,libr>ies47 ab\t ,,sug> ,,buy+ = ,jobb]s ,h[ y c less5 bus9ess risks by trad+ 9 ,ref9$ ,sug> ,futures by ,b4 ,w4 ,,dy] ,a ,,booklet ,,= ,,jobb]s ,,:o ,,sell ,,sug> ,lamborn ,company ,,sug> ,,headqu>t]s #acb ,,front ,,/reet ,,new ,,york ,copyright1 #aiba ,,lamborn ,,company ,ab\t ,sug> ,buy+ ,jobb]s :o h _h consid]able exp]i5ce 9 ex*ange op]ations w f9d 9 ?is booklet a simplifi$ & non-te*nical description ( activities ) :i* !y may be 9 g5]al famili>4 ,we believe1 h[ev]1 t ! inauguration ( trad+ 9 ref9$ sug> futures on ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc41 ?r[s op5 a new realm ( opportunity4 ,we h attempt$ to outl9e briefly ! *ief advantages to be ga9$ by a jobb]'s use ( ?is new m>ket1 assum+ t ^? :o h 9 ! pa/ dealt 9 raw sug> z a protection = _! ref9$ sug> ne$s w welcome sugge/ions z to ! b5efits to be d]iv$ f trad+ directly 9 ref9$ sug>4 ,"t1 ! ,cr\pi] ( ,bus9ess ,l a cr\pi] at a va/ r\lette table1 ,"t presides ov] ! realm ( bus9ess4 ,"t is ! tap-root ( mo/ bus9ess unc]ta9ties4 ,no "o c tell :at w happ5 a ye>1 a mon?1 a day1 a m9ute f n[--! future may br+ floods & w>s1 pe/il5ce & dr\?2 or x may br+ great crops & fair wea!r1 happ9ess & prosp]ity4 ,z bus9ess has become m & m complicat$1 ! "t elem5t has become l>g] & l>g]4 ,! "t elem5t z we "k x does n exi/ 9 simple b>t]--a man weaves a piece ( clo? & ex*anges x = a bu%el ( corn3 "t is ( no acc\nt 9 ! transaction4 ,a small jobb] locat$ 9 ! same t]ritory z ref9]s buys a small am\nt ( sug> today & di/ributes x to 8 trade ! next--"t is negligible4 ,a l>ge jobb]1 buy+ p]haps = sev]al bran* h\ses1 or locat$ at po9ts :i* necessitate a delay ( two or ?ree weeks 9 transit1 may f9d x necess>y ev5 on a decl9+ m>ket to pur*ase a consid]able am\nt ( sug>1 &1 z a result1 weeks may g by be=e 8 sug> arrives & is sold--"t is vitally important4 ,"t is an elem5t 9 co/s & prices1 because ov] any ext5d$ p]iod ( "t _m ?+s may happ5 to influ5ce co/s & prices4 ,all bus9ess plann+ mu/ deal ) ,"t4 ,to ! un5light5$ bus9ess man1 ,"t is a bugaboo--a gambl] ^: c>ds are /ack$ & aga9/ :om !re is no def5se4 ,su* a man conducts 8 bus9ess f h& to m\?1 9 con/ant fe>4 ,he is a fatali/1 tak+ 8 pr(its & losses z if !y 7 gifts or bl[s ( ,=tune4 ,! enlight5$ man works ) ,"t z an imp>tial1 exact+1 inevitable p[] = 8 own good or ill4 ,he %apes 8 actions & enli/s ! s]vices ( ,"t to prev5t cata/rophe on ! "o h&1 & to en=ce prosp]ity & happ9ess on ! o!r4 ,/orms may come1 b s f> z 8 m9d may control x1 he is ! ma/] ( 8 fate4 ,co/ & ,sell+ ,prices ,t ! elem5t ( ,,"t is important 9 ! jobb]'s bus9ess no "o w d5y4 ,he does n base 8 sell+ price on co/1 b r on ! m>ket price4 ,reg>dless ( 8 co/1 he mu/ sell to meet competition4 ,x is equally obvi\s t ! l>g] 8 bus9ess1 or ! great] 8 di/ance f ! s\rce ( supplies1 ! m important "p ,,"t plays 9 bo? 8 co/ & sell+ prices4 ,all jobb]s1 l>ge or small1 are oblig$ to assume great] risks 7ev5 proportionately7 & ex]cise great] c>e1 ?an1 = in/ance1 retail]s buy+ 9 small quantities4 ,a jobb]'s bus9ess may enl>ge by a p]fectly natural process ( expansion1 b 8 pur*as+ risks increase 9 great] ratio ?an 8 bus9ess exp&s4 ,simil>ly1 "u abnormal conditions1 jobb]s locat$ at po9ts requir+ sev]al weeks 9 transit prior to deliv]y1 mu/ assume great] risks ?an ^? locat$ at ! s\rce ( supply4 ,9 ! ev5t ( s]i\s delays 9 deliv]ies or 9 %ipm5ts1 ev5 buy]s locat$ at %ipp+ po9ts are confront$ ) ?is problem1 & ! difficulties ( ^? locat$ at a di/ance are increas$ immeasurably4 ,^! difficulties t5d to acc5tuate ! importance ( ,,"t 9 mod]n bus9ess4 ,z bus9ess gr[s1 in/ead ( decreas+--risks increase4 ,any ma*9]y :i* might op]ate to elim9ate or r$uce ?is unc]ta9ty or speculative elem5t 9 a jobb]'s bus9ess1 w\ld1 we believe1 be welcom$4 ,ex*anges provide j su* ma*9]y4 ,o!r commodities1 su* z raw sug>1 :eat1 cotton1 pork & c(fee h _h ?is ma*9]y = ye>s & x 0 provid$ = ref9$ sug> on ,may #b1 #aiba1 :5 trad+ 9 ref9$ sug> futures 0 inaugurat$ on ! floor ( ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc4 ,:]e ,buy]s & ,sell]s ( ,sug> ,meet ,! ,sug> ,ex*ange is a m>ket place1 :]e buy]s & sell]s ( sug> or _! repres5tatives meet to trade4 ,! ,ex*ange provides a conc5tration po9t1 :]e1 "u any m>ket conditions1 sug> may be b\ght or sold at a price4 ,:at t price is1 is det]m9$ by h[ mu* sug> is = sale & h[ _m p want x4 ,if ! supply is l>ge & buy]s are few1 ! price w be l[4 ,if sug> is sc>ce & buy]s are num]\s1 ! price w be high4 ,or1 to put x 9 ano!r way1 :5 !re are m sell]s ?an buy]s1 ! m>ket decl9es2 :5 m buy]s ?an sell]s1 x advances4 ,if ! supply & ! numb] ( buy]s are normally well balanc$1 ! price w be det]m9$ l>gely by ! co/ ( production & transportation4 ,if ev5ts or circum/ances op]ate to increase or curtail ei!r ! sug> supply or ! numb] ( buy]s1 & su* ev5ts or circum/ances foll[ "o aft] ! o!r alt]nately1 ! price w fluctuate4 ,^! are ! results ( ! op]ation ( well-kn[n economic laws4 ,9 ! case ( all commodities :i* _c be b\ght or sold at a common m>ket place 7or ex*ange71 price fluctuations are usually wide & frequ5t1 because no l>ge gr\p ev] has common k ( supply1 dem& & o!r factors t gov]n prices--pur*ases & sales are made direct betwe5 individuals1 & k ( ! am\nt ask$ or paid is re/rict$ to a limit$ few4 ,?r\gh ! common m>ket place provid$ by an ex*ange1 on ! o!r h&1 m>ket conditions & prices become common k almo/ in/antly ov] ! entire c\ntry4 ,?is t5ds t[>d /abilization--a fact :i*1 alone1 helps to elim9ate risks1 & enables m]*ants to buy at l[] prices ?an if =c$ to deal direct ) "o ano!r4 ,sell]s d n h to take su* long *ances & c ?us af=d to sell on a small] m>g9 ( pr(it4 ,competition is /imulat$ & fre$ f _m ( its complications & unc]ta9ties to ! advantage ( ! sell]1 ! buy] & ! public4 ,x is n[ admitt$ t1 _h ex*ange trad+ 9 ref9$ sug> exi/$ 9 #aibj1 a g5]al use ( ! ex*ange by all bran*es ( ! trade might h prev5t$1 to a consid]able ext5t1 ! abnormal advance 9 sug> prices ( t p]iod1 ) ! h>d%ip & mis=tune t att5d$4 ,! fact t an ex*ange always provides a buy] & a sell]1 at a price1 t5ds t[>d keep+ bus9ess fluid4 ,jobb]s are able to protect _! future requirem5ts4 ,produc]s are sure ( a m>ket = _! crops4 ,crop f9anc+ is made easi] because bank]s are m will+ to loan on crops sold 9 advance--an op]ation made possible by an ex*ange4 ,ex*anges op]ate to take ! gamble out ( bus9ess4 ,!y help to put & ma9ta9 bus9ess on a s\nd basis4 ,t "s p :o h no real int]e/ 9 ! commodity use ! ex*ange speculatively does n alt] ?is fact4 ,9 provid+ ma*9]y by :i* speculative risks incid5t to a jobb]'s bus9ess may be %ift$ f ! jobb] to ^? :o make a bus9ess ( assum+ su* risks1 ex*anges help to /abilize 8 bus9ess & to remove a l>ge "p ( ! de/ructive unc]ta9ty ) :i* he w\ld o!rwise h to cont5d4 ,ex*anges are ! creations ( mod]n economic developm5t1 design$ & op]at$ = ! b5efit ( ! comm]ce1 indu/ry & p ( ! civiliz$ _w4 ,!re=e we welcome trad+ 9 ref9$ sug> futures & ! opportunity to (f] y ! advantages t may be d]iv$ f a cons]vative1 intellig5t use ( its s]vices4 ,! ,ex*ange provides c]ta9 quality /&>ds & o!r regulations to safegu>d y\r int]e/s4 ,b y\r real assurance ( protection lies 9 ! "* & reliability ( y\r brok]4 ,if y\r brok] is n /rong f9ancially y d n h back ( y\r contract ! responsibility t y might o!rwise h4 ,if y _h a favorable contract ) a brok] :o became insolv5t1 y w\ld h no means ( =c+ ! fulfillm5t ( ! contract1 & no way ( secur+ ! pr(it :i* 0 due y4 ,! ?+ to d1 ( c\rse1 is to *oose a brok] :o is s /rong f9ancially t y incur no dang] 9 ?is respect :atsoev]4 ,use ! ,ex*ange :5 ! ,m>ket is ,favorably out ( l9e ,9 consid]+ ! illu/rative examples 9 ?is booklet1 x %\ld be borne 9 m9d t ! measure ( protection af=d$ is relative & n absolute4 ,! !ory ( ex*ange op]ations is t ! ex*ange m>ket w move relatively ! same z ! m>ket = ! actual commodity4 ,?is _c be /rictly true1 al?