The times. [volume] (Richmond, Va.) 1890-1903, 1900-07-29
SATURDAY, JULY IS. 1900.
DEALINGS IN FUTURES IN GER
MANY

We had occasion to point out recently the
adoption by Prussia of department store
law, having for its object the protection of
small dealers. And we now find another
Interesting example OF German financial
legislation. Nearly four years ago" says
the Manufacturers Record, Germany pro-
6ibited ali dealing IN futures in Industrial
shares in answer to the demand Of the
agricultural and anti-capitalistic classe..
The purpose Of this legislation was pro-
fessedly to check speculation and give
greater stability to quotations. Even many
Of the directors of industrial enterprises
were in favor of this legislation, feeling
that their business was unduly injured by
having their shares driven up and down at
the caprice of SPECTATORS Tor the first
three years no trouble was experienced, be-
cause continuously rising market existed.
However. the change set in, and with the
falling market the real fallacy IN this leg
dslauon was exposed, with much severer
consequences than had been expected by
anyone For the legislators either did not,
or would not, comprehend the value to the
mercantile part of society which Is given
10y having a body Of men who are willing
To Sell for future delivery The presence
OF these men acts as a check and balance
TO the violent fluctuations that are bound
to occur in staple articles like wheat or
cotton or corn. &c.
Suppose there is an enormous crop Of
some staple article and no one is allowed
TO sell for future delivery. Then every sale
has TO be made for cash, and as there is
more supply than demand, the market goes
~down rapidly and it remains for the pro-
Queer either to store his staple or sell it
at the unreasonably cheap price which the
market then offers. Now. the farmer Is
a person who nearly always needs money,
and SO when the crop Is large his cotton
or wheat viii inevitably be sacrificed.
But human experience plays as large
part In dealings in cotton as il, any other
business, and the men who buy and sell
cotton know that there will certainly come
a day when the crop will not be as large,
and in anticipation of that day they use
their judgment and their business experf-
ence to provide the cotton or wheat, or
they believe to be a fair value for the arti-
Gle in view of all the circumstances The
farmers objection to these dealers is that
they buy and sell stun which they never
raised and have never seen, and Yet it
would be well for the farmer to consider
what a valuable thing it is for him TO have
somebody there who is willing to buy and
pay the carrying charges on product that
would otherwise have TO be carried at the
expense OF the producer. To be sure these
dealers in flrures are not consumers or
users of the articles they buy or sell. but
their presence widens the market. and they
are there as men who are always willing
10 buy. when the market goes to certain
point, simply and solely TO cover sales that
they have made before. and it does not
concern the producer what motive actuates
the purchaser, so long as the goods are
bought and the bottom of the market Is
kept from dropping out.
We hear great deal OF talk about men
selling indus,risls short. with no CORE
spending statement of the fact that whose
ever sells anything short has sooner or
later got to buy In tina; same article in or
der to make good his delivery.
AZ a matter oc fact dealings In futures.
whatever its morals may be as form of
earning ones daily bread, IS certainly sys-
Gem which tends moro than any other that
has yet been devised. to protect the pro-
Queer. and for this very simple reason, that
there existx always 81 such a market a
largo body of ;n.e:iiEent men whase ;ipea
snd experience are focused on the one In
custr1ai In which they deal. and whose
1uesmen: Is used to sell the article in
question when 1t Is unreasonably high and
to bdy It when It 10 unrsasonably low. and
sAnsAr = Ass the prod,acer. Is nsazly u