TWO KINDS OF SPECULATION 267 



billion dollars of bank deposits, subject to check, and payable on 

 demand in gold will not be so paid (except in small part), and do 

 not need to be so paid to meet the needs of sound business. That 

 these demand deposits are actually six or seven times the whole 

 amount of gold in the country in no way reflects on the ethics 

 or soundness of American banking. Quite the contrary. It is an 

 evidence of a properly functioning banking system. It will be 

 necessary to defer until the chapter on the Grain Trade any further 

 explanations of the methods of settling the large volume of future 

 trading in grain by the delivery of a relatively small amount 

 of grain. 



Two Kinds of Speculation. In the field of Agriculture to-day 

 speculation is of two kinds, organized and unorganized. Organ- 

 ized speculation is that form of speculation conducted on the 

 organized exchanges of the country; it is under strict rules, which 

 are published and open and known to all interested ; it is conducted 

 openly before the public gaze; the volume of it, together with 

 actual prices involved, is made a matter of formal record and is 

 also very largely given to the public by means of the daily press 

 and the trade papers. Unorganized speculation, on the other hand, 

 is not conducted under any particular rules; it is not carried on 

 in the open light of full publicity; the .volume and nature of it 

 are not a matter of record, and are not known. 



Organized speculation is best illustrated by the trading in 

 lira in and cotton on the organized exchanges. Unorganized 

 speculation is illustrated by trading in farm lands particularly 

 the promotion of land sales by real estate agents, so-called. It 

 is also illustrated by the trading in the various forms of farm 

 produce not handled on the exchanges, such as fruits, vegetables, 

 poultry, etc. Since there are, in the case of these products, no 

 great organized exchanges, with severe membership qualifications 

 both ethical and financial, as is the case with grain exchanges, 

 it is exactly in these products that we find most frequent market 

 abuses. As an extreme illustration of this may be cited the poultry 

 market in New York City which for some years remained an open 

 scandal. Live chickens would be bought by a certain class of 

 dealers, kept without food for two or three days, and then be fed 

 heavily with sand, gravel, and cement. In this manner consumers 

 were buying daily thousands of pounds of sand, gravel, etc., at 

 fresh chicken prices. This abuse, great as it was, cannot be attri- 

 buted solely to the speculative nature of the business. Doubtless 

 there have been and now are a few farmers who follow similar 



