Mr. STURTEVANT. They make the allocations, and we have a witness coming up that can answer that exactly. He is in the export business, and I would prefer that he would answer it.

made

Senator O'MAHONEY. Mr. Sturtevant, just a moment ago you this statement, if I remember correctly, and you can correct me (reading):

If the Government could tell us exactly how much is to be exported, it would help us an awful lot.

Mr. STURTEVANT. Yes, sir; we would know what we had to shoot at in other words.

Senator O'MAHONEY. Then, is it your belief that Congress in determining what the Government policy should be in this great world crisis should adjust that policy to the needs of the speculators on the commodity exchange, or should the Congress attempt to adjust speculation upon the commodity exchange to suit the Government policy? Mr. STURTEVANT. Senator, that is a pretty involved question.

Senator O'MAHONEY. That is a very straight and simple question. Mr. STURTEVANT. It is a $64 question.

Senator O'MAHONEY. I intended it as such; it is the basic question in this whole issue, because your testimony and the testimony of every other representative for the board of trade has been that speculation in grain is the only activity that is carried on which does not affect the price and that there should be no statements or rumors or reports emanating from Washington affecting the market unless they were absolutely definite.

Now, that is a summary of your statement.

Mr. STURTEVANT. Yes, sir: and I stand by it.

Senator O'MAHONEY. So then I come back to the question.

Mr. STURTEVANT. I think speculation is incidental. I think that your effect of speculation has no effect over a long period. It is merely incidental. I will get back to that.

Senator O'MAHONEY. But when you tell us that in your opinion. the Congress and the Government should definitely state how much wheat is to be exported in order that those of you who are engaged in speculation on the commodity exchange may have an easier time, is that not what you are saying?

Mr. STURTEVANT. No, sir; that is wrong.

Senator O'MAHONEY. Are you not telling us that we should adjust our policy to suit the needs of the exchange?

Mr. STURTEVANT. I do not think, or at least I did not intend, to convey the opinion that I wanted these figures to come out for my own personal benefit.

Senator O'MAHONEY. Of course, I did not mean that, Mr. Sturtevant, naturally.

Mr. STURTEVANT. What I am trying to tell you is that the amount of wheat to be exported is very important, and these different statements coming from Washington are bound to affect the market. The whole economy of the country might stand in balance on whether we exported 500,000,000 bushels or 400,000,000 bushels, and the speculation is still incidental.

Senator O'MAHONEY. Now, you do not mean to have this committee understand that when you speak of reports and statements

coming from Washington, you are referring exclusively to official statements?

Mr. STURTEVANT. No, sir. I am not speaking exclusively of official statements, but official statements have more weight than unofficial

statements.

Senator O'MAHONEY. If a Member of Congress should say that in his opinion it might be a desirable thing for the Government to take over the entire wheat crop, that would have an effect upon speculation, would it not?

Mr. STURTEVANT. That is almost an official statement, sir, in my opinion.

Senator O'MAHONEY. It is not official, but it would have an effect. Mr. STURTEVANT. Yes, sir. I think it would.

Senator O'MAHONEY. Then do you believe that Members of Congress should not express publicly their views of what might be done just because it affects speculation upon the commodity exchanges?

Mr. STURTEVANT. I am not complaining about your expressing your opinions, but when you do, you must realize that you are going to affect something like this. That is up to you.

Senator O'MAHONEY. But then you said if we could have a definite figure from Washington, it would be very helpful to us, meaning the commodity exchange.

Mr. STURTEVANT. I think that that figure is very important from the standpoint of the national economy.

Senator O'MAHONEY. "Now, you have presented us with a very interesting chart on the daily closing prices of wheat at Kansas City market, and with a few variations up and down, the trend of that line is upward.

Mr. STURTEVANT. Yes, sir.

Senator O'MAHONEY. It begins in what 'year, at what month?
Mr. STURTEVANT. August 15 of this year.

Senator O'MAHONEY. And it ends in October.

Mr. STURTEVANT. That is November 17, as far as we could get on here.

Senator O'MAHONEY. How much higher is it at the end of the chart than it was at the beginning?

Mr. STURTEVANT. I think it is about as high as the high point, but I am not definite on that.

Senator O'MAHONEY. As a matter of fact, since that chart was prepared, the price has gone higher than it is on that chart?