\gh ! ex*ange m>ket mu/ ( necessity foll[ v closely ! actual m>ket1 because all ! sug> mu/1 9 ! f9al analysis1 come f ! actual m>ket4 ,if ?r[n out ( p>ity ) ! actual m>ket1 ! ex*ange m>ket is b\nd to come back ev5tually4 ,9 ! ex*ange m>ket anyone c buy & anyone c sell4 ,! m>ket is subject to _m outside influ5ces1 & ! fluctuations reflect & acc5tuate ! v>y+ %ades ( m>ket op9ions ( _m individuals4 ,b 9 ! m>ket = ! actual commodity1 ! quotations are made by comp>atively few m51 :i* means t !re w be less fluctuation4 ,!re=e1 x is obvi\s t al?\gh ! ex*ange m>ket %\ld be on a p>ity ) ! actual m>ket1 ! unequal fluctuations ( ! two m>kets w be con/antly ?r[+ !m out ( p>ity or out ( l9e4 ,!re are times :5 ! m>ket w be s out ( l9e t ! buy+ ( futures %\ld result pr(itably4 ,at o!r times1 ) conditions rev]s$1 sell+ ( futures seems obvi\sly advisable4 ,we d n claim t jobb]s c protect sug> pur*ases ) absolute & exact precision4 ,on ! basis ( long ex*ange exp]i5ce1 we d believe1 h[ev]1 t by a discreet use ( ! ,ex*ange1 & by us+ ! m>ket :5 quotations are favorably out ( l9e1 jobb]s c d s to _! decid$ advantage4 ,sell+ ( ,futures--,h$g+ ,z ! ^w itself indicates1 a h$ge on ! ,ex*ange is a protection4 ,y h$ge by buy+ or own+ actual sug>1 & sell+ %ort 9 ! same am\nt4 ,y sell sug> futures al?\gh y d n own any4 ,y actually contract to deliv] an am\nt ( sug> dur+ a specifi$ future mon? at a specifi$ price4 ,ev5tually1 y mu/ ei!r buy & deliv] actual sug> to c>ry out ?is contract1 or y mu/ buy ano!r contract = futures to cancel y\r %ort sale4 ,?is is kn[n z a cov]+ op]ation1 & ! cancell+ ( "o by ! o!r takes place automatically ?r\gh ! *annels ( ! ,ex*ange4 ,f ! jobb]'s po9t ( view1 ! op]ation ( h$g+ has ?ree out/&+ purposes4 ,he may h$ge3 #a4 ,to elim9ate ! probability ( speculative pr(it or loss1 due to m>ket fluctuations4 #b4 ,to protect a pr(it on a favorable pur*ase ( actual sug>4 #c4 ,to e/abli% & limit a loss on an unfavorable pur*ase ( actual sug>4 ,,h$g+ to protect a normal jobb+ pr(it by elim9at+ ! probability ( a speculative loss or ga94 ,?is op]ation is p>ticul>ly useful to jobb]s ) :om conditions are su* t !y desire to be assur$ t _! co/ w be at ab\t ! m>ket price at ! "t !y dispose ( _! sug>1 reg>dless ( :e!r ! m>ket be high] or l[]4 ,al?\gh !re are times :5 any jobb]1 no matt] :]e locat$1 w f9d ?is a useful transaction1 x is obvi\s t _m buy]s w n wi% to use ! m>ket 9 ?is way unless !y feel x w decl9e4 ,b x is p>ticul>ly ( advantage to a jobb] locat$ 9 m>kets necessitat+ a delay ( f "o day to sev]al weeks 9 transit4 ,= in/ance1 on a c]ta9 day 9 ,april1 two jobb]s b\ght _! usual quantity ( sug>4 ,"o 0 locat$ 9 ,syracuse1 ! o!r 9 ,new ,york4 ,two days foll[+ ! pur*ase1 ! m>ket broke half a c5t p] p\nd4 ,9 view ( ! fact t 8 sug>s 7 /ill 9 transit :5 ! m>ket decl9$1 ! ,syracuse buy] 0 oblig$ to su/a9 ?is entire loss1 9 ord] to meet competition4 ,on ! o!r h&1 because he receiv$ & di/ribut$ ! sug> be=e ! m>ket broke1 ! ,new ,york jobb] 0 able n only to avoid a loss1 b make 8 regul> pr(it4 ,,*>t #a ---------------------------------------- ------------------------------------ ,,h$g+ to protect a normal jobb+ pr(it by elim9at+ ! probability ( a speculative loss or ga9 ---------------------------------------- --------------------------------- ,initial ,transactions ,subsequ5t ,transactions ,result ---------------------------------------- ------------------------------ ,liquidat+ ,condition ,price ,result ,figure ,9 ea* ! h$ge ( m>ket y ( y\r case 7cov]+7 :5 y w\ld h$ge sug> ! cov] pay co/ co/ same y\r h$ge 9 ?is ?is cov] way way -+ ---------------------------------------- ------------------------------ ,y buy ,:5 y ,pr(it ,actual co/ actual sug> sell y\r ,x has decl9$ less pr(it at #f4jj sug> 7or to #d4jj #d4jj #b4jj #f-bd :5 x is deliv]$7 y buy ,y get ! same y\r am\nt ( sug> futures at at ! ! m>ket m>ket price1 price :e!r at ! high] or "t l[]4 :5 y sell x 7or :5 ,at ! same ,actual co/y\r "t y ,x has advanc$ ,loss plus loss deliv]y h$ge by to #h4jj #h4jj #b4jj #fbh is made47 sell+ ! same am\nt ,no ( futures ,x /&s at pr(it1,actual at #f4jj #f4jj #f4jj no lossco/ ---------------------------------------- ------------------------------ ,naturally ! great] ! am\nt ( sug> any "o conc]n may h 9 transit ! great] ! ne$ = protection4 ,we call ?is k9d ( transaction p>ticul>ly to ! att5tion ( buy]s hav+ bran* h\ses :o f9d !mselves oblig$ to make relatively l>ge pur*ases to supply _! trade 9 ! face ( a m>ket 9 :i* !y h no confid5ce4 ,^! disadvantages at :i* out-(-t[n buy]s are sometimes plac$ might be ov]come by us+ ! ,ex*ange4 ,on ! o!r h&1 :5 ref9]s are badly beh9d on deliv]ies1 ev5 buy]s locat$ at ! s\rce ( supply w f9d !mselves fac+ a simil> problem ! solution ( :i* may be f\nd 9 a use ( ! ,ex*ange4 ,x is !re=e evid5t t ! sell+ ( futures may be a transaction ! sole purpose ( :i* is to elim9ate speculation f a jobb]'s bus9ess4 ,reg>dless ( h[ c>eful a buy] may be1 !re is an elem5t ( speculation 9 ea* pur*ase ( actual sug>4 ,if ! price goes up1 !re is a speculative ga9--! sug> is wor? m4 ,b if ! price goes d[n1 ! buy] su/a9s a speculative loss4 ,! measure ( protection af=d$ by ! ,ex*ange w appeal to ^? jobb]s :o wi% to r$uce ! speculative elem5t 9 _! bus9ess4 ,9 ! example imm$iately foll[+1 z 9 all o!rs1 we h n tak5 into consid]ation ! diff]5ce betwe5 ! ,ex*ange quotations & ! ,seabo>d ,ref9]s' quotations1 :i* is expla9$ on page #ch4 ,?is w\ld simply inject an unnecess>y complication1 & w\ld be ( no p>ticul> advantage = purposes ( illu/ration4 ,suppose y %\ld buy ?r\gh y\r brok] f a ref9]1 = prompt %ipm5t1 an am\nt ( actual sug> at #f4jj1 :i* y plan to sell )9 a %ort "t aft] its receipt4 ,in/ead ( worry+ ab\t subsequ5t sug> price fluctuations1 y simultane\sly h$ge ?is pur*ase by sell+ futures 9 ! same am\nt on ! ,ex*ange4 ,! price at :i* y buy actual sug> & ! price at :i* y sell futures %\ld be relatively ! same1 s9ce ,ex*ange prices g5]ally reflect ref9]s' prices4 ,y %\ld be able to figure ! co/ ( y\r sug> at ab\t ! m>ket price at ! "t x is receiv$ or sold4 7,see ,*>t #a47 ,if ! price ( sug> %\ld g d[n to #d4jj at ab\t ! "t :5 y sell x1 y\r actual sug>1 = :i* y contract$ to pay #f4jj1 w\ld be wor? only #d4jj2 b y w\ld !n buy to cov] y\r futures sale1 mak+ #b4jj on ?is transaction1 :i*1 subtract$ f ! price y paid 7#f4jj71 br+s ! co/ d[n to ! m>ket price ( #d4jj4 ,9 o!r words1 y h accompli%$ y\r purpose ( be+ able to figure y\r sug> co/ at ! m>ket price at ! "t :5 y receiv$ x 7or at ! "t y sell x74 ,t is1 al?\gh e p\nd ( actual sug> 0 sold at a loss1 ?is loss 0 balanc$ by ! pr(it f y\r h$ge4 ,if1 on ! o!r h&1 ! m>ket %\ld advance to #h4jj aft] y\r orig9al pur*ase & h$ge at #f4jj1 ! value ( y\r actual sug> w\ld be increas$ by #b4jj4 ,y w\ld !n buy futures at #h4jj to cov] y\r %ort sale at #f4jj1 nett+ a loss !reby ( #b4jj4 ,?is loss w\ld be add$ to y\r orig9al co/ ( #f4jj1 mak+ y\r actual sug> co/ #h4jj1 :i* is ! m>ket price at ! "t4 ,_h y omitt$ ! h$ge1 y\r sug> w\ld h co/ y only #f4jj1 b1 9 ?is example we are assum+ t y w\ld sell only :5 y 7 will+ to figure y\r sug> co/ at ! m>ket price4 ,?is y h accompli%$ by =ego+ ! speculative pr(it y might h made 9 favor ( y\r normal jobb+ pr(it4 ,if ! m>ket %\ld rema9 relatively /able y w\ld buy to cov] y\r h$ge at approximately ! same price z y sold =1 y\r ga9 or loss be+ practically no?+4 ,9 o!r words1 y w\ld obta9 sug> at ! m>ket price1 :i* is ! purpose 9 ?is k9d ( a h$ge4 ,,h$g+ to protect a ga9 on a favorable pur*ase ( actual sug>4 ,all sug> buy]s h _h ! exp]i5ce ( buy+ actual sug>1 only to see x advance or decl9e be=e !y h dispos$ ( x4 ,h[ to protect ! ga91 or m9imize ! loss1 is describ$ 9 ! two h$g+ positions :i* we n[ discuss4 ,suppose y h b\ght sug>1 h n h$g$ aga9/ x1 & h se5 x advance4 ,f9ally y h said1 ,i ?9k sug> is ab\t z high z x is go+4 ,i am go+ to sell aga9/ t to protect t pr(it4 ,on ! o!r h&1 ! rev]se might be ! case4 ,y might f9d ! m>ket go+ d[n1 & say1 ,! m>ket is go+ l[]4 ,i want to h$ge aga9/ t1 & limit my