SCANDALOUS GAMBLE.

Star (Christchurch), Volume LXVI, Issue 20541, 16 February 1935, Page 1

SCANDALOUS GAMBLE.

Inquiry Into Pepper Crisis Demanded. LONDON, February 14. Declaring the pepper marketing crisis to be the result of a scandalous gamble, the ramifications of which demand searching inquiry in the interests of the public as well as of the city s good name, the “ News-Chronicle says: “ Behind the facts thus far emerged lies a background of mystery and rumour which has begun to involve not only leading figures in finance and industry, but also others whose responsibilities to the public are still greater.” “ The Economist,” tracing the history of the attempts to corner pepper and shellac, points out that Mr Reginald M’Kenna and Sir Hugo C-unliffe-Owen, who are shareholders in the firm of James and Shakespeare, are also members of the boards of other companies with which James and Shakespeare eventually became associated. “ The Economist,” commenting on these relationships, says: “It may be possible that Mr M’Kenna and Sir Hugo dissociate their personal interests as investors from their public responsibilities, but it is regrettable that men in such a position of trusteeship placed themselves in a position in which the market might infer that they had some responsibility for events.” A crisis in the London market which occurred ten days ago necessitated a five days’ moratorium of all sales while Mincing Lane brokers negotiated with the banks to finance 6500 tons of pepper coming to London, necessitating £2,000,000 being found almost immediately. The banks were disinclined to assist firms which had weakened themselves by speculation. It was stated that the heads of the “ Big Five ” banks, at the request of the Governor of the Bank of England and the Treasury, had agreed to launch a big drive against commodity speculation, Mr Norman and the Treasui believing that a wave of gambling in commodities threatened the Government’s whole cheap money policy. A dramatic development was a petition for the compulsory winding-up of James and Shakespeare. Ltd., of which Garabad Bishirgian is a director. Bishirgian is regarded as the leader of a syndicate which accumulated the pepper pool, though the firm nominally are metal brokers. James and Shakespeare, Ltd., was converted into a public company at the end of last year, with a capital of £500.000. Mr Joseph Rolls, head of the Mincing Lane firm of Rolls and Son, brokers, founded in 1861, issued a statement to the effect that “ the inability of the pepper pool to finance purchases which we made in good faith on their behalf means the ruin of my firm.”

WHEAT MANIPULATION

WASHINGTON, February 14. A special Cabinet Committee composed of Mr H. A. Wallace (Secretary of Agriculture), Mr D. C. Roper (Secretary of Commerce) and Mr H. S. Cummings (Attorney-General) found Mr Arthur Cutten, one of the large speculators on the Chicago Board of trade, guilty of violation of several provisions of the so-called “Grain Future” Act. He was prohibited from trading on any exchange in the nation for two years. The committee declared that he frequently failed to report holdings in excess of 500,000 bushels as required by law and that he operated through eight firms and disguised his dealings to manipulate prices.