WHEAT IN WESTERN CANADA 111 



House. This corporation performs most important func- 

 tions, for it greatly simplifies and facilitates trading opera- 

 tions between the members of the Exchange and, at the 

 same time, provides absolute security in all transactions 

 concerned with the future delivery of wheat or other 

 grains. The principle of the Clearing House is that for ^ . 

 every contract which the Clearing House accepts, the / 

 Clearing House becomes seller to the buyer and buyer 

 to the seller. In carrying out this principle, the Clearing 

 House with all its resources comes to stand solidly behind 

 every accepted contract. The result of this is that a per- 

 son who buys or sells grain for future delivery can rest 

 assured that, so long as he is willing to fulfill his part 

 of the contract and provide the necessary security against 

 the fluctuations of the market from day to day, if he is 

 a buyer, on the contract date the grain will be ready for 

 him to receive, and, if he is a seller, on the contract date 

 a buyer will be ready to take delivery of his grain and 

 pay him for it. 



Some of the features of a single transaction may first 

 be considered. Let us suppose that a grain broker buys 

 for a customer 5,000 bushels of May wheat and that the 

 price of May wheat at the time he wishes to make the 

 purchase is about $1.54 per bushel. He assembles with 

 other brokers in the wheat pit on the floor of the Ex- 

 change. A seller may say " I'll sell May wheat at fifty- 

 three and a half ! " By this he means that he offers 

 for sale 5,000 bushels of wheat to be delivered in May 

 at the price of one dollar, fifty-three and one-half cents 

 per bushel, the unit amount of wheat offered being always 

 understood as 5,000 bushels unless some other amount 

 is specified.^* If the purchaser says " Sold ! " the sale is 



48 The standard contract grade of wheat on the Winnipeg Grain 

 Exchange is No. 1 Northern, but No. 2 Northern and No. 3 Northern 



