OUR PRESENT PRICE-REGISTERING 

 SYSTEM * 



PRICES of corn belt food staples are registered more promptly 

 and more delicately on the Chicago Board of Trade than any- 

 where else in the world. The farmer visitor in Chicago, who has 

 a few minutes to spare, finds it very interesting to look down from 

 the Chicago Board of Trade galleries on the corn pit. For several 

 minutes, the pit may be the dullest thing imaginable, and suddenly 

 news will "break." Perhaps it is the month of August, and it has 

 begun to rain in Nebraska. As a result, certain operators are 

 anxious to dispose of the corn for which they had contracted. 

 Perhaps it is 9 :30 on another August morning, and the tempera- 

 ture, even this early in the day, is 85 degrees, and the prospects 

 are for hot winds sweeping Kansas and southwestern Iowa. Men 

 who have sold corn "short" a few days before, on the strength of 

 local rains, are now thoroly scared, and rush into the pit to buy 

 back before the price runs up more than three or four cents. 



The farmers sitting in the gallery, watching the speculators 

 buy and sell "paper" corn, by shaking their fists and nodding their 

 heads, feel that tlie Board of Trade is a gambling institution. So 

 firm is this conviction that several of our largest farmers' organ- 

 izations have gone on record as being opposed to the speculative 

 system as a method for registering prices of farm products. 



So far as the business world is concerned, the system of buying 

 and selling future contracts employed by the Board of Trade is in 

 the nature of risk insurance. A feed concern may have sold to 

 farmers twenty carloads of their feed at a price based on $1.20 

 corn. They have not bought this corn as jet, and do not have 

 room to store it. They therefore buy a contract for future deliv- 

 ery at .$1.20, in order to protect themselves against corn going 

 up in the meantime. This feed concern is in the manufacturing 

 game; it can not afford to take a risk, and for that reason buys 

 a future on tlic Board of Trade. When this feed concern accepts 

 the actual corn, it sells tlie contract. It may make or lose money 

 on the purchase and sale of the contract, but in either event the 



*It is suggested that those who are especially interested in a study 

 of speculative markets read "Braces' Organized Speculation," or "Em- 

 ery's Speculation on the Stock and Produce Exchanges of the United 

 States." 



