56 AGRICULTURAL ECONOMICS 



the number of such ventures, but are also the best proof that the 

 "bear" is by no means the only factor in the market. Such being 

 the case, the short seller in making his contracts say in October, the 

 month during which the farmer disposes of most of his produce for 

 future delivery a few months hence, will discount all past and future 

 conditions that may be foreseen when fixing the price for future 

 delivery. As a matter of fact the October price of December wheat 

 is always higher than the October price of spot wheat; likewise the 

 December price of May wheat is always higher than the December 

 price of spot wheat. 



The difference in speculative prices or future bids at different 

 places must necessarily conform to the same general rule, that the 

 difference between prices for the same article in two markets tends to 

 equal the cost of transportation between them. The conclusion to 

 which we are led is substantially this, that the speculative system has 

 to consider two kinds of values in the commodities it deals with, 

 namely, place values and time values. Place values vary by the 

 difference, for example, between the value of a bushel of wheat at 

 one place (Chicago) and another (Liverpool), or of a pound of cotton 

 at one place (New Orleans) and another place (Liverpool). By time 

 value is meant the difference between the value of a commodity (as 

 cotton or wheat) at one time (July) and at another time (October). 

 The difference in place value, in the long run, where surplus capital 

 is plentiful, tends to conform to the cost of carriage between the two 

 places, the cost of carriage including all elements of expense for dis- 

 tribution. Time values, on the other hand, differ according to the 

 degree of correctness of the judgment of the speculative dealer whose 

 business it is to foretell the factors and conditions that are likely to 

 influence the course of future prices. Inevitably the few of best fore- 

 sight into future conditions are going to make the most money. Their 

 fortune lies in foreseeing in advance of others the point at which price- 

 making factors are going to find their focus. 



161. THE UNITED STATES COTTON FUTURES ACT 1 



SECTION i. [Short title.] 



SEC. 2. [Definitions.] 



SEC. 3. That upon each contract of sale of any cotton for future 

 delivery made at, on, or in any exchange, board of trade, or similar 

 institution or place of business, there is hereby levied a tax in the 



'Abridged by the editor. 



