Future Trading Act

The Future Trading Act of 1921 (Pub. L.Tooltip Public Law (United States) 67–66, 42 Stat. 187) was a United States Act of Congress, approved on August 24, 1921, by the 67th United States Congress intended to institute regulation of grain futures contracts and, particularly, the exchanges on which they were traded. It was the second federal statute that attempted to regulate futures contracts after the short lived Anti-Gold Futures Act of 1864.

Futures Trading Act
Great Seal of the United States
Other short titlesFutures Trading Act of 1921
Long titleAn Act taxing contracts for the sale of grain for future delivery, and options for such contracts, and providing for the regulation of boards of trade, and for other purposes.
Enacted bythe 67th United States Congress
EffectiveAugust 24, 1921
Citations
Public lawPub. L.Tooltip Public Law (United States) 67–66
Statutes at Large42 Stat. 187
Codification
Titles amended7 U.S.C.: Agriculture
U.S.C. sections amended7 U.S.C. ch. 1 § 1
Legislative history
  • Introduced in the House as H.R. 5676 by Jasper N. Tincher (R-KS) on May 3, 1921
  • Committee consideration by House Agriculture Committee
  • Passed the House on May 13, 1921 (269-69)
  • Reported by the joint conference committee on August 23, 1921; agreed to by the House on August 23, 1921 (341-9) and by the Senate on August 23, 1921 (passed)
  • Signed into law by President Warren G. Harding on August 24, 1921
United States Supreme Court cases

The act imposed a tax of 20 cents a bushel on all contracts for the sale of grain for future delivery other than those on exchanges regulated by the U.S. Department of Agriculture that met standards set out in the statute. Twenty cents a bushel was considered a large sum by the standards of the day.

The Act was held to be unconstitutional by the U.S. Supreme Court in Hill v. Wallace on May 15, 1922. About four years later, on January 11, 1926, the Court announced a related decision in Trusler v. Crooks.

The Grain Futures Act of 1922 was ruled constitutional in Board of Trade of City of Chicago v. Olsen.

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