Bismarck daily tribune., 1908-05-06
LEGITIMATE TRADING AND ITS
NECESSITY.


In the recent wholesale condem-
nation of stock exchanges and of op-
orators in the various staples of crop,
"a good many critics appear to have
lost sight of the fact that legitimate
trading in crops and stocks is nee
essary to the conduct of business in
this and all countries today. 1t fur
nishes an immediate market for
all crop products and it tends to reg
ulate the price during the year. 1t
affords instant information of crop
and property falues and it circulates
information regarding crop condi-
tions and prospects. An illuminating
article on the legitimate phases of
transformations of this sort is fur
nished by H. N. Eager, president of
the Chicago Board of Trade, in a
recent article in Harper's Weekly
In summarizing the necessity of such
general speculative markets as are
now conducted through the country,
Mr.. Sager says:
Every thoughtful man who will
study the business of the world as
conducted today must see that in all
lines the future contract is neces-
sity. The world is fed, clothed, and
transported by supplies furnished on
future contracts. There can be no
possible distinction between supply
ing grain, flour and provisions on
future contracts and supplying coal,
lumber, steel, wool, and leather on
future contracts. Any sane man
knows that the business of the coun-
try could not go on for day if the
builder could not buy lumber, the
manufacturer buy wool and leather
the railroads buy coal, steel, hun
dreds of other things, weeks, months
and sometimes years in advance.
For every buyer there must be sell
Ter. Sellers have to meet demands
| of buyers by making future con-
tracts These sales are made before
| the wool is taken from the sleeps
| back, the hide from the steer, the
iron and coal from the mines. Just
so. wheat, corn and cotton are sold
before the crops are harvested; some
times before they are out of the
ground. The miller cannot wait un-
| til the wheat is on the cars to pro-
vide for this output. He sells flour
| months ahead. He must make con-
tracts for his wheat months ahead
| The seller (short seller, if you please
| until he can deliver the property
| is an absolute necessity. America
/ is engaged in feeding and clothing
Europe with her surplus grain an6
cotton The exchanges, with theil
facilities for ascertaining crop prom
Use at home on one hand, and for
eign needs on the other hand, en-
able their members to make con
: tracts with the producers, from
: whom they buy, and with the con
| 1
, whole business is based on futur
: contracts. Back of these contract
stand the exchange with it's iron
: clad rules offering guarantee t
all the world that the contracts @
5 its members will be faithfully met
/ If future contracts underlie the com
. mercial world it is difficult to Sc
' how lawmakers can interfere wit
5 the operations on legally and honor
e ably conducted exchanges withou
D running foul of the constitutions
, provision against class Legislation
: The problem which confronts tn
: trade and congress is how to
4 away with the parasites, and the
o vicious and harmful abuses of graf
n and cotton contracts, without cril
ping the enormous business depen'
e ing on legitimate transactions base
l. on future contracts.
|, In the few months succeeding tt
n grain harvest the country sends
market the requirements of consum
e ton for long period; an enormol
e surplus is stored in sight Som
3 body must carry this load Tv
& classes do this. First, the farme
t. carry large part of the crop f,
" varying periods; second, the skill,
If judges of value on the various e
ID changes, and their following, car
" that part which the farmers do n
lie choose to hold If such custom d
l. not exist we should be confront,
III annually with two hurtful extrem
1t of value. First, Immediately ST
ID ceeding the harvest, prices would,
es the face of present over-suppl
id fall to values below the cost of prof
er able production; later on, howeve
i'd just before the following harve,
ee supplies would be exhausted, al
IA eager consumptiye demand won