Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-07-18
MILLIONS AT STAKE.
Little Wonder at the Fight Being
Made by Chicago Brokers
AGAINST AN ANTI.OPTION LAW.
How the Windy city's Big Roard Of Trade
Would Ie Affected.
THE VAST SUNS WHICH ARE INVOLVED

Washburn anti-option bill or some similar
measure should become law, and its en-
forcement should turn out to be practica-
BILE, just how and in what way would the
great speculative interests centering about
the Chicago Board Of Trade be affected?
This is the question which the i, 900 men
doing business daily in and around the
board are devoting more thought to than
they have given to any subject in lifetime
Well they may, for it is of vital Importance
to them 1t involves the bread and butter
of great many thousand persons, the EN-
ployment of a great many million dollars in
money.
The effects of the bill would be infinitely
more far reaching than those who have not
given the matter careful study would i'm
agine, possibly necessitating an entire
readjustment of business methods relating
to contracts involving future performance,
for the application of legal principle
might not be confined to commodities men,
toned in specific bill.
1t is not that phase of the question, how
ever, which agitates the persons on Change
at this writing. They are guessing at the
| probable direct effects of the enforcement
of law prohibiting speculative trading in
grain and provisions-the immediate local
|
ihe Financial Interests Involved.
| 1t is possible to arrive at fairly intelli-
gent estimate of the financial interests di-
rectly and specifically composing the specu-
lative branch of the business by n careful
ANALYSIS of the boards membership and
clearinghouse lists. By that it is not
meant that statement of the individual
| wealth of the members is intended, but an
estimate of the capital actually employed
| in carrying on line of business which is
threatened with total extinction. That is
the plain English of it.
Blind faith that some wav may be de-
vised to "beat the law does not alter the
| fact that the anti-option people set out to
get the scalps of the commercial exchanges
| and that they believe the pending measures
are going to do the business.
There are over 1,S00 members of the
| Board of Trade, but only 311 firms and in
dividuals are on the Clearing House list.
Some of the firms are composed of halt a
dozen partners and others of only one
person. They will certainly average
less than three persons to firm.
Seven hundred and fifty would be liberal
estimate. The remainder of the member
ship is represented by possibly 600 brokers
| and clerks in the employ of these recog-
nized 81 firms, by unattached brokers who
do their trading through other concerns
(thereby saving Office expenses) and by non-
active members or non-residents.
volum. of the Business at Present
The speculative branch of the trade prob
ably gives employment to 1.500 clerks, be-
sides contributing indirectly to the labor
and emoluments of 2, 800 more in lines tribu-
tary to or interviewer with it. In this cal
culation no account is taken of the tens of
thousands OF men here and elsewhere who
are in the cash grain trade and in the meat
industries, the aim being to confne the
question to the persons and interests
selected for sacrifice by the Farmers Alli-
ance and their friends in Congress, the view
being strictly local.
A careful study of the Clearing House
list warrants those familiar with the rating
OF Board of Trade people in the statement
that the commission firms thereon rep
resented require at least $4,000, 900 in
cash to swing the speculative end of
may not be employed at all times, but
it must be actually invested subject to
check, or where it can be had at an
hours notice. The firms and individuals on
the list are, OF course, worth vastly more
than $40, ,O00, 900, at least a dozen members
OF the board being rated that high singly,
but that sum is necessary to be kept on
hand for the safe conduct Of business. In
theory the customers margins are all the
capital needed by the commission merchant.
but in point of fact he requires large cash
capital, tor he is always sin the gap" and
subject to calls of which the customer is in
state of blissful ignorance.
Duties of the Men In the Business.
He must protect his contract under any
and all conditions, and it is not an unusual
circumstance tor tens of thousands of dol
lars of commission mans money to he
tied up in deal months after the customer
has drawn his balance and gone off about
his own affairs. Thus the commission mer-
chant who has $4,000 in his business
never feels quite safe unless he knows where
he can put his hands on an additional S5O,-
OO0 IN case OF an emergency. No account
has been taken of the reserve capital That
is necessarily an indefinite quantity. One
man worth s., 100000 may limit his liability
to S25, 900 investment, while another
might feel in honor bound to protect a SIM
liar investment with his whole fortune.
The $4,000, 900 estimate of capital en-
ployed In swinging the speculative business
of the Chicago Board of Trade is very con-
servative. 1t is altogether within safe
bounds and does not include the money kept
busy by the army of professional speculators,
nor the margins put up by the great host of
outside operators commonly stvled "the pub
lic." These two latter items vary. They NAV
aggregate S5 1000, 600 at one time and S25, ,OOO.-
600 month later, depending on the volume
and activity of trade. Neither does it in
clude the capital employed in grain hand
ling and pork packing branches, further
than to make proper allowance for the
money required in the speculative end of
the provision market as standing capital
Packing Industry Of the Windy City.
The packing industry of Chicago easily |
represents an investment of S45 600, 900 to |
$50, 600, 900, of which possibly 35 per cent |
only is in plant The new International |
has $40. 000, 600 capitalization, the Armour |
concern has more than as much more in the |
business, Nelson Morris is worth more than |
S10, 900, every dollar of which |
is behind his meat interests, and then
there are the Swifts and half dozen small
Ter concerns. This great interest will be
seriously lnconvenienced by the enforce
ment of an anti-option law of drastic |
properties, but not to the same extent as
grain. Speculation is lighter, and few
great distributive houses worked up direct
connection with retailers and consumers in
all parts of the world. Manufacturers will
feel keenly their inability to insure against
losses by selling current production for
future delivery-a species of "hedge" very
popular with grain as we'll as provision men.
The grain elevator interests and the grain
receiving firms will also be vitally affected.
The system of buying and selling futures is
part and parcel of the grain handling busi-
ness as now conducted. The only insurance
against losses resulting from declining