Newspaper Page Text
DEALING IN FUTURES
FROM A NEW STANDPOINT
THE PRACTICE DEFENDED BY HON.
D. R. FRANCIS.
Interview With a Man Who Knows All
About Grain Spec illation—The Danger of
: ••Corners”—Claims That “Future” Trad
ing Helps the Farmers.
[Special Correspondence.]
St. Louis, Nov. I.—“ The man who
goes into a wheat corner loses money.”
So says the Hon. D. R. Francis, ex
secretary of the interior. Mr. Francis
probably knows more about grain spec
ulation than any man in public life to
day, and he speaks with authority.
“There was‘Old Hutch’in Chicago,”
continued Mr. Francis. “He ran corner
after corner in grain, and he became a
pauper. There was John Inman in New
York. He had made a fortune of several
millions in cotton. Two years ago after
a short crop he undertook to corner the
cotton market. They unloaded so much
cotton on him . that it cost him half his
fortune, and he died within six months.
This is a large country, and the man
who undertakes to corner any of its
products has a pretty big contract on
his hands.
••Corners.”
“The first money I ever made was
made in an oats deal. It was $15,000,
and it seemed a very big sum. I have
b4en in several other corners, and al
most invariably I have lost In 1882
four of us ran a corner in wheat and
<iW r
/A" /
“IT WOULD PUT BUSINESS BACK TWENTY
FIVE YEARS.”
put the price up to $1.68 a bushel. The
shorts got angry and went to Toledo,
Indianapolis and every place where
they could find wheat in the hands of
merchants or farmers or millers, and
they borrowed it for 60 days. Wheat
began to pour in on us, and the price
went down nearly 50 cents a bushel.
The shorts lost money on the deal, but
so did we. My share of the losses was
$56,000.”
“If corners are so unprofitable,” I
asked, “why do men run them?”
“They are forced into it,” said Mr.
Francis. “Noman starts out deliberate
ly to corner wheat or anything else.
Suppose I have bought 100,000 bushels
of wheat for future delivery. Some man
on ’change, in the vernacular of the
street, starts in to ‘make me sick’ by
selling 100,000 bushels at a quarter or
half a cent below my price. I have the
same confidence that wheat will go up,
and to protect myself I buy the other
100,000. If he offers another lot at a
half cent less, I bug again. After a time
I conclude that the sellers are going
short of the market—selling stuff they
haven’t—and when I find they have
nothing to deliver I very naturally try
to put the price up. Os course if the
other man had sold only what he had
and could deliver the wheat, there would
be n<j corner. ”
The greatest praise other
emulsions can take to them
selves is that they are
Just as Good as
Scott s
Emulsion
Measured by this standard
of the world, are these un- B
known preparations the |
thing for you to buy when |
health and life are at stake ? g
The Genuine Scott’s
Emulsion has a sal
mon-colored wrapper ‘
with a picture of the
man and fish. Two
sizes, 50c. and SI.OO.
For sale By all druggists.
SCOTT & BOWNE, Chemliti, N.w York.
“How does the corner in grain affect
the outsider?’ ’ I asked.
“It benefits him,” said Mr. Francis.
"It puts up the price of grain, and he
gets more for his product than he would
under normal conditions. In the case 1
just quoted to you all the farmers and
grain dealers and millers from whom
wheat was borrowed made money. The
railroads got a big sum. The men who
lost were those who were in the deal. ”
“What is the general effect of grain
speculation on the price of grain?”
“1 think it makes the price of grain
higher than it would be otherwise, and
the farmer gets the benefit of it. One
reason for that is there are always more
bulls than bears. A man who is new to
speculation is always more likely to
buy than to sell. He is like the fellow
in Robson’s play, ‘The Henrietta.’
