The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1891-02-01

moved yesterday may be illustrated by an
/ incident One trader having purchased
| 5000 bushels December wheat at 81. OF I
| stepped out of the pit. He had not been
! out but moment when he heard great
| hubbub, rushed in under the impression
| that the market was dropping on him,
/ frantically inquired the price, was told IL
! was seven eights,' sold his wheat at that
! price and was cursing his luck over loss
of 'three-eights.' when he heard the re-
mark that it was quick bulge and
learned 1t was SL02%, instead OF SlOlI,
and that he had a profit OF hve-eights In
stead of a loss"
Such conditions could not obtain were
men dealing in products instead of hctions,
as an immense capital would be involved
instead OF Insignificant margins, and callow
youths could not sell millions on capital
of a few hundred dollars.
Such fluctuations inevitably destroy le-
Ultimate grain buying for the purpose of
holding for profit, whereas few years
since men could be found at every village
IN the producing districts who stored grain
for an advance; now, however, the buyer
Is so thoroughly impressed with the dan
ger arising from these fluctuations that he
hastens TO sell his grain as soon as bought,
and when shipping takes the precaution to
sell to arrive, using the wire 10 effect sales
afraid TO trust the market for single day.
where owners of elevators are, In order TO
employ their warehouses, forced to pur-
chase grain, glad to secure an advance
equal 10 the ordinary carrying charge
With the option dealer dominating the
market and in position to destroy values.
men are unwilling to risk the holding of
farm product, hence each buyer, in turn,
hurrieS the grain out of his hands, and
prices cannot advance because of the pres
sure to sell induced by the fear of sudden
fall in prices. and the result is that from
two-thirds to three-fouri hs of the grain
elevators OF Chicago and other cities stand
idle the year through. (See report Chicago
Board Of Trade, 1883, p. Hale and report
of st. Louis Merchants Exchange, 1889, PIP.
102-141)
So completely is producer and dis
trIbuter at the mercy of those selling mere
pigments that the packer daily buying a
thousand hogs, the product from which
requires weeks to cure is forced to seek
protection against fluctuations, by selling
for future delivery an amount of product
equal to that from the hogs bought and
thus guard against possible loss result
ing from fluctuations which the exercise
Of no amount of sound judgment will
enable the business man to measure, as
none can measure the Yagaries of a pit full
OF frantic spectators, whose operations
are as devoid of business elaboration as of
commercial morality.
The following telegram to the Globe
Democrat, but family describes "a scene in
the provision pit. A scene well worthy
the pencil of a Hogarth
CHICAGO, April IL. 1S90-The provision
pit on the Board of Trade, which has been
almost deserted for several weeks
has been filled, since the opening of the
board this morning, with a crowd of
yelling betters As soon as the board
opened it became rumored that there was
a corner in pork in contemplation, and a
wild scramble of shorts to cover fol-
lowed
There is not an article which has known
the blighting touch of the option dealer
that it is not hazardous for the legitimate
dealer to handle, and grain is made a
veritable shuttle-cock of by body of
men, the majority of whom are known
by the suggestive title of 'scalpers,"
and whose entire capital is barely suffici-
ent TO buy Board of Trade membership
or margin" purchase or two of fiat
grain, and yet the Chicago Board of Trade
in its memorial to congress opposing the
passage of the Butterworth bill, says:
The passage of this bill and its enforce
ment as a law would produce a CONNER
clal CONFUSION amounting TO a national
calamity. 1t would be vital attack upon
the very foundation principles of modern
business methods and usages. 1t would be
hostile TO the commercial genius and spirit
of the age. IL would destroy a
vast system for the economical handling
Of the agricultural products of the nation. a
system which is in entire harmony with the
progress of our civilization and which is
part of that civilization. 1t would dis
disturb transportation interests
Of every kind and it would in many ways,
directly and indirectly, react injuriously
upon the farmers and that by
the passage and enforcement of the pro-
posed law the farmer will be bereft of a
market for his products
Such assertions leave the arms of proof
with the proponents but thorough ex-
animation of the memorial fails to disclose
a single fact in support of such statements
while 1t admits the pernicious character of
option dealing. and favors its suppression
when carried on in bucket-shops, where
methods seemingly identical with those
upon Boards of Trade
are in vogue, hence the layman
naturally believes the bucket-shop on
worse than the Boards of Trade and
Boards of Trade enmity to the bucket
shop to be the outgrowth of rivalry in |
business. The bucket-shop being the logi- !
,al cOrollary of option dealing. when !
option sales cease on the Boards of Trade !
.he bucket-shop will cease to exist.
Aside from its pOstulates the memorial !
seems to be compounded in about equal /
parts OF sop isticatiOns, pretended solicit /
ude for the farmer and special pleadings /
or the continuance of a system which the /
Judgment of the people condemn and the /
lbOlition of which would not cease even a /
Ipple upon the stream of trade, much less /
. commercial CONFUSION.
W hen we reflect that only grain. hog 1
cotton, coffee and petroleum are /
f,sa cub
ands OF other commodities are readily /
Fought and sold without the Fictitious 4
ids Of the option dealer and have thus /
ar escaped the blighting effects of Board /
4 Trade methods. and that the natural 1
citations of supply and demand determ-
nes the price for nearly all such articles,
ne cannot but hope that congress viii. by 1
he enactment OF an effective measure,
elegate the staples subject to Board Of .
Trade manipulation to such commercial
methods as suffice for all other commo-
titles.
Outside OF New York, Boards Of Trade
urnlsh no information as TO the extent of
ptlon sales. but they are prOdigious and
'robably exceed the entire product so dealt
q, two or three hundred times, while the
which do not mature into
ven option sales are ten TO thirty times
: much As the option sales and Il is these
lmltless offers as much as such sales
which depress prices. II sales were con-
med 10 actual com modities and delivery
followed maturity Of contract,
tfers would b. limited by the amount
vallab.e for delivery. Now. however. il IS
lot unusual for as much fat wheat to be
I'D IN day as there : Of actual grain re-
elved IN year For instance on the eth
I Anrll New York spectators sold D.
600 bushels OF fat wheat, probably more
ban viii reach that city this year. while
he offerings in single day, ~ either
.hlcaEO or New York are often said TO eX-
eed 3J0. 000 90 bushels, such offerings hav-
AZ the intended effect Of depressing prices.
there is 10 means OF determin-
az the volume of such sales, yet we
aught some conception thereof from q
sw days option sales Of wheat and cotton
: New York a. ct forth in press des-