MARKET METHODS AND PROBLEMS 495 



the speculative market to eliminate the risk of price fluctuations by 

 unloading that risk upon a group of speculators instead of on the 

 producer, and thus can give the farmer the best price. 



Without an organized market the farmer would not know the 

 price of his grain from day to day, because transactions, if private, 

 would not be recorded, might be designed to mislead, and certainly 

 would not be representative of the general judgment. He would be 

 exposed to a hundred times the fraud of today, when every newspaper 

 of any importance in the country gives daily produce quotations for 

 the day before. 



The tendency toward steadying price movements is also facilitated 

 by the operations of the bear crowd. Short-selling is often of the 

 greatest benefit in repressing rampant speculative enthusiasm on the 

 one hand, and in checking the effect on prices of excessive pessimism 

 on the other. If it were not for the group of short-sellers who resist 

 an excessive inflation, it would be much easier than now to raise 

 prices through the roof; and then, when the inflation became apparent 

 to all, the descent would be abrupt and likely unchecked until the 

 basement was reached. 



3. It helps to regulate the rate at which the year's crop is consumed. 

 The modern grain and cotton markets are so organized today that 

 the distributing interests in the trade are constantly informed as to 

 the "visible supply" on hand, which may be defined as being all 

 grain, or any given kind of produce, which is stored in warehouses, 

 elevators, cars, or boats, and which is available for purchase. Owing 

 to the fact that warehouses in all the important distributing centers 

 are regulated by law or by the rules of the local board of trade, or 

 both, it is possible to collect data periodically as to their holdings. 

 These statistics are published regularly in the form of visible supply 

 tables and, when viewed in connection with similar statistics of 

 former years, will serve as a guide in fixing the price, and by doing 

 this exert an effective influence in regulating the consumption of the 

 crop. If the visible supply, plus the known stocks of grain still in 

 the farmer's hands, is unusually low, it is likely under normal con- 

 ditions that the price will be bid up and consumption decrease, and 

 if unusually large, it may be expected that prices may decline and 

 consumption increase. In this way the movement of prices will 

 indirectly benefit the community by regulating consumption so that 

 each year's crop, whether large or small, just happens to meet the 

 needs of the consuming world. 



