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CORN 



them, and in every settlement, whether it involves two or twenty 

 parties, the losses equal the profits. 



To illustrate this, let us use an imaginary settlement involving five 

 brokers. The settlement is of 5,000 bushels of May corn and might 

 occur any time after trading in that "future" becomes general. 



Brown has sold to Jones at 46 cents. 

 Jones has sold to Smith at 44 cents. 

 Smith has sold to Day at 47 cents. 

 Day has sold to Lee at 43 cents. 

 Lee has sold to Brown at 48 cents. 



A little figuring shows that Jones, Day and Brown have respec- 

 tively 2 cents, 4 cents, and 2 cents a bushel loss, aggregating 8 cents a 

 bushel, in their transactions ; while Smith and Lee each have a profit 

 — Smith of 3 cents and Lee of 5 cents a bushel, a total of 8 cents a 

 bushel, equal to $400 on 5,000 bushels. When it is discovered that 

 the trades are in the position indicated and delivery is unnecessary, 

 and all the parties agree to settle the transactions, the next step is to 

 transfer the $400 owed by Jones, Day and Brown, to Smith and Lee. 



An extremely simple method in doing this has been in vogue for 

 twenty years. Each day a "settlement price," or more properly a "fig- 

 uring" price is fixed. It has nothing to do with the real settlement of 

 the contracts, being a mere convenience. In settling this 5,000 bushels 

 of May corn, as among the five brokers, the settlement or figuring 

 price for the day on which the settlement is made will be used as a 

 figuring basis. Taking 45 cents as the settlement price, we get the 

 following result: 



SETTLEMENT 5,000 BUSHELS MAY CORN. 

 SETTLEMENT PRICE 45 CENTS. 



You will notice that in the case of Day, who has a loss of 4 cents 

 a bushel ($200.00) to pay, he has the corn bought of Smith, who has 

 a profit of 3 cents a bushel ($150.00) to collect; and he (Day) has sold 

 it to Lee, who has a profit of 5 cents a bushel ($250.00) to collect, and 



