THE PRICE OF WHEAT 247 



below the cost of production on account of an unforeseen change 

 in the market. The directive control exerted through prices 

 "is its service to society in general." The "risk-bearing func- 

 tion is its service to trade as such." That the need of specu- 

 lation is proportionate to the magnitude of the risk element is 

 axiomatic. Through the speculative market flows a continuously 

 moving stream of business which will carry the risks of mer- 

 chant, producer, manufacturer and consumer alike, and at any 

 time or place. Speculation alone makes hedging transactions 

 possible. By its anticipations, it lessens price fluctuations. The 

 short seller is the most potent influence in preventing wide 

 fluctuations in price, for he "keeps prices down by short sales 

 and then keeps them strong by his covering purchases. ' ' * The 

 producer always finds a ready market, and large stocks of wheat 

 can be carried over from a season of abundance to one of 

 scarcity without great risk of loss. 



The Speculator. The American is unquestionably the greatest 

 and most typical of all wheat speculators. The stupendous 

 undertakings which he sometimes assumes are characterized 

 with an importance, as well as* with a boldness and a brilliancy, 

 that excites world-wide interest. He is practically the manager 

 and director of the world's wheat movement. If objection is 

 made to the great scope of his influence, it must be remembered 

 that experience has already taught him that he cannot continue 

 long in his position of importance unless he solves the mighty 

 world problem that is ever presenting itself, the problem of 

 providing bread for the non-producers of wheat. Eminently 

 practical and clearheaded, his future vision is as keen and pene- 

 trating as was that of the prophets of old. He is necessarily a 

 cosmopolite, and he knows the traits and needs of many races. 

 His facilities for acquiring information are unsurpassed. The 

 governmental weather map shows him the rising storm which 

 threatens Kansas wheat. The experiment station bulletin 'in- 

 forms him that the next year's crop will be damaged 20 per 

 cent by the Hessian fly. The state government weighs and 

 grades his wheat. He knows the progress of harvesting in Aus- 

 tralia and Argentina. The transportation companies give him 

 regular quotations of freight rates to all parts of the world. 

 Telegrams and cablegrams give him immediately the changes of 

 1 Emery, Speculation, p. 121, 



