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51

71

91

111

121

141

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181

291

301

1. Short title of chapter.

2. Definitions; "contract of sale"; "person"; "grain"; "future delivery"; "board of trade"; "interstate commerce."

3. When transaction deemed in interstate commerce; "State" defined.

4. Liability of principal for act of agent.

5. Resolution declaring dangerous tendency of dealings in grain futures. 6. Prohibition against dealings in grain futures; general exceptions.

7. Designation of board of trade as "contract market"; conditions and requirements.

Sec.

8. Application for designation as "contract market"; suspension or revocation of designation; composition of commission; review by circuit court of appeals.

9. Exclusion of persons from privilege of "contract markets"; procedure for exclusion; review by circuit court of appeals.

10. Review by Supreme Court on certiorari.

11. Vacation on request of designation as "contract market"; redesignation.

12. Investigations and reports by Secretary, generally.

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13. Violations generally; false reports; punishment.

14. Violations previous to November 1, 1922, not punishable.

15. Provisions of Interstate Commerce Act made applicable.

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16. Cooperation by Secretary with other agencies, Government, State, etc.; appointment, removal, and compen. sation of officers and agents; expenses; appropriation.

17. Effect of partial invalidity of chapter.

This chapter consists of Act Sept. 21, 1922, c. 369, 42 Stat. 998, entitled "An act for the prevention and removal of obstructions and burdens upon interstate commerce in grain, by regulating transactions in grain future exchanges, and for other purposes," and to be cited as "The Grain Futures Act."

This chapter superseded Act August 24, 1921, c. 86, 42 Stat. 187, known as "The Future Trading Act," which act was held unconstitutional (at least in part) in Hill v. Wallace (Ill. 1922) 42 S. Ct. 453, 259 U. S. 44, 66 L. Ed. 822, cited under the notes to this section. Section 3 of said act was held unconstitutional as imposing a penalty in Trusler v. Crooks (Mo. 1926) 46 S. Ct. 165,, 269 U. S. 475, 70 L. Ed. 365, cited also under notes to this section.

Sections 3 and 4 of the Act of August 24, 1921, which were under consideration by the Supreme Court as cited above, provided as follows:

"Sec. 3. In addition to the taxes now imposed by law there is hereby levied a tax of 20 cents a bushel on every bushel involved therein, whether the actual commodity is intended to be delivered or only nominally referred to, upon each and every privilege or option for a contract either of purchase or sale of grain, intending hereby to tax only the transactions known to the trade as 'privileges,' 'bids,' 'offers,' 'puts and calls,' 'indemnities,' or 'ups and downs."

1. Constitutionality.

"Sec. 4. In addition to the taxes now imposed by law there is hereby levied a tax of 20 cents a bushel on every bushel involved therein, upon each contract of sale of grain for future delivery except(a) Where the seller is at the time of the making of such contract the owner of the actual physical property covered thereby, or is the 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 contracts are made by or through a member of a 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 memorandum in writing which shows the date, the parties to such contract and their addresses, the property covered and its price, and the terms of delivery, and provided that each board member shall keep such memorandum for a period of three years from the date thereof, or for a longer period if the Secretary of Agriculture shall so direct, which record shall at all times be open to the inspection of any representative of the United States Department of Agriculture or the United States Department of Justice."

Other provisions of said act were not materially different from the corresponding provisions of this chapter.

5. Validity of state statutes.

6. Power to regulate Boards of Trade. 7. Jurisdiction of Trade Commission over Chamber of Commerce.

8. Exclusiveness of jurisdiction.

Prior Law

1921) 257 U. S. 265, 42 S. Ct. 101, 66 L. Ed.

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1. Constitutionality.-This act, aimed at the Chicago Board of Trade, the greatest grain market in the world, was declared constitutional as to its main purposes in Chicago Board of Trade v. Olsen (Ill. 1923) 262 U. S. 4, 43 S. Ct. 470, 67 L. Ed. 839. It was held that the flow of grain shipped into the Chicago market from other states, stored temporarily or held on cars, sold on the Chicago Board of Trade, and reshipped in large part to other states and interstate foreign countries, merce subject to regulation by Congress, and that the fact that such grain was shipped under through bills of lading from western to eastern states giving shippers the right to remove the grain at Chicago for temporary purposes of storing, inspecting, weighing, grading, mixing, and of changing ownership, consignee or destination, and then of continuing the shipment under the same contract at the same rate, while it did not prevent the local taxing of the grain while in Chicago, did not take it out of interstate commerce SO as to deprive Congress of the power of regulation over it. Stafford v. Wallace (Ill. 1922) 258 U. S. 495, 42 S. Ct. 397, 66 L. Ed. 735, 23 A. L. R. 229, was cited as authority for this proposition, and it was held that the decision of the court in Hill v. Wallace (Ill. 1922) 259 U. S. 44, 42 S. Ct. 453, 66 L. Ed. 822, holding that local dealings on boards of trade in grain for future delivery could not constitutionally be brought under federal control by means of the taxing power, as was attempted by the Future Trading Act [cited in historical note to this section] was not an authority against the Grain Futures Act, which is an exercise of the power to regulate interstate commerce. It was further held that the fact that grain shipped was temporarily stored in Chicago in warehouses and mixed with other grain, so that the owner received other grain when presenting his receipt for continuIng the shipment, did not prevent regulation by Congress, citing as authority Eureka Pipe Line Co. v. Hallanan (W. Va.

merce.-In view of the authorized conclusion by Congress that manipulation of the market for futures on the Chicago Board of Trade might, and from time to time did, directly burden and obstruct interstate commerce in grain, and was constantly possible danger, it had power to restrain and avoid such abuse by regulating transactions on such exchanges, Board as it did by Grain Futures Act. of Trade, of City of Chicago v. Olsen (Ill. 1923) 43 S. Ct. 472, 262 U. S. 1, 67 L. Ed. 839.

4. Conflicting statutes displaced.-Provisions of this chapter passed in pursuance of commerce power of Congress held to supersede and displace statutes conflicting therewith. Chamber of Commerce of Minneapolis v. Federal Trade Commission (C. C. A. 1926) 13 F. (2d) 673.

5. Validity of state statutes.-Laws (Kan.) 1925, c. 6, prohibiting board of trade from refusing membership to co-operative associations, and providing against rules forbidding such associations to distribute profits to bona fide members on patronage basis, held not invalid for uncertainty and ambiguity when restricted to boards of trade within state not designated as "contract markets." under this chapter, by Secretary of Agriculture. Farmers' Co-op. Commission Co. v. Wichita Board of Trade (1926) 246 P. 513, 1120, 121 Kan. 348.

6. Power to regulate Boards of Trade.The Chicago Board of Trade is engaged in a business affected with a national public interest, and is subject to national regulation as such, and Congress may reasonably limit the rules governing its conduct, with a view to preventing abuses and securing freedom from undue discrimination in its operation. Board of Trade of City of Chicago v. Olsen (Ill. 1923) 43 S. Ct. 470, 262 U. S. 1, 67 L. Ed. 839.