Connecticut western news., 1888-10-24
MERCANTILE EXCHANGES.
A Strong Claim that Their Functions
 are Valuable.
From Henry Georges Standard.l

lTIou leHlS oeoiS otdIludIu.J
 A certain Mir. Hutchinson is reported to have cleared million dollars or more by gambling in the wheat pit of the Chicago exchange. Believing that the wheat crop was considerably smaller than most people thoughtit. MT. Hutch inson contracted with various Chicago brokers to take all the wheat they could deliver him up to and including Sep tember 3Oth, at prices ranging from S5 cents up to $1 a bushel. The brokers, on the other hand, believing that the crop was not extraordinarily short, and that before September 3Oth they could buy plenty of wheat to deliver to MT. Hutchinson at less than he was willing to promise to pay for it, accepted his offers freely. The event proved that Mir. Hutchinson was right. The wheat crop acas short. When the brokers tried to buy wheat to deliver in fulfilment of their contracts they found they could not get it. The result was sharp com petition to get what there was, and a sudden rise in price. When the last day of delivery arrived the contracting brokers who had not succeeded in buy ing wheat to deliver were at MT. Hutch inson's mercy. He could put the price of wheat, as 6et,ceen him and them, at any figure he pleased, and they must pay him the difference between that figure and the price he had agreed to pay them. He might have named $10 bushel had he chosen. He was prudent ly merciful, and named two dollars only. At that very moment, wheat to be de- livered within two or three days was selling at $1.lO bushel.
 What MT. Hutchinson did, in effect, was to make bets with certain other men that his estimate of the wheat crop was better than theirs. That this gambling is demoralizing, goes without saying. It is bad thing for all concerned in it; and it is doubly bad thing for those who, seeing it, are tempted to try if they also cannot make a living by gam bling instead of by honest work. It is bad thing, in the same sense that the sale of pools at horse races is bad.
 But great many people seem to think that MT. Hutchinson's successful corner is going to make wheat cost the people who use it more than otherwise would have been the case. It will do nothing of the sort. The law of supply and de- mand is operating as freely and as sure ly as if MT. Hutchinson had never been born. There is no less wheat in the country than there would have been, there has been no abnormal increase of population, there has been no diminu- tion of wealth with which to purchase wheat. The factors that determine prices are all operating with full effect. What has happened is simply the dis covery of the fact that the supply of wheat is short. The rise in price is Q legitimate result of that discovery. Men will have to pay higher prices for bread this winter, not because MT. Hutchin- son won his bets, but because there is less of the material to make bread in the world than usual.
 And in so far as the Chicago corner established the fact that the wheat crop is short, it was distinctly good thing. To establish such facts is, in the intri- cate scheme of our civilization, the chief function of mercantile exchanges. It is by the friction of buyers and sellers up- on their floors, by the bringing of diver gent opinions to the test of actual facts, that the worlds supply of food and ne- cessar;es is distributed and brought to hand as 1t is needed. What the German socialists would accomplish by means of an army of statisticians, and with fright full risk of mistakes, our exchanges do at trifing cost and with unfailing accuracy. Mep arc probably sowing wheat in Aus tralia and Chili to-day because MT. Hutchinson's deal has warned them that the United States will furnish less than her share of wheat this year for the worlds consumption. We shall have bread to eat in February without paying famine prices for it for the same reason. All the civilized world over, whenever men gather to exchange productions, the clash of buyer and seller, for present and for future use, goes on increasingly and whether it be tea from China, or coffee from Brazil, or wheat from Dako- ta's prairies that is dealt in, the result is the measuring of supply against demand, and the checking or increasing of con sumption, so that famine and surfeit may be alike avoided. It is pity that men like MT. Hutchinson should gam ble. It is pity that other men should bet upon the passages of rival steamers. But it is as foolish to reprehend the Chicago exchange because of MT. Hutch inson's gambling as it would be to burn steamship because men wagered upon her speed.