78 GAMBLING IN FOOD PRODUCTS. 



Probably few men know better tbau Mr. Hutchiusou that up to tlie time when 

 short-selling became the means of determining prices the warehouses were filled with 

 grain bought as an investment whereas now these warehouses stand less than one-third 

 full the year through the capitalist being afraid to invest money in property the value of 

 which may be so greatly lessened in a day, by the limitless offers of the short-seller, as to 

 entail loss. 



Thus has that kind of speculation, which is at best but the worst form of gambling, 

 destroyed that laudable speculation which made a market for the products of the farm 

 before they were needed by the consumer. Not only did this beueficient form of specula- 

 tion go on at the trade centers but at every railway station and mill in the country ali- 

 sorbing and taking out of sight an enormous aggregate of farm products. Now, however, 

 instead of buying grain to store the miller buys an "option" and if the price goes up col- 

 lects tlie difference from the short-seller and goes into the market and buys the grain the 

 day he desires to grind it his profit being found in the saving of waste, insurance, inter- 

 est and storage room all of which accrue to the benefit of the miller or short-seller. In 

 other words: in consideration of the deposit of a small margin by the miller the short- 

 seller furnishes a vest-pocket elevator, insurance company, bank accomodations and a 

 guarantee against waste — all of which operates against the farmer who must carry the 

 grain and in ease he requires money, while the price is lower than he believes it ought 

 to be and will be, he must borrow from the banker. 



While the short-selling speculator thus deprives him of the purch.iser, for distant 

 use, that he formerly enjoyed it is not the worst phase of the comijetitiou of the short, 

 seller as the grain which the miller and investment buyer formerly took from off the 

 market, and stored until needed for consumption, now all presses with fearful weight 

 upon a market that is also loaded down by the daily offering of hundreds, and some" 

 times thousands of millions of fiat products. 



The amount of grain required for current consumption is a constant quantity ami 

 more being offered than is required will necessarily depress the price, be it actual grain or 

 simply the promises of the short-seller to deliver at some future day, and the volume of 

 such offerings necessarily determines the price. If less than the current requirements 

 prices are advanced by the buyer who has failed to secure the quantity his customers de- 

 mand, while on the contrary if the quantity offered is largely in excess of current needs 

 and there are no investing buyers of actual grain the price recedes. The world's yearly 

 requirements of wheat and rye now approximate closely to 3,600,000,000 bushels, and, 

 excluding Sundays and holidays, this implies daily needs of 12,000,000 bushels; hence we 

 may assumfe that If the offerings for any considerable period exceed the sum of the daily 

 requirements the efl'ect will be to lessen prices, and so long as the offerings continue to be 

 greater than the consumption so long will the tendency of prices be downward and no 

 advance in price can be expected, uo matter what the probabilities as to the future supply 

 may be, until the pinch of scarcity shows that the offerings of the short-seller are but 

 emanations from the lungs of a horde of unprincipled gamblers. So long, however, as 

 the actual deliveries of the farmer exceed or equal the world's requirements and these 

 offerings of flat products continue and there are no investment buyers of the farmer's 

 surplus there can be no permanent advance. 



It goes without saying that so long as these conditions obtain and so long as more 

 flat grain is offered upon the markets of the world, by these industrious producers of 

 "promises to deliver," so long must the farmer expect low pi'ices, and instead of being a 

 benefit to the producer this kind of speculation— which has certainly slaughtered all in- 

 vestment buying of grain — is the greatest curse that could be inflicted upon any com- 

 munity by a horde of gamblers who are under the protection of the law, and who plume 

 themselves upon their ability to run wheat up to two dollars a bushel; advance the price 

 of the loaf and make the "other fellow" settle his bets at a price which the successfu' 

 worker of the corner fixes at twice the sum the farmer receives lor the product of the 

 fields upon which his labor has been expended and in which he has invested a vast cap- 

 ital. 



When a successful corner has been made possible because there happens to be but 



