be substituted the practice of paying the full cash value of the product you were buying at the time you bought it.

Mr. SNYDER. If you could do that there would be no corners.

The CHAIRMAN. I thought you would want to revise your answer to that question.

Mr. SNYDER. A man could not control money enough to do it.
The CHAIRMAN. Of course not.

Mr. SNYDER. Obliterating the rank speculator that I speak of, and retaining the hedging privilege would, in my judgment, help the grain business; it would help the producer and it would help everybody.

The CHAIRMAN. Do you not think it would be an excellent thing for the exchanges to try and put their houses in order, and to eliminate the element that they all admit is an evil and which does more than anything else to bring reproach upon their system and to endanger the whole system?

Mr. SNYDER. Yes; provided you did not go so far in endeavoring to eliminate that rank speculator as to endanger other lines of the same trade.

The CHAIRMAN. Do you not think it reasonable that gentlemen engaged in legitimate business upon these exchanges should help Congress and their legislative bodies to find the real line of demarkation rather than to be standing up and opposing any kind of legislation?

Mr. SNYDER. Yes, sir. I think that the only reason, or one of the greatest reasons, why we are opposing to-day this antioption bill, is because it started out to cut too deep, to cut into our privilege of hedging. From what I know of it, it has started out to cut into our privileges, and to interfere with our doing business in a legitimate way, unless we do as the farmer does. And, Mr. Chairman and gentlemen, I tell you the present American farmer needs no apology, and needs nobody to apologize for him to-day. He used to. I remember as a schoolboy-and some of you may remember the same things when I had to walk over muddy roads with my little copperthings-when toed boots, and take my lunch to school with me, as a country schoolboy; and there were others. To-day the average farmer's children are sent over to school in an automobile, and some of them are carried home to lunch and taken back by automobile. We must not think that the farmer of to-day needs the same treatment at the hands of Congress that he needed fifty years ago. He can give us cards and spades, all of us, to-day, and beat us. [Laughter.]

The CHAIRMAN. Yet the southern farmers, the producers of cotton, are practically unanimous in demanding legislation along this line. Mr. SNYDER. There is no relationship between dealing in grain and dealing in cotton, sir.

The CHAIRMAN. Can you differentiate between them, in a word or two?

Mr. SNYDER. In the first place, permit me to read this for a mo

ment:

SEC. 12. Wheat sold for spot or future delivery—

This comes back to your first question, Mr. Chairman, and answers it

unless otherwise specified, shall be known as contract wheat. Upon such sales the seller shall have the right to deliver No. 2 red winter wheat, or No. 2 red winter wheat, western

That is wheat grown west of the Ohio River, and that is qualified in that grade. It is wheat that has no garlic in it. In our section of the country garlic is permitted in the grade of No. 2 red wheat; and the difference between the No. 2 red winter and the No. 2 red western is that the No. 2 red western is not permitted to have any garlic

And or No. 1 hard spring wheat, and or No. 1 northern spring wheat, Baltimore inspection, at same price.

SEC. 13. Forms of contracts.

No.

Buyer's contract, Baltimore Chamber of Commerce.
BALTIMORE,

19-.

have this day bought and agreed to receive from Baltimore inspection, at cents per bushel,

19-.

For value received bushels contract wheat deliverable in the elevators at seller's option, during the month of The seller has the right to deliver No. 2 red winter wheat, and or No. 2 red winter wheat western, and or No. 1 hard spring wheat, and or No. 1 northern spring wheat on this contract at same price.

Certificates tendered on this contract must have not less than three days' free storage. In case of dispute, it is mutually agreed that the matter shall be referred to the arbitration of three members of the chamber-two of the arbitrators to be respectively chosen by the parties in dispute, they to select a third-and the decision of a majority of the arbitrators shall be final and binding. This contract is to be governed by the rules, regulations, and by-laws of this chamber in force at this date.

If a margin or security has been put up by

the decision of the arbitrators shall

be made known to the committee on margins, and that committee shall sign an order for the release of the margin or security.

Bushels at

The seller's contract is just the same, except the word "seller" appears where here it is the word "buyer."

Mr. MCDERMOTT. Would that committee's decision be final?

Mr. SNYDER. Yes, sir. There is one thing more, Mr. Chairman and gentlemen. I want to call your attention to just one thing more in this book, at page 67:

MARGIN BANKS.

