trusts. The word "grain" shall be construed to mean wheat, corn, oats, barley, rye, flax, and sorghum. The term "future delivery," as used herein, shall not include any sale of cash grain for deferred shipment or delivery. The words "board of trade" shall be held to include and mean any exchange or association, whether incorporated or unincorporated, of persons who shall be engaged in the business of buying or selling grain or receiving the same for sale on consignment. The words "interstate commerce" shall be construed to mean commerce between any State, Territory, or possession, or the District of Columbia, and any place outside thereof; or between points within the same State, Territory, or possession, or the District of Columbia, but through any place outside thereof, or within any Territory or possession, or the District of Columbia. (Sept. 21, 1922, c. 369, § 2, 42 Stat. 998.) Historical Note Other This section was derived from § 2 of Act Sept. 21, 1922, c. 369, 42 Stat. 998. provisions originally contained in that section will be found in §§ 3 and 4, post, of this title. See also historical note under section 1, ante, of this title. § 3. When transaction deemed in interstate commerce; "State" defined. For the purposes of this chapter (but not in any wise limiting the definition of interstate commerce in the preceding section) a transaction in respect to any article shall be considered to be in interstate commerce if such article is part of that current of commerce usual in the grain trade whereby grain and grain products and by-products thereof are sent from one State with the expectation that they will end their transit, after purchase, in another, including in addition to cases within the above general description, all cases where purchase or sale is either for shipment to another State, or for manufacture within the State and the shipment outside the State of the products resulting from such manufacture. Articles normally in such current of commerce shall not be considered out of such commerce through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of this chapter. For the purpose of this section the word "State" includes Territory, the District of Columbia, possession of the United States, and foreign nation. (Sept. 21, 1922, c. 369, § 2, 42 Stat. 998.) Historical Note See historical note to section 2, ante, of this title. Notes of Decisions 1. "Current of interstate commerce."In Board of Trade of City of Chicago v. Olsen (Ill. 1923) 43 S. Ct. 470, 262 U. S. 1, 67 L. Ed. 839, the court, reviewing the activities of the Board of Trade in respect to grain, said: "The fact that grain shipped from the West and taken from cars may have been stored in warehouses and mixed with other grain, so that the owner receives other grain when presenting his receipt for continuing the shipment, does not take away from the interstate character of the through shipment any more than a mixture of the oil or gas in the pipe lines of the oil and gas companies in West Virginia, with the right in the owners to withdraw their shares before crossing state lines, prevented the great bulk of the oil and gas which did thereafter cross state lines from being a stream or current of interstate commerce. Eureka Pipe Line v. Hallanan (W. Va. 1921) 257 U. S. 265, 42 S. Ct. 101, 66 L. Ed. 227; United Fuel Gas Co. v. Hallanan (W. Va. 1921) 257 U. S. 277, 42 S. Ct. 105, 66 L. Ed. 234." § 4. Liability of principal for act of agent. The act, omission, or failure of any official, agent, or other person acting for any individual, association, partnership, corporation, or trust within the scope of his employment or office shall be deemed the act, omission, or failure of such individual, association, partnership, corporation, or trust, as well as of such official, agent, or other person. (Sept. 21, 1922, c. 369, § 2, 42 Stat. 998.) Editorial comment.-Although the language employed in this section is without limitation it should be considered as if preceded by the words "For the purpose of this chapter." Historical Note See historical note to section 2, ante, of this title. § 5. Resolution declaring dangerous tendency of dealings in grain futures. Transactions in grain involving the sale thereof for future delivery as commonly conducted on boards of trade and known as "futures" are affected with a national public interest; that such transactions are carried on in large volume by the public generally and by persons engaged in the business of buying and selling grain and the products and by-products thereof in interstate commerce; that the prices involved in such transactions are generally quoted and disseminated throughout the United States and in foreign countries as a basis for determining the prices to the producer and the consumer of grain and the products and by-products thereof and to facilitate the movements thereof in interstate commerce; that such transactions are utilized by shippers, dealers, millers, and others engaged in handling grain and the products and by-products thereof in interstate commerce as a means of hedging themselves against possible loss through fluctuations in price; that the transactions and prices of grain on such boards of trade are susceptible to speculation, manipulation, and control, and sudden or unreasonable fluc tuations in the prices thereof frequently occur as a result of such speculation, manipulation, or control, which are detrimental to the producer or the consumer and the persons handling grain and products and by-products thereof in interstate commerce, and that such fluctuations in prices are an obstruction to and a burden upon interstate commerce in grain and the products and by-products thereof and render regulation imperative for the protection of such commerce and the national public interest therein. (Sept. 21, 1922, c. 369, § 3, 42 Stat. 999.) Historical Note See historical note to section 1, ante, of this title. Notes of Decisions 1. Right of court to question.