Future Trading Act
Encyclopedia
The Future Trading Act of 1921 (ch. 86) was a United States Act of Congress
intended to institute regulation of grain futures contract
s 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
.
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 US 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 an unconstitutional by the US 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.
Act of Congress
An Act of Congress is a statute enacted by government with a legislature named "Congress," such as the United States Congress or the Congress of the Philippines....
intended to institute regulation of grain futures contract
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
s and, particularly, the exchanges
Exchange (organized market)
An exchange is a highly organized market where tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought.-Description:...
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
Anti-Gold Futures Act of 1864
The Anti-Gold Futures Act of 1864 was the first instance of United States Federal regulation of derivatives. More formally titled "An Act to Prohibit Certain Sales of Gold and Foreign Exchange," the Act was passed by Congress on June 17, 1864....
.
The act imposed a tax of 20 cents a bushel
Bushel
A bushel is an imperial and U.S. customary unit of dry volume, equivalent in each of these systems to 4 pecks or 8 gallons. It is used for volumes of dry commodities , most often in agriculture...
on all contracts for the sale of grain for future delivery other than those on exchanges regulated by the US 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 an unconstitutional by the US Supreme Court in Hill v. Wallace
Hill v. Wallace
The Futures Trading Act of 1921, approved August 24, 1921. , c. 86 attempted to institute Federal regulation of grain futures contract trading by imposing a prohibitive tax on futures contracts traded on any market other than those that met the statute's requirements and were regulated by the...
on May 15, 1922. About four years later, on January 11, 1926, the Court announced a related decision in Trusler v. Crooks.