148 WHEAT PRODUCTION IN NEW ZEALAND 



prices is necessary. The most successful speculator is 

 he who gets first-hand information, and his success 

 depends entirely on the accuracy of his estimates. Thus 

 it follows that where organised speculation is found the 

 most perfected facilities for securing early and reliable 

 information will exist. 



Investigations on the influence of the operation of 

 dealings in "futures''' on the level of prices, all tend 

 to show that the prices of commodities which are subject 

 to such dealings are lowered both by the reduction of 

 risks and the diminished cost of handling the commodity. 

 While increasing the frequency of price fluctuations, 

 dealings in "futures" decrease the range of these 

 fluctuations. A Committee of the British Association 

 for the Advancement of Science submitting their report 

 in 1900 found these results after an investigation into 

 the effects of "futures" on wheat and cotton. These 

 conclusions, moreover, are in agreement with the work 

 of Emery, who has made investigations in the United 

 States.* "Speculation," says Dondlinger,t "is the 

 flywheel which imparts to the modern commercial 

 machine a motion so uniform that all of its parts 

 operate continuously and simultaneously." In various 

 ways the effects of speculation are beneficial to the 

 community. Thus speculation has the effect of directing 

 production and consumption into the most advantageous 

 channels. Speculators are the men best equipped for 

 securing and interpreting news of variations in supply 

 and demand ; and thus a price is determined which, with 

 slight local variations, prevails throughout the world. 

 Again, speculation anticipates price-determining events, 

 and tends to equalise prices at different periods. Through 

 the speculative market flows a continuously moving 

 stream of business which will carry the risks of merchant, 



*See "Speculation." Chapter IV., Section II. 

 t" The Book of Wheat." Page 246. 



