Below is the OCR text representation for this newspapers page.

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