When they asked him why he hadn’t
sold ‘Henrietta,’ he said: ‘l’m going to
do that today. I bought it yesterday. I
couldn’t sell it till I bought it, you
know. ’ The man who goes into grain
trading can't accustom himself at first
to selling something he doesn’t own,
and he is much more likely to buy than
sell. That really works to keep the price
of grain above the normal. Then the ease
with which grain is handled under the
system of buying and selling for future
delivery makes it possible for the farmer
to get a better price for his crop than he
could possibly obtain under the old con
ditions.
“The prices of grain are sent by the
.Western Union Telegraph company two
or three times a day to every railroad
station where there is a wheat buyer.
When the farmer comes to the buyer
and says: ‘I want to sell my crop. I
shall begin harvesting next week and
I’ll have about so many bushels, ’ the
buyer can figure out exactly the price
which he can afford to offer. The buyer
knows that the price of October wheat
is. say, 98 cents in St. Louis. He knows
that he can wire me and I will buy one
or two or three carloads at that figure
for delivery in October. He knows just
what it will cost to ship it. He esti
mates the shrinkage, and after deduct
ing 2 or 3 cents a bushel for his profit
he can make the farmer a fair price for
his crop. Now, if that man could not
sell to me in advance of delivery, he
could not handl-j the grain on anything
like a2or 3 cent margin. He would
have to offer the farmer 50 or 60 cents
under the cash price" because he would
take the risk of a falling market in the
time it took to harvest the wheat and
get it to St. Louis.
“Dealing in futures is good for the
farmer in another way. The wheat
crop, for example, comes to market in
July and August. During those months
the markets are always glutted with
grain. The millers who were the chief
buyers of wheat used to get together
and agree not to pay more than a cer
tain figure for No. 2 wheat, and often
because of this combination the prjce
dropped 5 cents a bushel in a day when
the receipts were large. Now the mill
ers cannot control the market. If they
don’t want to pay the cash price for
wheat in August, some one else will
buy that wheat and sell it for, say, De
cember delivery at a price which will
pay storage, interest and insurance.
That insures the farmer a fair market
for his grain at any season.
“It would put business back 25 years
if dealing in futures were prohibited.
Today the world is one great market for
grain and cotton. Liverpool, Hamburg,
Paris, New York, Chicago, St. Louis,
are all one. I buy in St. Louis today.
I sell the wheat in Berlin tomorrow, or
perhaps I sell today and buy tomorrow.
If I offer in Paris and my agent there
wires me that wheat is selling below my
price, I answer perhaps with an order
to buy instead, and I sell futures here
instead of buying for future shipment
The balance of prices all over the world
is on a knife edge.
“In the last year I have gone into the
export business very largely. I used to
buy grain for cash, sell it for future de
livery and keep it on storage in St.
Louis elevators. It is harder to bring
grain to St. Louis now because there
are so many routes to the gulf over
which grain can be shipped for export,
and of course grain can be stored more
cheaply in a country elevator than in a
city elevator. I have my men all
through the west buying grain for ship
ment abroad. Every night 1 send cable
messages to Liverpool, Paris and Berlin
offering grain for two months’ ship
ment—that is, 1 offer it for shipment
in December, January or February-
March or November-December. The an
swers come in the next morning before
10 o’clock. The difference in time, you
know, is about seven hours. I usually
offer from 25,000 to 50,000 bushels to
each of the three markets. Suppose 1
received orders from gach of these mar
kets the next morning for 50,000 bush
els of wheat. If it is tor December-Jan
uary shipment, 1 may buy December
wheat that morning, or .1 may buy No
vember wheat and afterward sell my
November and buy December or Jan
uary. In either case I am protected
against loss because if 1 have to pay
more for my December wheat later than
the price at which I sold it abroad I
have a profit on the November wheat,
which balances my loss. Now, if I could
not buy futures against it, 1 could not
possibly take the risk of selling 150,000
bushels for future shipment. So if deal
ing in futures were prohibited business
would be very seriously restricted.