Mr. STURTEVANT. Yes, sir.

Senator O'MAHONEY. And you recognize the fact, and you have said so in your paper, that the soaring cost of living has become a matter of great concern to the public of the United States.

Mr. STURTEVANT. That is right.

Senator O'MAHONEY. And you believe that something should be done about it?

Mr. STURTEVANT. If it can be done, I do.

Senator O'MAHONEY. Does that qualification mean that in your opinion it is likely that nothing can be done?

Mr. STURTEVANT. Yes, sir; it is likely.

Senator O'MAHONEY. It is your belief then that Congress can nothing to check this rising cost of prices?

do

Mr. STURTEVANT. I think it can do something, but maybe you are oing it; if you want a horseback opinion, I will be glad to tell you hat I think.

Senator O'MAHONEY. That is what we are here for. Now, what o you think we should do?

Mr. STURTEVANT. Maybe you are doing this, but I would think if were in your place, the first thing I would do would be to find out efinitely how much wheat Europe had to have; and I mean definitely. And I would find it out through sources that I knew I could depend on. Senator O'MAHONEY. Do you think anybody in Congress can conrol the weather in Europe?

Mr. STURTEVANT. I am not talking about the weather. I am alking about what they have to have to be fed.

The CHAIRMAN. Until their next crop, you mean?

Mr. STURTEVANT. Yes, sir.

Senator O'MAHONEY. Does that not depend upon circumstances and conditions that are away beyond our control?

Mr. STURTEVANT. At least you could bring it up to date and find ut what you think is their minimum amount they want over there; hat is the key to the whole thing, and you can start from there. Then, if you want to give them that amount and take the risk of puting prices up and possibly injuring our economy, that would be up o you, and not me, to say.

Senator O'MAHONEY. Now, if we should follow your recommendaion, and I am using your words, establish the minimum amount, the peculators would still say, "That is the minimum, and now it may be beyond that," and they might push the prices up again, is that right? Mr. STURTEVANT. It is possible, but it is incidental after all.

Senator O'MAHONEY. Now, let us get back to that incidental character. Do you want the committee to understand that in your opinion this trading upon the commodity exchange, this speculative rading, the buying and the selling, has no effect upon the market price?

Mr. STURTEVANT. I did not say it had no effect. I said it was ncidental. That is my opinion.

Senator O'MAHONEY. Does it have any effect on the market?

Mr. STURTEVANT. It might have in one day, but it irons itself out. Senator O'MAHONEY. Over what period?

Mr. STURTEVANT. I cannot tell you; but over a period like this it rons itself out.

Senator O'MAHONEY. You are a devotee of the contention that the buying and the selling of the speculators upon the commodity exchange, because they do not put any wheat in, being no producers, and because they take no wheat out since they are only speculators, has no effect at all except a very incidental effect?

Mr. STURTEVANT. That is right.

Senator O'MAHONEY. Is it not the fact that the only purpose of these speculators is to benefit from the price change?

Mr. STURTEVANT. That would be obvious.

Senator O'MAHONEY. It is obvious?

Mr. STURTEVANT. Yes, sir.

Senator O'MAHONEY. So that all of these speculators have a very definite interest in the price.

Mr. STURTEVANT. The same as the speculator in land or anythin else.

Senator O'MAHONEY. And do they not sometimes try to affect th market up or affect the market down?

Mr. STURTEVANT. I could not answer that, sir, I would imagin that anybody that bought wheat would like to see it go up; whethe they could or did affect it, I could not say.

Senator O'MAHONEY. Is it not a matter of fact that there are of erators who at least from time to time try to bull the market an operators who from time to time try to bear the market?

Mr. STURTEVANT. I presume there are, sir.

Senator O'MAHONEY. Do not you know that there are?

Mr. STURTEVANT. I said that I "presume." That means that think so.

Senator O'MAHONEY. Of course.

Mr. STURTEVANT. But the commodity credit exchange now has a eye on all of that, and if they see anything that is wrong, they ca

say so.

Senator O'MAHONEY. Of course, you know that when the com modity exchange was established, the representatives of the exchang were down here uttering the same sort of protests that are now being uttered against a possibility that we might put the margin up.

Mr. STURTEVANT. I think that that is the answer. I do not se anything wrong with that.

