Gambling in Farm Produce. 
297 
risks, which might become very heavy during the whole period 
of the contract. As every one of the fifty men interested in 
the transaction, except the first and last, is both buyer and 
seller, forty-eight of them pay one man and receive from 
another, if there be any difference in price above or below the 
price agreed upon in each case, on every settlement day during 
July, August, September, and part of October, though possibly 
for only one day in October ; and the first and last man have each 
to pay or receive. This shows how enormous the complications 
may be upon a sale of 5,000 bushels of wheat. But this is 
by no means all the complications involved, for every one of the 
fifty men may “ hedge ” more or less, to protect himself agaisnt 
loss on the transaction, by buying or selling other options. Of 
course the multitudinous transactions are simplified by means 
of the clearing-house ; but the effect is the same as if each man 
had to pay all those to whom he owes, and receive from all who 
are indebted to him. In this country, at least, it is not usual 
for any particular lot of grain to be transferred as supposed 
under the future system ; but the effect of the usual transactions 
is as above described, except that thousands take place without 
any delivery of grain whatever. 
It is customary among some English importers of grain to 
hedge by selling options or futures in this country or in the 
United States — usually in this country. For example, if an 
importer buys 10,000 quarters of wheat abroad, rather than 
risk the whole amount that he would lose if a fall took place, he 
sells an equal quantity of wheat in the shape of futures at the 
highest price he can get. If he sells the futures at the same 
price as he has paid for the grain, he covers his risk entirely, 
and stands to win at least as much on the former in the event of 
a fall in price as he will lose on the latter. Indeed, a series of 
falls will be more to his advantage than a series of advances, 
because he cannot get any profit on his grain till it arrives in 
this country, and for every advance in price he will have to pay 
cash on his futures, which might be inconvenient ; whereas, in 
the event of a heavy fall, he might buy in his futures on very 
advantageous terms, wait for a temporary turn in the market in 
order to sell again, and then look forward to another fall to 
enable him to repeat the manipulation. In short, what suits 
him best is a series of falls, with brief recoveries or partial 
recoveries at intervals. But a continuous fall will be more 
advantageous to him than a continuous rise. 
From the preceding statements it will be gathered that 
there is a very large number of men, especially in the United 
States, engaged in purely speculative trading in grain and other 
VOL. IV. T. S. — 14 X 