The following city banks have been designated as margin banks, viz: First National Bank, 17 South street; Farmers and Merchants' National Bank, corner South and Lombard streets; Citizens' National Bank, Pratt and Hanover streets; National Union Bank of Maryland, 3 and 5 East Fayette street; National Marine Bank, Gay, and Water streets; National Bank of Commerce, 26 South street; Merchants' National Bank, South and Water streets; National Mechanics' Bank, South and German streets; Commercial and Farmers' National Bank, Howard and German streets.

You will notice, sir, that every one of these banks designated as margin banks, where margins must be put up between the buyer and the seller, in the case of our exchange, are national banks. They are national banks. There is not a single state bank or city bank. The CHAIRMAN. What difference does it make what kind of a bank the margin is put up in?

Mr. SNYDER. These banks are all governed by Congress, by the Senate and the House. They are governed by the United States. The state banks are governed, as I understand, by the state laws when the laws do not conflict with the Constitution of the United States; but these are banks that are chartered by the Government, showing that they are strong. The banks are strong to the extent of their deposits, so that the man who puts up a margin will not lose the margin because of putting it in a weak vessel.

The CHAIRMAN. You think that the chamber of commerce is very much to be commended then for

Mr. SNYDER. For putting every safeguard around every trade that comes before its members.

The CHAIRMAN (continuing). For taking care of the money that is put in it.

Mr. SNYDER. Yes, sir.

Mr. Cocks. There is a way for the money to get out, though, and for the fellow to lose his money, even if the bank does not break.

Mr. SNYDER. But the money can not get out. When the trade is cleaned up both the buyer and the seller must release the bank.

Mr. Cocks. Do you not believe if the margin proposition were eliminated, so far as outside people are concerned, that it would greatly reduce speculation?

Mr. SNYDER. Certainly, sir. If the gentleman on my left, with all due respect, sent an order to me, I would not fill the order unless the margin accompanied it.

Mr. Cocks. If a check accompanied the order it would be executed

Mr. SNYDER. Yes.

Mr. Cocks (continuing). As long as the margin is up. Would it not be possible for the exchange to adopt some rule to prevent that kind of business?

Mr. SNYDER. From outside people?

Mr. Cocks. Yes.

Mr. SNYDER. You may, Mr. Cocks, want to buy as a miller. You may want to buy 10,000

Mr. Cocks. No.

Mr. SNYDER. The supply being exhausted in your neighborhood, you may want to buy on the market.

Mr. Cocks. No; if you want to take me, do not take me as miller. Take me as one of these rapscallions who comes along the street with more money than brains.

Mr. SNYDER. I can not do that in this case. I must put you down as an honest miller [laughter]. The supply of grain

Mr. HAWLEY. The presumption is that everybody who applies to a member of your chamber of commerce to buy or to sell is honest? Mr. SNYDER. Naturally-even Mr. Cocks. We would look upon him in that way [laughter]. Now, all joking aside, gentlemen

Mr. Cocks. My point is this: That if your grain people, the members of your chamber of commerce, or the members of the various grain exchanges, ceased taking orders from outsiders on margin, that would eliminate a whole lot of speculation. I do not know that a law could reach it, but the rules of the exchange might reach it in some way. For instance, this letter I have here in my hand solicits business.

Mr. SNYDER. Yes.

Mr. Cocks. But never mind whether it solicits or not. Some fellow comes along, and you know that he is not a miller, that he is not a farmer, and that he is not in any way connected with it. He would speculate in anything.

Mr. SNYDER. Yes, sir.

Mr. Cocks. Is there not some way in which that fellow could be gotten out?

Mr. SNYDER. I presume he could be gotten out, provided it did not go so far as to interfere with other people.

Mr. Cocks. That is just the point exactly that we are after.

The CHAIRMAN. Suppose it comes to a question of either eliminating that fellow or eliminating your exchange?

Mr. SNYDER. Then eliminate that fellow and let us go on with our business.

The CHAIRMAN. Do you not think you could find some way to do it?

Mr. SNYDER. I have no doubt, Mr. Chairman, that it could be done; but it would require very, very careful thought and consideration.

Mr. HAWLEY. Have you ever appointed a committee to take up that question?

Mr. SNYDER. We have not, because speculation is the least feature in our market.

The CHAIRMAN. Speculation could be eliminated in your market without interfering with the legitimate business?

