422 REPORT— 1900. 



lines. The one group of commodities manifests the general characteristic 

 that the supply is not continuously produced, but that, speaking broadly, 

 the supply for a year depends upon the results of a harvest which falls 

 within a limited part of the year ; the demand for consumption is, how- 

 ever, one which exists throughout the year, being rovighly continuous. 

 The work of dealers in these commodities is, therefore, to arrange 

 relations between a spasmodic supply and a continuous consumption. 

 With products of which metals may be taken as the type, there does not 

 exist the same dependence of supply on the I'ound of the seasons. 

 Demand fluctuates ; but supply can, if necessary, be organised so as to 

 provide a continuous output calculated to meet a steady demand of large or 

 of small dimensions. It seems reasonable to suppose that the influence of 

 the market organisation for future dealings on price and supply will not 

 follow identical lines in cases so widely contrasted. As, further, the 

 interest in the subject referred to the Committee is, in the main, derived 

 from the questions raised in reference to farm products (and particularly 

 in reference to grain), the Committee propose to confine their report to 

 this section of the material which the reference to them might be con- 

 sidered to cover. Should the questions connected with future dealings in 

 metals appear of sufficient interest, a separate investigation may be 

 directed into that subject by a committee suitably constituted. 



The problems which arise in connection with future dealings in produce 

 are in some respects not unlike some of those which are discussed in Sir 

 Robert Giffen's essay on Stock Exchange Securities, ^ but diiferences 

 fundamental in their nature distinguish the cases of stock and produce 

 dealings. If no other difTerence existed, the fact that the existing 

 supply of raw cotton (for example) will be, in the main, used up in the 

 course of a year, while at the end of a year the bulk of the existing Stock 

 Exchange securities will still be found in existence, would differentiate 

 the two problems sufficiently. The influences which determine the level 

 of values are certainly not identical in the two cases, so that the points 

 which are of greatest importance in the discussion of the Stock Exchange 

 will not necessarily need to be equally fully considered here, nor will the 

 conclusion in regard to what Sir E. Giffen designates ' fictitious securities ' 

 be capable of simple application to what is sometimes called ' fictitious 

 grain.' 



It may be not superfluous to sketch the leading features of the market 

 organisation, the influence of which we seek to trace. In so doing, it will 

 be necessary to remember that we have not simply to consider bargains, 

 the fulfilment of which is contracted to take place at some future date. 

 It need not be argued that such bargains are regularly made in every 

 department of life, and that no very special interest attaches to the 

 investigation of the influence of the custom of making contracts which, 

 from the nature of the case, are incapable of instant fulfilment. More- 

 over, such contracts are, in many cases, eminently speculative, though 

 greater speculation may occur in cases, where no .such conti-act is made. 

 The builder who undertakes to build a Town Hall at a definite price is 

 making a contract for future delivery of goods ; but it is the builder who 

 erects houses with the expectation of disposing of them when finished — 

 who makes, in respect of them, no contract for delivery at a definite price 

 and time — who is commonly referred to as the ' speculative ' builder. It is 



' Stock Exchange Securities : An Essay on tlte General Causes of Fluctuations in. 

 their Price. By Kobert Giffen. 1877. 



