National Affairs: No Proof

Last Black Friday that is, March 13 when the Messrs. Jesse L. Livermore (Manhattan) and Thomas Howell (Chicago) loosed an avalanche of wheat and rye that proceeded right through the bottom of the grain market, Mr. Arthur Cutten (Chicago) was notably annoyed and the U. S. Department of Agriculture was somewhat alarmed (TIME, Mar. 23, 30, BUSINESS). Mr. Cutten was annoyed because he, the big holder of wheat and rye, was feeling bullish, and his enormous paper profits were being swept rudely into oblivion . Also , Mr. Cutten felt that the catastrophe had been timed purposely to do him injury, since it happened while he was on an automobile excursion, out of touch with his agents. U. S. Secretary Jardine was alarmed because the simultaneous action of the Messrs. Livermore and Howell suggested possible collusion to manipulate grain prices-a practice painstakingly prohibited by the Capper-Tincher Grain Futures Act.

Mr. Cutten could do nothing about it save abuse the Messrs. Howell and Livermore beneath his breath and hope with a great hope that Secretary Jardine would order an investigation, discover collusion, punish his oppressors.

Investigate, Secretary Jardine did. Last week he was still investigating. It was known that the Departments of Jus tice and Commerce were also sniffing about the Midwestern brokerages. But not one of the investigators had yet run upon any proof of correspondence between the Messrs. Livermore and Howell nor any records of sales in those gentlemen's names executed in other than legitimate "contract" markets. As far as the evidence went, it was mere business acumen that had moved them separately to sell their grain at the same time and keep on selling until it was time to buy again and start the price-swing going upwards. The Messrs. Livermore and Howell are alleged to have made between them some 22 millions on the operations. Some Europeans lost much money, others saved much by buying necessary wheat shipments when the price was down. From the U.S. standpoint, this latter feature was not creditable to the Messrs. Livermore and Howell as an "economic service," for the U.S. farmer lost a fat slice from prices he had hoped to command this month and next.

Last week, it seemed that the most important result of last Black Friday would be recommendations from Secretary Jardine that the Boards of Trade institute rules limiting the fluctuation of grain futures prices in a single day-rules similar to those found beneficial on the Cotton Exchange.