The Moral Side.
is another side to grain fn-
THE ROME TRIBUNE. F lUAY. NOVEMBER 5. 1897.
tures, ana tuat is tne moral side. 1 have
given that a great deal of serious con
sideration in the last year or two be
cause I have six children, all boys, and
I have had to consider what I would do
with them, whether I would put any of
them into my business or not. I know
that dealing in futures awakens the
gambling instinct in a man, and men !
who are on the exchange get a false idea >
of money values. Money comes easy I
there, and it goes easy. But when I |
look over the business field it seems to
me that there is hardly a part of it in
which there is not the speculative fea
ture. The farmer sells his hogs when
they are only pigs. The horse fancier
sells his foals before they are born. The
shoemaker contracts «for hides which
are still on the hoof. The cloth mills
make contracts for cotton before the
seed is in the ground. All of these are
speculators just as much as the man
who buys or sells futures in grain.
“They say that more wheat is sold on
the Chicago board of trade in six weeks
than is raised in this country in six
X. /'
' __
“STOCK SPECULATION IS A GREAT DEAL
WORSE THAN GRAIN SPECULATION.”
years. That is true, but most of it is the
same wheat sold over and over again.
My contract with an importer in Berlin
may be transferred through a half dozen
hands before the time to deliver the
grain, yet the actual grain is intended
for delivery all the time.
“The export trade is something which
most people overlook when they figure
up the transactions on the Merchants’
Exchange. In the recent flurry in grain
they reported that I had made $300,000.
Now, it is a fact that I had sold grain
for export before the advance began, and
that 1 did not count on the market
going up. So 1 did not buy until
there had been an advance which cost
me $4,800. After that I bought more
wheat and evened up. I suppose I’ve
made some money out of the advance,
but nothing like the sum reported.”
“Sharp advances stftnulate specula
tion, do they not?”
“Yes. They bring a great many peo
ple into the market who know nothing
about the conditions of trading. Direct
ly after the publication of that story
concerning my profits in wheat I re
ceived letters from three women, one
inclosing SI,OOO, another inclosing S3OO
and another a smaller sum. The writers
wanted me to invest the money for them.
I didn’t even know them all. Os course
I returned the money.
“Conditions have changed a great
deal in the last 15 years. There are
fewer outsiders trading on the floor of
the exchange and the dealings in futures
there are confined almost entirely to the
professional grain men. Where the gam
bling is done is in the ‘ bucket shops, ’
the places where not a bushel of actual
grain is ever bought or sold. The bucket
shops are merely gambling houses, and
they ought to be closed up. To prevent
trading in futures on the grain and cot
ton exchanges would injure legitimate
business. They have tried it in Berlin,
and from what I can hear it has resulted
merely in driving the traders from one
place to another. ”
The German Law,
“What do you think of the feature
of the German law which requires the
public registration of every man who
deals in futures through a broker?” 1
asked.
“It seems to me an excellent provi
sion, ” said Mr. Francis. “There is no
objection to it, provided the details of
the transactions between brokers and
their customers are not made public.
It might prevent clerks and other per
sons holding positions of trust engaging
in purely speculative transactions in
which they would be tempted to use
their employers’ money.
“Stock speculation is a great deal
worse than grain speculation in many
ways, I think,” said Mr. Francis.
“Men run railroads not to earn divi
dends for their stockholders, but to
make the stock go up or down for the
purpose of speculation.
“I tell you the successful trader in
stocks as well as in grain or cotton has
got to know what is going on in every
part of the civilized world, and I don’t
know an occupation which demands
such constant thought and such a wide
range of current knowledge as trading
on the great exchanges. The man who
is not prepared to give his whole atten •
tiou to it would better let it alone. ”
George Grantham Bain.
Condensed Testimony
Chas. B. Hood, Broker and Manu
facturer’s Agent, Columbus, Ohio,
certifies that Dr. King’s New Discovery
has no equal as a Cough remedy. J. D.
Brown, Prop. St James Hotel, jet.
