K LADINGS IN RURAL ECONOMICS 



from the basic price if below the grade in terms of which the 

 price is quoted. 



These varieties of form are the outcome of different trading 

 conditions. The relative advantages of the term contract and the 

 " to arrive " contract are related to the slightly different problems 

 of marketing in producing and consuming centers. The produc- 

 ing market will have little occasion for the " to arrive " contract ; 

 the consuming market will find it possible to use both forms, 

 though in many cases the " to arrive " contract seems to be better 

 adapted to the needs of trade than the other form. For this rea- 

 son, it would be a serious error to regard the " to arrive " form 

 as a rudimentary term contract, and in tracing origins and study- 

 ing tendencies it is essential to remember the complexity of the 

 problem. The two forms of term contracts are likewise an out- 

 come of differences in conditions. Some commodities can be 

 handled most readily in a particular market upon a specific con- 

 tract ; others can be handled only upon a basic contract. When 

 the number of grades is small and proportions fairly certain, the 

 specific contract has become the characteristic form, as it is in 

 the wheat pit of the Chicago Board of Trade. With a great multi- 

 plicity of grades and much uncertainty as to the proportion of 

 each grade from year to year, as in the cotton trade, a basic 

 contract is probably essential. 



In view of all these complexities of form it might seem that 

 historical treatment of the growth of the modern system would be 

 impracticable, but the course of development is not complicated. 

 The Dutch in the seventeenth century used all forms of specula- 

 tive contracts, and their speculation tended to degenerate into 

 pure gambling entirely detached from actual buying and selling 

 of goods. In England, in the eighteenth century, the "to arrive" 

 contract was elaborately developed and placed on a secure basis by 

 reason of the development of the bill of lading into a negotiable 

 symbol of property. In the East India trade at London and in 

 the iron trade at Glasgow, the dock warrant was developed and 

 at Glasgow became a purely general certificate of ownership of 

 a particular quantity of a specified grade of goods. This develop- 

 ment of negotiable symbols of property was a fundamental step, 



