The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1892-02-04
DEALING IN FUTURES.

United States Senator Washburn's bill TO
practically prohibit by excessive taxation
contracts for future delivery of grain. cot
ton or other property. is renewal Of the
absurd legislation attempted by Senator
ingalls,, of Kansas, and Congressman But
terworth, of Ohio at the last session of
congress. The Farmers Alliances are re-
sponsibe for this impracticabie legisla-
ton. These shallow thinkers argue that
the influence of the speculation in grain fu-
lures is TO depress prices and to reduce the
returns of the farmer for his labor These
farmers imagine that when an operator
sells corn 'short" he becomes competitor
of the producer, and by that competition
10 sell brings down the price. The failacy
OF this reasoning was never better stated
than by the Springfield Republican, as fol-
lows:
The condemners OF short selling forget that
every sale implies buyer, whose interest is as
strong TO push prices up as that of the seller is
to depress them, and that Ia the battle OF bulls
sud bears the former wins often as the latter.
Ultimately, supply aud demand fix prices, and
the most that dealers in futures csu do is to au-
tlCipate conditions few mopths in advance,
and 50 eqUalige prices Tor the whole crop and
season. This season the bulls bought grain
early Ia anticipation OF the foreign demand and
prices Of grsu went up, while the bears s0ld
cotton heavily because OF the large crop. IL was
not the buying Of the bulls on future delivery
which put Up the price Of grsin, but the Euro
peaa demand; nor was il the selling of the
hears which depressed the price Of cotton, but
tie large crop aud relatively small demand
This forecasting of the future on the exchanges
undoubtedly hastens the movement OF prices,
but plays very subordinate part In fxing them
II every exchange in the country were closed,
this process Of antici pstlng the future and q 4
ing prices OF the great staples accordingly would
80 on, and the farmer would get, a. tie gets now,
tie price determined by supply aud demand
Speculative dealing ia futgges ca1 a. the most
ONLY temporarily disturb this process
Tins kind of legislation was beaten in
the last congress. Senator ingalls, offered
al amendment TO Senator Sherman's bin
10 prohibit trusts providing. that any per-
son who agreed to sell any grain, cotton or
provisions at future time. but who did
not az the time own the article which he
agreed to deliver, should lie required to
pay special tax per pound on the articles
80 agreed 20 be delivered and also to take
out license at $1,000 per year for the
privilege Of doing business at all. The
amendment was adopted, bat the next day
the Southern senators perceived that the
ingalls, amendment could prevent man
from selling bale of cotton for future
delivery unless he happened 10 own it at
the same time. and this would not do, for
the South does most Of its cotton trading
that way. Then Senator BLAIR, OF New
Hampshire. remembered that it was the
universal custom of the New England cot
ton mills to buy their cotton before II was
actually gathered. The cotton mills 90
this in order 10 make sure Of their cotton
hv binding contract, which would supply
them with the raw material at s hxed
price. regardless Of the fluctuations Of the
market. and the ingalls, amendment would
close the New England mills, who could
not do business in any other way. Sena-
ter Mitchell, Of Oregon, rose and said that
the amendment If enacted would prevent
she farmers of his state from selling their
crops before they were harvested, that be-
ing custom on the Pacific coast.
The ingalls, amendment failed TO be
come 8 law, and If Wsshburn's bill should
happen 20 become law IL will OF course
he dead letter on the statute book. No
law can forbid contracts for the future de-