THE PRICE OF WHEAT 241 



market. Under normal conditions, the wider market deter- 

 mines the price. After world, markets had arisen, the local 

 market became an insignificant factor in determining prices, 

 even within its own circle of distribution. This change took 

 place in the United States about the middle of the nineteenth 

 century. Before this date prices of grain were determined 

 chiefly by local conditions. 



Concentration of Price-Determining Influences now occurs in 

 the world market. Modern transportation, which enables the 

 California wheat grower to send his product to the Liverpool 

 market, and modern communication, which has practically 

 eliminated the time element in sending news, are the factors 

 which have made the whole world tributary to the great central 

 markets, where the changes that affect supply and demand are 

 continually recorded, and given their due weight by the keenest 

 of experts in the modification of prices. These changes vary 

 greatly in character, and they are reported from every wheat 

 raising quarter of the globe. If a telegram is received saying 

 that the monsoon in India is overdue ; that the , drought in 

 Kansas has been broken; that a swarm of grasshoppers has 

 been seen in Manitoba ; that a hot wind is blowing in Argentina ; 

 that navigation on the Danube is unusually early; that bad 

 roads in the Red river valley are preventing delivery; that 

 ocean freights to China have risen; or that Australian grain 

 "to arrive" is freely offered in London, prices rise or fall to a 

 degree that corresponds to the importance attached to the news. 

 New inventions and discoveries, legislative enactments and in- 

 ternational agreements, political, commercial and industrial 

 complications all have their effect upon prices. 



The Eise of the Speculative Market. When the local market 

 was the center of all distribution, the producer, having under 

 his own observation all of the factors which determined price, 

 endeavored to hold his products for sale until such a time as 

 when he would receive the highest price. This was the first 

 form of speculation, and it must have arisen very early in 

 civilization. It has had a continuous existence until the present 

 day. Practically every wheat grower who holds his crop for a 

 rise in price, instead of selling it as soon as it is threshed, is a 

 speculator of this class. 



