348 THE GRAIN TRADE 



transporting crops long distances. In the larger .commercial 

 centers "Boards of Trade," as they were called, sprang up, to 

 promote uniformity in the usages of merchants and to improve 

 and dignify commerce in general. Few of these local boards, 

 however, survived and became grain exchanges. The first and 

 most important one to do so was the Chicago Board of Trade of 

 1848. It was ten years before this board of trade became a grain 

 exchange in the modern sense of the term. The Chicago Board 

 of Trade at once took up the fundamental market problems of 

 weighing, inspecting, and grading the grain. The practice of the 

 Chicago grain exchange of selling wheat by weight instead of the 

 measured bushel was forced on the Buffalo and the New York 

 markets. A system of weighing was developed which proved 

 satisfactory to both buyers and sellers of grain. It is worthy of 

 note that while inspection and grading have been taken over by 

 the State as proper functions of State government (under Federal 

 supervision), yet the weighing of grain on the Chicago market is 

 still done exclusively by the Board of Trade. In the Kansas City 

 and Minneapolis markets, however, weighing as well as inspection 

 is now a State function. 



Cash, to Arrive, and Futures : Corners. Three forms of trading 

 in grain developed before the Civil War on all the grain exchanges, 

 namely, cash grain, to arrive grain, and future trading. Cash 

 grain or spot grain means the grain itself or a sample of the grain 

 is on hand when the trade is made. Dealers on the various ex- 

 changes, however, found it unsatisfactory to depend upon the 

 supply of cash grain to meet their requirements. Hence contracts 

 were made for grain to be shipped at certain times or within 

 certain definite periods, and this form of dealing came to be called 

 "to-arrive" business. As a natural outgrowth of "to-arrive" trad- 

 ing came future trading. "To-arrive" contracts were naturally 

 made with parties having grain stored along the canal or railway. 

 Before the Civil War, particularly on the Chicago market, traders 

 began to make contracts to deliver wheat in a definite future 

 month at a definite price, which wheat they did not yet own, but 

 expected to buy and deliver. In other words, they sold short. 

 In this way future trading started. The careful students of this 

 subject are convinced that future trading began in this natural 

 way, as an outgrowth of to-arrive trading, and in this manner 

 served the interests of the cash grain business. The speculators, 

 however, saw the possibilities in this new field, and proceeded to 

 prostitute this wholesome form of trading till its abuses well-nigh 



