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I believe, is the 25th, but under this bill the limit could be made the 15th.

Mr. MARSHALL. The gentleman who just testified from Kansas City said that it will affect the price of wheat. Do I understand that you do not agree with him? Mr. DUVEL. I do not agree with him on that; no.

The CHAIRMAN. Mr. Beam. Mr. BEAM. Mr. Duvel, just what benefit do you think the producer is going to derive from having the Government licensing the broker? The exchanges themselves are interested in the operations of these floor brokers, as the gentleman testified here last Monday or Tuesday; in their supervision of them they are much more anxious to have honest operations than anyone else could be, and is it not possible if you could make some provision for submitting the evidence to them that they could deal with it more effectively than the Department?

Mr. DUVEL. If we could secure the facts—the exchanges have been very successful in dealing with cases of that kind, that come within their rules and regulations.

Mr. BEAM. And do you not think that they are in much better position, can deal more directly and in a much more expeditious way than if you have the Government license floor brokers as is contemplated by the proposed legislation?

Mr. DUVEL. No; I do not think so.
Mr. BEAM. Why not?

Mr. DUVEL. Well, let us take the floor broker who holds a customers' order, if he fills that order by taking it into his own account, there is not any way for the exchange to know anything about it.

Mr. BEAM. Has there ever been any case of that kind called to your attention? Have you had any complaints along that line that the floor brokers do what you have just described here?

Mr. DuVEL. Yes; I mentioned the case that we had before the Commission.

Mr. BEAM. Just the one case. Is that all?
Mr. DUVEL. No; there were others.

Mr. BEAM. Well, how many? I am anxious to find out some of them.

Mr. DUVEL. There are a number of other cases. We have had no authority to go into that. It requires considerable work to find out whether that has been done, and we have not had any means of doing it up to the present time.

(The chairman withdrew and Mr. Doxey assumed the chair.) Mr. Doxey. Mr. Kleberg desires to ask you one or two questions. Mr. DUVEL. Certainly. Mr. KLEBERG. If that is all right with you, Mr. Beam? Mr. BEAM. Yes. Mr. KLEBERG. The idea in Mr. Beam's question, as I understand it, is to find out the criticism of the present manner or method the trade itself has set up for control over these various unethical practices. Now, how would the Department arrive at a method of obtaining evidence, if you please, on the violations of ethical practices carried on by the trade itself?

Mr. DUVEL. From the records.

. Butpes, do you ble; the re

Mr. KLEBERG. How is that?
Mr. DUVEL. From the records.

Mr. KLEBERG. But you do not have a record of those transactions, of the amount of trades, do you?

Mr. DUVEL. They are available; the records of such transactions are available at the present time.

Mr. KLEBERG. Is there no way now, under the present set-up, whereby the Department could not function efficiently merely by calling attention to the board itself, the exchange, by consulting the records and determining the facts and pointing out the evidence to them?

What I am trying to get at is this: That instead of having this additional legislation, could not the Department, if it would merely call these discrepancies in these trades to the attention of the board, and these unethical practices—that the board could correct them?

Mr. DUVEL. There is not any way of getting at it, as I said, unless they were required to furnish

Mr. KLEBERG (interposing). I think perhaps you do not understand my question. My question is this: Would not merely the fact that your office calls these matters to the attention of the board, practices that appear in the record, and bring the facts to the exchange as the basis for your statement, enable the exchange to correct it itself?

Mr. DUVEL. We do that right along, wherever we find these cases; we work with the exchange, the business-conducts committee in these cases.

Mr. KLEBERG. Do you get response from them in cases where you have called it to their attention?

Mr. DUVEL. Yes, where there has been a strict violation of the rules; yes. We work with the business-conducts committee and it has been very effective in those cases.

Mr. KLEBERG. Do you not think their regular set-up is sufficient to cover any real dishonesty or unethical transactions ?

Mr. DuVEL. The difficulty is in getting the necessary machinery to find out the facts concerning the unethical practices.

Mr. KLEBERG. That goes back to the first question. Then if they do not have the machinery to find out the unethical practices, or who would be dishonest, and if you do not have that machinery, how are you going to discover these discrepancies?

