THE CONSUMPTION OP WHEAT 9 



remains here to indicate the way the system assists in 

 the marketing of wheat. 



By dealing in " futures" the merchant who buys large 

 quantities for sale at a future time, can insure himself 

 against loss in the event of a fall in price. Thus, suppose 

 our merchant sells to a speculative buyer a similar 

 quantity of wheat to be delivered at some future time, 

 then, if prices drop, he can buy up a quantity at reduced 

 prices to fulfil the engagement, and so recoup himself 

 of any loss incurred by his former transaction. In 

 practice he does not deliver the wheat to the speculative 

 buyer, but the transaction would be completed by the 

 speculator paying to the merchant the difference in value 

 due to the fall in price. 



At all the other great markets in the States, the system 

 of ''futures" is a distinctive characteristic, but has not 

 reached such a stage of perfection as at Chicago. The 

 marketing of wheat in the United States of America must 

 be considered merely as local gathering, for no outside 

 wheat is sold on the exchanges. Therefore, while Europe 

 buys supplies of wheat on, say, the Chicago exchange, 

 this exchange is not a world's wheat market in the same 

 sense that London, Liverpool, and Amsterdam are. 



The development of marketing in Canada follows 

 closely that of her neighbour, and the Canadian system 

 approaches that of the United States in efficiency. But 

 in Russia the methods are very imperfect, though there 

 is some progress towards the American system. The 

 marketing of wheat in India and Argentina is similarly 

 very cumbersome and uneconomical, and the oppor- 

 tunities for fraud and injustices are at a maximum. 

 Until some progress along American lines is made these 

 two countries will be under a great disadvantage in 

 selling wheat. 



5. Marketing in New Zealand. 



The New Zealand system of marketing is somewhat 

 cumbersome ; but, while it causes inconvenience in many 

 respects, it ensures justice and equity in most cases. 

 The yearly production of wheat in New Zealand does 



A a 



