New-York tribune., 1918-04-29
Commerce Reaps
Benefits From
Speculative Marts
Exchanges Gather and Dis
tribute Commodities
Economically
(From "The Americas"

(From "The AmcricaS')
In this country we have suffered
from a superfuity of middlemen and
speculator activities in certain parts
of our business organization, but we
cannot afford to deprive ourselves of
the solid services of the big phases Of
trading skill and organized speculation
that are absolutely vital to national in
dustry. If the conditions of war time
make it necessary, we must sacrifice
any kind Of normal production or bus;
ness; but the carrying on Of pro-
gramme designed to alter permanently
the structure of our business machin-
cry is a somewhat different matter, and
there is no doubt that if those among
our trading community who are con-
ccrncd with the appearance Of this are
correct in their assumptions, we will
have a serious discussion in this coun-
try soon such as is now going on in
England.
In normal conditions of commerce
the great worldwide markets have
served an important purpose. 1t is
difficult to see how industry can 60 on,
when competition and ocean transpor-
tation is opcn, without them.
They include the "factors" and local
merchants all over the world, who earn
their living through small buying and
collection OF the materials Of com
mcrcc, in direct and indirect ways,
measure stimulate and even finance
primary production. and they are en-
ablcd to do so by larger traders, who
have established connections with them.
and who. in their turn. depend upon
commission traders and brokers close
to the organized markets whore the
banking resources are that furnish the
means Of getting commodities in mo-
ton and OF carrying the stream along,
even when the stream crosses the ocean
to the places Of use in industry.
Service Rendered
By the Trader
These traders arc men of expert in
formation and shrewd Judgment. They
know the commodities thoroughly. They
know where they are produced, and
they keep informed, in ways they them
selves have organized. of the varying
production in all parts Of the world.
They know expertiy how the com
modities arc used. and they also have
organized ways Of knowing how con-
sumption, in all parts Of the world,
will vary and cause differences in de-
mand. There is work and definite
service in this trained ability to judge
Of supply and demand, which affects
the prices Of their commodities and Of
the goods made from them. 1t is next
to impossible and it would be far from
sensible economics to expect manu-
facturcrs, except perhaps the very big
gcst manufacturing organizations, to
be equipped in the same way.
They are of additional service in
Standardization and distribution OF
raw materials. Take cotton as an in
stance of a commodity with a world
wide market There arc really about
twenty cottons. There arc that many
types and grades each or several com
ing from the production of certain
producing area. and each used as rnw
material in some definite way in pro-
duction Of cotton goods and other
manufactures. The established trad
ing and merchandising organization Of
the international cotton market gath
crs, sorts, standardiZcs and furnishes
in the right grades to industry the
twenty different cottons Of commerce.
It is not conceivable that a single
organized could do this for himself
locating his producers, finding the
ones who would sell him at the best
price and carry out their contracts,
getting exactly the cotton he wants.
"The market" in it's merchandising
capacity, can do all this with the
greatest possible economy, gathering
as it does the whole worlds production
and distributing to all the worlds in
dustries according to their particular
demands, using in some way all the
grades and qualities, without waste or
lost motion.
The spectators in the cotton mar
ket also render service, essential SER
vice Of great value which has saved
much for producers aud consumers.
Occasionally manipulator has tried to
Corner" the market and before he
failed has driven up the price. The
producer profited. the consumer had to
pay more for goods. Occasionally a
"bear" market has turned the tables.
In the long history of all organized
speculative markets these are only oc-
casional incidents, and it is easily
demonstrable that the bigger the specu-
lative interest in any commodity, the
steadier and truer to what scientific
examination of supply and demand
would show its true price is the cost.
Speculation
Stabilizes Prices
Moreover, the margin of distance
between the producers return and the
cost of the commodity in consump-
ton, which represents the middle
man" profit, is invariably narrower in
the case OF commodities having a wide
speculative interest in their market
ing. Over reasonable period the |
service of the speculative element IN
markets in economies Of cost to indus |
tries is great. But it has rendered |
still greater service, for it is the sta