Omaha daily bee., 1917-07-01

Washington, June 2S-The pend
ing food bill puts into the hands of the
administration power Of life and death
over grain exchanges and boards OF
trade where grain is bought and sold.
The bill provides absolute authority
to regulate such exchanges, or even
to suspend their operation, but it does
not direct that the power be used.
What course will the administration
adopt toward the exchange. And in
how far is board of trade speculation
in grain responsible for excessive
prices, and what would be the effect
Of closing the exchangesi These are
questions of considerable importance
today, both to farmers and to con-
sumers.
Mr.. Hoover has stated that specu-
lators have robbed the American pub
lie Of $250,000,000 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 as crimi-
mails. Such practices will be sternly
dealt with; but there is considerable
confusion in the public mind, accord
ing to high authorities, as 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 in iniquity. A consid-
cradle number Of patriotic Americans
would like to see all trading in futures
put stop to, without pausing to con-
slider what the results may be.
Gambling in futures is wrong. Trad
ing 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, or the existence
Of a hedging market" is benefit to
producer and consumer, if that trad
ing is legitimate and strictly regu-
lated. 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 illegiti-
mate speculation is abolished.
Charles J. Brand, who is chief of
the federal bureau of markets, which
attends to what federal regulation of
the grain trade is now in force, points
out that a Spectator is not neces-
sarily a gambler. A gambler, says
Mr.. Brand, is a man who creates
risk in order to assume it. A man
who offers to match you for $5 is a
gambler, because he creates a risk
of losing S. especially in order that
he may assume it. with the chance
of 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 a gambler and not a specula-
tor, because, to complete Mr.. Brands
definition, speculator is man who |
assumes an already existing risk.
That is the situation in the wheat
market, because the wheat crop is har-
vested in three months and marketed
throughout all the twelve. Somebody
has got to assume the risk of carry
ing the surplus wheat from the time
Of harvest until it is needed at the
mill. There are bound to be fuctu-
atoms in price over that period and
the man who holds it is either going
to gain or going to lose. The best
interests Of the farmer and the con-
sumer are conserved when the risk
is made as small as possible, because
it is an economic law that large risks
demand large profits and in this case
the profits go to the nliddleman.
The machine that has been evolved
to carry the three months wheat har-
vest over the twelve-month year with
A minimum of risk is the system of
future trading as practiced on the
grain exchange. This system pro-
vides means whereby any man may
hedge his contracts, as the saying is,
Or, in other words, insure himself
against the element of uncertainty in
lerent in future conditions.
A city baker, for example, knows
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