Mr. DUVEL. We know a little more about the transactions of the brokers; we know something about the transaction; what is done, from the records.

Mr. KLEBERG. How are you to find that out?
Mr. BEAM. How can you know that?

Mr. KLEBERG. How would you ascertain those facts? In other words, what means, under this bill, is made available to you to ascertain the information and make it available to the Department with reference to these discrepancies?

Mr. DUVEL. We would be able to ascertain from the broker what his transactions were; that is what I am getting at.

Mr. KLEBERG. And you cannot do that now?

Mr. DUVEL. We do not have any authority to make that check at the present time.

Mr. BEAM. You have authority now to refer violations back to the exchange, have you not?

Mr. DUVEL. The grain exchange?

Mr. BEAM. Yes. What Mr. Kleberg and I are trying to find out now is how would it work out so that you would be able to find out and determine the evidence in thousands and thousands of dealings that go through every day on the exchange, every day in the year the exchange is open, how would you find out, as a practical matter? Is that feasible? That is what I want to know.

Mr. DUVEL. We would probably, in the case of the broker, require from him a report, or require him to keep some kind of a record.

Mr. BEAM. You are not requiring that at this time?
Mr. DUVEL. No.

Mr. BEAM. Well, the stock exchange has a record of every sale that the man makes, has it not? Mr. DUVEL. Perhaps so.

Mr. BEAM. And you have access to the records of the stock exchange now?

Mr. DUVEL. The stock exchange?
Mr. BEAM. Yes.
Mr. DUVEL. The board of trade.
Mr. BEAM. You have the board of trade?
Mr. DUVEL. Yes.

Mr. BEAM. What I have in mind is that if you were to try to ascertain the transactions of each individual floor broker-you already have the records of the board of trade itself—it would be an endless task.

Mr. Doxey. Gentlemen, it is now 12 o'clock, and the first thing that comes on the floor this morning is the conference report on this seed-loan bill. I know we are all interested in this discussion and I hate not to prolong it, but I am afraid we will have to adjourn. I hope those who have questions will make them short so that we can adjourn.

Mr. GOODWIN. Mr. Chairman, I would like to ask a question. Mr. ANDRESEN. I have one or two questions too, Mr. Chairman.

Mr. Doxey. Of course, we could prolong this hearing for some time. We are interested in these matters, but our time has expired.

Mr. GOODWIN. I would like to ask if Mr. Duvel could be here tomorrow; if we could have another session again tomorrow.

Mr. Doxey. Well, if that is what the committee wants, I am sure it will meet with the chairman's approval. I understand that those who have not had an opportunity to testify have been given the privilege of filing whatever statement they wanted to make, and I was fixing to adjourn this committee subject to the call of the chairman.

Mr. KLEBERG. I would like to get a little more information myself.

Mr. Doxey. Well, I will tell you what we will do—if you want to meet tomorrow morning on this matter

Mr. ANDRESEN (interposing). I would like to make a unanimousconsent request.

ng it. We are all"inis the conferand the firs

Mr. Doxey. You have that privilege, of course.

Mr. ANDRESEN. That is, that Dr. Duvel submit to us tomorrow complaints that he has received regarding operations that are illegal, and some of the practices indulged in-specific instances and also the procedure that has been adopted in taking this matter up with the board of trade and the business conducts committee; and let this committee know what cooperation he has had with that committee in dealing with these complaints. Also, that he furnish specific complaints that he has referred to here or the other day of irregular practices, and of the case where the man wrote to the department stating, as you may recall, that he had lost several thousand dollars in trading.

Mr. DUVEL. Yes.
Mr. ANDRESEN. And giving us more information on it.

Mr. DUVEL. I do not know that I can give you that tomorrow. As I stated the other day in executive session we only had the one side, and I do not know the other.

Mr. ANDRESEN. Well, that matter was referred to in executive session, and I believe the committee is entitled to have that made a matter of record, the cases that have been cited to the department, and set forth in the hearings. And I would ask unanimous consent. that Dr. Duvel appear here tomorrow morning and furnish a complete statement and full information.

