494J 



AGRICULTURAL ECONOMICS 



when the roads are in a condition to bring it to market, or he may 

 have it stored in an elevator at his own expense waiting for a better 

 price yet in each of these cases he can, and usually does, dispose of 

 his surplus crops by selling them through a broker upon some board 

 of trade for delivery at some future time." 



Produce exchanges also serve as a world's clearing house for trade 

 and crop information, and in this respect render an invaluable service 

 to producer, middleman, and consumer. All our leading crops are 

 produced over such large areas that few individuals have it in their 

 power to keep in daily touch with current crop and trade events 

 except it be in their own particular locality. The prices of nearly all 

 leading cereals are determined by national or world-wide conditions, 

 and a favorable or unfavorable condition of a crop in one locality or 

 country may be so outweighed by the opposite condition elsewhere 

 as to render worthless a price quotation based upon local evidence. 



Today, however, all the leading produce exchanges are in constant 

 touch with crop conditions, weather reports, the movements of grain, 

 changes in freight rates, the rate of consumption, economic legislation, 

 political complications, etc.; and all this information as currently 

 received is given immediate expression in the form of purchases and 

 sales at prices which are immediately transmitted by wire to all the 

 trade centers, and soon made available to the general public by the 

 daily press. 



The value of this prompt and elaborate collection of trade infor- 

 mation is fourfold, viz. : 



1. It makes possible the discounting of the future, i.e., it enables 

 dealers and speculators to exercise their best judgment at once in the 

 form of actual transactions, and thus the effect of a short or bumper 

 crop upon prices is reflected, i.e., discounted, long before it would 

 otherwise be realized by the general public. 



2. It steadies prices. The daily discounting of current events 

 makes unnecessary, except in rare instances where manipulation has 

 interfered with the smooth working of the organized market, a sudden 

 decline or rise in prices upon the wide publication of events which 

 have been slowly developing. An elaborate statistical study of prices 

 for forty years, one-half of which period was before the time of 

 exchanges, shows clearly that the fluctuations in the price which the 

 farmer received for his grain or cotton was not nearly so great during 

 the twenty years when exchange markets were in operation as it was 

 prior to their existence. The middlemen who handle the crops use 



