"Speculator!"

In the global scramble for strategic materials, Russia last week grabbed with both hands. In Singapore, the Soviets bought rubber by the shipload, sent prices bouncing up almost 6-c-a pound in one day to 52.5-c- a pound. As a result, rubber also rocketed in New York--to 54.3-c- a pound, a 22-year record. New York's Commodity Exchange governors, fearing that the futures market was soaring out of control (a speculator who put up $800 to buy rubber futures in January could have had a $7,500 profit last week), ordered speculative futures margins doubled; buyers had to put up almost half the purchase price in cash.

Although most other commodity prices either dropped last week or showed signs of leveling off, the Dow-Jones Futures Index--which gives consumers their best glimpse of price rises to come--closed at 177.34. It was still 4% under the postwar high, but about 15% higher than at the outbreak of the Korean war.

Official Shouts. That brought Secretary of Agriculture Charles Brannan bustling into the market place, shouting "Speculator!" at the top of his lungs. Said he: high commodity prices are the fault of speculators; since the war began, the volume of futures trading has jumped 128% in eggs, 98.2% in lard, 78.6% in wheat and 44.1% in wool tops; prices have increased accordingly, from 5% to 41%. Brannan wanted Congress to give him authority to control margins and thus choke off "unrestrained" speculation.

There was no argument about speculation having been heavy since the Korean war started, but the booming economy had set off price rises long before that. Traders argued that scarcity, not speculative buying & selling alone, had also boosted prices. The commodities which have been most heavily traded in the past two months have had the smallest price rise; e.g., the 128% jump in egg trading has produced only a 5.4% price increase.

Sugar Plum. Commodity men had another solution for high prices. Instead of throttling the futures markets, they said, the Government could keep prices down simply by dumping on the market some of its $2.5 billion load of surplus farm products. Said Chicago Board of Trade Executive Vice President J. 0. McClintock: "Since there is really no scarcity, with the government holding all these goods . . . selling surplus is possibly the best way to stave off inflation."

Brannan needs congressional permission to sell products below 105% of support prices (plus carrying charges) or below the going market prices, whichever are higher. But cotton, for example, is selling so far above supports that the Commodity Credit Corp. can dump it without the political blessing of Congress.

Last week, Secretary Brannan did move fast to ward off one possible shortage: for $64,560,000, he bought Cuba's surplus sugar stock (600,000 tons), began negotiations for 250,000 tons more from other producers. This will boost the U.S. sugar supply to a new high of 8,700,000 tons, far more than normal annual consumption.

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