428 REPORT— 1900. 



determined by the transactions of dealers handling the actual goods alone. 

 It will be convenient to consider these views separately, and to make such 

 comparisons of the actual course of market-prices as seem most likely to 

 throw light on the subject. 



First is the influence on the general price-level. The reason for 

 asserting that this has been depressed by dealings in futures appears to 

 be, when the statements of the advocates of this view are considered, 

 chiefly that other causes are inadequate to produce the result actually 

 experienced. We do not think it is necessary to support our dissent from 

 this view by indications of the influences to which the fall in some prices, 

 especially those of wheat, maize, and other grain, should be attributed. 

 To do so would be to travel far outside the matter referred to us. It will 

 suffice to say that we hold it to be necessary to show how the operation 

 of the futures- market can depress the general price-level of the goods dealt 

 in. In only one way can we admit a real depressing influence, and that 

 is through reducing the cost of handling : i.e., the price may be reduced to 

 the consumer without a reduction of price to the producer of the raw com- 

 modity by cheapening the marketing (as well as the freight) charges. 

 Such a reduction of price would reduce the return to all those producers 

 between whom and the consuming regions but little expense of carriage 

 intervened. It is an important point to examine, therefore, whether the 

 return received by the American farmer in the great wheat-producing 

 areas has been reduced largely — whether it has been reduced as much pro- 

 portionately as have prices generally. This is a point not very easy to 

 determine. The U.S. Department of Agriculture compiles a figure 

 which is given as the average farm-price of wheat at the beginning of 

 December. Comparing this with the average export-price of wheat from 

 the U.S., we have (see for extended table Appendix) :— 



Y„„_„ Average farm price. Years ending Average export price. 



Cents per bushel June 30 Cents per bushel 



1869-78 . . . 104-7 1870-79 . . . 127-6 



1889-98 . . . 66-5 1890-99 . . . 79-7 



These figures indicate a fall of not very different proportions in the 

 two prices. The freight-rates from Chicago to New York,^ compiled by 

 Mr. J. C. Brown, of the New York Produce Exchange, show a reduction 

 of the all-rail rate of over 12 cents per bushel, of the lake-and-rail rate 

 of 11 cents, and of the lake-and-canal rate of over 9 cents, comparing the 

 same two periods. 



Average Hates. Cents per Bushel. 



Years Lake and Canal Lake and Rail All Rail 



1870-79 . . . 14-8 . . . 18-6 . . . 256 

 1890-99 ... 5-2 .. . 7-3 .. . 13-0 



The reduced cost of transportation seems, in the light of these figures, 

 capable of accounting for all, and maybe more than all, the diff"erence 

 between the fall in the farm and export prices. If these figures were 

 really representative, the conclusion would be that charges other than 

 freight have possibly increased, since the fall in price falls short of the 

 fall in freight, by the all-rail routes, between Chicago and New York. 



' Cf. Statistical Abstract of the United States, 