loss to a def9ite am\nt4 ,,*>t #b ---------------------------------------- ------------------------------------ ,,h$g+ to protect a ga9 on a favorable pur*ase ( actual sug> ---------------------------------------- --------------------------------- ,initial ,transactions ,subsequ5t ,transactions ,result ---------------------------------------- ------------------------------ ,h$ge ,condition ,price y ,result ( ,figure ,9 ( m>ket pay = h$ge & actual ea* :5 y futures cov]+ sug> case cov] to cov] op]ation co/ ! y\r h$ge h$ge ?is way same ---------------------------------------- ------------------------------- ,y buy actual ,price paid sug> at #f4jj1 = actual b be=e y ,x has sug> less,y\r h receiv$ decl9$ h$g+ sug> x 7or be=e to ,a pr(it pr(it co/ y sell x7 #f4jj #f4jj ( #b4jj #f-bd4jj is ! price #b4jj advances to "u #h4jj ,price paid! = actualm>ket ,y n[ h ,y sell,x has sug> plus y\r sug> at futures advanc$ h$g+ #b4jj "u !at to ,a loss loss m>ket #h4jj #aj4jj #aj4jj ( #b4jj #fbh4jj ,y feel t ,x /&s ,no pr(it1 ! m>ket may at #h4jj #h4jj no loss #f4jj rec$e & elim9ate ?is ga91 s-- ---------------------------------------- ------------------------------ ,9 bo? ( ^! cases1 ! op]ation is relative4 ,if a man has a pr(it1 let u say #b a p\nd1 & he h$ges1 he ma9ta9s 8 pr(it ( #b a p\nd z comp>$ ) ! m>ket at ! "t ( deliv]y1 or at ! "t :5 he expects to sell ?is sug>1 reg>dless ( :e!r ! m>ket is high] or l[]4 ,9 ! same way1 conv]sely1 if he has a loss on 8 sug> ( #b a p\nd1 by h$g+ he c limit t loss to #b a p\nd1 ev5 ?\gh ! m>ket goes /ill l[]4 ,9 o!r words1 8 sug> co/ at ! "t ( deliv]y1 or at ! "t :5 he expects to sell ! sug>1 w be ab\t #b above ! m>ket price1 :e!r ! m>ket is high] or l[]4 ,we %all assume t y h b\ght f a ref9] ?r\gh y\r brok] a supply ( actual sug> at #f4jj4 ,:ile y\r sug> is 9 transit or be=e x has be5 %ipp$ by ref9]s1 ! m>ket advances to #h4jj1 at :i* po9t x app>5tly is /eady4 ,y n[ h a !oretical ga9 ( #b4jj--t is1 if y 7 to sell y\r sug> at once1 y w\ld h an actual pr(it ( #b4jj2 b y d n sell because y\r sug> is 9 transit or y ne$ x = y\r trade4 ,h[ev]1 y d want to pres]ve & protect ?is favorable position ( hav+ y\r sug> #b4jj bel[ ! m>ket at ! "t y want to sell x4 ,s y sell ! same quantity ( futures on ! ,ex*ange at #h4jj4 ,?ree ?+s may occur--! m>ket may decl9e1 or x may cont9ue to advance1 or x may rema9 /eady4 ,y h accompli%$ y\r purpose 9 any case 7see ,*>t #b74 ,by ! "t y sell y\r sug> 7or at ! "t ( its deliv]y7 x becomes necess>y = y to cov] y\r h$ge & if ! m>ket has decl9$ f #h4jj 7at :i* po9t y h$g$7 & /&s at #f4jj aga91 y\r h$g+ op]ations consid]$ alone w\ld net y an actual pr(it ( #b4jj4 ,y\r orig9al sug> co/ 0 #f4jj4 ,y\r pr(it on y\r h$ge 0 #b4jj1 s t y w\ld figure y\r actual sug> co/ at #d4jj4 ,y w\ld h accompli%$ y\r purpose ( gett+ y\r sug> #b4jj "u ! m>ket at ! "t ( sell+ x 7or at ! "t ( its deliv]y74 ,t is1 y\r delay 9 sell+ y\r sug> has co/ y practically no?+1 ev5 ?\gh ! m>ket has decl9$4 ,if ! m>ket has advanc$ to #aj4jj1 :5 x becomes necess>y = y to cov] y\r h$ge 7at ! "t ( sell+ y\r sug> or :5 x is deliv]$7 y\r h$g+ op]ations consid]$ alone w\ld net y a loss ( #b4jj4 ,y w\ld buy 9 futures at #aj4jj1 :i* y sold at #h4jj4 ,y\r orig9al sug> co/ 0 #f4jj1 y\r loss on y\r h$ge 0 #b4jj1 s t y w\ld figure y\r actual sug> co/ at #h4jj4 ,b ! m>ket at t "t 0 #aj4jj1 s t y h accompli%$ y\r purpose ( gett+ y\r sug> #b4jj "u ! m>ket at ! "t ( sell+ x 7or at ! "t ( deliv]y74 ,9 o!r words1 y w\ld make ! same pr(it z ?