Evening star., 1925-06-20

What is the difference between an
investor, a speculator and gambler
The answer will perhaps be defined
by the next Congress, in re the grain
and cotton markets, in case the eN'
changes do not see mt to draw the DIS
tinction very clearly before the SO
called radicals" of the farm bloc
undertake the job.
Never before has public sentiment
been so aroused upon the subject of
grain speculation and gambling in
non.exiStent wheat as Is manifested
today, in connection with the last W in
ter's violent fluctuations on change.
The Secretary of Agriculture, Mr.. Jar
dine, has been investigating the stu
alton, and the findings, as stated In d
preliminary report, clearly show that
the wide fluctuations were primarily
due to the heavy trading of limited
number Of professional spectators;
likewise that their operations were
facilitated, to a considerable degree,
by the large participation on the part
of the public after material advance
in prices had occurred the last half
of January"
A single member is said to have
sold short" 50,000,000 bushels.
Prosecutions of the spectators are
promised, to the extent of present
laws, but the Secretary lis particu'
larly concerned in the development of
some new method by which a repeti-
ton of such destructive price changes
may be obviated."
No specific plan has yet crystallized
but In general it is said that some
bills which will be proposed In Con-
gress by the farmers may go so far
as to close all grain exchanges and
throw the handling of grain into the
hands of dealers who will be strong
enough to buy 1t outright and dispose
of it, without hedging" with ''fu-
lures" What such a measure would
do to the price Of grain received by
the producers will be seriously con-
sidered in the light of economics and
the history of experiments in certain
States.
= X y i
Ordinarily the price of grain. in
change, does not fluctuate more than
2 or cents a bushei, except in case
of some world wide catastrophe, such
as serious war or widespread de-
struction of growing crops. One pro.
posal now under considera ton is a
law forbidding fluctuations exceed
ing cents a bushel on any one day,
though it is argued by opponents
that one might as we'll legislate
against gravitation as to pass laws
suspending the relationship of sup
ply and demand" How much had
supply and demand to do with the
jumping of prices last Winter?
On November l the Chicago price
of wheat was, s1.45; by January %
it rose to s2.o5s. All through De-
cember and January the innocent by
ISLANDERS, the bieating lambs, the un-
sophisticated public were eagerly
hitting their savings into the gamble
Bootblacks. clerks. widows and or
phans were selling short" thousands
of bushels of wheat, when they had
never seen wheat growing in the
fields. They were selling short foi
alleged delivery in May-what the
market terms, May wheat" Their
the gamblers and spectators began
to shake out the public" and wheat
l121a cents; on March z, fe-advanced
cents and dropped s cents; March
II, fell, 7a; March 13, dropped l5
cents and continued to drop through
out April until 1t reached bottom al
$1.36. That squeezed out all margins
put up by the innocent suckers OF the
public, but by the rise and stagger-
ing DROP. 1t gave the gambler an
opportunity to clean up scores OF
millions at the expense not alone
of the grain raisers (who seldom sell
on a rising market, hoping to gain
by holding on for still greater rise }
but alse the millers and bakers and
ultimate consumers.
At least the ultimate consumers
theoretically would suffer loss in the
great rise Of the speculative infla
! ton of prices, but aside from eco
nomic theory, 1t is interesting to
note how little the market price OF
wheat has to do with the price OF
bread at the bakery. Was bread
higher at retail last February. when
| wheat was costing the mil-ers. 2.05B
| than in May when it cost only
I$l.36h7 Did bread prices fall with
| the drop of SO cents a bushel or more
than S1.10 O barrel of flour or kalf
cent on the -four in each pound OF
bread?
How much has supply and demand
to do with wheat, in the unrestricted
market of our grain exchanges. since
each day throughout the late specu-