The Kimball graphic. (Kimball, Brule County, Dakota [S.D.]) 1883-1905, 1888-11-09
THE KIMBALL GRAPHIC.
Official Paper Of the City and County,
By c. R. TlNAN.
ia man spea6s avgM 1ut ats honest
CONNECTIONS. pray. aeAere is lis hoaesln?.
Considerable excitement was crea

'h"h Slftt'E upyRt pNt TtS bVHcst
eonoietions, prag, achere is lis donesty?.
Considerable excitement was created
throughout this country not long ago by
n man named Hutchinson, who took 1t
into his head as he sauntered into the
Chicago board of trade one day to
raise the price of wheat He accord
| ingly began the formation of a corner
in that cereal, the result being that the
figures were raised from SSi cents to SO
per bushel. Everybody, or nearly every
body, talked about 'Old Hutch and
the corner The people either com
mended his shrcwdness or dcplared the
fuct that his talent had been devoted to
such an Ill use, most of his commentators
having not the slightest knowledge,
however, of the case they were discuss
ing. To be sure everybody had heard
of shorts and ''lopgs'' and bulls
and bears" and all that, but not one
person out of every twenty who dis
ct.ssed the affair had any notion of
what The shorts had to do with the
corner or why. in fact, there should
be such a thing rs e short" FOR the
benefit of many who are fortunate
enough to be ignorant of the methods
of spectators in grain and stocks an at
tempt will be made to give a general
outline as their methods and means Of
of procedure.
The amount of grain bought and sold
on the Chicago OF any other board of
trade. by no means represents the ac-
tual supply or demand of the country.
This is plainly proven by the fact that
Hutchinson, when he formed his recent
corner purchased perhaps twice as
much wheat as was stored in the eleva-
tors at Chicago, and the parties who
sold to nin had no idea where the wheat
they were ~disposing of was to come
from. ltdidn't make any material diff
ference to them whether there were 10,
600 or 10000, 900 bushels in the store
houses. There was no probability
that they would ever be called upon TO
produce the actual goods. Al that
would be required Of them when the de-
livery time came would be TO pay overto
"Hutch' 90 cents, 81 or 81 as the case
might be, for every bushol of wheat for
! which he held their certificates. There
was no likelihood that he would insist
upon having the grain when he could Sc
care its current equivalent in cash. On
this basis all the buying and selling of
wheat in Chicago Is conducted. When
Smith says to Brown: IN s>ll 1O4, 600
bushels of April wheat ut 95 cents p,I
b%ushel," and Brown takes ii ut that
figure the transaction merely amounts to
this: Smith agrees TO furnish the 100,
000 bushels Of grain or its cash equiva-
tent, six months after the date OF the
agreement, if, for example, the sale WAS
made in the month of November. AT me
rate OF % cents per bushei, pruvidcd the
price does not fall below IS cents in the
meantime. 1t is always tapitiy under.
sto d by specu!ator. that in case the
seller wishes to deliver the goods he is
at liberty to do SO at any time, though
the purchasers annot demand delivery
until the arrival OF the date first agreed
upon. TO make this point palmer, The
case of Smith and Brown may again be
taken. Say, forinstance, thatthe month
is November. Smith sells Brown 100,
O00 bushels OF April wheat % cents per
bushel. that is to say, Brown gives
Smith a check for $50, 900 for which
the latter agrees to furnish 100, coo
bnshelS OF grain six months hence, no
matter what the price may be at that
time. II. however, the price of wheat
declines to so cents a bushel the day
nfter the transaction is entered into, or a
week or a month after that time, Smith
may at such time compel Brown to accept
delivery. In tins case it will be seen
that smith could buy and deliver for
30 cents a bushel the same wheat for
which he received 90 cents a bushci.
Ho%beit, instead Of turning over to
Brown the actual grain Smith would
merely p.escnt his cheek for 500, coo,
thus leaving him n profit of IS, Goo on
The tram q ton, no graii having been
hand ed at all, or, for that matter, hay.
ing beer anywhere procurablc. The ac-
tnal supply OF grain has n certain in
luence upon the speculative price be-
cause The seller may deliver the goodsi in
stead of the money equivalent, which
prevents running the prices up or down
very far beyond what the bona tide
supply and demand warrant. Now to
return to Smtn and Brown. Ii the
price Of April wheat had have e ne VI
instead of down Smith would have been
the loser because he would have had to
buy IN Mt 81 or more per bushel the
wheat he had previously sold for 81
cents per buahel. The way in which
Hutchinson manipulated his corner
was th:s: 1t became noised about among
the Chicago board of trade speculators
along the wharf the latter part of Sep.
tcmber that the "old man" Hutchinson
was long IN cash wheat. that is Sep.
teinheT wheat. In palmer words The
spectators were lead to believe tina,
Hutch" held certificates for tcveral
hundred thousand bushels Of Septem.
Der wheat which it would be necessary
to deliver to him before 3 O'Clock y. III.
OF The last day of the month. Septcm
Der wheat at that time was worth 9sl
cents u bushel. The srcculators arguet
among themselves that by selli:.ga large
amoiint of wheat they would be able tc
depress the market and in that way BIZ
enabled to fill the orders which Hutch
inson held at u price below 9s} cents pei
bushel. Hutchinson got an inkling Of
the scheme and quietly ordered Iii.
agents to buy in all the September
wheat offered. The result was tina
when the time for delivery drew rea,