\gh y _h re-sold y\r sug> to second-h&s orig9ally1 in/ead ( h$g+1 b _h y foll[$ ?is c\rse1 y might n h _h sug> 9 /ock = y\r regul> trade4 ,on ! o!r h&1 :5 x becomes necess>y = y to cov] y\r h$ge1 if ! m>ket has rema9$ /eady & is aga9 at #h4jj1 ! two futures transactions cancel !mselves )\t pr(it or loss4 ,y\r orig9al co/ ( #f4jj1 !re=e1 /&s z y\r actual sug> co/ at ! "t ( sell+ 7or at ! "t ( deliv]y74 ,?is is #b4jj "u ! m>ket & y h accompli%$ y\r purpose4 ,,h$g+ to e/abli% & limit a loss on an unfavorable pur*ase4 ,?is op]ation is id5tical 9 its work+ ) ! previ\s example1 except t y h a diff]5t end 9 view4 ,,*>t #c ---------------------------------------- ---------------------------------- ,,h$g+ to e/abli% & limit a loss on an unfavorable pur*ase ---------------------------------------- ----------------------------- ,initial ,transactions ,subsequ5t ,transactions ,result ---------------------------------------- ----------------------------- ,h$ge ,condition ( ,price ,result ,figure ,9 m>ket :5 y ( actual ea* y cov] pay h$ge sug> case y\r h$ge = & co/ ! futures cov]+ ?is same to op]ation way cov] h$ge ---------------------------------------- ----------------------------- ,y buy ,price paid actual sug> = actual at #f4jj b sug> less be=e y h$g+ h ,x has decl9$ ,a pr(it pr(it receiv$ x to #d4jj #d4jj ( #a4jj #f-ae4jj 7or be=e y sell x7 ! price decl9es to #e4jj ,y n[ h ,price paid,y\r y\r sug> = actualsug> at #a4jj sug> plusco/ is above ! ,y sell h$g+ #a4jj m>ket futures ,x has advanc$ ,a loss ( loss above at #e4jj to #f4jj #f4jj #a4jj #fag4jj ! m>ket ,y feel ,x /&s at ,no pr(it1 t ! #e4jj #e4jj no loss #f4jj m>ket may decl9e /ill fur!r & increase ?is loss1 s-- ---------------------------------------- ----------------------------- ,let u say t y pur*ase actual sug> at #f4jj4 ,if ! m>ket decl9es to #e4jj aft] y\r orig9al pur*ase at #f4jj1 y h a loss ( #a4jj1 9 ! value ( y\r sug>4 ,fac+ ! possibility ( a fur!r decl9e & desir+ to limit ?is loss to #a4jj1 y h$ge by sell+ futures4 ,9 ?is case y %\ld limit y\r loss to #a4jj j z effectively z 9 ! previ\s example y pres]v$ y\r ga9 ( #b4jj1 & by ! same c\rse ( proc$ure4 7,see ,*>t #c47 ,by ! "t x is necess>y = y to cov] y\r h$ge by buy+ an equival5t am\nt ( futures1 ! m>ket may h decl9$ /ill fur!r1 say to #d4jj4 ,y sold at #e4jj1 y b\ght at #d4jj1 pr(it on t op]ation1 #a4jj4 ,subtract ?is pr(it f y\r orig9al co/ 7#f4jj7 & figure y\r sug> co/ at #e4jj4 ,9 o!r words1 al?\gh ! m>ket w5t /ill l[]1 y succe$$ 9 limit+ y\r loss to #a4jj1 z comp>$ ) ! m>ket price at ! "t ( ! deliv]y ( y\r sug> 7or at ! "t y sell x74 ,_h y omitt$ ! h$ge1 y\r actual sug> co/ w\ld h be5 #f4jj1 :i* 0 #b4jj above ! m>ket4 ,aft] y\r orig9al pur*ase at #f4jj1 & m>ket decl9e to #e4jj 7at :i* po9t y h$g$71 ! m>ket might advance aga9 to #f4jj1 or rema9 /eady at #e4jj1 b ! op]ation is no diff]5t f t previ\sly describ$1 & y 9 ea* case atta9 ! same result4 ,buy+ ( ,sug> ,futures ,ref9]s d n make a practice ( tak+ ord]s m ?an ?irty days 9 advance ( actual deliv]y--b !re are obvi\sly times :5 x is advisable to cov] "o's requirem5ts = a long] p]iod4 ,a jobb] may d ?is on ! ,ex*ange :]e he w always f9d a sell] at "s price = ! quantity he desires4 ,?is privilege is p>ticul>ly valuable to3 #a4 ,jobb]s :o believe t ! m>ket price ( ,sug> is go+ high] & :o desire to cov] _! future requirem5ts beyond ! delay p]iod :i* ref9]s w ext5d4 #b4 ,jobb]s1 :o desire to sell to manufactur+ cu/om]s = future deliv]y at a fix$ price s t ^! manufactur+ cu/om]s may det]m9e _! sell+ price1 may d s by ! use ( ! ,ex*ange4 #a4 ,buy+ ( sug> futures--,bas$ ^u ! expectation ( high] prices ,no d\bt _m jobb]s w recall occasions :5 anticipat+ _! requirem5ts seem$ obvi\sly advisable1 p]haps almo/ imp]ative4 ,su* a jobb] w\ld be "o :o believ$ 9 ! m>ket4 ,8 action w\ld be bas$ on 8 op9ion ( ! m>ket4 ,he might note 9 ,janu>y1 let u say1 t ! price ( ,may or ,july futures is favorable4 ,he w\ld l to get 8 ,may or ,july sug> at ab\t t figure4 ,y y\rself probably c recollect _m times 9 ! pa/1 :5 ! g5]al m>ket 0 9 su* a /rong position fundam5tally t anticipat+ y\r requirem5ts seem$ advisable4 ,y decid$ to buy a consid]able quantity only to f9d t ref9]s w\ld n sell y to ! ext5t t y wi%$ to pur*ase4 ,:5 cov]+ y\r future requirem5ts on ! ,ex*ange1 y c buy any quantity desir$4 ,consid] also on h[ _m occasions :5 y want$ & ne$$ a def9ite future mon? ( %ipm5t1 y h be5 told t z soon