Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1917-07-01
CONTROL OF GRAIN EXCHANGES
BY FnEDEnIo J.. HAskIN

WASHINGTON. ID. c., June 30.-The
pending food bill put into the hands
OF the administration power of life and
death over grain exchanges and boards
of trade where grain Is bought and
thortty to regulate such exchanges. or
even to suspend their operation. but
II does not direct that the power be
used. What course will the admins
tration adopt toward the exchanges
And i'm how far is board-of-trade spec
ulatfon in grain responsible for ex-
cesstre prices. n what would be the
effect of closing the exchanges? These
are questions of considerable impor-
lance to-day. both to farmers and TO
consumers.
MIR. Hoover has stated that specu-
lators have robbed the American pub
lie OF $3.50. 600. 900 on tho price OF wheat
In the last few months. The food
pirate has been or every
hand. as Is eminently lifting and
proper. The Assistant, Secretary OF
Agriculture has characterized tho men
who force up food prices to their own
advantage as traitors as well as crimi-
nails. Such practices will be stcrnly
dealt with: but there is considerable
confusion In the public mind. accord
Ing TO high authorities. us TO just who
the offenders are.
Take. for example. the catch-phrase.
gambling in futures" This has come
TO stand with many people as the last
word tn iniquity. A considerable num-
Der OF patriotic Americans would like
TO see all trading In futures put a stop
to. without pausing to consider what
the results may be.
Gambling In futures Is wrong. Trad
ing in fntmre4 iS ry-tn rnriaip
lines. In those lines, II Is beneficial.
hat Is the case in a nutshell. And
wheat is one OF tho commodities in
which future trading. or the existence
OF Il hedging market" is a benefit 10
producer and consumer. IL that trading
Is legitimate and strictly regulated.
So the Idea that cheap bread will re-
turn with the closing Of the grain OK
changes is another illusion that Will
not stand the test Of scrutiny. Prices
viii come down when illegitimate
speculation is abolished.
Charles J. Brand. who is chief of the
Federal Bureau of Markets. which at
tends to what Federal regulation OF
the grain trade is now in force. points
out that 4 Spectator is not necessarily
a gambler. A gambler. says Mr.. Brand.
is a man who creates a risk In order
TO assume ir. a man h offers TO
match you for SIS is a gambler. because
~ q ION VI 80 ' -
in order that he may assume IT. with
the chance OF winning n 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 a gambler and not Il
speculator. because, to complete Mfr.
Brands definition. n speculator is n
man who assumes an already existing
risk.
That is the situation in the wheat
market. because the wheat crop Is hRr-
vested in three months and marketed
throughout all the twelve. Somebody
has got TO assume the risk OF carry
Of harvest until ii Is needed at the
mill. There are bound TO be nuctua-
tons in price over that period. and the
man who holds 1t is either going to
gain or going to lose. The best in
teresis OF the farmer and the consumer
are conserved when the risk is made as
small as possible. because il is an
economic law that large risks demand
large profits. and in this case the
profits 20 to the middleman.
The machine that has been evolved
to carry the three months wheat har-
vest over the twelve-months' year with
a minimum OF risk is the system Of
future trading as practiced on 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