The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-06-01
The Contract Grade.

become the question OF the hour at
the Chamber of Commerce, had planned
the events of the past day or two, cir
cumstances more favorable to their
cause could scarcely have developed.
There has been squeeze in Minneapo-
lis May wheat. Call it a corner or
deny that it is a corner, argue that
every bushel of the wheat was bought
for legitimate purpose, that OF max
ing it. into -four, and prove by ordln-
airy trade rules that corner did not
exist, and the facts will remain that
Minneapolis May wheat, congested all
thru the month, sold up yesterday to
$129, and closed at $1.271@. One large |
milling interest either owned or con-
trolled the supply Of No. l northern
wheat, the contract grade. Men who
had sold wheat for May delivery and
could not get No. l northern to deliv-
er were obliged to buy in their short
sales of May on an advancing market.
It has been bad deal for the entire
trade, for much losss has been inflicted
upon the short sellers and unless set
Element of defaulted short sales is eff
fected, suits at law may grow out Of it:
To all the complaints of the shorts
the answer is this-that if a man sells
what he has not got, he must take his
medicine if the market goes against
him. This seems fair. 1t is fact that
when. wheat declines heavily, little
sympathy is heard for the buyers who
are losing money, nor is there any rule
Of the trade, or of the exchanges to
which they can resort for relief. They
have to take their medicine, conse-
| quently why should not the shorts take
| theirs. This is the talk heard today at
the Minneapolis chamber. 1t is not
good talk. 1t is eminently fair, if
ones conception Of the Chamber of
Commerce is of a place where men go
long and short for speculation and win
or lose as the case may be. But we
doubt very much if any member of
that commercial body would not resent
such definition as unfair and unjust,
and would not criticise the maker of it
as lacking in knowledge Of the real
purpose Of the chamber.
Last year no less than 134,000,0O0
bushels of grain came into Minneapo-
lis. Such movement makes a great
trading center. A grain market lives
and grows when all the various inter-
ests are prosperous. Conditions in their
ideal state imply market where mill
ers may come to buy wheat, where ship
pers may send their wheat with assur-
ance of prompt sale at fair prices, and
where an outside speculative interest
exists, large enough to create contin-
ued activity, that receivers Of grain
Immediately upon purchase Of the cash
article, may hedge against loss from
decline by selling in the pit for future
delivery. ".- '.s - Il.
Whenever anyone, specifically in
formed, makes the statement that the
exchanges are gambling places, and
speculation is the meat of it all, the
exchange members are quick to present
an array Of facts showing that the ne.
cessity for an active speculative mar.
ket exists, that millions of bushels of
wheat are hedged, and that the selling
, hedges of the cash wheat buyers, an6
> the buying hedges Of the millers
: against their sales Of flour, make up the
real life of the pit. Moreover all well
, informed students Of conditions admit
{ the necessity for such institutions al
q the Chamber of Commerce and the i'm
: portance of the part they play in tn,
: economic system of the country. Blu
the members themselves who stant
upon the contention that man caugh
short is entitled to no sympathy, be
cause he should not have sold short
overlook the fact that their very argu
ment defeats the plea Of legitimacy O
t the exchanges, for if speculation is fai
n at all it is as fair to sell short as to g
e long, and spectators cannot Away
t. buy, nor would there be that state o
o activity so necessary to maintenance o
il ideal conditions in the pit if there wer
$ no short sellers.
e If, however, it were only the speculs
n tors who were concerned it would no
o be so serious, but in the case Of tn
d three Milwaukee firms who yesterda
{ defaulted on total Of $4,000 bushel
of wheat sold for May delivery, it az
IS pears that their sales were in the ns
t. ture of legitimate hedging transaction
IS To say that having wheat in their bin
8. in Milwaukee they should not hav
IS hedged it by sales against decline, i
q to say that they should not have don
a that which is a regular practice and
r always advanced as the legitimate re;
+ son for the existence of the pit-to Ell
% able buyers or holders Of wheat to pr,
!. tect themselves. To say then, thu
" they should not have hedged it in Mi,
% neapolis is to say that this is the ma
/ ket to pass by, yet everyone know
- that once Minneapolis loses her hedgin
- business her decline as great graf
market has begun.
y The Journa al does not assume
= advise the members Of the chamb,
= as to their duty with refe
"a ence to this matter Of changing I'll
:. contract grade, but it does not belle,
: it has overstated the seriousness Of II
present situation.
is The populist and public ownership pre-
" in Russia is getting its feet under. FL
le Russ says "Sevastapol struck the shacl
h. les from the serf and Port Arthur. Mukdt
Ill and Tsu islands should free Russia fro