z possible 0 ! only acceptable basis4 ,or h y _h ! exp]i5ce ( plac+ an ord] & wait+ tw5ty-f\r or ?irty-six h\rs )\t kn[+ if ! ref9] w\ld accept y\r ord]8 ,mean:ile ! m>ket might h advanc$1 &1 if y\r ord] _h be5 decl9$1 y w\ld h _h to pay an ev5 high] price = y\r sug>4 ,! facilities ( ! ex*ange (f] opportunities = protect+ requirem5ts quickly & )\t ! unc]ta9ty & delay sometimes enc\nt]$ f ref9]s4 ,a jobb] mu/ anticipate ! m>ket 9 ord] to take full advantage ( x1 & 9 ?is connection x %\ld be borne 9 m9d t ! ,sug> ,ex*ange1 z 9 ! case ( practically all ex*anges1 usually anticipates ei!r favorable or unfavorable developm5ts 9 ! m>ket = ! actual commodity4 ,consequ5tly1 prompt action is necess>y :5 ei!r a high] or l[] m>ket is expect$1 z ! ,ex*ange m>ket w usually be ! fir/ to reflect *ang+ conditions4 ,suppose y feel t ! price ( sug> is l[ & probably go+ high]4 ,y try to anticipate y\r requirem5ts = "s "t to come1 b f9d t ref9]s w n sell = m ?an ?irty days4 ,y c g on ! ,ex*ange & buy futures 9 ! quantity & mon? desir$4 ,assume !n1 t y pay #f4jj = y\r futures4 ,n[1 :atev] happ5s 9 ! sug> m>ket1 y "k y c get ! quantity ( sug> desir$ at ab\t #f4jj 7see ,*>t #d74 ,! m>ket w advance1 decl9e or hold /eady4 ,say ! m>ket advances4 ,:5 x seems advisable to close out y\r ,ex*ange contract & buy actual sug>1 ! price may h gone up to #h4jj4 ,y w !n sell y\r futures at ab\t #h4jj1 g into ! m>ket & buy actual sug> at ! same price1 assum+1 ( c\rse1 t ! actual m>ket has advanc$ 9 relative proportion--:i* is likely4 ,al?\gh actual sug> has co/ y #b4jj m ?an y _h figur$1 y h made #b4jj on y\r futures4 ,pr(it & loss cancel ea* o!r4 ,y\r sug> co/ is #f4jj4 ,on ! o!r h&1 suppose ! m>ket decl9es aft] y h b\ght futures at #f4jj1 & goes d[n to #d4jj1 :5 x seems advisable to close out y\r ,ex*ange contract4 ,y sell y\r futures at #d4jj1 a loss ( #b4jj4 ,b y w also buy y\r actual sug> at #d4jj1 :i* is #b4jj l[] ?an y _h plann$4 ,y\r actual sug> co/ 0 !re=e #f4jj1 :i* is ! price y _h figur$ 0 favorable4 ,if ! price /ill is at #f4jj :5 y desire to liquidate1 y w\ld sell y\r futures & buy y\r actual sug> at ab\t ! same price4 ,?us y h nei!r ga9$ nor lo/1 b y h be5 sure ( gett+ sug> at #f4jj1 :i* is ! price y felt 0 l[4 ,! "t to buy actual sug> is g5]ally :5 ! m>ket becomes /rong & an advance 9 ! price ( ! actual commodity seems imm95t2 b ! "t to buy sug> futures is be=e ! /r5g? develops4 ,! future m>ket inv>iably disc\nts decl9es & anticipates advances4 #b4 ,buy+ ( ,sug> ,futures to protect pr(its on advance sales to cu/om]s ,:ile x may n be an e/abli%$ cu/om1 we "k num]\s in/ances :]e jobb]s h sold sug>s 9 small quantities = future deliv]y4 ,! examples to :i* we ref] are small manufactur]s buy+ sug> locally1 :o1 :5 ! m>ket appe>s 9 a /rong condition desire to be assur$ ( _! regul> supply ( sug> at a specifi$ price4 ,"u su* conditions we h kn[n jobb]s to sell !m sug> = deliv]y ov] sev]al mon?s4 ,if at any "t y are plac$ 9 a simil> position1 & desire to take c>e ( y\r cu/om]s 9 ?is mann]1 )\t incurr+ too great a risk1 ! ,ex*ange (f]s exceptional opportunities = protection1 z1 ( c\rse1 y w\ld be able to buy sug> = deliv]y 9 any mon? y desire1 ev5 z f> 9 advance z "o ye>4 ,x is cle> t if y sell at a specifi$ price = deliv]y at a c]ta9 "t1 y\r only protection is y\r belief t y'll be able to buy sug> *eaply en\gh to make a pr(it4 ,,*>t #d ---------------------------------------- ------------------------------------ ,,buy+ ,,sug> ,,futures #a4 ,bas$ on ! expectation ( high] prices4 #b4 ,to e/abli% co/s1 pre-det]m9e sell+ prices & protect pr(its on advance sales4 ---------------------------------------- ------------------------------------ ,initial ,transactions ,subsequ5t ,transactions ,sug> ,co/ ,result ---------------------------------------- ----------------------------- ,condition ,price ,result ,price ,figure x ,9 ( m>ket y ( y ?is way ea* :5 y w\ld sell+ pay case buy actual obta9 y\r = ! sug> = y\rfuturesactual