Mr. SNYDER. Without seriously interfering with the legitimate business. You gentlemen may not know it, but Baltimore is the largest exporter of corn in the United States to-day. We bring more corn from the West than any market. We export more corn grown in the West than any market in the United States, and, Mr. Chairman and gentlemen, we do it all the year round when we can get hold of it. The Gulf only does it at certain periods, because the germinating season comes on earlier, and they have to pull out. The corn will not keep when shipped through Gulf ports.

The CHAIRMAN. Do you think the rank speculation in your chamber of commerce has any influence on the legitimate trade? Mr. SNYDER. No, sir.

The CHAIRMAN. Are there any further questions?

Mr. LEVER. To eliminate the rank speculator would not interfere with the export business of the country, would it?

Mr. SNYDER. To eliminate the maker of corners, the rank speculator, would not interfere with it. If the rank speculator could be eliminated, I, as a receiver and exporter of grain, as a dealer with the shipper of the West, and as a seller to the foreign buyer, would be very glad to see him eliminated.

Mr. HAUGEN. Have you any suggestion to offer as to how to eliminate him?

Mr. SNYDER. I would not like to undertake to do that.

Mr. HAUGEN. Undoubtedly you have given this matter consideration.

Mr. SNYDER. I considered that I was coming before a committee that I was very much afraid I would be afraid of. [Laughter.]

Mr. HAWLEY. If you have any suggestion to make we would like to have it.

Mr. SNYDER. I have no suggestion to make right offhand.

The CHAIRMAN. He has repeatedly said that he had not any suggestion to make.

Mr. BEALL. I understand that your exchange has been in existence for 54 years?

Mr. SNYDER. Yes, sir.

Mr. BEALL. For what portion of that time has future trading been permitted?

Mr. SNYDER. I do not know that I could give you the exact year. I should say since I have been a member of the exchange-about thirty years. There has been future trading in that exchange during my membership.

Mr. BEALL. Do you know whether, during the early years of your exchange's history, dealing in futures was or was not permitted? Mr. SNYDER. I could not tell you, before I became a member. I can say one thing to you, gentlemen. Before the time of the elevators, the cars were brought in from the country on the street tracks and bags of wheat, corn, and rye were carried up ladders on the backs of niggers and stored in the warehouse.

Mr. BEALL. I understand that on your contracts four grades of grain are deliverable where no particular grade is specified. Mr. SNYDER. No.

Mr. BEALL. Four classes of grain?

Mr. SNYDER. No; the particular grade must be specified. I have explained that you say "May wheat."

Mr. BEALL. You say "May wheat."
Mr. SNYDER. No, sir.
Mr. BEALL. Or No. 2?

Mr. SNYDER. No, sir.

Mr. BEALL. You say "May wheat?"

Mr. SNYDER. Yes, sir.

You do not say No. 1 hard?

Mr. BEALL. Under that sort of a contract the dealer can deliver either one of the four kinds?

Mr. SNYDER. Yes, sir.

Mr. BEALL. Can he deliver some of each kind?

Mr. SNYDER. Oh, yes; he can.

Mr. BEALL. He can deliver all of any one grade, or he can deliver part of each of the four grades?

Mr. SNYDER. Yes, sir; he can do that.

Mr. BEALL. Can he deliver any other kind of wheat?

Mr. SNYDER. No, sir.

Mr. BEALL. Is there any sort of penalty attached to it?
Mr. SNYDER. No, sir; unless by a mutual agreement.

Mr. BEALL. He can deliver one of the four kinds?

Mr. SNYDER. Yes, sir. Further, it says here "Wheat sold for spot for future delivery unless otherwise specified." As I tried to explain, when I sell you No. 2 red wheat, that is otherwise specified "May delivery," I must deliver you No. 2 red. I tried to explain that to you a few minutes ago.

Mr. BEALL. Suppose under one of these contracts the seller tenders wheat that does not come within any of these grades, is there any way by which that can be forced on the buyer?

Mr. SNYDER. "In case of dispute, it is mutually agreed that the matter shall be referred to the arbitration of three members of the chamber two of the arbitrators to be respectively chosen by the parties in dispute, they to select a third-and the decision of a majority of the arbitrators shall be final and binding."

Mr. MERRILL. Mr. Snyder, I beg your pardon; but Mr. Beall, I think, wants to know if No. 3 or No. 4 wheat could be delivered on that contract.

Mr. SNYDER. It could not.

Mr. BEALL. If those arbitrators decide that it is not one of these four grades, can that wheat be forced upon the buyer at all? Mr. SNYDER. There is no difference whatever. It can not be forced upon the buyer. You must deliver on your contract one of the four grades.