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Mr. S of wheat masight. erstand

Mr. SNYDER. I do mean it, sir.

The CHAIRMAN. Do you mean to say to this committee that no more wheat is traded in than there is in the country?

Mr. SNYDER. Oh, no; I do not mean that. The CHAIRMAN. I thought you did not mean what you said. Mr. SNYDER. But you seem to lose sight of the fact that a million bushels of wheat may be traded in where there are only half a million bushels of stock in sight.

The CHAIRMAN. We understand that perfectly. Mr. SNYDER. It was testified to the other day-I think the gentleman from South Carolina asked the question—that hogs had been sold at $9.80, which was the highest price in forty years, and the gentleman from South Carolina suggested that that was because the farms were depleted. If you will permit me to say it, the farmer in the United States is not fool enough to give away his basis of supply because there is a little advance in the market. Thousands of boars are kept on the farm. They are not sold off. The pigs are there, and they are growing into money. It is the basis of supply.

The CHAIRMAN. I did not mean to divert you. I merely wished to call your attention to a statement that I was sure you did not want to stand in the record.

Mr. SNYDER. I think there is almost as much grain on the farms of the country to-day-within 50 per cent, on the farms to-day—as was raised. The man who did not ship his grain early is the man who is getting the high price. The man who did ship his grain early got his money for it. He was willing to do it as a matter of barter and sale.

The CHAIRMAN. I did not mean to divert you. Mr. SNYDER. To answer your question, I will say, yes, sir. Mr. BEALL. John Smith sends down an order, accompanied by $500, to buy him 10,000 bushels of grain. Bill Johnson, over in Indiana, sends to some other person an order to sell for him 10,000 bushels of grain, and he sends $500. You buy for Smith from the broker who represents Bill Johnson 10,000 bushels of grain. The broker who represents Johnson sells to you 10,000 bushels of grain for delivery by Johnson.

Mr. SNYDER. No; not at all.

Mr. BEALL. Both Smith and Johnson are using the Baltimore Exchange, and with no expectation of delivering that grain on the one hand or of receiving it on the other. Is not that a gambling transaction pure and simple ?

Mr. SNYDER. I think not, sir. In the first place, I do not know Smith and I do not know Jones yes, I know Smith.

Mr. BEALL. That is the very point I am getting at. Mr. SNYDER. I know Smith because he sends me the order to sell for him 10,000 bushels of grain. I do not know there is a Jones in the transaction. I make the returns to Smith. I have nothing to do with Jones.

Mr. BEALL. As long as you get your commission, you are indifferent whether this man over here expects to deliver 10,000 bushels of grain, or whether that man over yonder expects to receive'it.

Mr. SNYDER. But do not lose sight of the fact that the grain may be delivered to me if he is entirely satisfied, and I may have to pay 100 cents on the dollar for it, and put it out on the market again. He may deliver that grain. He may not buy that grain in.

The CHAIRMAN. Are there any further questions?. Mr. MERRILL, I want to have the record right in respect to hedging Is it not true, sir, that a large part of the hedging, which of necessi: is in contract grades, is for the protection of the off grades which car not be delivered Mr. SNYDER. Naturally. Mr. MERRILL. The gentleman says “naturally.” Mr. HAUGEN. A moment ago you referred to excess commission I infer from what you said that in case of delivery there is an extre commission charged. Mr. SNYDER. For hedging: yes. Mr. HAUGEN. I thought the commission would be one-quarter of a cent. Mr. SNYDER. On the original deal there is a commission of oneuarter of a cent. Take corn, for instance. If the corn is delivered . I * the usual price for handling the actual corn—half a cent a bushel. . HAUGEN. Half a cent, for corn? . SNYDER. Yes. . HAUGEN. That is what you charge? . SNYDER. For handling the actual corn. . HAUGEN. Half a cent? . SNYDER. Half a cent. . HAUGEN. Now, John Smith sells 10,000 bushels of corn to be delivered in May. What is required of him to do? First he puts up the margin? Mr. SNYDER. First he puts up the margin. Mr. HAUGEN. To pay one quarter of a cent? Mr. SNYDER. Yes, sir. Mr. HAUGEN. Then what happens when the month of May comes? Mr Mr.

