clerk of such court a written petition praying that the order
of the said commission be set aside or modified in the manner stated
in the petition, together with a bond in such sum as the court may
determine, conditioned that such board of trade will pay the costs of
the proceedings if the court so directs. The clerk of the court in

ommissiontocertify
records,etc.,tocourt.

which such a petition is filed shall immediately cause a copy thereof
to be delivered to the Secretary of Agriculture, chairman of said
commission, or any member thereof, and the said commission shall
forthwith prepare, certify, and file in the court a full and accurate
transcript of the record m such proceedings, including the notice to
the board of trade, a copy of the charges, the evidence, and the report

Acceptedasevidence

and order. The testimony and evidence taken or submitted before
the said commission duly certified and filed as aforesaid as a part of
the record, shall be considered by the court as the evidence in the
case. The proceedings in such cases in the circuit court of appeals shall
be made a preferred cause and shall be expedited in every way.
Such a court may affirm or set aside the order of the said commission
or may direct it to modify its order. No such order of the said corn- oders,t ytlimitde

mission shall be modified or set aside by the circuit court of appeals
unless it is shown by the board of trade that the order is unsupported
by the weight of the evidence or was issued without due notice and
a reasonable opportunity having been afforded to such board of trade
for a hearing, or infringes the Constitution of the United States, or is

beyond the jurisdiction of said commission: Provided further, That sionifsecretry ree
if the Secretary of Agriculture shall refuse to designate as a contract to designate board
market any board of-trade that has made application therefor, then ket.

such board of trade may appeal from such refusal to the commission
described therein, consisting of the Secretary of Agriculture, the Secretary of Commerce, and the Attorney General of the United States,
with the right to appeal as provided for in other cases in this section,
the decision on such appeal to be final and binding on all parties

interested.

Disionfis.

of

1002

SIXTY-SEVENTH CONGRESS.

SESS. II.

CH. 369.

1922.

omplaints against
sioso Act, etc.

(b) If the Secretary of Agriculture has reason to believe that any
person is violating any of the provisions of this Act, or is attempting

Noticeofhearings.

to manipulate the market price of any grain in violation of the
provisions of section 5 hereof, or of any of the rules or regulations
made pursuant to its requirements, he may serve upon such person
a complaint stating his charge in that respect, to which complaint
shall be attached or contained therein a notice of hearing, specifying

a day and place not less than three days after the service thereof,
requiring such person to show cause why an order should not be
made directing that all contract markets until further notice of the
said commission refuse all trading privileges thereon to such person.
,oinmissClionorereC
to.conduct hearings.

Said hearing may be held in Washington,
District of Columbia, or
a

J.ursdii'on
.esecr-

retary of Agriculture as chairman of the said commission. That for
the purpose of securing effective enforcement of the provisions of
this Act the provisions, including penalties, of section 12 of the

ingtestimon-y, -f-orc

ment,etc.
l. , p. 743.

elsewhere, before the said commission, or before a referee designated
by the Secretary of Agriculture, who shall cause all evidence to
be reduced to writing and forthwith transmit the same to the Sec-

Interstate Commerce Act, as amended, relating to the attendance
and testimony of witnesses, the production of documentary evidence,
and the immunity of witnesses, are made applicable to the power,
jurisdiction, and authority of the Secretary of Agriculture, the said
commission, or said referee in proceedings under this Act, and to
Offendertoberafused
pdviiEg
by contract
markts.

persons subject to its provisions. Upon evidence received the said
. .
commission may require all contract markets to refuse such person

all trading privileges thereon for such period as may be specified
in said order. Notice of such order shall be sent forthwith by
Apeo
coupt
order

ct

registered mail or delivered to the offending person and to the govAfter the issuance of the
order by the commission, as aforesaid, the person against whom

of appadtoit erning boards of said contract markets.

de, etc.

it is issued may obtain a review of such order or such other equitable
relief as to the court may seem just by filing in the United States
circuit court of appeals of the circuit in which the petitioner is doing
business a written petition praying that the order of the commission
be set aside. A copy of such petition shall be forthwith served

Pcdure.

