New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-21
Friday, July 20, 1917


cents a bushel. Within a few hun
dred miles of the Chicago Board of
Trade, where the price is estab-
l:shed, millions of bushels Of wheat
are being harvested. These facts are
in such striking contrast as to call
for some explanation.
The immediate cause Of the ap-
parently uncalled for advance in the
price of the commodity lies in the
fact that more wheat has been sold
short" than can possibly be deliv-
cred in the next two weeks, for the
simple reason that stocks in the
Chicago elevators are practically
exhausted and are not likely to be
replenished in time 70 help those
who have contracts to fill. In this
case speculation can hardly be
blamed for a situation which IN
days gone by would have been much
10 the liking of the big operators,
Who, each in his turn, tried to "cor-
Ter" the market. On the contrary,
the restrictions placed on specula-
ION by grain exchanges throughout
the country are held by many to be
responsible for the present squeeze"
of shorts. But for the fact that
elevator interests and cash grain
dealers have been denied the privi-
sxe of selling futures against pur-
hases of wheat in the country the
Grain newly gathered from the win
.er wheat fields, it is contended,
would be moving toward the leading
primary markets in sufficient guam
titles to enable those who have sold
for delivery this month to fulfil
their contracts. Some advices from
the West intimate that the farmers
ere unwilling to sell their new wheat
for less than So bushel, and that
this is the reason for the small
movement so far this season.
The truth is, however, that until
the food control bill is passed and
those who are engaged in the busl-
ness of handling the grain crops of
The country know more definitely
under what conditions they are to
operate wheat will continue to re-
main largely in farmers hands, no
matter what price they might be
willing to take for their crop.
Meantime the July shorts have only
one consolation. They cannot be
forced to pay over S2.75 bushel for
the privilege of settling their con-
tracts, that being the maximum quo
.ation fixed by the officials of the
Chicago Board of Trade.
One of the most difficult things to
he faced by those who take up the
task of solving the food problem
will be to dislodge wheat from the
farmers hands. The farmer is a
pretty good gambler, and knows
from long experience how to play
waiting game when circumstances
are propitious. This year he knows
there is not enough wheat to go
around, and consequently will be
slow to release what he holds.
The Wall Street atmosphere is
saturated with gloom, but here and
there one finds CLEAN of sunlight.
Here is one by way of example. 1t
is the opinion Of prominent Stock
Exchange house:
The ink is hardly dry on the first
instalment Of the Liberty Loan, and
already preparations are taking place
for the sale Of $4,000, 100000 more.
That will be s5,OOO,OO0,O0O within the
first year of our participation in the
war, besides a great quantity of
short-term notes hoated and to be
Aoated by the United States Treas
ury.
The effect Of pouring new money
into the arteries of new business and
industry at this stupendous rate has
\ not yet begun to be anticipated.
We shall be told, of course, that a
war loan is not money; that, on the
contrary, it is bought and paid for
with money.
This is both true and untrue. II
is technically true that a war loan
is not money. II is mainly untrue
that war loan is bought and paid
for with money Largely. a war loan
is paid for with credit, which is to
say. that when the loan is Aoated
bank credits are enormously expand
ed to finance it. Credit performs the
function Of money; credit. in fact,
is money, of which we have three
kinds-namely, metal, paper and
checks. Thus. IL the creation of war
loans is inevitably accompanied by
an increase in the volume OF exist
ing credit, il comes TO the same
thing as 70 have said in the begin
ming that the effect Of war loans is
TO pour additional money into the
arteries Of business and industry.
II you increase the volume OF
money faster than the total volume
Of business prices will rise. That is