Democratic Sentinel, Volume 15, Number 52, Rensselaer, Jasper County, 15 January 1892 — GAMBLING IN GRAIN. [ARTICLE]

GAMBLING IN GRAIN.

SENATOR WASHBURN REPLIES TO MR. COUNSELMAN. Bis Object Is to Benefit the American Farmer—Legitimate Trade Injured by the Pernicious System of “Short Selling.” To Protect the Producer. Senator W. D. Washburn, the author of the option bill introduced by him in the Senate last month, in an interview In Chicago the other day, said: “I have just finished reading the interview with Mr. Counselman in which that gentleman sevely criticises the bill introduced by me to prevent grain gambling. lam not surprised at that gentleman’s hostility nor at all disturbed by the sarcastic reference to my philanthropy in the premises, for any effort directed toward a curtailment of the great evil known as ‘short selling’ can be expected to call down the wrath of all dealers in illegitimate or flat grain. But Mr. Counselman wholly misunderstands the situation when he assumes that this bill is put forth as a perfect bill in ail its details. I recognize the extreme difficulty in drawing the line between what is hurtful and what is helpful to the producer, and I introduced it early to draw out criticism and suggestions from all quarters. I already see places that I think are weak, and before the discussion is over I may see other places that should be improved. “The future selling of real grain is perfectly legitimate, and should not be interfered with. In fact, to prevent a man from contracting his grain for future delivery would be ruinous in its effects on the producer, and no one is seeking to encompass that. “What I want to do,” said the Senator, is to stop this thoroughly pernicious and demoralizing practice known in gambling parlance as .short selling,’ where a man can go on the board without a kernel of grain, either real or prospective, and sell millions of bushels, thus depressing the market the same as if so much real grain had been dumped on. Why, Mr. Pillsbury, the largest buyer of real wheat in the world, tolls me that there are men in Minneapolis with their offices in their hats who sell more wheat in a year than he buys, and that there are days in Chicago when men sell more than he will buy in a whole year, and yet these men have the audacity to claim they are helping the market.” Referring to a meeting of the Chamber of Commerce at Minneapolis for a conference with the Senator, Senator Wasliburn said:

“Of course the Board of Trade folks up there occupy the same position as docs the Chicago Board, they claiming to believe that the bill means the utter demolition of trading in futures, but they will And their mistake when the bill formally becomes a law and goes into effect. I was especially surprised at the statement made then by President Sawyer, of the Sawyer Elevator Company, when he said that not over 10 per cent, of the sales made on the boards of trade in the country were of the gambling character. I had not the data with me, but I find on looking the matter up that a quite different state of affairs exists. No board furnishes any data to make a comparison from except the New York Board, which is small compared with the Chicago Board, but even then the figures are startling. “Here is a very interesting table that I came across the other day. It shows that during ten days of the summer of 1890 the real and bogus sales of wheat were as follows:

Sales of ac- Opt'n sales tual wheat, of fictitious Date IStX), bus. wheat, bus. Aprils '. -..03,000 18,400,000 Aprils. 54,0(0 2,00),030 April 12 1,800 10,('SO,000 April 14 0,00 3 44,000,00) SOP*- 3 8.000 8,000,000 Sept. 4 32,030 6,401,000 Sept. 15 62,(00 7,240.000 Oct. 22 12,000 4,000 000 Oct. 23 04.000 3,000,000 Oct. 24 35,000 4,600,000 Total 337,803 125,720,030 “The facts are that during the days named, for each bushel of wheat sold, New York market-wreckers sold 372 bushels of flat grain, and.that it would require but thirty-six days for them to sell options equaling in amount an average wheat crop. “An expert, writing on the subject, says: ‘lt is not unusual for as much fiat wheat to be sold in a day as there is of actual grain received in a year. For instance: On the 14th of April, 1890, New York speculators sold 44,000,000 bushels of fiat wheat, probably more than twice as much as reached that city during the year. While tho “offerings” in a single day, at either Chicago or New York, are said to often exceed 300,000,000 bushels, such offerings having the intended effect of depressing prices.’ ” “What would wheat have been worth had it not been for the board of trade methods?”

“Well, I think that every bushel would be worth 30 cents more to-day. In fact, all Europe is astonished that it is getting our wheat to-day for the ridiculously low price considering alLthe circumstances. They expected to pay more, and it is an outrage upon the producer that he should thus be sacrificed to the relentless greed and disreputable deals of the ‘short seller’ on our Boards of Trade. Yes, sir, In my opinion, somo kind of relief will be granted our producers in a restrictive law that will preserve all the good features in future dealings and eliminate the bad. By taking up this question, and drawing in the vie-vys from all sides, a great servico will be rendered to the people of the Northwest. What we want is intelligent, honest investigation, and something good will come out of it.”