EFFECTS OF THESE FACTORS 19 



worm); plum curculio; San Jose scale; house fly; onion thrips and 

 onion fly (Thrips tabaci and Pegomya cepetorum "now threaten 

 this crop with destruction "); onion smut; pea blight; root rot of 

 tobacco (Thielavia basicola, "As a conservative estimate it is 

 thought that this single disease last year (1912) cost Wisconsin 

 tobacco growers a loss of approximately $1,000,000"); black rot 

 of tobacco. This showing is significant, coming as it does from a 

 state which is unusually free from plant and animal diseases. 

 Mention may be made of the following animal diseases, prevalent 

 in various parts of the United States, but now apparently in course 

 of extinction: Glanders in horses, tuberculosis in cattle; cholera 

 in hogs. In the year 1914 an outbreak of the foot-and-mouth 

 disease among cattle occurred in the United States, entailing a loss 

 of millions of dollars. 



Effects of These Factors. The above list of pests and diseases 

 contains only a few of the commoner and better known ones. It 

 is evident, however, that climatic conditions, pests and diseases 

 are factors of uncertainty in agriculture. These factors affect 

 both the quantity and quality of the farmer's output, whether 

 field crop or livestock. These factors therefore render coordination 

 of supply and demand impossible. There must inevitably result 

 from these great fluctuations in supply corresponding fluctuations 

 in price. Price fluctuations in turn create a class of risk takers. 

 The farmers themselves, where the markets are narrow, local, and 

 unorganized, are of course the risk takers, and take both the gain 

 and the losses of price fluctuations. In the great staple commodi- 

 ties sold on the world-market, however, where the organized market 

 is the rule, a distinct class of risk takers, commonly known as 

 speculators, has been slowly developed. It must be clearly appar- 

 ent to every person giving the subject any thought that prices do 

 not fluctuate because men speculate, but that men speculate 

 because prices fluctuate. The service of the speculator to the 

 farmer and the trade in general has often been pointed out by the 

 Federal Government. For instance, the report of Cotton Ex- 

 changes x makes this point very clear, in the following language : 



"Dealings in cotton must always be accompanied by risk, either to the 

 producer, the merchant middleman, the speculator, or the spinner. Natural 

 conditions greatly affect the supply, and other conditions the demand, and 

 both consequently affect the price. What is the equitable distribution of 

 these risks? It is a general principle that much of the risk should properly 

 be borne by the speculative class; that is, by those who neither produce nor 



1 Report of Bureau of Corporations on Cotton Exchanges; Part 1. 1908 f 

 pp. XVII-XVIII. 



