Savannah morning news. [volume] (Savannah) 1868-1887, 1883-07-27

Editor Morning NctcS: A Mr.. Floyd
has published an article in the North
american Reuietc, under the title of ''Mak-
ing Bread Dear in which he accuses the
various commercial exchanges of the
country, of crimes and misdemeanors
with a reckless indiscrimination born
only of the densest ignorance.
1t has become common for would-be
moralists to lay to the charge of ''specu-
lation" every i'll that may befall or
threaten the world generally. Mr.. Floyd
follows this rule with the most praise
worthy constancy. 1 will quote few
passages { at second hand) from his some
times tacetious article. Speaking Of the
enormous speculative transactions made,
he says:
"When the cotton plantations of the
South yielded less than 6 1000, 900 bales, the
crop on the New York Cotton Exchange
was more than 80, 000, 000;' he means the
sales of futures were over 80, 0OO, 600.
Now a transaction in cultures" requires
two operations to be completed; sale Is
reported each time, so that we at once
find that the number of culture" bales
actually dealt in was only 16,OO0,OOO.
Furthermore, each bale of actual spot
cotton may be sold bona fide a half dozen
times before il is finally manufactured
first, at the small interior town or cOun-
try store, at one or two larger towns, at
the Southern seaport. in New York, and
again in Liverpool, HaYre or elsewhere.
So the sales of actual spot cotton on crop
of 100000, may readily foot up 10 to 20
millions or more. Why not, therefore,
culture" contracts also? These large
sales of futures have again and again
been pointed out to show the prepOsterous
nature of the Exchange dealings, and l
merely wish to call attention to the alb
surdity of such criticisms.
Again he says:
''The prices of the speculative wheat
and the spectral hog of the board fix those
of the real wheat and the actual hog of
the field. The negro planter in Georgia
who raises his bale and half must sell 1t
for what the Cotton Exchange says 1t is
worth. The man who works in the ground
must take the price fixed for him by the
man who works in the air."
Now, all this stuff is doubtless intended
to imply that the man who works in the
ground has grievous wrong done him
by not being allowed to fix his own price
for what he produces. In the first place,
however, the exchanges do not nix prices,
despite the assertion that they do. And
in the second place, the facilities they
afford for a perfect equilibratiOn of de-
mand and supply which there, as else
where, fix prices, are by far the best that
the business world has yet been able to
attain.
The general drift of Mr.. Floyd's article,
however, is to charge the exchanges with
the responsibility for every advance in the
price of food Ridiculous as is this charge,
Mr.. Floyd is not the only one who credits
it. 1 would like to ask such theorists who
eXclaim: Speculation is the cause of it,"
whenever provisions are dear, if there
were no such thing as high prices for food
before exchanges and futures were
ever thought of; if they don't have famines
and enormously inflated prices even now,
where there are no exchanges.
On the contrary, the truth is that before
there were exchanges and futures periods
of high and famine prices were both more
frequent and more aggravated than any we
have in modern times, and, strange as it
may seem to Mr.. Floyd, the spectators
are the very ones who have produced this
beneficial change. For be it understood
that in speculation there are two sides
one wanting higher prices and one want
ing lower prices. Each is active, vigilant
and ever on the alert for means to pro-
tect themselves from injury anticipating
every disaster and then taking precau-
commodity dealt in seems likely to run
short, prices are advanced by the natural
movements of speculation Immediately,
enough TO check supurfluOus consump-
ton, and afford means for bridging over
the period of scarcity. Were it not for
these instructive movements, so to speak,
for self-prOtectiOn by the sensitive
culture" markets, it is fearful to cOntem-
plate the result of a famine year. The
range of prices forced up by the panic
stricken demand which ignored Futures
would be far above those reached by the
most successful corner"
There are two kinds of corners"
One is the natural kind, such as l
have referred to, when a legitimate
short supply results in something like a
famine. These have always happened,
and may be expected to happen again
from time to time; but the modern specu-
lator acts the role of the ancient Joseph,
and divests these disasters of their worst
features, equalizing, as well as may be,
periods of abundance with periods of
want.
The second is an artificial Corner"
when one party controls most of the arti-
Gle and cOmpels those who are under OBJ
legations to deliver large quantities to
them to pay dearly for selling what they
not.
The first corner makes the people suf-
fer; the second has for its victims almost
the ''shOrt" or "bear" specula-
tors. These latter are usually of
short duration, and do not gen.
orally seriously affect the price
of the actual commodity for
any great length of time-sometimes not
at all. Then when the ''cor-
ner'' is relaxed prices at once drop, and
thus the general value is about equalIZed.
Such enhancement OF prices, however,
as these artificial corners do effect with
regard to the actual consumer may be
justly credited to the speculatOr, but this
is insigniticat cOmpard with the misery
attendant upon natural corner" But
Mr.. Floyd and that class of bigots say
"Behold the evil of speculation" no mat
ter what was the cause of the corner"
According to this logical writer, the eX-
changes amuse themselves by fixing
price cruelty too low for the poor ignorant
Georgia negro planter, and at the same
time heartlessly too high for the wearied
mass of people.
That a spirit of reckless speculation is
harmful cannot be denied; but even then
the harmful effects are mostly confined to
the participants and their dependents.
The general result to the country of car
rying on business through futures is
Va
cultures" instances of men, tempted by
glowing hopes of rapid fortune, to specu-
late with other peoples money or trust
funds is to speak Of another matter. One
kind of stealing does not materially differ
from another kind.
One would infer from such an article as
Mr.. Floyd's that the merchants of our
various exchanges were little less than
bands of organized highwaymen. What
class of men in the country are more pro-
gressive, more public-spirited than these
pirates of the eXchangesY
When public charity is invoked or pub
lie improvements contemplated, Iwhere
are found more spontaneous and gener-
Gus responses than from the members of
the exchanges?
Mr.. Floyd had better let the exchanges
and the ''fiXing of prices" alone, and
eOnfine his writings hereafter to subjects
that he knows something about. Or if he
must deal with such matters, let him seek
to deter people from specializing by point
ing out to them the dangers they person.
ally incur by embarking in such capri
cious business and not bring up such
general and baseless accusations against