Mr. Doxey. Without objection, the unanimous-consent request of Mr. Andresen, that we meet in executive session tomorrow at 10:30 and have Dr. Duvel appear before us with the information along the line suggested—without objection, that will be done.

Mr. GOODWIN. I have one or two questions, Mr. Chairman.
Mr. DoXEY. Yes.
Mr. GOODWIN. I wanted to ask them at this time.
Mr. Doxey. Yes, Mr. Goodwin; you may proceed.

Mr. GOODWIN. While we are in this discussion of section 4 (i), page 15, which reads:

Such contracts shall be made prior to a date to be fixed by rule or regulation of the Secretary of Agriculture, which shall not be earlier than the 15th day of the delivery month to which such contract relates.

The gentleman from Kansas City made the statement, as I understood it, that there would be a loss to the farmer under that section. I ask this question: Dr. Duvel said a moment ago that it would not, in his opinion, result in such loss.

Now, may I ask the privilege of having the gentleman from Kansas City give us the reasons for his statement that there would be such a loss?

Mr. Doxey. Yes; Mr. Davis.

Mr. Davis. I think you can see, from the illustration which I will give you, that it would result in such loss. Let us assume, for instance, they advise the Secretary they should stop trades on the 15th day of the month. I am operating an elevator, and I buy grain, have been buying grain in that trade area, and there is plenty of it. Now, someone is long 5,000,000 bushels of December wheat. Now, under this law no new trade can be made after the 15th of the month.

Therefore, I could not go out and trade with the farmer who had wheat and go back into the pit and sell on December wheat, because he would not allow any new trades. Now, it might mean that in that trade there would be a better price, but the farmer could not get the benefit of the price.

Suppose, for instance, that the price of wheat is 95 cents, and I could go out and would be glad to pay 95 cents for that wheat, and I send men around to buy wheat, and I would be glad to pay the farmer the 95 cents. Under the present operation I could take that wheat, and the farmer would get 95 cents for the wheat. But if this provision becomes a law, and if that May wheat is selling at 92 cents, I would have to pay the 92 cents, because I could not handle any new wheat, could not make any new trade, after the 15th day of the month. Of course, I might go out and buy a few cars of wheat at 95. But the man who demands delivery of that wheat will not hold that price up for a long period. But I could go out and pay 95 cents, and I could come in and make that sale today, but I cannot under this regulation, which means that the farmer will have to lose on that transaction 3 cents a bushel.

Now, I will state that I have been in this business for 35 years, and I am willing to bet a thousand dollars to a penny that I can prove my statement.

Now, in regard to the question asked about the code, I would just like to read this one paragraph from the code, in respect to its amendment. The code states:

This code in all its provisions is expressly made subject to the right of the President of the United States, in accordance with the provisions of subsection (b) of section 10 of the act, from time to time, to cancel or modify any order of approved lines under the rules and regulations of said act.

That is what the code provides regarding amendments. Mr. BEAM. I would like to amend Mr. Andresen's unanimous-consent request, that we have an open hearing. I think that the witness' statement should be on the record.

Mr. DoXEY. We could determine that in executive session tomorrow, and I think we can save the time of the witnesses, and perhaps get further. It is my understanding that we would not have any further session, but if the committee wants it, of course, that is what we will have to do.

Mr. ANDRESEN. My unanimous-consent request was not for an executive session. I wanted the statements to be made by Dr. Duvel to go into the record.

Mr. TOBEY. I think we should have some further hearing.
Mr. BEAM. If necessary, I make that motion.

Mr. DoXEY. If that is the wish of the committee, I am going to adjourn this hearing until tomorrow morning at 10:30.

(Thereupon, at 12:05 p. m., the committee adjourned until 10:30 a. m. tomorrow, Friday, Feb. 8, 1935.)

STATEMENT OF PAUL J. CHRISTIAN

Mr. CHRISTIAN. Mr. Chairman, my name is Paul J. Christian
The CHAIRMAN. I have your telegram and I was going to read it

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