Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1917-07-03
SELLING WHEAT-By Frederic j. Haskin

VrTASHINGTON, D. c., June 2S.-The pending
w food bill puts into the hands of the admin
w istration power of life and death over grain
exchanges and boards of trade where grain is
bought and sold. The bill provides absolute au-
thority regulate such exchanges, even to sus-
pend their operation, but it does not direct that
the power be used. What course will the admins
tration adopt toward the exchanges? And in how
far is board speculation in grain response
BILE for excessive prices, and what would be the
effect of closing the exchanges? These are ques-
tions of considerable Importance today, both TO
farmers and to consumers.
Mr. Hoover has stated that spectators have
robbed the American public of $25OOOO,OOO on
the price of wheat in the last few months. The
food pirate" has been denounced on every hand,
as is eminently fitting and proper. The assistant
secretary of agriculture has characterized the men
who force up food prices to their own advantage
as traitors as we'll criminals. Such practices
will be sterny dealt with; but there is considerable
confusion in the public mind, according to hlgn
authorities, as to just who the offenders are.
Take. for example, the catch-phrase, gambling
lin futures" This has come to stand with many
people the last word in iniquity. considerable
number of patriotic Americans would like to see
all trading in futures put stop to, without paus-
ing to consider what the results may be-
Gambling in futures is wrong, Trading in
futures is necessary-in certain lines. In those
lines it is beneficial That is the case in nutshell
And wheat is one of the commodities in which
future trading, the existence of a hedging mar
ket" is benefit to producer and consumer, II that
trading legitimate and strictly regulated. SO the
Idea that cheap bread will return with the closing
of the grain exchanges is another illusion that
will not stand the test of scrutiny. Prices Will
come down when illegitimate speculation is abol-
ished.
Mr. Charles j. Brand, who is chief of the fed
eral bureau of markets, which attends to what red
eral regulation of the grain trade Is now in force,
points out that a Spectator is not necessarily
gambler. A gambler, says Mr.. Brand, is man
who creates a risk in order to assume it. A man
who offers to match you for SO is gambler De-
cause he creates risk of losing $5 especially In
order that he may assume 1t, with the chance or
winning like amount. There is nothing In the
order of nature which DEGREES that somebody must
lose and somebody else must win, that much
money. The man who wants to match you is
gambler and not a Spectator, because, to COM
plete Mr. Brands definition, Spectator is man
who assumes already existing risk
That is the situation in the wheat market, be-
cause the wheat crop is harvested in three months
and marketed throughout all the twelve. Some
body has got to assume the risk of carrying the
surplus wheat from the time of harvest until 1t Is
needed at the mill. There are bound to be fuctua-
tions in price over that period, and the man VINO
holds It is either going to gain going to lose.
The best interests of the farmer and the consumer
are conserved when the risk is made as small as
possible, because it is economic law that large
risks demand large profits, and In this case the
profits go to the middleman.
The machine that has been evolved to carry the
three months wheat harvest over the twelve
months wear with a minimum of risk is the sys-
tenn of future trading practiced the grain
exchange. This system provides a means whereby
any man may hedge his contracts, as the saying
is or in other words insure himself against the
element of uncertainty inherent in future condi-
lions.
A city baker for example, knows that on the
first of August will need 1000 barrels of flour.
That -four may be non-existent; the butterflies may
be futtering over the wheat that will make 1t, to
paraphrase General Cocktails. But none the less
your baker can go to miller and contract for his
-four at given price. The risk is thus transferred
to the miller. He has bound himself to deliver
-four at a given rate, and If the price Of wheat
should double in the interim It might break him.
But he can 60 into the market and buy the un-