SPECULATIVE TRANSACTIONS IN 1926 MAY WHEAT FUTURE 4] 
In considering the significance of the relation which these groups 
bear to the price, the natural inference is that the large trader is gen- 
erally right and the small or medium-sized trader is generally wrong 
in his market operations. In the absence of specific purchase and 
sales prices for the trading of each group so that an actual measure of 
their profit or loss could be made, this conclusion can not be definitely 
demonstrated. If, for example, the relationship between the pur- 
chases and sales of large traders were so perfect that the price moved 
up and down in exact proportion to their market position, they would 
financially always “‘break even.”’ In actual practice this is of course 
not the case. On some days they do not change their position while 
the price moves up or down. On days on which they do change their 
position, some are changes to an unusual extent and effect the price, 
while others are smail and show no consistent effect. 
An outstanding observation that can be made is that the volume of 
purchases or sales is not in itself an adequate explanation for price 
movements. It has often been said by adverse critics of exchanges 
that speculators short-selling millions of bushels of grain permanently 
depress the price. The proponents of organized speculation have 
answered that this could not be since these same short sellers must 
later buy to an equal extent. Both arguments have very little merit. 
For every sale, there must at the same instant be a purchase; for sales 
in large volume, there must at the same instant be purchases in equally 
large volume. If, therefore, either buying or selling in itself were an 
adequate explanation of price changes, the price obviously would 
never move up or down. 
The information already presented indicates that the manner in 
which sales or purchases are made rather than mere quantity, vitally 
affects the course of prices. Table 2 shows that there is a vast 
difference between selling 5,000,000 bushels of wheat futures during 
the course of one day and the same operation spread over several days. 
Figure 8 shows the vital difference between a purchase or sale of 
5,000,000 bushels made by several hundred smali traders sending 
in orders intermittently to be executed “at the market,’’ and the pur- 
chase or sale of an equal amount by one or two individuals closely 
directing the manner in which their orders are executed and noting 
their effect upon the price. 
Close analogies are to be found in the field of cooperative bargain- 
ing. For individual laborers to call upon their employer intermit- 
tently in an effort to raise their wage scale may have little effect, but to 
join together and call in a body under shrewd leadership may result 
differently. Similarly in the sale of any commodity, where offered on 
the market by hundreds of producers in small uncertain quantities at 
irregular intervals, the effect upon the market price is much more 
uncertain than if sold by a single controlling influence and in accord- 
ance with a definite prearranged plan. 
Opinions regarding supply and demand determine prices in grain- 
future markets as in any other market. On the side of supply there ~ 
are opinions of existing supplies of grain and these are fairly accurately 
grounded in fact. There are also opinions as to the future or poten- 
tial supplies both of grain and of grain futures. On the side of 
demand opinions regarding the usual factors of foreign and domestic 
purchasing power, changing tastes for alternative foods and substi- 