Senator O'MAHONEY. I am glad to have you acknowledge that. Mr. STURTEVANT. I have not seen anything wrong with it. Tha is an honest opinion.

Senator O'MAHONEY. I do not say there is anything wrong in you coming down here and expressing your opinion, and I am trying a defend the business in which you are engaged. My purpose is mere to determine whether on the whole it is in the public interest that L Congress attempt to limit the effect of this speculation upon th market.

Mr. STURTEVANT. We have tried to tell you that we do not think Senator O'MAHONEY. And you think it has no effect?

Mr. STURTEVANT. Yes, sir.

Senator O'MAHONEY. I am trying to make it appear, sir, that y are in the position of saying everything else affects the market; £ · Member of Congress opens his mouth, that affects the market; at. if somebody in Europe cannot raise wheat or if the Governme undertakes to talk about exporting wheat, that affects the mark and if the farmer holds wheat on his farm instead of sending it that affects the market. Everything affects the market except sp ulation; and to me it seems to be an absurd conclusion.

Mr. STURTEVANT. Well, sir, I think that you have overlooked te fact, or rather you have admitted that the wheat is not taken out the market by the speculator and it is not the same kind of a dens the Commodity Credit; when he takes it out, it is out.

Senator O'MAHONEY. That is why I say it is absurd to me to th that speculative operators who add nothing to the amount of 27and who take nothing away from the amount of grain and whose or activity has to do with pushing the prices up or down have no eff upon prices.

Mr. STURTEVANT. This might help you, Senator, if you listen to just a moment. We made a survey in Kansas City of about 7 we

trading, from September 1 to October 25, and in that trading the percentage of speculation was 24 percent, and the amount of long ving was 40,000,000 bushels, and the amount of long selling was 12.000.000 bushels. Now, that shows a very definite balance between peculative buying and selling, and it also shows the percentage of he total business is relatively small, and I would say that I do not Link the market could operate with less than 24 or 25 percent specutive buying. That is merely my opinion.

Senator O'MAHONEY. Have you not known instances?

Mr. STURTEVANT. Do those figures make any impression on your gument?

Senator O'MAHONEY. Not much, I confess, Mr. Sturtevant. Mr. STURTEVANT. I am sorry. I thought that they might. Senator O'MAHONEY. Let me ask you now, have you any recollecion of any incidents of trading upon the Commodity Exchange where operator buying or selling on a large scale has so affected the price hat when overextended, he finds himself cut? There is a rapid hange and a lot of innocent people are injured when they sell their ommodity.

Mr. STURTEVANT. When you say an "operator," do you mean a peculator?

Senator O'MAHONEY. Yes.

Mr. STURTEVANT. There is no way of telling about who is speculatFor instance, that business is handled by brokers and you do ot know whether it is speculative buying at the time it is being done. could not say as to that, because you do not know who puts the rders in.

Senator O'MAHONEY. I asked you the question because I have in. ind a story which was printed in the papers rather broadly last *tober from the Cotton Exchange. The price had been pushed up y an operator whose name I have forgotten, a speculator, to about cents, and he was overextended, and he was caught, and he had let go, and the price tumbled to 30 cents just when the cotton proacers were bringing their product to market, and they were the ones ho got the low price then. Now, upon that theory, it might be a od thing to help drive prices down if we have a lot of speculation. ad the speculators were overextended.

Mr. STURTEVANT. Of course, that is liable to happen any time, but nder the present regulations, it would not go that far in the grain arkets, I think. You are bound to have corrections at any time. Senator WATKINS. As I understand it then, it is your theory that te sellers, the speculative sellers, practically equalize those who are aying, and that is why it does not affect the market.

Mr. STURTEVANT. That is right. Any speculator that buys has got sell it sometime, and any speculator that sells has got to buy it metime. This survey was a spot check and it is over 7 weeks, and think it is fairly representative, sir.

Senator WATKINS. That would be true on nearly any of the other arkets?

Mr. SURTEVANT. I would say so; yes, sir.

Senator WATKINS. It seemed rather simple, but it seems to me that at probably was fairly convincing some are pounding the price up ad others are pounding it down-it would probably equalize it.

Mr. STURTEVANT. It was simple to me. That is why I said it, but ie Senator did not agree with me.