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. SNYDER. If John Smith has shipped that corn? . HAUGEN. If he has shipped it. Mr. SNYDER. If he has shipped it he has his margin to his credit— Mr. HAUGEN. Certainly. Mr. SNYDER. He has the margin to his credit, and I handle that actual corn for him, and charge him half a cent a bushel, and interest for paying his draft, and taking in the corn through the elevators, and .# it and putting it out, and making the return to him. Mr. HACGEN. We will say the price is half a dollar a bushel, which would be $5,000 that you sell it for. What are the commissions? Mr. SNYDER. Half a cent a bushel. S * HAUGEN. What is the net amount that is returned to Mr. Smith ! Mr. SNYDER. The net amount is less his freight, and his commis. sion and interest. He has to pay the freight. Mr. HAUgEN. Certainly. Mr. SNYDER. Less the freight, interest, elevator, insurance— Mr. HAUGEN. What is the interest? Mr. SNYDER. Six per cent. Mr. HAUGEN. On what? Mr. SNYDER. On the advance made for him. Mr. MERRILL. They always draw drafts. Mr. SNYDER. He will draw 75 per cent of the draft.

Mr. HAUGEN. We will leave the bill of lading and the sight draft out.

Mr. SNYDER. Then we just charge him the freight and the elevator charges.

Mr. HAUGEN. What are the elevator charges ?

Mr. SNYDER. He has free elevation in Baltimore for the first twenty days. After that there is a charge of an eighth of a cent for each five days.

Mr. HAUGEN. Suppose he ships it according to contract.

Mr. SNYDER. There is another thing. If I sell 10,000 bushels for him I can deliver it car by car.

Mr. HAUGEN. Without going through the elevator ?

Mr. SNYDER. No, sir; it must get the certificate. It must be inspected, and there is a charge for the inspection.

Mr. HAUGEN. It must go to the elevator to be inspected ?
Mr. SNYDER. Yes, sir.
Mr. HAUGEN. What are the charges at the elevator ?

Mr. SNYDER. The charge for inspection is 50 cents a car; and the charge for elevation is three-quarters of a cent a month, after the first twenty days.

Mr. HAUGEN. But he delivers it on contract.

Mr. SNYDER. Then there is no additional elevation where he delivers it out on the first twenty days.

Mr. HAUGEN. I am trying to get at

Mr. SNYDER. I will put it down so that you can read it. (Making memorandum for Mr. Haugen.) The freight

Mr. HAUGEN. Suppose he prepays the freight?

Mr. SNYDER. Then I charge him a commission of half a cent a bushel; inspection 50 cents a car; weighing, I think that is 25 cents a car now—we will put it that way. This is per car. He has to get out the quantity, you know, as well as the quality.

Mr. HAUGEN. There is no dispute as to these charges. I want to get at the elevator charge.

Mr. SNYDER. He has paid the freight; he has made no draft; commission, half a cent a bushel; inspection, 50 cents a car; weighing, 25 cents a car; elevation, one-eighth of a cent for each five days.

Mr. HAUGEN. Why should there be a charge of one-eighth of a cent for the elevation if he has delivered it according to the contract?

Mr. SNYDER. He has not delivered it according to the contract unless it comes to the elevator. In some places the elevation is a part of the railroad rate; but it is against the interstate commerce law that such should be the case.

Mr. HAUGEN. If the grain was shipped through-
Mr. SNYDER. Shipped through to Europe?
Mr. HAUGEN. Wherever it is destined for.
Mr. SNYDER. He would have to pay that charge.
Mr. HAUGEN. I mean spot delivery.
Mr. SNYDER. On the car ?
Mr. HAUGEN. On cash delivery.
Mr. SNYDER. Cash delivery, sir-

The CHAIRMAN. One minute. Both of you gentlemen are talking at the same time, and you are talking to each other. The stenographer will get no record at all.

