HUSBANDRY: Soviet Shorts

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Last week Secretary of Agriculture Arthur Mastick Hyde thought he had found a sinister explanation of declining U. S. wheat market prices. In a voice loud enough to be heard in the principal wheat-growing states (where low farm prices are likely to be a political issue in this year's campaign) he charged the Soviet Union with selling wheat short on the Chicago Board of Trade-to depress the price, to increase farm unrest. Secretary Hyde insisted that the Soviet short-sellers could never cover their future contracts by actual delivery of Russian grain over the 42¢-per-bu. U. S. tariff.*

These fresh politico-economic accusa- tions against Russia quickly stirred up a great commotion from which these facts emerged:

The All-Russian Textile Syndicate, a Soviet trade agency in the U. S., received orders from a "client" (presumably the Russian Government) to sell wheat futures in Chicago. The amount: 5,000,000 to 7,500,000 bu. According to E. W. Belitzky, the Syndicate's vice president and treasurer, these sales were hedges— that is, the "client" held the wheat and contracted for its future sale as a form of price insurance.† Recent declines gave the "client" a $200,000 paper profit on his sales over the spot price.

Secretary Hyde opened his offensive by a telegram to President John A. Bunnell of the Chicago Board of Trade, demanding action by the Board to protect U. S. husbandmen from alleged Soviet price manipulation. Mr. Bunnell replied by asking for specific charges and proofs. Secretary Hyde, annoyed at the skepticism that greeted his accusation, started for Chicago to press his case against Russia in person. Before he left, he declared:

"We are affording the Chicago Board of Trade an opportunity to clear the decks by its own voluntary action. If it doesn't, that will be another chapter. . . . During four days [Sept. 8, 9, 10, 11] the market on May wheat dropped 5¢. The sales by Soviet Russia were probably not responsible for all of this drop, but such sales, added to other bear factors, contributed greatly to a bear psychology which depressed the market. ... So far from having wheat to sell and thus to hedge, the Russian Government is rationing its people."

In the meantime Mr. Belitzky had this to say of his wheat operations: "The sale of a small quantity of wheat [5,000,000 bu.] could not appreciably affect the trend of prices in view of the fact' that the turnover on the Chicago Board of Trade is from 50 to 60 million bu. a day. . . . The transactions were of a purely business nature and were not intended as manipulations. . . . There was no investigation when we bought $250,000,000 worth of American goods, but when we sell a little wheat—oh!"

Suspicion developed that Secretary Hyde was beating this new Soviet tom-tom to divert attention from the political aspects of farm relief. Wheat state Senators who have long inveigled against Chicago grain "gambling" openly mocked him for his sudden agitation. Declared Washington's Senator Dill: "It looks to me as though Secretary Hyde and the Farm1 Board are grabbing at a straw like a drowning man trying to find the first excuse for their own failure to keep up the price of wheat."

Chicago grain dealers were hardly more sympathetic. Recalled was the fact that the Government's purchase of 60.000,000 bu. of