The Devils Lake world and inter-ocean. (Devils Lake, N.D.) 1915-1920, 1915-09-02
HEDGING IN THE GRAIN TRADE.

Hedging as applies to the grain trade is a method of transaction
ing risk taken to the SPECTATOR on a grain exchange who stands
d dpeps sSte fs5 sSSh n 1i Wbsat' T asfs p es,a c., S S5 h &c gseg by by ! pa!tis gsr %ns
as protection against loss through the sudden drop in prices. The
as a direct insurance or protection against loss in the same way as
fire and life insurance are considered a protection. against loss. He
entire risk by the running change that might occur in prices.
gan y or dealer I to s"i the speculative risk Which would exist if
their the f1 Sash purchases Ss5;assx o Ts sn .p mot he %5ys5asf By t tnSs u sfes1j f6gt a f f5Furs
delivery price as a purchasing basis the specializing risk is trans
i SECURITY 70 q Fl he eS grsin On 52e s and Milling aHina1 bas snens E Fhs local I buy :
ta,o Of grains is quite ~ willing to give up q aa change of. OF Large ge5 Spseula-
The practice Of hedging could be abused if the local grain-buyer
attempted TO- go into a speculative business on the grain exchange
: The practice Of hedging, which means short.selnng, origniat-
terror points to Chicago was by water. Navigation; being closed
dur Mt the en winter r. 9 S%; n grain w6;1s dealers fSeg w devised secS "a paaa Gf se sraig
during the winter to move on the opening Of navigation. ~
vrS SsSsq9 stsss s aad Y Ssst tnat snGf iat ss' {se p assRisRsd sys tssm Of E
gambling. In theory the interior grain dealer may hedge his
2 the large grain raj hi interests st' at central al points point send out overnight BIDS
for grain 70 the country: Interior dealers accept &c pit; these a IL they sy can "a
a /: - :e cent en- H per i bushel r. The hedging is done by purchasers a. the
central points.
tons " st 5u niSfi for : bus ;rSl with ai Interior grain purchases, the sys,,
TEN would not be open no to criticism tic smi but ,Sal IN pfaetac = taG gu scf%sl Gf
delivered; in fact delivery is never contemplated when the sale is
made. The theory Of hedging has been always advanced e as the
naent of grain is facilitated thereby, but it's opponents contend that
the big grain interests know what is to be delivered on contract
use the actual grain to control the market. Sometimes they make
a market to sell on when they have the grain; in other periods they
depress prices to buy in the country. They always have cards up
their sleeves, and can produce an ace whenever their play requires
it. The board of trade commission interest thrives on volume and
makes its living off speculative transactions, consequently its en-
ergies are always exerted to induce the public to take a chance.
AS to the influence that short selling has on grain values, much
difference of opinion exists; but on the country drops an incredible
sun of money playing the La sele Street game, and never gets
cured of its habit. The big interests usually hold down the price
of grain by short selling and other devices %ntiF they have t baggeo
the major part of the crop; then they mark up quotations anc
pocket their profit. Last year they arrested the wheat rise unit
this had been done. Likewise the packer holds down hogs until ne
has filled his cellars with cheap product. Full cellars are always
a bull argument on provisions; this year the machine slipped a cog