Mr. HAUGEN. If I consign 1,000 bushels of grain or corn to Baltimore and it is sold under cash sales, there are no charges for elevation are there? Mr. SNYDER. If you have sold it? Mr. HAUGEN. I am talking about spot market, cash market. Mr. SNYDER. Our market is a cash market. Mr. HAUGEN. I am trying to get to the point. Mr. SNYDER. Have you sold it? Mr. HAUGEN. I have consigned you 1,000 bushels of grain. Mr. SNYDER. And I am selling it for you. Mr. HAUGEN. What are the charges? Mr. SNYDER. Just as I gave them to you. Mr. HAUGEN. One-eighth of a cent for elevation? Mr. SNYDER. Yes, sir. Mr. HAUGEN. Cash sale? Mr. SNYDER. Yes, sir. Mr. HAUGEN. That is not the case in Chicago. Mr. SNYDER. It is not? I guess you are wrong. Mr. MERRILL. That is peculiar to Baltimore. Mr. SNYDER. You are talking about track stuff, and I am talking about contract stuff. Mr. HAUGEN. I am trying to get at the difference. Mr. SNYDER. If the car was on the track the commission would be eater than if it went through the elevator, as there would be more abor attached to it. The CHAIRMAN. What is your idea? This is hardly germane. Mr. HAUGEN. I am trying to get at the difference. I am trying to et at the difference in the amount these people are held up for. . is what I am trying to do. If they are being held up I want to ow it. Mr. SNYDER. You have got Chicago confused with Baltimore. Mr. HAUGEN. Do I understand you to say that there is this difference in the track transaction and the future transaction? Mr. SNYDER. No, sir; you are confused. I want to try to unravel you, if you will permit me. Mr. floo. Go on with the transaction. Mr. SNYDER. You are talking about Chicago, and I am talking about Baltimore. You are talking of a track sale, and I am talking of an elevator sale. If I buy of either of you gentlemen, Baltimore grading, you have not fulfilled your contract until that grain is graded and until it is weighed, and it can not be weighed until it is weighed

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in the elevator. That is the Baltimore system. You are confused in that. You are buying at Chicago on track, and there is no elevator charge.

Mr. MERRILL. Tell him about Baltimore. Mr. SNYDER. I buy in Baltimore on the Baltimore grading, and mixed corn is our contract grade. In Chicago Mr. HAUGEN. Let us carry it through. The CHAIRMAN. Has he not given you a statement of all the charges? Mr. HAUGEN. I want to follow that through. Mr. SNYDER. You sell me 10,000 bushels of mixed corn, Baltimore terms, May delivery. Mr. HAUGEN. You have stated that would be the future.

Mr. SNYDER. Is that plain?

Mr. HAUGEN. The next question would be, if I ship you 10,000 bushels of corn, and you sell that 10,000 bushels of corn to Mr. John Smith, a miller of Baltimore, what are the charges ?

Mr. SNYDER. Are you consigning or selling me this corn?
Mr. HAUGEN. I am consigning it.
Mr. SNYDER. And I sell it to a miller ?
Mr. HAUGEN. Yes; at Baltimore.
Mr. SNYDER. On the track now, sir?
Mr. HAUGEN. You sell it to the miller.

Mr. SNYDER. But there are different ways of selling to the miller. Do you mean in the elevator or on the track?

Mr. HAUGEN. Well, that is for you to explain.

Mr. SNYDER. I sell it to the miller on the track, and we send it to the mill, and I charge you a cent a bushel. I put it through the elevator for half a cent a bushel commission. One is the local export rate, and our by-laws control it, and the other is the domestic rate. You want to eliminate the commission. You want me to sell 10,000 bushels of corn, Baltimore terms for myself. That is the easiest way. It gives the lowest rate and the lowest charge.

Mr. HAUGEN. I want to get at the facts. I am somewhat familiar with the manipulation of these matters both in the stock yards and in the exchanges, and I am trying to find out what extra charges are imposed that might be eliminated, if there are any such.

The CHAIRMAN. We are considering bills, Mr. Haugen, looking to the elimination of future dealing, where no delivery is intended. I do not know just what the rest of the committee think

Mr. HAUGEN. You do not care as to the methods that are employed.

The CHAIRMAN. I do not see what the connection is between the line of questions you are asking and the purpose of the bill.

Mr. HAUGEN. My position is that this business should be eliminated, or that there should be some reason for it. If the transactions are legitimate, if there is nothing to investigate as to the methods employed, what is all this investigation about? If it is gambling, I think this committee ought to know it. My purpose is to investigate as to the methods that are employed; how these people are held up at an extra expense of one-quarter or half a cent, or whatever it may be, through the operation of buying for future delivery. That is what I want. We have been told all the time that these transactions are legitimate, and that no extra charge is exacted from anyone. If that is the case, I see no reason why the practice should be eliminated.

The CHAIRMAN. I thought all your questions were directed to transactions in actual grain.

Mr. HAUGEN. I am trying to find out where the hold up is.

The CHAIRMAN. Whereas the bills contemplate transactions in phantom grain, if there are any such.

Mr. HAUGEN. Now, if Mr. John Smith buys 10,000 bushels of corn for May delivery, what is he expected to do—the price on time. being 50 cents a bushel ?

Mr. SNYDER. He would pay for it on delivery.
Mr. HAUGEN. How much?
Mr. SNYDER. Fifty cents a bushel.
Mr. HAUGEN. And that is all ?
Mr. SNYDER. That is all.

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