260 THE BOOK OF WHEAT 



degree of ignorance under which he is operating is the test of 

 recklessness. Even many of the large milling and elevator 

 companies insure themselves regularly by hedging. 



Statistics show that since the advent of speculation, fluctua- 

 tions in the price of grain have been of smaller extent, com- 

 paring year by year. Such fluctuations as do remain are changes 

 of a more gradual nature, and the gradations are much finer. 

 For example, wheat was formerly quoted in fourths of a cent a 

 bushel, while now it is quoted in sixteenths of a cent a bushel. 

 A half century ago, traders required a margin of 10 cents a 

 bushel for carrying wheat. Now the margin is 2 cents. With 

 the minimizing of risks, profits for carrying them fell. In part, 

 these changes are doubtless the result of other concomitant de- 

 velopments, but there is no question of their being chiefly due 

 to the development of speculation. 1 As to the agreement of 

 present prices of futures with future cash prices, little, if any, 

 increased accuracy of prediction is shown. While there have 

 been improvements in the methods of speculation, there has also 

 been an increase in the size and complexity of the world wheat 

 market, a factor which would tend to decrease the accuracy of 

 prediction. 



The increasing uniformity of price tends to decrease the 

 amount of business done upon the exchanges, for this business is 

 dependent upon price variations. This tendency of prices to 

 remain more steady will be increased with the further con- 

 centration of commercial wheat interests. A similar develop- 

 ment has taken place in the case of other commodities, such as 

 oil and pork. In these commodities prices are practically 

 fixed by a small group of men who know, and, in a measure, 

 control supply and demand, and there are few price fluctuations 

 left to serve as a basis for speculative dealings. Consequently 

 operations no longer have their former magnitude. Local con- 

 sumption of wheat will increase with the growth of population, 

 and less actual wheat will be bought and sold at the terminal 

 and export markets. The force of these influences is certain 

 to be reflected on the speculative exchanges. The opportunity 

 for men to indulge their gambling proclivities by means of 

 the bucket shop; the growing prosperity of the country; the 

 increasing steadiness of the price of wheat on account of the, 

 1 Emery, Speculation, pp. 124-165. 



