, 1876-05-27

Tho recent discussion Of tho direct trans-
portation question, as affecting the produce
markets Of Chicago, has led to close scru-
tiny of the rules adopted by tho Board Of
Trnde in tho hope Of preventing corners. Tho
result OF that scrutiny is conviction in the
minds OF many that the rules IN question,
though apparently fair, may DO mado to seryo
the special interests of ono class OF trade1s o.
against the others. Ithns been shbwn that tho
buyer Of given quantity of grain or provis-
ions, to bo delivered in sono futuro month,
ia expected to receive and pny for the prop
orty when 1t is tendorcd to him, whatever bo
tho prico then ruling in other mnrkots. It
matters nothing that prices in New York
have declined or 10 conts bushel, SO that
be must inevitably loss severely by shipping
to the eeaboard aud selling it thero. The
trade ia binding on him and Justly 80. In
buying for future delivery hs .akea tho
chances Of profit through All advance, or losa
by decline, in prices, during the timc which
in commercial circles is called "the life Of
tho CONTRACT"
Tho man who sells the property for future
delivery has, however, three strings to his
NJ" wv 0S44AE III AA9 AAfO1t Uul9 QuG
against him. II tho market declines bctwoeu
the time of the salo and tho dato that limits
the duration Of the contract, 1o can buy at
less than he sold for; and the difference is
his profit. If tho market turns upwards, ho
il not bound to I'LL his contract, provided ho
can show that on tho day tho contract ex-
plres ho is not ablo to buy in the sail proper
ty at its roal value As determined by rofer-
enco to what 1t is worth to ship to other
points, at tho then current rates Of freight,
or for manufacturing purposes in this city.
Ho may have lad several weeks or months
timo during which he could havo covered tho
transacsion with profit TO himself, but risks
tho chances Of tho commercial battle by
waiting till tho last minute of tho last tlny,
It IL true, the rules Of tho Board of Trade
provide that undor such circumstances tho
seller shall, IT the Committee of Arbitration
80 decide, pay damages To tho e1tont of
per cent at the contract price; but tho pen
atty ia not always imposed, aud. II imposed,
would not in oil cases be sufficient to rei,u-
burse the buyer for his actual loss by the
(nouD transaction.
The consequence Is that an operator who
buys large lot Of produce, OF different
prices, at different timos, intending to ship
1t, iaplacedat adecided disadvantage. Suppose
ho agrees to-day To forward 2o0,oo bushels
OF corn to correspondent in England, dur
ing the month of August. 1Io buys 100000
bushels this week, "soller August" at 47o.
Next month he buys 100000 busels at
55c, the market having advanced 8o
IN the meantime. When the tilno comes
round for delivery tho market here is
h5o, and tie corn is worth $50 per
bushcl to ship at tho then current prices.
II all we're delivered to him, It's cost would
average hiu, 5lc, giving profit Of 20; but
the Tx, 900 bushels Of high-priced corn is do
livcrcd to him; and lie may whistle for tho
rest, though lie has hml nothing to do with
thu advance Of the market to $50 in August.
This is no fancy sketch, except that wc have
not quoted actual quantities and pricos.
Moro than ono case Of this kind has occur
red since tho last revision Of the Nules of
the Board Of Trado,--tlia chief object Of
which WINS the protection Of short sellers
against unmerciful squeezing on tho part of
corner oporaton
1t cannot bo disputed that somo such pro.
lection was naeded-as tho corners Of the
past wero commercial nuisances, Il not
crimes; but the protection should not be all
ono way. The man..who buys the produce Of
tbs country has some rights, and ought to
llave some other chances than those embod-
led In tho declaration; "lf tho market goes
down lose; F; II it advances gain nothing"
The rul0 OF trailing lpnU sinca at1onfad NJ,
the French RourHe seems 80 vol calculated to
meet ths difficulty, and Is 10 pa]pably fair
that 1t Ia . wonder our Board OF Trade has
not ere this adopted it,-eithor with or with
out modification. That rule is to the effect
that either buyer OR heller may prevent tho
transaction from involving loas OF moro
than 10 per cent Of the contract price by de-
ol&ring it closed At any tima during
tho life Of the contract. Tha adoption Of