THE PRICE OP WHEAT 145 



in a market which was world-wide, and consequently 

 the risks which the trader assumed were no longer of 

 local origin, but were caused by changes in world-wide 

 conditions. The trader could not now undertake these 

 risks under the new conditions. Just as the producer 

 had handed over to him the assumption of trading risks, 

 so the trader now delegates to a new class the assumption 

 of these increasing risks. This class is composed of the 

 speculators as distinct from producers and exchangers. 

 Thus the development of world-wide markets gave rise 

 to modern organised speculation, which is found only 

 in commodities marketed under such conditions. More- 

 over, the machinery of speculation is limited to com- 

 modities of an uncertain production which are widely 

 demanded and gradable. Absence of serious hindrances 

 to free competition is a further requisite. Thus monopoly 

 control of an article would prevent the operation of 

 speculation in the market. Brief consideration will 

 show that all these conditions are found in the market 

 for wheat which is eminently favourable to the operation 

 of speculation. Indeed, it is one of the markets where 

 the machinery of speculation is most highly developed. 



The practice of dealings in " futures" is the most 

 important feature of modern organised speculation. In 

 the market for wheat are found all the conditions 

 necessary for the development of "future dealings. " 

 These conditions are : v 



(1) The goods are sold by standard grades. 



(2) Delivery of the goods is at stated and regularly 

 recurring intervals. 



(3) The speculative dealers are interested merely 

 in the "differences." They do not generally 

 buy the commodities for use themselves. 



(4) There are clearing-houses in each market, and 

 periodical settlements, and an association com- 

 prised of operators on the market. 



(5) The market is utilised for hedging transactions. 



