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of trade and exchanges have not been idle, and by rules and bylaws have controlled these "commercial pirates," to a strict accountability for their acts. Here is a rule that holds both buyer and seller to a money responsibility that they cannot avoid:

"On all sales or purchases of grain for future delivery either party to the contract shall have the right to call an original margin of ten cents per bushel on wheat, rye and barley, and five cents per bushel on corn and oats, and a further margin from time to time to the extent of any variation in the market value from the contract price."

This rule is both restrictive and protective, and forcibly reminds each party entering into future transactions that he must put up his money and leave it beyond his control till he has fulfilled his obligation, as an evidence of his good intent. It also limits the "short seller" to the ability of his pocket to respond to marginal calls, and keep the margin good. Now, when it is remembered that the "short seller" is operating in the face of a world-wide market, it is evident that the moment he gets below legitimate values, he will be overwhelmed with purchasers who are always on the lookout for bargains and who will insist on the money protection under the marginal rule. It is our experience that the application of this rule is a most effective check upon the professional "short seller." Here is another rule which is equally protective, but in another direction, and is given as an evidence of the thoughtful care that surrounds all these future transactions:

"RULE 32.-SEC. 1.-In case any property, contracted for future delivery, be not delivered at maturity of contract, the purchaser shall notify, in writing, the Committee on Grain, of the failure to deliver, and the Committee on Grain shall, at the next call, publicly read such notice, and buy in the grain for account of the party directing the purchase, but no unreasonable price shall be paid, arising from manipulated or fictitious markets, or unusual detention in transportation. Any legitimate loss resulting to the buyer shall be paid by the party in default and the grain so bought shall be a good delivery on defaulted contracts maturing that day."

Under this rule the person who aims to operate a "corner" is quickly defeated, for a manipulated or fictitious price cannot be enforced.

These examples could be largely multiplied, but we infer that enough has been said to show that the possible evils of future sales have been much exaggerated, and that their correction has received, and is continuously receiving, the thoughtful attention of honorable, competent men.

THIRD AND FOURTH OBJECTION.-"That it will injure the producer by restricting the range of his market,” and “will drive to the wall the large army of middlemen" is self-evident and will be treated of, doubtless, by the representatives of the boards of trade near to the sources of production and the homes of those active traders, than we in New York, that I will not occupy your time discussing it, further than to say that the absolute success of a large part of the business enterprises operated on and though our exchange is almost wholly dependent upon the agricultural classes, and the person and firms and elevator associations with whom they directly deal. An injury to them comes rapidly home to us, and from that standpoint of intimate relationship, we give it to you as our deliberate judgment that you could not enact a more unfortunate or aggressive law against our common interests, than the bill under consideration, which we denounce as ill-advised, illogical, and in its spirit, bad.

To destroy by legislation the protective element furnished by sales for future delivery, is simply to drive a large “produce purchasing constituency" from the field, and would prove so disastrous to the agricultural classes that upon the first opportunity after they realized its injurious effect, they would relegate the legislator who advocated and enacted it into political oblivion.

FIFTH OBJECTION.-"It is veneered with moral and philanthropic pretense," etc.

In making this assertion we have simply stated our belief with the view of putting you on your guard, and inducing critical examination into motives, before reaching a conclusion. In seeking a reason for the introduction of this objectionable measure into Congress, we soon found to our satisfaction (that while ignorance of the whole subject and a laudable desire to shield the agriculturist from the "raids" of the "short seller," and the community at large from the efforts of the "corner" monger to give to food products an exaggerated value, had something to do with

it) the more dangerous element was cloaked under the cry "that it was morally wrong to sell what was not actually held in hand." The authors of this foolish platitude, while posing as the "farmer's friend," are nothing short of his worst enemies. Their aim is to deprive him of his "world-wide market" by driving off competition through legislative aid, and thus having corralled him into the narrow limits prescribed in this bill, purchase his products at their own time and price.

Many expedients have heretofore been resorted to, to induce the holding back of farm products from the ordinary channels of commerce (particularly in the Northwest) and failed, and now as a last effort the Congress of the United States is unblushingly asked, under the plea of needed revenue legislation, to tax out of existence a mercantile right that is in every way lawful and never before questioned, and has proved of incalculable benefit to the commercial interests of the whole country.