-In view of evidence before congressional committees and the Federal Trade Commission as to manipulations of futures markets and their effect, the conclusion of Congress, expressed in Grain Futures Act, that dealings in futures are susceptible to speculation, manipulation, and control, working to the detriment of producers, consumers, shippers, and legitimate dealers in interstate commerce, and that such burden and obstruction on interstate commerce is direct, recurring, and a constantly possible danger, is not unreasonable, and cannot be questioned by the court. Board of Trade of City of Chicago v. Olsen (Ill. 1923) 43 S. Ct. 470, 262 U. S. 1, 67 L. Ed. 839. § 6. Prohibition against dealings in grain futures; general exceptions. It shall be unlawful for any person to deliver for transmission through the mails or in interstate commerce by telegraph, telephone, wireless, or other means of communication any offer to make or execute, or any confirmation of the execution of, or any quotation or report of the price of, any contract of sale of grain for future delivery on or subject to the rules of any board of trade in the United States, or for any person to make or execute such contract of sale, which is or may be used for (a) hedging any transaction in interstate commerce in grain or the products or by-products thereof, or (b) determining the price basis of any such transaction in interstate commerce, or (c) delivering grain sold, shipped, or received in interstate commerce for the fulfillment thereof, except (a) Where the seller is at the time of the making of such contract the owner of the actual physical property covered thereby, or is the grower thereof, or in case either party to the contract is the owner or renter of land on which the same is to be grown, or is an association of such owners, or growers of grain, or of such owners or renters of land; or (b) Where such contract is made by or through a member of a board of trade which has been designated by the Secretary of Agriculture as a ་ "contract market," as hereinafter provided in this chapter, and if such contract is evidenced by a record in writing which shows the date, the parties to such contract and their addresses, the property covered and its price, and the terms of delivery: Provided, That each board member shall keep such record for a period of three years from the date thereof, or for a longer period if the Secretary of Agriculture shall so direct, which record shall at all times be open to the inspection of any representative of the United States Department of Agriculture or the United States Department of Justice. (Sept. 21, 1922, c. 369, § 4, 42 Stat. 999.) Historical Note See historical note to section 1, ante, of this title. Notes of Decisions 1. Constitutionality.-In Chicago Board of Trade v. Olsen (Ill. 1923) 262 U. S. 3, 43 S. Ct. 470, 67 L. Ed. 839, it was held that the constitutionality of provisions forbidding use of the mails or interstate means of communication, to offer or accept sales for future delivery, except through members of boards of trade, was not involved, since the plaintiffs were not affected by them, and, under § 10 [see § 17 of this title], invalidity of part of the act was not to affect the validity of the remainder. § 7. Designation of board of trade as "contract market"; conditions and requirements. The Secretary of Agriculture is hereby authorized and directed to designate any board of trade as a "contract market" when, and only when, such board of trade complies with and carries out the following conditions and requirements: (a) When located at a terminal market where cash grain of the kind specified in the contracts of sale of grain for future delivery to be executed on such board is sold in sufficient volumes and under such conditions as fairly to reflect the general value of the grain and the differences in value between the various grades of such grain, and where there is available to such board of trade official inspection service approved by the Secretary of Agriculture for the purpose. (b) When the governing board thereof provides for the making and filing by the board or any member thereof, as the Secretary of Agriculture may direct, of reports in accordance with the rules and regulations, and in such manner and form and at such times as may be prescribed by the Secretary of Agriculture, showing the details and terms of all transactions entered into by the board, or the members thereof, either in cash transactions consummated at, on or in a board of trade, or transactions for future delivery, and when such governing board provides, in accordance with such rules and regulations, for the keeping of a record by the board or the members of the board of trade, as the Secretary of Agriculture may direct, showing the details and terms of all cash and future transactions entered into by them, consummated at, on, or in a board of trade, such record to be in permanent form, showing the parties to all such transactions, including the persons for whom made, any assignments or transfers thereof, with the parties thereto, and the manner in which said transactions are fulfilled, discharged, or terminated. Such record shall be required to be kept for a period of three years from the date thereof, or for a longer period if the Secretary of Agriculture shall so direct, and shall at all times be open to the inspection of any representative of the United States Department of Agriculture or United States Department of Justice. (c) When the governing board thereof provides for the prevention of dissemination by the board or any member thereof, of false or misleading or knowingly inaccurate reports concerning crop or market information or conditions that affect or tend to affect the price of grain in interstate commerce. (d) When the governing board thereof provides for the prevention of manipulation of prices or the cornering of any grain by the dealers or operators upon such board. (e) When the governing board thereof does not exclude from membership in, and all privileges on, such board of trade, any duly authorized representative of any lawfully formed and conducted cooperative association of producers having adequate financial responsibility which is engaged in cash grain business, if such association has complied, and agrees to comply, with such terms and conditions as are or may be imposed lawfully on other members of such board: Provided, That no rule of a contract market shall forbid or be construed to forbid the return on a patronage basis by such cooperative association to its bona fide members of moneys collected in excess of the expense of conducting the business of such association. (f) When the governing board provides for making effective the final orders or decisions entered pursuant to the provisions of section 9 of this chapter. (Sept. 21, 1922, c. 369, § 5, 42 Stat. 1000.) Historical Note Section 9 of this chapter, referred to in subd. (f) of this section, was derived from par. (b) of § 6 of the Grain Futures Act, as originally enacted. This par. (b), prior to its incorporation into the Code, contained also a provision as to finality of judgments and review thereof by the Supreme Court, which is contained in § 10 of this title. A further provision of said section 6, par. (b), is contained in section 15, post, of this title. See historical note to section 1, ante, of this title. |