The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1883-03-02
Dealing In Cultures"

Dealing in ss Futures."
Very much is said nowadays about
dealing in futures" and severe con-
domination is visited upon the practice.
and upon men who engage in it--per-
haps, in some cases, by persons who do
not take in all the facts, or fully un-
derstand what is meant by the word
'.futures."
The phrase dealing in futures" sig
mites the act of buying or selling for
future delivery. ToilIustrate: Suppose
iron is to-day selling at twenty-five dol
lars q ton. An iron merchant, or a
Spectator. for some reason that seems
good one to him, comes to the con lu-
sion that the demand for iron is to
increase, and that the price will be
higher. With this view. he goes to an
other iron merchant and agrees to buv
of him a thousand tons of iron, to be
delivered in April, and he also agrees
to pay twenty-five and IA half dollars a
ton for it.
This kind of trade. in its simplest
form. is of the very essence of modern
business methods, and can no more be
discontinued than can the running of
railroads. Of course it involves the
purchase by one party Of what he does
not at present need. and the sale by
the other Of that which he does not
possess.
But let us look at the matter practi-
cally. During the summer months,
wholesale boot and shoe dealers from
all over the country C me to Boston to
buy their goods The manufacturers
have made up sets of samples. Show
ing these to the visiting merchants,
they take orders to sell boots and shoes
like the samples shown, Tor future de-
Gvery-fOr the summer buying is for the
coming winter and spring trade.
In this case the shoe manufacturers
sell goods for which they have not yet
even bought the ma erial. And their
practice which is absolutely necessary,
for they could not at ord to hod DDS
six months-is in the fullest sense deal
ing in futures.
Then take the other case of a pur-
chase. The treasurer OF a colt N mill
knows that he will need certain num-
Der OF ba es If cotton for use each
month. By carefully informing him
self, as he supposes. as to the cotton
crop. he has come to the conclusion that
cotton will be worth in June a higher
price than the present quoted price for
June delivery. Accordingly he buys
five hundred bales to be delivered in
that month. Ii he is successful in his
forecast. he makes more money for the
stockholders OF his corporal on than he
I,r lal L.
he actually needed the cotton.
In fact, knowing when to buy and
when to sell is of the utmost Importance
in our modern commerce. And as it
would be not only unjust, but incon-
sistent, to make law allowing men to
buy for future delivery what ti.ey will
need by and bv, but forbidding men t,
sell what they have not on hand-it will
be seen that it is not possible to stop all
dealing i'm cultures"
Yet it can not be denied that there
are great evils corrected with the
practice. Last year the sales of wheat
in Chicago were thirty times as great
as the whole amount of wheat which
was received in the city. Millions OF
bushels were bought and sold by men
who never really owned one blshel of
wheat This was speculation pure and
simple. The speculate merely made
bets that wheat would rise or fall in
price. An enormously large part of
this sO-called trading was done on
.'marg ns'-the spectators paying
only so much of the price of what they
bought or sold IS might be necessary to
cover pOssi BILE losses.
Whether specializing on margins can
ever be stopped by law is a question
that can not he discussed now. But it
should be seen that it is a question en-
tirely separate from that of /" futures"
For the speculator may operate on a
margin when there is an actual delivery
of goods by the seller; and he may trade
in futures without depositing margin.
Another point to be noticed is that in
general the speculation in iutures does
not jiuriously affect prices. Where
there is buyer there is a seller. Mr..
A buys wheat 'options'' freely be-
cause he thinks grain is to advance in
price. Mr.. B sells wheat futures
freely because he thinks the price is to
decline.
That is to say, there are spectators
ION both sides of the market" If
there are more buyers than sellers, that
is because the general judgment is that
wheat s to advance; and the reverse is
true when sellers are i'm majority
But suppose SINE man with large |
capital endeavors to force prices up.
This is called ''bu ling" the market
Then the "bears." those who believe !
that an advance is not warranted, sell !
futures " freely, and unless the !
"bull" speculator has seen further
into the future than they have, he loses |
and they make money.
The whole question is very perplex-
ing one, 10th in a legal and in moral |
point of view. 1t is to be eared that, |
after all. the line between what is
proper and what is improper must be |
Drawn by public sentiment. so as to en-
courage all legitimate trading and even
SPECULATION. but to repress gambling. -
Foutts' Companion.
How to Use n Rifle.