Permit us to call your attention to the peculiar wording of this bill, and especially to the bracketed words in the second section, reading as follows: "or unless the articles so contracted to be "sold and delivered shall subsequently be actually delivered to "the purchaser for manufacture or consumption.") In other words, a miller can purchase wheat for delivery from anyone who wishes to sell, whether he has it in hand or not, without the tax being operative on either party, provided it is delivered to the said miller for manufacture. A merchant or exporter cannot make such a purchase, because he is neither a manufacturer nor a consumer under this law, therefore the man who wishes to sell wheat for future delivery, without incurring the tax, which he has not actually in hand, has only the one class of customers, and they are the privileged millers.

Now please examine the third section and you will notice that while all the products of the hog are made subject to the proposed tax, the product of wheat (flour) is not mentioned. Here again the miller is made the favored son of legislation. This may be the result of accident and not design, but when taken in connection with the fact that the exports of flour from the United States during 1891 amounted to the value of $64,783,861 and that it was largely dealt in for future delivery, exactly as wheat, corn,

provisions and the other articles mentioned in the bill as subject to tax are, some idea may be formed of the immense advantage the proposed legislation would give to the large milling interest of the Northwest.

For these reasons we think we are justified in characterizing the measure as "hiding a selfish purpose which aims to injure the many for the direct benefit of the few."

Gentlemen, one word more and I have done. The United States is eminently a commercial country, and through her commerce, backed up as it is by agricultural, mineral, mechanical and scientific development, is rapidly becoming the wealthiest of all the countries of the world.

Let me call your attention to this fact, which, while we do not claim it as a result, we have a right to say of it that it is a coincidence. Buying and selling for future delivery (although always more or less operated as now carried on) became the rule with the American merchant about the year 1875. Since that period (because of its protective element) it has been adopted by every European country with whom we trade, and it is found to give every satisfaction. For the seventeen years prior to 1875 the balance of trade against this country aggregated in round numbers $1,200,000,000. Since that period, which is also seventeen years, the balance of trade in favor of this country aggregates in round numbers the enormous sum of $1,825,000,000, of which amount $155,500,000 was for the year 1891. Do not these figures speak volumes for the men who hold the helm of commercial enterprise in the United States, and are not their views on commercial subjects entitled to consideration and respect?

We do not come here as suppliants, but ask for, in the firm hope of receiving, recognition for what we have done, and are doing, in forcing the country to the front. There is no egotism in our claim that the American merchant stands out as the central figure in our national development. He is as necessary to the agriculturist in obtaining the largest money value for his labor, as he is to his government to whom he contributes the major part of the revenues which it receives. He is the patron of the railroad, the steamship, and the wonderful discoveries of science, whose inventions he quickly adapts to the more rapid and economic

requirements of his business. He is the friend, and to a great extent the supporter, of the professions and contributes largely to education, literature and the arts and every other refining influence that creates and furthers social happiness. It is consistent, therefore, that we should ask for, and you grant the fostering care of legislation to commercial enterprise, and that the great mercantile associations throughout the land, who are more directly responsible for the outcome and who are continually alive to the changes that are of necessity always taking place, are the best able to detect injurious influences as they arise and to suggest to legislative bodies the needed remedies.

Respectfully submitted in behalf of the

NEW YORK PRODUCE EXCHANGE,

February 16, 1892.

By A. E. ORR.

The following protest against the passage of either bill has been duly presented to Congress:

"NEW YORK, February 4th, 1892. "To the Hon. The House of Representatives of the United States: "The undersigned, engaged in the banking business in the city of New York, believe that if House of Representatives' Bill, No. 2699 [the Hatch bill], now before your honorable body, taxing purchases and sales of cotton, grain and hog products for future delivery, becomes a law it will do great damage to the business in those articles, and work a serious injury to producers.

"That, as bankers, we consider our risk in advancing on such property, very much less than was the case prior to the inauguration of the present method of doing business.

"We therefore earnestly protest against the passage of this measure, and trust that no legislation in this direction may be approved by your honorable body.

JAS. T. WOODWARD..
J. EDWARD SIMMONS..
WARNER VAN NORDEN.

ARTHUR B. GRAVES..
JAMES STILLMAN-

-President, Hanover National Bank.
President, Fourth National Bank.
-President, National Bank of North
America.

-President, St. Nicholas Bank.

-President, National City Bank.

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