The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1917-10-04
WHEATLESS DAYS
ETed A. Derby Tells ROtarians
of Grain Regulations.
Says Many Dealers Find 1t
Hard To Keep Busy 4
'UPHOLDS BOARD OF TRADE
Topeka Dealer Tells of Its
Legitimate Functions.
He Predicts Many VIII Have
To Eat COrnbread.

That government regulation of
grain prices is one of the factors that
are pointing the United States to-
wards ''wheatless days was the as
sertion made today by Fred A. Derby,
president of the Derby Grain company
and one of the leading grain men of
Topeka, before the Rotary club at
its regular noon luncheon.
Mr.. Derby gave the Rotarians one
of the most comprehensive exp1ana-
tons of the grain situation that has
regulations and price fixing rules went
into effect, and he went into condi-
tons as they existed before the war.
as they now exist and as they will
exist if something is not done to
remedy them.
After explaining in a general way
the business methods used by grain
dealing firms, Mr. Derby went directly
into the government control problems
and the abnormal conditions brought
about by the war and by the Hoover
methods. He said in part:
The feature OF the grain business
that | know you are all interested in
is the action of the government in
controlling the price of wheat The
great bull market started in August,
pean war. The war encouraged the
bull spectators. increased export de-
mand and naturally the market adj
vanced- The 1915 wheat crop in the
United States was the largest ever
raised estimated at be little over
900 million bushels, but the price
ranged nearly twice normal prices.
The 1916 and 1917 crops were hardly
average, and of course the prices were
extremely high With the high price
Of wheat, coarser grains, meaning
corn and oats, naturally followed
Ii pW
men have little idea of the workings
of the boards of trade l know such
an orgaeization and its patrons are
called gamblers. but q is because they
are not understood or because the
word gamblers is used in so broad
sense thai It could cover any business
tranSa ction that in any way takes into
consideration the element of risk A
gambler creates A risk to assume
speculator assumes a risk that already
exists Bear in mind the distinguish
ing difference as we discuss this
question.
How Board Works.
IN the heavy movement of corn
next December and January, not
being a speculator, will prooabIy
not want to carry the risk of a decline
in the market on all the corn We buy
at our country sselevatoEs,-so will sell
May corn against our purchase. or
what grain dealers term hedge In the
MAY OPTION some SpeCuldtoE that
believes this a good investment buys
| what L sell; as my corn arrives at the
| market we buy in our hedges and dis
pose of our cash corn. l have made
my margin of profit for handling the
corn. The speculatCr has guaranteed
me against any loss. Whether he has
profited or not depends on whether
| his Judgment was correct in buying
/ my corn.
/ The grand standing politicians
I contention that it wa the SPECTATORS
/ that caused the high prices last sea-
| son is far from right When wheat
I got above the 50 mark professional
/ wheat spectators would not take the
/ bull side as figures did not seem to
/ warrant such prices but here comes
new cause for higher prices. The
/ allied government buyers known as
the Wheat Export company, began
/ last fall to buy cash wheat and make
| contracts for any delivery within six
months, and also boughtthe May, July
and September options until they ran
\ the price to well over So.
/ In dealing in futures the actual de-
livery of the commodity traded in is
! contemplated With a maximum price
this could not be done as a settlement
price is arranged if the market holds
! that high. In other words it gives
that figure or delivering the grain If
/ the market is lower If a buyer con-
! tracts for commodity with the idea
of using this commodity you see this
arrangement doesn't help him if it is
what he wants. 1t is the opinion of
! experienced grain men that had the
government controlled the export sit
I uation limiting the time of making
! contracts and prohibiting the trading
in futures except for thirty days the
price question-~ould have taken care
| of itself
The food administrators plan for
/ controlling the price of wheat is some
thing as follows; All elevators are
licensed; mills of over one hundred