The customer may feel that he can not or will not risk more money on his open trades and orders them closed at a loss. If customers do not respond to margin calls the house with the open lines on its book, may close the same for account of those whose margins are about exhausted.

These are extreme cases. The ten per cent. margin call is unusual. In the ordinary condition of trade from 2 cents to 5 cents a bushel protection is considered sufficient by the commission merchant. Naturally there are times when the customer can not be reached quickly or for some reason can not respond quickly enough and the commission house is caught in the gap between the wicked market and the tardy principal.

Many students of business methods are apt to conclude that all transactions on an exchange are surrounded by some unex-plainable mystery. They readily understand that conditions such as drought, frost, excessive rain, etc., affect the year's output of produce, and the whole problem of grain speculation is made up of factors as plain and simple. The speculator watches the crops of the world the year through. If the winter crops go into the ground in good shape it is the first promise of abundance for the coming year. If spring crops are seeded favorably and a large corn acreage is planted the probability of abundance increases. Everything else left out of the question, this farm prosperity starts the speculator selling months ahead. If the opposite is true - adverse seeding seasons, winter killing of wheat and wet weather delay in corn planting - the speculator begins buying on the theory of short supplies and naturally higher prices. Extend this system of observation so that it covers the importing countries of Europe - chiefly England, France and Germany - and the competitors of America in exporting supplies to Europe - chiefly Russia, Danubian countries, India, Australia and Argentina - and you will find the commercial reason for ninety per cent. of the trading done on future conPrices based on Trade News tracts. If importing and exporting lands are promised short crops then very high prices for twelve months ahead are almost certain. If both importing and exporting countries have an over abundance promised, prices are likely to be depressed. The speculator also takes into account the reserves on hand from the previous year. This is important whether these reserve stocks are at home or abroad. Weather conditions are watched every day of the year. Great crop promise may be changed in a night by a hard untimely frost, by hot winds, by excessive rains at harvest or by a widespread drought during the growing period. The perfection of the signal service and the weekly and monthly weather and crop reports furnished all exchanges by the agricultural department at Washington have become more and more an aid to the trade in shaping prices according to natural conditions.

In a general way the Produce Exchange is a benefit to both producer and consumer. The first great benefit is in the accuracy with which the organized trade gathers and makes public valuable information about production the world over. Both producer and consumer can more intelligently prepare for the future - the one by selling quickly or holding on to his year's production as the conditions suggest, the other by making his contracts early for supplies or by holding off for lower prices as his judgment might direct. In the event of poor production at home the speculator is the best friend of the farmer. Long before the grain approaches harvest and perhaps months before the great American corn yield is to be gathered, the traders who watch every feature of crop development have advanced prices to a high level and the man who owns the acres is the first to feel the benefits. He may have less bushels to market but his crop loss is to a large extent made good by the markets made possible only by the Produce Exchange as here outlined.