274 SPECULATION 



which most speculation occurs. Perishable crops, such as fruits 

 and vegetables, should be directed by the organized growers 

 themselves to those markets that are not already glutted. For 

 instance, consider the case of ripe peaches. Growers in New York, 

 Pennsylvania, Ohio, and Maryland ship to Pittsburgh, which is a 

 very important distributing point to the mining towns in that 

 region. The market reports show that Pittsburgh's consuming 

 capacity is about 15 carloads of peaches a day in the peach moving 

 season. But, as illustrating market glutting by shippers, mention 

 may be made of one week's record recently in that market. The 

 week's receipts ran from Monday to Friday inclusive on the nor- 

 mal basis. But on Saturday 78 cars arrived. Of course these 

 cars were bought by speculators (who performed thereby an 

 important market function) but the glut forced the price down, 

 not the speculators. The shipment of peaches to any particular 

 destination lies wholly in the hands of the shippers, and the growers, 

 if they are not suited with present methods, have the power in 

 their own hands to change things. They have the liberty and the 

 encouragement to organize and distribute their crop where specu- 

 lative risks will be greatly reduced. In reality, it is the grower 

 who is employing the speculator to market his fruits and vege- 

 tables for him, in cases like the above, and hence if criticism is 

 due, it is due in part to the grower himself. 



The more non-perishable crops, such as grains and cottons, 

 must be stored for a period of months, and in some cases over into 

 the next crop season, before they enter into consumption. This 

 storage problem brings with it the credit problem, since the 

 grower in most cases must have his money when he parts with his 

 crop. In many cases the " middleman" is the banker for the 

 grower, functioning through some local elevator, merchant or 

 dealer. But in any event, the middleman commonly borrows 

 from the big money markets and gets the money to the point of 

 production a banking function. Fireproof warehouses, under 

 private management, with low insurance costs, issuing negotiable 

 warehouse receipts, all under public supervision and regulation, 

 are coming into general use. Under the Federal Reserve Banking 

 system the use of trade acceptances is likewise growing rapidly 

 in favor. But the point to be emphasized here is that a solution 

 of the warehousing and the credit problems will go far towards 

 solving the speculation problem. To spend time denouncing 

 speculation and speculators is about as futile and barren an 

 occupation as can well be imagined, unless it be followed with 



