482 AGRICULTURAL ECONOMICS 



rise by Mr. James A. Patten, of Chicago, and his followers. Back 

 of the manipulation by these daring speculators was a short crop in 

 the Argentine Republic, due to December frosts, which reduced the 

 amount of wheat that could be exported to feed Europe, the large 

 needs of Europe itself, her short acreage, and probably the small 

 supply of wheat on hand in the world left over from last year's harvest, 

 though there are conflicting theories on this last point. 



Getting a sense of this situation last fall, Mr. Patten bought dur- 

 ing last winter and this spring some twenty million bushels of wheat 

 to be delivered in May, paying probably, not much more than $i .00 

 per bushel. At the same time, opposing speculators who had not a 

 correct sense of the situation were selling "short" wheat for May 

 delivery as the price rose to figures which seemed to them more and 

 more unjustified. When the short sellers became frightened at the 

 apparent correctness of Mr. Patten's theories, and attempted hastily 

 to buy in enough wheat to carry out their sales, the pyrotechnics of 

 April resulted the more rapidly because of the fanners' unwillingness 

 to sell until the top of the rising prices was reached. 



With flour selling at $7 . oo to $7 . 20 per barrel, numerous requests 

 have been sent to Congress asking that a federal law should be passed 

 prohibiting such operations as Mr. Patten's bulling of wheat "futures." 

 If Mr. Patten is right in his assertion that the supply of wheat is 

 inadequate to meet the world's demand, it is obvious that federal 

 prohibition of speculation would have no final effect on the size and 

 price of the consumer's loaf of bread. And if Mr. Patten is wrong, 

 the history of attempts to "corner" wheat markets suggests that he 

 and his fellow-speculators will certainly be overwhelmed by a flood 

 of wheat coming from the farmers' stores to break the price which 

 has been momentarily held at an artificially high level. 1 



153. BUYING TRUST AND PRODUCERS' POOL' 

 BY ANNA YOUNGMAN 



The farmer, both because of his situation and because of certain 

 peculiarly distinctive features of agriculture, has usually been con- 

 ceived of as a permanently isolated producer. Yet the farmer is not 



1 As a matter of fact, this speculative movement was carried to a successful 

 conclusion. Subsequently, Mr. Patten engineered a similar corner in the cotton 

 market. The Supreme Court decided that this latter enterprise operated in 

 restraint of trade and was in violation of the Sherman Anti-Trust law. EDITOR. 



Adapted from the Journal of Political Economy, XVIII, 34-44. 



