HUSBANDRY: Soviet Shorts (Cont.)

If Secretary of Agriculture Arthur Mastick Hyde expected to provide U. S. farmers with better prices for their wheat by his charge that the Soviet Government was selling short on the Chicago Board of Trade, he must have been a sorely disappointed man last week. The Board of Trade barred short sales by foreign governments. Soviet shorts covered their position. The Federal Farm Board, through its grain corporation, began to buy again. Yet within the week September wheat slumped 7 cents per bu. to a 24-year-rec-ord low of 74½ cents, as compared with the 5 cent-per-bu. decline the week Soviet traders were accused of deliberately trying to depress the market to demoralize U. S. husbandmen (TIME, Sept. 29).

Red Explanation. The extent of Red short sales was definitely established when the House committee investigating Communism questioned E. Y. Belitzky, vice president of the all-Russian textile syndicate, and the three New York grain brokers to whom he gave his selling orders. Comrade Belitzky revealed that he received by trans-Atlantic telephone instructions from Chlebtorg, Hamburg agency of the Russian grain trust, to sell 7,765,000 bu. of wheat in Chicago. According to this witness, Russia had the wheat to sell abroad but, pending delivery, decided to use the Chicago market to hedge the sale as a form of price insurance. Hedging, he said, seemed necessary because of London estimates of a larger world crop with consequently lower prices. Declared Comrade Belitzky: "To say the syndicate was selling wheat short to depress the price is fantastic. The logic and the facts refute this charge."

Brokers' Explanation. Brokers for this Soviet sale were: Harold L. Bache of the Manhattan firm of J. S. Bache & Co., who disposed of 2,300,000 bu.; Alvin Wachsman of Wachsman & Wassail who sold 3,110,000 bu.; Adolph E. Norden of A. Norden & Co., whose sales totalled 2,335,000 bu. The House committee members seemed dazed by the intricacies of grain trading as described by Broker Bache, who denied that the Soviet sales were large enough to affect the pit price, explained that if Russia had wanted to manipulate the world price, it would have sold short in a narrow market such as Liverpool rather than on the world's biggest at Chicago.

Board, Hyde, Kipling. Meanwhile to satisfy Secretary Hyde, the Chicago Board's business conduct committee was making its own investigation of the Soviet sales. Because Secretary Hyde did not complete his trip to Chicago to help Board of Trade's investigation, Board officials, led by their counsel, Silas Hardy Strawn, travelled to Washington to see him. When their "free, frank and friendly" conference broke up, they were still miles apart on interpreting the influence of the Red short sales upon wheat prices. Counsel Strawn voiced the opinion of practically all experienced grain traders when he said: "Short selling of 7,500,000 bu. of wheat would not depress its price." Secretary Hyde stoutly repeated that the Board must "clean house." added: "if it doesn't, that, as Kipling would say, is another story."