834 READINGS IN RURAL ECONOMICS 



organization lies in the separation of the speculative and non- 

 speculative elements involved. During the Middle Ages all trans- 

 actions involved speculation ; to-day some transactions are purely 

 speculative and others wholly devoid of speculation. To-day a 

 trader may choose to speculate or to avoid speculation and seek 

 gain in a purely industrial or commercial operation. The organi- 

 zation of speculative trade has restricted the field of speculative 

 gains and losses, actually reducing the proportionate importance 

 of such transactions. 



The organization of produce speculation has obscured in a 

 measure the distinction between speculation and gambling. It is 

 not so clearly evident to-day that the speculator actually owns 

 produce, and this has presented a real problem. In the modern 

 markets many transactions are settled by ring settlement or set-off. 

 The business of the different traders on an exchange during the 

 day is naturally settled in the simplest way. If A has bought 

 wheat and later sold a similar amount, there is really nothing to 

 be done but pay the differences in cash. It is likewise possible 

 to bring together a group of transactions which involve several 

 parties who have dealt in similar lots. The whole series of pur- 

 chases and sales can perhaps be liquidated by a single transfer 

 of warehouse certificates for money, so that the parties eliminated 

 do not actually go through the form of buying and selling produce. 

 Critics of the exchanges have endeavored to discredit these opera- 

 tions by declaring that they are in fact mere wagers upon the rise 

 and fall of prices. It cannot be denied that it is possible to make 

 wagers upon the movement of prices. There may be some wager- 

 ing in the exchanges, but it is certainly not characteristic. The 

 operations on the floor of the exchange are wagers neither in form 

 nor in intent. Transactions are based upon actual rights to acquire 

 property or upon obligations to deliver property. The goods are 

 represented only by documents of title that are symbols of prop- 

 erty, but this does not make the transaction less real. The Su- 

 preme Court has upheld the exchange, and the doctrine of intent 

 that is involved is one of the most fundamental legal principles. 



