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Gambling in Farm Produce. 
one of the most extensive buyers of grain in the United States, 
in defending the option system, said that the option was a 
negotiable contract, as “ sacred ” as any bank bill. He added : — 
It goes from one man to another until it is probably transferred hundreds 
of times. That is what makes this enormous short selling that you are 
talking about. There are probably not less than 75,000,000 of these con- 
tracts floating around from one man to another on the Boards of Trade of 
Chicago, Minneapolis, and New York. 
Mr. Sawyer was probably referring to options of all kinds, and 
not to those relating to grain only ; but his statement is notable 
as that of a defender of the option system, as it shows in even a 
more striking manner than the accounts of the opponents of the 
system the multiplicity of the transactions carried out in con- 
nection with a single lot of grain. According to Mr. Sawyer, 
a lot of five or ten thousand bushels of wheat may be nominally 
transferred hundreds of times. In the great majority of in- 
stances, however, no particular lot of grain or other produce 
is in view in connection with a future contract, but only a given 
quantity of a certain grade. 
Now let us endeavour to imagine what takes place in con- 
nection with a wheat option for 5,000 bushels made on July 1, 
to terminate in October, the seller to have the option of fixing 
the particular date in October when delivery shall take place. 
Let us further suppose that there is a particular lot of grain 
which is transferred from one man to another until fifty men 
are interested in it, including the first seller. We have here 
forty-nine pairs of men, as every man except the first and last 
is a member of two pairs. For example, A sells to B, B to C, 
C to D, and so on until the fiftieth man is reached. Therefore 
there are forty-nine pairs of men whose interests are opposed as 
far as this particular transaction is concerned, one of each pair 
being interested in a rise, and the other in a fall of prices, after 
he has entered into a contract. Now, wherever the option or 
future system is in extensive operation, there is a daily or weekly 
settlement through a clearing-house, and the daily or weekly 
differences in price have to be settled between each of those 
forty-nine pairs of men on each settlement day. If the price 
advances above that at which the option is sold, every one of 
the forty-nine sellers has to pay the difference on 5,000 bushels 
to every one of the forty-nine buyers, because if he had to get 
the wheat to deliver he would have to pay so much more for it ; 
and if the price falls, every one of the forty-nine buyers has to 
pay the difference to every one of the forty-nine sellers, because 
the price he has agreed to pay is so much more than the price 
at which the wheat could be bought. This is done to minimise 
