Mexico weekly ledger., 1901-10-17
LEE STONE.
Writes the Ledger an Interesting Arti-
Gle on Speculation" His Letter
on the Tariff Attracted Con-
siderable Attention.

-
ties, wrote the LEDGER an interesting
letter on"Tarif Reform. nQuite num-
Der of our readers complimented this
article, and said that they would like
to hear from Stone again. We have
the privilege Of submitting the follow
ing letter on "Grain Speculation, .
which we believe will be Of interest to
most Of our readers:
To the Editor OF the Ledger,
ST. Louis. Oct I1.-In all my ex-
perIence Of twenty-five years in the
grain business, l have never seen con-
ditions more favorable for a large adj
vance 10 prices OF grain and provisions
and never have / seen the general
trading and speculative public more
unanimous in this belief Of higher pri-
ces than at the present time. And yet
prices do not materially advance. The
question naturally is asked, aWhat is
the natter"
The common and erroneous reply
made by the average pit trader and
grain merchant is, "that there are too
many bulls or buyers"o or "that the big
fellows are not ready to put it up
etc. etc.
| believe / can answer this question
and in doing so will also show you that
the fault lies with the trading public
because Of their placing their orders
in bucket-shops instead Of placing
them on the legitimate markets Of the
produce Exchanges Of our great mark
ct centers. This reply is not salts
factory, in itself, to the average trad
ing public, for the reason that they do
not know the difference between a
trade made in a bucket-shop and that
made on the regular market OF the
produce Exchanges Of our great mark
ct centers. must therefore first ex-
plain what constitutes a regular
Board Of Trade or Produce Exchange
and then define what consti-
tutes a bucket-shop, when l will have
done this, then the adequacy Of my
answer becomes very apparent. Then
what is a Board of Trade? A Board
OF Trade, is an association Of all the
merchants and traders OF a market
center engaged in handling, in any
way, certain products or commodities,
who have one common meeting place;
where all buyers and sellers Of those
products or commodities come togeth-
er and trade; where the grain commits
sion merchant, who receives grain on
consignment from the farmer or
country shipper, displays his samples
Of corn, wheat and oats, and where
the miller, the domestic and foreign
buyer comes 10 examine these samples
and compete for them. 1t is also the
place where the commission merch-
ant, representing the farmer, the
country shipper, the miller, the
domestic and foreign buyer and the
sp%eculator meet TO buy and sell these
same products for future delivery, IT.
%reverently styled in common parlance,
to trade in options on a margin. Every
Board Of Trade has its bylaws, to.
which every member subscribes and
by which he is bound. These bylaws
name and define certain elevators and
warehouses which shall be the regular
and authorized carriers Of grain for
the Board OF Trade; they define and
classify the various grades Of grain
and define definitely what constitutes
a contract for future delivery ofgrain,
naming a penalty in case Of non-fulil-
ment of same. The following is the
accepted wording of a contract for
future delivery of grain by our st.
Louis Board of Trade, viz: "Wehaye this
day solder bought of)and hereby agree
tOdeliver totor re~ceivelfrom A-B-blank
bushels wheat, eor or oatsl at blank
price per bushel to be delivered at
sellers option during the month Of
blank in regular elevators" The very
nature Of this contract implies and
contemplates the actual delivery Of
grainand the very foundation and ex-
istance of trading in grain for future
delivery depends upon the enforce
ment of the conditions Of this contract
in full. The very certainty that the
implied conditions OF this contract are
enforced attracts the foreign and
domestic buyers of the cash grain,
who are enabled to lay in their sup
plies months ahead Of their require
ments, without entertaining expense
of interest, insurance, shrinkage and
elevator charges and also enables the
foreign buyer to provide for freight
and vessel room ahead, by buying for
future delivery. This, In turn, en-
ables the elevator or carriers Of grain
10 buy up the daily, accumulation of
cash grain over and above immediate
wants and sell 1t to the forign and
domestic buyers for forward months.
II the current daily receipts OF grain
were no more than the actual daily
requirements for house and foreign
wants, there would be no necessity for
trading in grain for future delivery
and in all probability there would be
no such thing as future trading; but
the fact is that as soon as harvest is
over the producer sends his grain TO
market in larger quantities than the
consumer can use It and in order to
care for this surplus, without serious
ly ~effecting prices, the necessity for
the carrier Of cash grain and the buyer
for future delivery becomes very APP
parent. Under such conditions it is
very apparent also how necessary 1t is
for the buyer Of this surplus grain TO
know that when he sells this grain for
future delivery that acceptance OF the
cash grain on that future contract is
absolutely certain and enforced by the
laws and customs Of our Board Of
Trade. IL is this absolute certainty,
therefore, that all the conditions OF
every grain contract be fulfilled, that
enables us to carry forward surplus ac-
cumulations and the greater the
amount Of speculation and the der
mand for future delivery the greater
the amount we can carry forward and
the better prices are sustained.
Now what is a bucket-shop? A
bucket-shop may be composed OF a
single individual or a company Of