The morning news. [volume] (Savannah, Ga.) 1887-1900, 1898-04-11
Options and Prices.


It has not been a great while since anti
options bills were popular with certain
gentlemen in Congress. There were a
number of eloquent theorists in both House
and Senate who could and often would
talk for hours at time upon the desperate
wickedness of the man who. owning not
bushel of wheat or a pound of cotton,
would go into the markets and contract
for thousands of bushels of the one or
thousands of bales of the other on mar
gins for future delivery. 1t was argued
that such persons were nothing short of
enemies of the farmers since they specu-
lated In the necessaries of hfe "gamabled
upon the bread OF the people" as the ora
tors were fond of saying. And there were
many wheat and cotton planters who took
a good deal of stock in that sort of talk.
Nothing, however. is heard these days
of anti-options bills. Nobody is calling
for the shutting up of the exchanges and
boards where contracts for the future de-
livery of commodities are sold. Joseph
Letters wheat deal has furnished an OBJ
ject lesson which has made an impression
upon the agricultural world, and a pro-
found impression upon the wheat growers
of the Northwest. Indeed, in some of the
wheat states Letter is regarded with such
admiration that the farmers are naming
their babies for him. They say they owe
it TO him that they received 81 or better
for their recent crop of wheat. They have
not a word to say in condemnation of the
fact that he dealt in options; 'gambled
upon the bread of the people," they would
be glad il he would do so again next sea-
son.
1t is probably in a measure true that Mr.
Letter has been something of a benefactor
to the wheat growers. He did not make
the conditions which resulted in sending
the price of wheat up, 10 be sure. Wheat
would eventually have advanced in price
If Mr.. Letter had never bought a bushel of
1t for future delivery and if there had
been no transactions in the wheat market
except for the actual grain. The failure
of crops in other countries occasioned the
increase in price. At the same time, it
was the option buying of Mr. Letter and
those acting with him which caused the
early and steady rise in the market. They
foresaw the shortage and anticipated It,
Had there been no specula ton, there would
have been no advance in price until the
actual fact of the shortage become press
ing, and at that time in the present in
stance the wheat would all have been out
of the hands of the producers and into
those of the dealers, who would have reap
ed all of the profit. Letters deal in OPP
tons, therefore, put profits into the pock-
cts of the farmers which they would not
have received had speculation been pro-
hibited by law.
Values are regulated by the law of sup
ply and demand. Speculation is a medium
which operates as a check to the violent
fluctuations which would take place upon
the sudden discovery of a surplus or de-
fciency in the supply. Suppose there had
been no discounting of the latest cotton
crop, an excessive one, by speculation
where would the price have dropped when
the enormous proportions of the crop were
definitely ascertained? There can be but
little if any doubt that 1t would have gone
lower than four cents.