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ON FUTURE DEALINGS IN RAW PRODUCE. 429 



It is not, however, satisfactory to compare the fall of price at a parti- 

 cular date in the year on the farm with the average fall registered in a 

 year. A distinctly useful corrective to the idea that the prices of recent 

 years at places near the great producing regions are without precedent, is 

 afforded by the record of monthly averages of prices of wheat at Cin- 

 cinnati which are given in the ' Cincinnati Price- Current ' (for table see 

 Appendix). The range of prices of the ten years 1844-53 would compare 

 quite closely with those of the past fifteen years. The lowest figures, those of 

 1894, do not touch the level reached in the course of 1846. It is true that 

 for long periods— for example in the dozen years ending 1882 — the fluctua- 

 tions of price centred about a level some 50 per cent, above that about which 

 the fluctuations of 1844-53, or those of the years since 1885, have centred. 

 But it does not seem necessary to invoke the aid of the modern market 

 organisation to account for a return to the level of half a century ago. 



It is further of importance to recall the fact that in another great 

 staple, cotton, the lowest prices of recent years hardly fell below those 

 registered early in the century. The table of average prices of middling 

 American cotton, which is given in the Appendix {cf. p. 435), shows that,, 

 whatever may be the influences which have depressed the prices of cotton 

 of late years, the level reached is practically that of the period before the 

 American Civil War. Any suggestion of the need of an influence from 

 the futures-market to produce the actual result would appear unnecessary. 



It may be granted that absolute certainty cannot, on this point, be 

 reached from the examination of statistical compilations. A considera- 

 tion of the matter from the point of view of the probable influence of an 

 active futures-market, however, shows no point where a permanent de- 

 pressing influence can arise. The facilities for short-selling are, it is 

 true, considerable, but the 'bear' must cover his sales, and hence he 

 must, in the end, support the market by buying. And, it may be added, 

 the organisation aflPords as great facilities to the ' bull ' as to the ' bear,' so 

 that, whatever the effect on the fluctuations of price, the increase of both 

 buying and selling would hardly produce a strong pressure which, in the 

 long run, is all in one direction. The depressing effect of sales of wind- 

 wheat is hardly the same as in the stock markets is produced by the in- 

 troduction of fictitious securities. The sales, as stated, must be covered 

 by purchases, and that within a limited time. Hence the nature of the 

 commodities ' fictitious wheat ' and ' fictitious securities ' is not the 

 same. 



A not uninstructive illustration is afforded by the recent experience 

 of the Berlin market. As a result of the Bourse Law of 1896, the active 

 dealings in that market have been restricted within very much narrower 

 limits than formerly. The form of contract which is no longer legal there 

 is still legal in Liverpool, London, Amsterdam, and elsewhere, and to these 

 centres much of the business formerly transacted in Berlin is practically 

 transferred. Berlin is cut off from that close contact with the world- 

 market which was maintained so long as the methods of transacting busi- 

 ness there were similar to those in use elsewhere. The result is shown in 

 the annexed table (p. 430), showing the average level of price in Liverpool, 

 Amsterdam, and Berlin in each of the last eight years, from which it will 

 be seen that the check on futures business in that market has certainly 

 not raised the price there relatively to that on the great markets of the 

 world. Berlin prices have shown, indeed, a smaller excess over those 

 representing the free markets of Europe since than before the Bourse 



