Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1882-03-03
THE RUIN OF SPECULATION

The serious and detrimental disturbance
of business by the collapse of the specula-
tons in grain, cotton and provisions, which
have been in progress for the past two weeks,
shows the urgent necessity of some legal re-
striction to speculation in these products
In the first place it ought not to be possible
for ring of spectators TO control the price
-ef the three great staples for months, by
locking them up and then compelling the
consumers to pay them tribute for every
bushel they unlock. There might be some
liberation of this proceeding if it were a
legitimate business transaction, but IL is not.
The purchases that are made in these "bull"
movements are not paid for out and out, but
by small per ceatage Of the price agreed
upon, called margin" The purchaser
does not once in hundred times buy the
wheat, or corn, or cotton, or pork, or lard, to
use in legitimate business, but simply and
solely for speculative account He buys for
a "raise." A pool is generally made up of
wealthy Spectators, who pool their capital
and agree to take all the wheat, or corn, or
pork that comes ON the market at certain
price. AS they buy upon margin small
amount of capital goes a good ways in these
transactions. With few millions of dol
lars the most stupendous operations are pos
sible. Such pool could control the entire
grain or provision trade of the country for
months together.
There is limit to the capacity to purchase
even of the most powerful clique 1t is a
trying time to such a pool when it sees its
elevators and store-houses bursting with al
most countless millions of bushels of wheat,
while every railroad from the wheat growing
regions daily brings in additional hundreds
of thousands of bushels, whilst its capital
for margins is becoming rapidly and alarm
'ngly less, and the expected demand from
Europe puts in no sign. A continuance OF
these conditions little longer is what brings
the inevitable crash.
II Is difficult to say which is the most in
furious 10 the business Of the country, the
artticially high prices for these staples
which the pools compel the consuming pub
lie TO pay for several months, or the wide
spread disaster of the final collapse OF the
spectators themselves. The latter, proba.
bly,. involves. more poignant if not such
widespread suffering. The former compels
the poor to pinch somewhat in their house
hold supplies for months, while the latter
brings utter ruin to many of the spectators
and their following 'lambs"
But the most calamitous effect of these
break downs of great speculative movements
is the blow which il gives to confidence and
credit Such disaster sends Il thrill of
nervous fear throughout the entire business
community, and hesitation and inactivity
take the place of confidence and enterprise.
These speculations lure into their vortex
capital from all parts of the country and
from all branches of business, and when they
Gail the resultant shock is correspondingly
extensive and paralyzing.
The law ought to be invoked TO put stop
To this margin business. II is frightful
source OF danger, always impending, like
the the sword Of Damocles, over the head OF
the business world.