BOARD OF TRADE 



787 



BOAT 



high prices. Such efforts seldom succeed. The 

 most memorable attempt to "corner" wheat 

 occurred on the Chicago Board of Trade in 

 1867, when the price reached $2.85 per bushel; 

 in 1898 another attempt sent the price to $1.85 

 but cost the operator, Joseph Leiter, several 

 millions of dollars in losses. 



Transaction of Business. In the midst of all 

 the noise and confusion which the outsider ob- 

 serves on the floor of the board of trade during 

 the hours when it is in session, there is a vast 

 and thoroughly-systematized volume of busi- 

 ness being transacted with a speed which 

 amazes the onlooker. The brokers on each 

 board of trade have a sign language peculiar to 

 themselves, by which they can make them- 

 selves understood above the din constantly 

 prevailing. A sign made with the open hand 

 of the broker toward the person with whom 

 he is in communication signifies "sell"; if he 

 shows the back of his hand, it means "buy"; 

 one finger raised means 5,000 bushels or other 

 unit of the article dealt in; two fingers raised 

 signifies 10,000 bushels, and so on. The cir- 

 cular platform or depression where the business 

 is transacted is called the "pit." 



Margins. The practice of dealing in margins 

 has become a leading feature of the business 

 of all boards of trade. According to this 

 method of dealing, the trader deposits with 

 his broker a sufficient amount to cover the 

 ordinary fluctuations in price, and the broker 

 furnishes the rest of the necessary capital. For 

 instance, in January the trader wishes to buy 

 5,000 bushels of wheat for delivery in February. 

 If the present price is $1 a bushel, he may 

 advance his broker $250, which is a margin of 

 five cents a bushel; he may margin it for even 

 two or three cents per bushel, if he prefers. 

 If the price of wheat advances, he can order 

 the broker to sell it, and if he chooses, with- 

 draw his margin as well as a profit, according to 

 the extent of the rise. In case the margin is 

 five cents per bushel, if the price recedes below 

 $0.95 or below the point where his margin 

 will cover the loss, he must either deposit 

 enough margin with his broker to cover the 

 falling off or lose what he has advanced. 



Settlement. Most boards of trade have their 

 own clearing houses, and at the end of each 

 business day all parties who have been trading 

 on the board must send reports of sales and 

 purchases to the clearing house. Those whose 

 reports show net loss must send certified checks 

 for the amount, and those who have made net 

 gains are paid. 



Rules and Regulations. The most stringent 

 regulations are made to prevent fraudulent 

 practice on the board. The smallest fraud on 

 the part of any member, however prominent 

 he may be, is punished by immediate suspen- 

 sion, and his trial is prosecuted with a rigid 

 impartiality not surpassed by the courts of law. 

 A board of trade contract matures on the last 

 day of the term mentioned in it, and all trans- 

 actions between members for purchases or 

 sales on the floor of the board are strictly con- 

 tracts under its rules. 



The distinction between so-called long and 

 short transactions is as follows : In the former, 

 the trader buys, expecting a later advance in 

 price to net him a profit ; in the latter, he sells, 

 expecting a subsequent decline. 



Caution. While boards of trade are repu- 

 table commercial organizations, the manner of 

 transacting business is such that they are no 

 place for the inexperienced trader, whose judg- 

 ment of the market may be exceedingly faulty. 

 Because of this lack of good judgment very fre- 

 quently he loses his investment. See CHAMBER 

 OF COMMERCE. E.D.F. 



Two novels dealing realistically with the pro- 

 duction and distribution of wheat are Frank 

 Norris's The Pit and The Octopus. 



BOAT, as generally referred to, is a small 

 vessel or water craft usually built of wood. It 

 is propelled by oars, by sails set to catch the 

 wind or by a screw turned by mechanical 

 means. There are many special names applied 

 to the different kinds of boats; among these 

 are the punt and dory flat-bottomed boats 

 used in shallow water; cutters, dinghys, 

 launches, gigs and barges; whaleboats and life- 

 boats, sharp at both ends; racing shells, long 

 and narrow, with sliding seats to give the oars- 

 men great power; and skiffs, small, light boats 

 usually fitted with a centerboard, a weight 

 suspended below the keel, to give stability and 

 lessen drifting when sailing. 



Every ship is required by law to carry a 

 number of boats proportional to its size and to 

 the number of passengers. Among such boats 

 must be fully-equipped lifeboats, in addition to 

 which are numerous collapsible boats and rafts. 

 Vessels carrying no passengers must provide 

 sufficient boats to accommodate the crew, if 

 they should be forced to leave the vessel. 

 Ship's boats when not in use are hung on 

 davits at the sides of the vessel and are lowered 

 and raised by hand with block and tackle, or 

 by steam or electric power. The seats in boats 

 are called thwarts, and the spaces for oars are 



