CHAPTER IV. 



THE FARMER AND THE SPECULATOR. 



THE science of economics recognizes the existence of 

 moral obligations, but does not concern itself with their 

 enforcement. It merely takes account of economic 

 results following their observance or non-observance. That 

 "honesty is the best policy" is an economic, not a moral 

 precept, meaning that in the long run uprightness is most 

 profitable. With the resemblance, if any, of speculation to 

 gambling, or the immorality of that practice, if it be immoral, 

 this work has nothing to do. What I have to consider in 

 this chapter is tlie economic result to farmers, of speculation, 

 by others than themselves, in the products of the farm. 



"Speculation " is the purchase of a commodity not needed 

 by the purchaser for consumption (or for sale to customers in 

 the ordinary course of business), in the expectation that the 

 market price will be higher;' or the contracting to deliver at 

 some future time a commodity not owned by the seller, in the 

 expectation that before tlie maturity of the contract he will be 

 able to purchase for delivery at a price lower than that con- 

 tracted to be paid to him. The speculator who buys will 

 profit by higher prices, and is interested in promoting them, 

 which he commonly does by the persistent circulation of facts 

 or rumors indicating a scarcity of the commodity. He is 

 called a "bull" from the habit of that animal of tossing things 

 up on his horns. He desires prices to go up. More commonly, 

 of late years, he is called "long of the market," meaning that 

 he has a supply of the commodity in excess of his contracts 

 to sell. Speculators who contract to make future deliveries 

 are called "bears," from the habit of tiiat animal of tearing- 

 down things with his claws. Thoy wish prices to go down. 

 More commonly, of late years, they are called "short of the 

 market," meaning that they own less of the commodity than 



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