The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-12-10
DEFENDS The PIT
President Gates of Chicago
Board of Trade Speaks.
Says Grain Business Specula-
tive From Start to Finish.
CAPPER BILL INTERESTING
Impossible to Eliminate Future
Trading Called Absurd.
No Law Can Balance the Supply
and Demand.

Kansas City, Dec. 16.-Prsident Les
lie F. Gates of the Chicago board of
trade in an address today before the
International Farm congress denied
that the board of trade was in any
way responsible for grain prices.
After explaining that the board is
merely meeting place for traders
who deal in the world open market,
he declared that the prices at which
private individuals have bought and
sold are often mistaken by individuals
as prices of the board of trade
Nothing could be further from the
truth; nothing would be SO destructive
of an open market as an attempt to
fix prices or to interfere with indi-
viduals in their constitutional right to
make business contracts in accordance
with their individual judgment" he
said.
Whole Grain Business Speculative.
Development of agriculture in
America has been the development of
the grain trade and the present system
of marketing which the speaker said,
is more economical than that of mar
keting any other foodstuff, provides
facilities of hedging or insuring
grain against loss which is of ire
mendous value to the grower as we'll
as the manufacturer.
Speculation in grain begins with
the preparation of the seed bed and
that risk of seed and labor and use
of land has always been borne by
the producer" he said. "This specu-
lation does not always produce an
abundant harvest, but such production
as results imposes on the grower q
further risk of ownership until the
crop is sold.
Ownership Big Risk.
This risk of ownership follows the
grain through the various handlers
until it is finally consumed. Under
ordinary merchandising conditions in
other commodities this risk of owner
ship is passed along from producer to
consumer in the form of heavy toll
to cover the risk assumed ard this
would be true of grain were it not for
the system of future trading through
which the risk of ownership is shifted
and distributed"
Speaking further on the subject of
hedging Mr.. Gates said that the lay
man did not recognize that speculation
and hedging go hand in hand, he does
not see that for every hedging sale
there must be either a hedging or a
speculative buyer and for every hedg-
ing buyer a hedging or speculative
seller and that in as much as supplies
never collect on the market exactly as
needed. some one must appear as a
ready buyer or seller if the hedging
system is to be a success
Capper Bill Interesting"
"a bill recently introduced in con-
gress by your president, Senator Cap
per, together with the brief accom-
panying it, furnishes very interesting
reading. There is in this brief a rec
ignition of the value of a hedging
market, but there is a wish expressed
that all speculative dealings be elm
mated. This bill was promised us by
its author early in September, up to
which time, since open trading in
wheat was established on July Is,
1920, the market had been very large
ly of the character which he now
wishes to make permanent.
ITO make a purely hedging market