Wayne, Ind., testifies th't he was cured
of a Cough of two years standing, caused
by La Grippe, by Dr. King’s New Dis
covery. B F Merrill, Baldwinsville,
Mass., says that he has used and recom
mended it and never knew it to fail and
would rather have it than any doctor,
because it always cures. Mrs. Hemming,
222 E. 25th St. Chicago, always keeps it
at hand and has no fear of Croup, be
cause it instantly relieves. Free Trials
Bottles at Curry-Arrington Co. ’s drug
■‘ore.
Just as the Flashlight
Pierces Through the Night
ffI'DONALD-SPARKS-STEWART CO.
LOW PRICE POWER
PERMEATES EVERY MARKET OF MERIT
Our price son Carpets are lower than yo a can buy
them of cost sales elsewhere, no matter what price is
quoted our price will be lower. Get our prices before you
White Enamel Line of T X x- J
BUCK’S n I buy. Our line of Furniture, Mattings, Rugs, Lace and
eELEBRMED Cheneille Curtains, Window poles, Shades, Blankets,
OY6S & l Comforts, Quite, Bed Spreads, Baby Carriages and all
housefurnishing goods.
We also carry a full line
of Cole’s celebrated Hot Our immense Stock is now complete and we are mak-
Blrst Heaters. The best .
heating apparatus on the in S a aisplay of elegant goods never before excelled m
market! North G orgia.
Come, let us show it to
you.
We want your Trade, and shall endeavor to please you.
Don’t fail to visit and inspect our stock, now in store and ready
for your inspection, This stock cannot be surpassed in detail of
goods and our prices are beyond competition.
McDONALD-SPARKS-STEWART CO
THE BIGGEST THING IN ROME
Coffins, Caskets, Undertaking Embalming.
GOLD FIELDS.
- New Route to Klondike.
How to Reach Alaska.
Stop over in Rome and we will show you the Gateway wherein
untold thousands can be found by calling at
G. J. BRIANT & CO S
THE ARMSTRONG | fl A O O
BRIANT COPNEB ( DMIXU.
The best appointed and most elegant in Rome, saving 50 per cent on your purchases is the first step to
wealth. We are first hands for everything in the Liquor line. We represent the best distilleries and Im
porters in America. With an experience us over 30 years, we feel confident we know the wants of the Trade
and can supply customers to the very best advantage. Don’t throw away your money before you give us a
trial.
Look « LOOK AT THIS LIST I
Monogram Rye, Monongahela Murray Hill Club,Clover Club, Old
ZWwA R y e > Nathan XXXX Rye, Yellow Lincoln County 6 yrs. Old, Jas. E.
/WH ‘ Label Whisky. Pe »P« r & Co . R V e - w
, zmj n u- . Old Forrester Rye, Watermelon
Nathan’s Old Cabinet, Gold Med - Gin> Gin p hogphat /
bl, Lewi8 ’ 66 Rye ’ Baker ’ 8 Rye - Old Wind Mill Gin, Imported
Old Family Nectar, Golden Age Gins, Scotch and Irish Whiskey,
Rye. Canadian Club Whisky, Paul Fannin and Pickens County Com
Jones & Co’s Pure Rye, Whiskey, Jas. Hennessey’s Brandy.
SBBmwSkX T _... „ c- „ , Otard, Dupu <fc Co.’b Brandy,
Jno Gibson Sons & Co Rye, G. H, Mumm’s Champaigns.
jjfl® i l||iJ XXXX Acme, Green Briar Linco n Wines, Imported and domestic,
O® I W county Whisky. t Tobaccos, Cigars, <fcc, &c.
V Sole agents for the Celebrated Pabst Milwaukee
| Beer, the best on the market. Largest and
| most select stock of whiskeys, Brandies,
a w 1 Domestic and imported. wines, Ale, Porter,
i\\ J! (J gin, cigars, tobacco, etc. Bottled and draft
M beers, Jos. Schlitz & Budweiser bottled beer.
Corn Whiskey a Specialty.
| i| We make a specialty of the Jug Trade, and all orders by mail
""" ' or telegraph will have our prompt attention. Special in-
Vl |il ducements offered.
B_J BRIANT’S CORNER,
1 Bass’ old stand. ROME, GA
3