Juridcon

of cort,

upon the commission by delivering such copy to its chairman or to
any member thereof and thereupon the commission shall forthwith
certify and file in the court a transcript of the record theretofore
made, including evidence received. Upon the filing of the transcript
the court shall have jurisdiction to affirm, to set aside, or modify
the order of the commission, and the findings of the commission

as to the facts, if supported by the weight of evidence, shall in like
toreo ewby supre manner be conclusive. In proceedings under paragraphs (a) and

(b) the judgment and decree of the court shall be final, except that
the same shall be subject to review by the Supreme Court upon

Court.
36, p. 157.

depsiationotr
mart,

t
IssueO'

Raedesignaton
or
a .

certiorari, as provided in section 240 of the Judicial Code.
SEC. 7. Any board of trade that has been designated a contract
market in the manner herein provided may have such designation

vacated and set aside by giving notice in writing to the Secretary of
Agriculture requesting that its designation as a contract market be
vacated, which notice shall be served at least ninety days prior to
the date named therein as the date when the vacation of designation
shall take effect. Upon receipt of such notice the Secretary of Agriculture shall forthwith order the vacation of the designation of such
board of trade as a contract market, effective upon the day named in
the notice, and shall forthwith send a copy of the notice and his order
to all other contract markets. From and after the date upon which
the vacation became effective the said board of trade can thereafter

be designated again a contract market by making application to the
Secretary of Agriculture in the manner herein provided for an original
application.

SIXTY-SEVENTH CONGRESS.

SESS. II.

CH. 369.

1003

1922.

SEC. 8. For the efficient execution of the provisions of this Act, Investationso
and in order to provide information for the use of Congress, the Sec- of trade.
retary of Agriculture may make such investigations as he may deem
necessary to ascertain the facts regarding the operations of boards
of trade, whether prior or subsequent to the enactment of this Act,
and may publish from time to tune, in his discretion, the result of Publicationofresults
such investigation and such statistical information gathered therefrom as he may deem of interest to the public, except data and
information which would separately disclose the business transactions of any person and trade secrets or names of customers: Provided, Proo.
That nothing in this section shall be construed to prohibit the Sec-

gr

retary of Agriculture from making or issuing such reports as he may
deem necessary relative to the conduct of any board of trade or of
the transactions of any person found guilty of violating the provisions of this Act under the proceedings prescribed in section 6 of
this Act: Provided further, That the Secretary of Agriculture in any Statement of facts.
report may include the facts as to any actual transaction. The Cortivs'eeStinaSecretary of Agriculture, upon his own initiative or in cooperation ditions.
with existing governmental agencies, shall investigate marketing
conditions of grain and grain products and by-products, including
supply and demand for these commodities, cost to the consumer,
and handling and transportation charges. He shall likewise compile formation as to grain
and furnish to producers, consumers, and distributors, by means of marketsetc.
regular or special reports, or by such methods as he may deem most
effective, information respecting the grain markets, together with
information on supply, demand, prices, and other conditions in this
and other countries that affect the markets.
tsoedo
SEC. 9. Any person who shall violate the provisions of section 4 fnlTmt
of this Act, or who shall fail to evidence any contract mentioned in qirements prohibisaid section by a record in writing as therein required, or who shall nte, p.99.
knowingly or carelessly deliver for transmission through the mails
or in interstate commerce by telegraph, telephone, wireless, or other
means of communication false or misleading or knowingly inaccurate
reports concerning crop or market information or conditions that
affect or tend to affect the price of grain in interstate commerce, shall
be deemed guilty of a misdemeanor, and, upon conviction thereof, be
fined not more than $10,000 or imprisoned for not more than one year,
or both, together with the costs of prosecution.
SEC. 10. If any provision of this Act or the application thereof to vit'sl

any person or circumstances is held invalid, the validity of the remainder of the Act and of the application of such provision to other persons
and circumstances shall not be affected thereby.tie
SEC. 11. No fine or imprisonment shall be imposed for any violation of this Act occurring before the first day of the second month

fanpento
afect remainder of
At, etc.
not
e for two months

following its passage.

SEC. 12. The Secretary of Agriculture may cooperate with any agecies
department or agency of the Government,

of theGovern

any State, Territory, ment, states, etc.

District, or possession, or department, agency, or political subdivision
thereof, or any person; and shall have the power to appoint, remove,

oAethoety f

etc-

and fix the compensation of such officers and employees, not in conflict with existing law, and make such expenditures for rent outside
the District of Columbia, printing, telegrams, telephones, law books,
books of reference, periodicals, furniture, stationery, office equipment,
travel, and other supplies and expenses as shall be necessary to the
administration of this Act in the District of Columbia and elsewhere,
and there are hereby authorized to be appropriated, out of any moneys
in the Treasury not otherwise appropriated, such sums as may be

necessary for such purposes.
Approved, September 21, 1922.

Athoperiations

Post, . 1003.