"Roulette"

The most sensational development so far in the sugar scandal is the perpetual injunction petitioned for by the Government to restrain the New York Coffee and Sugar Exchange and the Sugar Clearing Association from carrying on any more speculative dealings in sugar. The injunction petition bears the signatures of Attorney General Daugherty, Solicitor General James M. Beck and five assistants representing the highest legal talent in the Government, and aims to " make the gamblers in sugar remove their roulette wheel from the American breakfast table."

The Government charged in its petition that " actually, transactions on the exchange in an overwhelming majority of cases do not involve and are not intended to involve the delivery of the amount of raw sugar purported to be sold thereby. Such transactions are completed by matching ring settlements or payments of difference, and by clearing through defendant clearing associations (named in the suit) without delivery of the amounts stated in the contracts." The Government goes on to quote the percentages of contracts actually consummated by delivery as being .0018% in November, 1922; .0023% in December, 1922; and so on up to March, 1923, with .0010 percent.

These amazing figures which would convict the exchanges as being little better than huge gambling rings were punctured by the equally amazing revelation by the New York Evening Post that the Government's petition had been prepared so hastily that in every case the decimal point was placed two places too far to the left! The discrepancy between fact and figure in the matter of the world's supply of sugar was found to be even more significant. The petition stated that the Department of Commerce " estimates the 1922-23 world production of sugar at 19,511,000 tons." But the latest published figures by the Department give the world production as 18,308,000 tons. This error of 1,200,000 tons is made by the Government at a time when the whole sugar trade is upset by reports of an estimated shortage of only a few hundred thousand tons!

That the sugar dealers are not alarmed by the Government's suit, which may be followed by a criminal action for conspiracy in restraint of trade, is shown by the fact that dealings in futures and trading went on as before and the price of both raw and refined sugar climbed to unprecedented heights. Cuban raw sugar went up to 6.25 cents a pound and refined to 9.50 and 9.85. Brokers freely predicted that retail sugar would soon cost housewives 12 cents a pound.