THE PRICE OF WHEAT 151 



(e) Alleged Evils. The speculation of modern times, 

 it is alleged mostly by laymen who do not understand 

 the system on the whole works havoc in the economic 

 world. Its evils are more easily recognised than its 

 benefits. From an imperfect understanding of specu- 

 lation, it is easy to ascribe many evils to it with which 

 it has no connection. ''The modern system of 'futures' 

 has proved itself a convenient scapegoat for all the evils 

 of the grain trade. It is charged with being the cause 

 of low prices and of high prices, with increasing trade 

 risks, and with diminishing them until there is no chance 

 for profit. A few years ago the farming class clamoured 

 for the suppression of the speculative market, while 

 recently the Kansas farmer started a movement to con- 

 tribute a cent a bushel on all their wheat to a fund for 

 the benefit of the most daring speculator of the Chicago 

 market. ' '* But recently the operations of the speculator 

 have come to be more understood, with the result that 

 he is no longer regarded as a mere gambler, but a person 

 with recognised and beneficial economic functions. 



The really fundamental objection to speculation lies 

 in the fact that an individual, or a group of individuals, 

 may secure control of the market and manipulate it as 

 they please. Manipulation may occur from either the 

 bear or the bull side, but "bearish" manipulations, on 

 account of their attendant difficulties, are rare. A 

 successful "bear" manipulation consists in selling a 

 commodity short in sufficient quantities to reduce the 

 price, and then to cover these contracts at the low 

 price. A sufficient body of short sales will depress price, 

 but the price will rise again immediately the "bears" 

 commence buying. The danger is so great that such 

 a manipulation is seldom attempted. The biggest 

 operations on the short of the market were those of 



*Emery, "Economic Journal/' 1899. Page 45. 



