The Grain Futures Act of 1922 is a federal statute passed on September 21, 1922 by the U.S. Government. It enacted a law that trading in grain futures must occur on regulated commodity exchanges and established a policy of trading transparency by requiring exchanges to increase the amount of information available to the public.
Only exchanges that behaved accordingly could be designated as a contract market by the Secretary of Agriculture. The law states that if the Secretary of Agriculture has reason to believe that any person “is attempting to manipulate the market price of any grain,” then this person could be excluded from market trading.
The primary purpose of the legislation was to control “excessive speculation.” This phrase is found repeatedly in the Grain Futures Act and was used to justify the creation of limits on speculative practices, but the term “excessive speculation” was actually not defined so that its exact meaning remains vague.
The enforcement of this act became very difficult, however, since disciplinary consequences were taken against the exchange itself and not against individual traders. Consequently, it was revised in 1936 by the Commodity Exchange Act and was superseded in 1974 by the Commodity Futures Trading Commission.