Democratic Sentinel, Volume 16, Number 6, Rensselaer, Jasper County, 26 February 1892 — AIMED AT THE FARMER [ARTICLE]

AIMED AT THE FARMER

THEY SAY ANTI-OPTION LAWS WOULD HURT HIM. President HamlU and Other ChlcAgoans Attempt to Show that Pending Measures Would Depress Prices of Grain und Live Stock and Derange Business. Speculators Talk. President Hamill and four other members of the Chicago Board of Trade appeared before the Senate Committeejon Judicary to protest against thd legislation contemplated by the Hatchand Washburn anti-option bills. President Hamill made a long ■ address, and was followed by Thomas A. Wright and Michael Cudahy. “Speculative bodies,” urged Mr. Ham--111, “are necessary to adjust the relations between the supply and demand of products. ■ The advance in prices checks consumption and stimulates production, and the fall in price checks production and increases comsumption. There is some price at which they are perfectly adjusted, and this is termed ‘proper price.’ The speculator makes the actual market value conform to it. He cannot influence it, since the supply and demand do that, but he merely determines the actual market price and makes it coincide as nearly as possible with the proper price. Fluctuations should be as little as possible, and the tendency of speculation as conducted by file boards of trade is to ke,ep the in a state of equilibrium. The movement of wheat last fall was enormous. Under the existing system the dealers and exporters placed wheat for delivery in the future at high prices. The orders were filled, and by" the time the farmer was able to deliver it the machinery of commerce was in motion, and the crop moved off easily at good prices. No glut ensued, and the sellers as well as the buyers were benefited. The speculative supply, as a third element, prevents undue enhancement of prices. The speculator is also an important factor in distribution. Buying in a market relatively cheap and selling in a market relatively high prevents accumulation at some points and undue depletion at others, and this equalizing process helps distribution.”

Mr. Hamill continued that the bill would have the effect of prohibiting merchants from handling products in legitimate channels of trade. While itwould allow the farmer to sell his products for future delivery, the merchant who bought of him would be prevented from selling until the actual delivery was made. “The result is,” ho continued, “that while the farmer has the naked right to dispose of his property, even before he has raised it, he can really dispose of his wheat only, and Ill's to the miller alone. His corn, rye, and barley must be sold, if sold for future delivery, to a dealer who, under the provisions of the bill, would bo prohibited from disposing of such property until its actual delivery! It entirely eliminates all legitimate competition in the purchase from tho farmer of his products, for the reason that the.miller and maltster alone remain unhampered as possible buyers from him. It discriminates solely in favor of the miller and maltster, and creates a monopoly for their advantage by driving out every other dealer and warehouseman.”

Under the bill, said Mr. Hamill, the packer of hogs, now the only important buyer in that line, would bo prohibited from contracting for future delivery of pork products. As the result the packer would be compelled to insist upon a larger margin t» cover the additional risk of market while manufacturing. This would tend to reduce the price to the grower or farmer. As a final objection to the bill Mr. Hamill urged that it would result in overturning and unsettling to the extent of the total destruction of long and well understood usages in the handling of agricultural products. Tiro restriction placed upon the business of buying and selling would prevent men from engaging in a legitimate trade. Thomas A. Wright followed in a long argument in which he cited the legal phases of\the situation and quoted from various decisions to show that contracts such as were made on boards of trade were legitimate and recognized as such by the courts. In closing he claimed that the effects of the passage of the law proposed would be to drive capital out of the business of handling agricultural products. To prohibit futures would be to remove the only insurance affQrded the dealers. He thought the measure was intended solely for the benefit of tho big millers. Senator Washburn, the author, who was in the milling business himself, made no objection to this intimation. Mr. Wright produced some statistics recently gathered by S. K. T. Prime, of Dwight, showing that many farmers as well as millers and grain merchants throughout Illinois, lowa and Minnesota were opposed to the anti-option bills. It was also shown that selling future delivery was a practice coming into vogue in many agricultural districts, and the farmers were taking the same advantages as the grain dealers to insure themselves against loss by selling for delivery ahead.