24 BULLETIN 558, U. S. DEPARTMENT OF AGRICULTURE. 
modified so that the understanding refers only to the grain produced 
on a certain number of acres, which is known as “ contracting by the 
acre.” In another form of agreement the seller undertakes to deliver 
to the purchaser a definite number of bushels, a proceeding commonly 
alluded to as “ contracting by the bushel.” As a rule, contracts for 
future delivery are mere verbal agreements, although written forms 
are not unusual. Rarely are any margins deposited by either party 
to insure actual fulfillment of the contract. 
HAZARDS OF CONTRACTING FOR FUTURE DELIVERY. 
The country grain dealers, as well as the farmers, are seldom in 
accord regarding the advisability of contracting for future delivery 
of grain. Many dealers condemn the practice because of the liability 
of misunderstanding between the dealer and the farmer. From the 
buyers’ standpoint, most unpleasant experiences have resulted from 
contracting by the acre. It is alleged that some farmers seek to de- 
liver more than the stipulated amount of grain in event of a drop in 
price, but withhold it, on the other hand, upon a rising market. 
Then, too, the farmers contend that a material drop in price evokes a 
disinclination upon the part of the dealers to accept the grain, or finds 
expression in an attempted discount from the contract price by claim- 
ing that the grain delivered does not meet the standard stipulated in 
the agreement. It would seem that some form of business practice 
could be devised that would reduce to a minimum the number of such 
cases. pee 
Many difficulties are encountered in attempting to fulfill the terms 
of a contract, particularly when an interval has elapsed between the 
date of the contract and the time of delivery. Often a delayed 
harvest, accompanied by a prolonged rainy season, renders delivery 
at contract time an impossibility. When this condition exists it 
results in much confusion, for the country dealer in many instances 
has resold the grain by contract, the last purchaser disposing of it 
perhaps to an exporter desiring to fill a cargo. The failure, for what- 
ever reason, on the part of the farmer to deliver the grain to the 
country elevator at the specified time interferes seriously with the 
proper fulfillment of the country grain dealer’s previously incurred 
obligation with other grain merchants. Also, if delivery is not 
effected upon schedule time the buyer who is dependent upon grain 
bought for future delivery for the filling of his requirements must 
purchase the shortage in the open market, often at a marked advance 
in price. In this case, however, relief is afforded from financial loss . 
by the infliction of a penalty upon the contracting party at fault. 
The latter, having purchased the grain for future delivery from a 
country dealer who has beer unable to supply it when desired, there- 
