eral amount sold against on the
Exchange for future delivery. By October, the situation had become
acute. Dealers who had classified themselves as jobbers or importers had
gone into the retail classification in order to evade the limitations of
profit allowed jobbers, and were limiting their sales to lots of
twenty-five bags or fewer. Dealers who had legitimately hedged their
holdings were unable to buy in.

The Exchange officials showed no disposition to relieve the situation;
and as all prices had reached the maximum price for every month
permitted, the food administration, on November 1, 1918, ordered the
liquidation of all contracts outstanding, bought or sold, by not later
than November 9. This was done; and the coffee covered by such contracts
was released to the trade.

The regulations governing transactions on the Exchange were withdrawn on
December 5, 1918; and, after a long argument, the Exchange decided to
re-open for trading on December 26, 1918. Opening transactions amounted
to 25,000 bags on a basis of seventeen and one-half cents per pound or
nine cents over the prices at which contracts had been liquidated. On
December 28 the price had declined to fifteen and one-half cents. In the
opinion of many of our best merchants, the Exchange should have been
closed during the war, as it failed to be of any real service. That it
was operating at a fixed price for the spot month only, made it of no
value to the trade during this period. Of its loyalty to the government,
and its evident desire to assist there can be no question; but its
cheerful acceptance of the burdens laid upon it proved largely futile.

The action of the food administration in confining the coffee business
solely to licensed dealers and to a fixed profit on actual cost; in
limiting dealers to ninety days stock; and in prohibiting resales, was
the cause of much unjust criticism. The regulations were based on the
general rules of the food administration, and applied to coffee quite as
equitably as did the regulations governing other food commodities under
control and license. As a matter of fact, they were much less rigorous
in some ways than the regulations applying to many other articles. For
example, ninety days stock based on sales for 1916-17 was allowed on
coffee. There was no other article on the food list to which this
liberality was permitted. A forty to sixty days stock would probably be
found to be the maximum permitted to be carried