Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1922-04-25

Over private wires, the Chicago
houses send out their gossip to the
branch houses all over the country.
Says TIE Federal Trade Commissions
freport: Much that is sent over the
wires is Of the nature Of rumor, some
is doubtless sheer invention, and often
dishonest invention to influence prices
to ones advantage" Sometimes there
is advice as to the time to buy.
Vast fortunes have been made and
lost in grain speculation. The private
wire systems have put more than 200
cities in direct, daily contact with the
pit, and increasing numbers are being
induced to play the market. Twenty
billions of bushels of wheat-even the
commissions on this phantom grain
amount to more than s12,O00,000 a year
at the most conservative figures?
Now, who pays the toll? Why Is
this speculation tolerated?
That question has brought out, ac-
cording to many observers, the fact
that even the ills of speculation are
not unmixed with good. Whether the
evils overbalance the good-well, that
depends upon on which side Of the
fence YOU happen to be. -.
The theory of the grain exchange is
that future trading takes up the risk in
handling grain, and serves to lower
the margin between the producer and
the miller. This also is the view Of
many economists. The speculator
steps in when there is lessened de-
mand from the miller, and buys the
wheat, carrying it until the miller
needs it. In other words, he takes up
the slack, and tends to stabilize the
market.
If the country elevator could not
hedge" it's purchase, the grain eX-
change man says, the elevator man
would find himself faced with the risk
that the wheat price might drop before
he could get his purchase to market
He sells future, and he is protected.
Insother words, there is a certain risk
in handling grain, and the speculator
simply assumes the risk. ,
If the country elevator man did not
have this insurance, he would have to
take a wider margin of profit to be
safe, according TO the proponents Of
future trading. So would the COM
mission merchant. So would the miller
have to have a wider margin.
The cost of the system falls partly
on the spectators and partly on the
producer, say observers, though Prof
Boyle insists the cost of the insurance
to the grower is negligible compared
to the benefits derived. Farmers will
not agree with this, however.
But such is substance in the theory
that so far has sustained future selling
A good many farmers appreciate the
advantage in hedging. About half the
tice, feeling it is a necessary safeguard
at present. On the other hand, a very
large number of farmers are against all
future selling, and point out that hedg-
ing is needed only as a protection from
the mainipulations Of the spectators.
Orderly movement of the farmers
crops TO market is the only stabiliZer
needed, they say.
Manipulation-that is the weak point
! in the case of proponents of future
selling. Farmers in increasing num-
bers feel that the machinery Of the
grain exchange is used by the specu-
lators to force down the price of wheat
while the farmer has it to sell, and
then to raise it after he sells.
Professor Boyle and the economists
are apt to say that supply and demand
determine the price Of wheat. But the
farmers are not convinced. J. NJ. An
derson, president Of the Equity Co
attorney, say that within certain limits
imposed by the law of supply and de-
mand, the spectators can raise or
lower the price Of wheat at will.
On the morning of January q, 1921,
all the market news was optimistic. 1t
was reported that the Armour interests
began selling large holdings Of March
wheat. In three hours. the price of
March wheat dropped more than six
cents in Chicago. and 13 cents in
Minneapolis. And, the government
report adds, cash prices declined moro
than futures
Dissatisfaction of the farmers ovel
this kind OF thing forced a future trad
ing act through congress last year Ii
placed grain exchanges under the su-
pervision of the secretary of agricul-
ture, and abolished privileges, one form