The morning call., 1891-11-26
THE PRODUCE EXCHANGE e.

Ship-Owners and members OF the Prouuce
Exchange are going through furry of ex-
element. 1t is the old story. Speculative
dealers have made contracts which they
cannot live up to, and the question Is, What
can be done with them? 1t can hardly be
said TO be a new question. Only two or
three years ago some of the very people who
are caught in the present crisis undertook
to corner the wheat market, and in so doing
bought more wheat than they could pay for.
When the sellers of the wheat rendered it
the buyers simply lay down and asked their
friends, What are you going to DO about il?
You can't get blood out of stone" which.
as scientific proposition, is beyond ques-
ton, though perhaps as an excuse for
breach of contract it leaves something to be
desired.
Now some of these operators, with others
of the same kidney, reasoned last summer
that tonnage would be scarce this fall in
this port, and wheat plenty; on this they
went to work charteriDg ships to arrive,
and paid as high as IS shillings. Unfortu-
nately for them their major premise failed.
Tonnage, instead of being light. became
unpreceien;edly c0pious. 1t was not easy to
ind berth room for the ships which came
here to load with wheat. And Simutane-
ously the farmers displayed no alacrity to
market their wheat They reasoned that
by holding off they would get cheaper
freights. Thus it came about that the sup
ply of ships proved in excess of the supply
Of cargoes, and one after another the vessels
went on demurrage. This broke down the
freight market, and freights fell from 10
shilings to 80 shillings. Everybody who
had chartered vessel to arrive ran round
trying to sell the charter, and, in the de-
moralized condition OF the market, nobody
was willing to buy
Tie agents of the ship-owners now go to
the charterers and demand the fu6llment
OF their contracts. To which the specula-
tive charterers on the Produce Exchange
reply that they are broke. They cannot
load the ships. for they have no wheat;
they cannot put up the difference between
the market price of charters and the-price
they agreed to pay; they cannot even meet
charges for demurrage. And they ask, as
they did three or four years ago, 'What are
you going to do about it? You can't get
blood out of a stone"
In one aspect this is matter which only
concerns a ring of SPECTATORS on the Pro-
duce Exchange, and is of no public I'M
portance. Whether Jack takes Jim's money
or Tim takes Pats is of no more conse-
quence to the community than the fate which
befalls a jack pot in a gambling-house. But
the ships whose owners are now being de-
frauded by the failure of the charterers are
not owned on the Produce Exchange. They
are the property of responsible business
men in the East and in Europe. These men
sent their vessels to San Francisco on a
legitimate errand, relying on the faith of
the community of this seaport for the full
filment of the bargains they made to carry
our wheat to market. They now ind that
the contracts which induced them to send
their vessels here are not going to be full
filled; That the parties who chartered the
shi ps are not responsible, and that the fair
profit which they reckoned to make by
trading with San Francisco is going to be
converted into a loss. That is not a credit
able occurrence, ror is it one which decent
citizen, taking proper pride in the good re-
pute of the city, eau view with Indifference.
II the Prcduce Exchange has no machinery
to enforce the fulfllment Of contracts by its
IN embeTS it is time it devised such machin-
cry. 1t holds out to the world q tacit guar
antee of the responsibility of its members
4 member of the Produce Exchange is sup
posed to be able to live up to his contracts
and to pay his differences if the market
goes against him. If he is not able to do
either. he has been trading on false pre-
lenses, and the exchange has placed it in
his power to do so. 1t is only because he is
member of the exchange that he acquired
credit enough to charter ships. When a
store-keeper obtains goods by false repre-
sensations of his capital he commits a
crime of which the courts will take cog
nizance; indictments against two men for
this very offense were found by the present
Grand jury. Wherein does their wrong
doing differ from that of the member of the
Produce Exchange who chartered ships to
arrive, well knowing that he had neither
wheat to lead them with nor money to make
good any loss on the charters. if freights
fell, and simply and wholly Intending to
play the game of Heads l win, tails you
lose"