Abstract

A master of the spoken and written word, on the eve of the passing of the first Federal Government Law to regulate futures trading in Grain, Senator Capper from Kansas addressed Congress in 1921 as follows, ‘Mr. President, … today, under the cloak of business respectability, we are permitting the biggest gambling hell in the world to be operated on the Chicago Board of Trade’ (61 Cong. Rec. 4761, 1921). Current and contemporary literature views the early regulations of the 1922 Grain Futures Act as the result of ‘an orgy of populist rhetorical excess’ to eliminate as much free market capitalism as possible from the way the grain trade operated (Stassen 1982). Tellingly, however, the President of the Chicago Board of Trade (CBOT) wrote in a confidential memo to the Secretary, ‘The plain and simple facts are.. the bill is drafted substantially as we wished’. My paper describes the interactions between the stakeholders (the Grain Trade, the CBOT , key legislators and the Department of Agriculture) and juxtaposes their actions to the growing anti-Grain Trade rhetoric extant at the time and evidenced at the quasi-public Hearings and in the press. I comment specifically on the non-existence of the voice of the farmer in the very private conversations in Washington, Kansas City and Chicago. I conclude that the early legislation was welcomed if not explicitly demanded by the grain exchanges, and, perhaps coincidentally, the weak powers granted to the Grain Futures Administration served to prevent future regulation from restricting speculation in Grains during the post-Great War agricultural depression as well as the subsequent Great Depression.