Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1890-04-23
FINANCIAL AND COMMERCIAL.
rnADa soras-uaoP aseoars.

gH2DE S0FGs-OSsOP REPORTS.
SHORT SELLING OR OPTIONS ON WHEAT
Some years ago when illegitimate trading
in b:eadstnffs and provisions was more dis
cnssed than has been the casa of late, wa
embraced the opportunity to present the
viewa of tie conservative and experienced
observers of such matters. especially 20 to
the effect produced not only at the seats Of
trade aud commerce, but also rs it eoncern-
ed the interior producer and miller. Very
often cur farmers have realized the s;nga
laE fact, that the demand fer wheat Was &C.
tive without the least animation respecting
81 advance in prices, but could nos trace
the cause for such cec1't. Most general
i it has heen supposed to 1t options II ooTn-
eFs had tie effect only of spasmodic move.
nents or cessation OF activity ia prices CON-
tFollug the real as we'll az the option or
marginal transactions which did DOT move
L poand Of the commodity represented, but
that result was only for a season.
| The great Minneapolis miller, Dir.
Cna5Ies a. PilIsbury, arites letter to
Brsdstreets which appears in that jairnai
Of taa 12sh ioss-ai, th.t pre-eHts soae aow
views and shows that disasters will oontin-
Us in after years to follow the reprehensible
mode which has been practiced.
| It seems to US that our producers of
grain, who have surplus to sell, should
have the opportunity of reading the Vows
and conclusions of one who doubtless ia
better prepared to Investigate this question
of trade than any other man, especially as
his conclusions, deeply concern not only
the future of their tell, but raises the ques-
ton as to the extent of tins our agricuitur
al industry is TO exist under the influences
that have so deeply wronged it.
| To the Editor of Brodstreet's.
SIR-I believe that the system which has
come SO generally into use in the last four or
| I've years. of selling grain short. is more re
sponsibe for the present low prices of wheat
| than all other causes combined. My reasons
| for believing this are based on both tn cory and
| observation. The theory which believe 1t
is, that future selling was first established as
means through which party could absolutely
sell for future delivery wheat he had on hand
| or had contracted for; that lately. however, the
mania for short selling has increased that
probably 80 per cent of the short sales are not
| made against actual VIII eat. but are made by
parties VINO believe they can make money by
depressing the market by selling for future de.
livery. There may be sufficient number OF
people who believe In wheat, and are willing
and financially able TO buy all the legitimate
| su plus of wheat at fair prices, but when they
are called upon to bay millions of bushels Ct
wheat which does not exist and to put up mar
gins on the same they throw up their hands in
disgust. and down go the markets. Thus 1t in
terferes TO the detriment of the natural laws OF
supply and demand.
Now as to cbservttio 1 think no one will
claim that the crops of wheat for the last five
years have been excessive. Tnis Is proven by
the following facts:
1t is well known that almost every miller,
both In Europe and America, and every flour
dealer and baker used to carry large stocks of
grain and -four. If any Of these parties now
carry stocks of grain and -four to any extent
beyond their present and actual needs it is the
exception and not the rule.
1t is well known that the amount ofwheatin
sight is less to-day than 1t has been for many
years. and when you take into consideration
the fact that Russia. Austria, Australia and
South America had very much lighter crops
than usual, and no country in the world had a
very much heavier crop than usual, 1t must be
evident that the stocks of wheat In farmers
hands. or the invisible supply as 1t Is termed.
must be lighter than usual. 1t is well known
that the visible supply or amount afloat is
smaller than usual in dealers and miliars'
hands.
II We admit the above facts that the stocks
of wheat and -four are smaller than they used
to be. and that the visible aud Invisible supply
is Smaller than usual, it follows of course that
the mption daring the last five years has
been larger than the production.
All statlsticians Substantially agree as to the
following facts:
First, That the amount of wheat raised DUR
ing the last i've years has not been as large as
was raised during the five years previous,
and
second, That the consumption OF wheat
during the same time has been much larger.
In the meanwhile prices have been ruling
much lower. There is no question in my mind
that short-seilinz is largely responsible for
This condition Of affairs. 1t used to be COM
mon thing for grain dealers and mtllers to buy
their stocks of wheat when the farmers were
parting with their crop very rapidly just after
harvest,and carry the same over until the next
spring summer, aud this was almost always
done at profit but since this short-selling
mania has struck almost every speculator in
the country the man who DOES thls thing Is
sure to lose money OF course there will be an
end to this sometime, but the question is
whether the farmer viii not be about wiped out
before this rel comes. When it does come
it is likely 20 be rapid and violent. In the
meanwhile l cannot escape the conclusion
that short. selling Is nov and has been for the
last five years the cause of the extremely low
prices that we have seen from time to time.
CHAS. A. PILLSBURY.
Minneapolis, MIMI. April 5.