READINGS IN RURAL ECONOMICS 



by the almost complete ignorance of the amount of the hoardings 

 held in store by the wealthy proprietors of the country districts. 

 The absence of information was of course a natural outcome of 

 the conditions which created such hoards. The possibility of 

 carrying produce on credit has resulted in more immediate sale 

 of the crop and the storage of the greater portion of the actual 

 stock in warehouses that are more or less public. The portion of 

 the supply visible at any one time is much greater than in the 

 past, and as nearly all the crop is sold in the course of the season, 

 accurate seasonal crop statistics become possible. This brings the 

 total supply within the range of certain knowledge. 

 " The organization of the modern markets has extended the 

 functions of the middleman. In the old days his only recognized 

 function was the transportation of the commodity from place to 

 place. Now, apart from the speculative function that we now 

 recognize, there are also a number of non-speculative functions. 



The future contract makes it essential that some means be 

 found of trading in the particular commodity as freely as would 

 be possible if the entire supply were actually of uniform quality. 

 The contractor can only agree to deliver certain quantities, and 

 as the specific lot of goods to be delivered is not designated, the 

 quality must be described. Such future transactions imply that 

 each portion of the supply is substantially as good as any. In fact, 

 the most even-running commodities present differences of quality. 

 Organized speculation thus involves a grading system. Judg- 

 ments of quality are standardized, rendered independent of the 

 individual caprice of the- parties trading, carefully defined and 

 described so that the adjustments with reference to quality can 

 be impartially and certainly made. 



Financing the storage of the commodity during sale is inevita- 

 bly associated with speculation. The possible changes in value 

 during storage make the transaction speculative in part at least, 

 and the amount of capital value that must lie idle pending sale 

 constitutes a specially serious problem in these days of concen- 

 trated trade. When general farming was the rule, sale of a por- 

 tion of the crop was a necessary means of securing money to pay 

 taxes and other special obligations. The means of subsistence 