same futures sug> ---------------------------------------- ----------------------------- ,price paid ,y\r = actual sug> ,a sug> less co/ is ,y buy ,sug>,:5 ,if x has pr(it h$g+ #f4jj ,futures at y advanc$ ( pr(it z pre- #f4jj to cov]buy to #h4jj #h4jj #b4jj #h4jj #h-bf det]- future actual m9$ requirem5ts2sug>1 ,a ,price paid fix y\r y ,if x has loss = actual price & sell decl9$ ( sug> plus take ord]s y\r to h$g+ loss on ! basis fu- #d4jj #d4jj #b4jj #d4jj #dbf ( #f sug> tures ,if x is ,no /ill at pr(it1 #f4jj #f4jj no loss #f4jj #f4jj ---------------------------------------- ----------------------------- ,x is equally cle> t if a manufactur] names a price & takes advance ord]s )\t pre-det]m9+ 8 sug> co/1 8 pr(it is a matt] ( guesswork4 ,he is n go+ to "k ! co/ ( 8 manufactur$ product until he buys 8 sug>4 ,assume t y h contract$ to deliv] sug> to a manufactur] or to any cu/om] at a def9ite date & a specifi$ price1 )\t buy+ sug> to cov] y\r requirem5ts4 ,if ! price ( sug> is favorable :5 y deliv] x1 y are =tunate & net a pr(it4 ,b sug> may h advanc$ to a po9t :]e y are =c$ to pay su* a price t y\r pr(it is l[] ?an x %\ld be4 ,9 fact !re may n be any pr(it at all4 ,by cons]vative1 wise use ( ! ,sug> ,ex*ange1 mo/ ( ?is risk & unc]ta9ty c be elim9at$ & bo? y & y\r cu/om] c g ahead ) y\r plans ) y\r prices det]m9$ ?r\gh a kn[n sug> co/4 ,suppose t 9 ,m>* or ,april1 = example1 ! m>ket appe>s /rong & y f9d t "s ( y\r manufactur+ cu/om]s are anxi\s to be assur$ ( an adequate supply ( sug> at a def9ite price4 ,9 su* a case1 if ^! advance ord]s call$ = a suffici5t volume1 & provid$ ,ex*ange prices 7 favorable1 y c\ld take c>e ( y\r trade's future requirem5ts at a fix$ price1 )\t y\rself tak+ a speculative position4 ,we also believe t buy]s mak+ ^! arrangem5ts ) any ( _! trade w\ld be ju/ifi$ 9 reque/+ ! same proportionate m>g9al protection :i* x is necess>y = jobb]s !mselves to give ! sell] on ! ,ex*ange4 ,!re w no d\bt be _m occasions :5 x w\ld be wor? :ile to solicit ord]s on ?is basis4 ,) y\r own sug> co/ fix$ by ! use ( ! ,ex*ange1 y c\ld take prop] c>e ( ^! buy]s )\t worry+ ab\t subsequ5t fluctuations ( ! m>ket1 z y w\ld "k t y\r sug> co/ w\ld be ab\t ! price paid = y\r futures :i*1 let u say1 is #f4jj4 7,see ,*>t #d47 ,! m>ket may advance s t by ,septemb]1 sug> is sell+ at #h4jj4 7,y are n[ mak+ deliv]ies to y\r trade z contract$74 ,s y sell y\r futures at #h4jj1 g into ! m>ket & buy actual sug> = ab\t ! same figure1 assum+1 ( c\rse1 t actual sug> has also advanc$ 9 relative proportion1 :i* is likely4 ,y pay #b4jj m = y\r actual sug> ?an y _h figur$ b y h pr(it$ to ! ext5t ( #b4jj on ! sale ( futures4 ,pr(it & loss cancel ea* o!r & y h y\r sug> at #f4jj4 ,9 o!r words1 al?\gh ! m>ket is n[ #h4jj y are deliv]+ #f4jj sug> to y\r cu/om]s1 ) a pr(it to y\rself4 ,if ! m>ket decl9es aft] y\r orig9al pur*ase at #f4jj s t 9 ,septemb] sug> is sell+ at #d4jj1 y w sell y\r futures at #d4jj1 tak+ a loss ( #b4jj4 ,b y w buy y\r actual sug> at ab\t #d4jj1 also1 :i* is #b4jj l[] ?an y plann$ =4 ,?is ga9 ( #b4jj1 :ile n to be t]m$ an actual pr(it1 may c]ta9ly be consid]$ z cancel+ ! loss on ! sale ( y\r futures1 s t ! co/ ( y\r sug> is really #f4jj1 y\r orig9al price4 ,ano!r way ( look+ at ?is is to add ! loss ( #b4jj on ! sale ( y\r futures to #d4jj1 ! co/ ( y\r actual sug>1 mak+ #f4jj1 ! price ^u :i* y _h bas$ y\r plans4 ,if y _h wait$1 y w\ld h be5 able to get y\r sug> = #d4jj1 b by buy+ x ahead y h _h ! b5efits ( protection & ! elim9ation ( speculation & risk4 ,if ! m>ket rema9s /eady aft] y\r ,june pur*ase1 or aft] v>i\s fluctuations1 returns to #f4jj by ,septemb]1 y sell y\r futures at #f4jj & buy spot sug> = ab\t ! same am\nt4 ,?us y h nei!r ga9$ nor lo/1 b y h be5 protect$ 9 y\r sug> co/4 ,?is is ess5tially a play+-safe op]ation4 ,x results 9 pr(it insurance = ! jobb] :o is will+ to sacrifice ! possibility ( a speculative ga9 on advance sales to cu/om]s4 ,x is ?or\ghly s\nd bus9ess policy & is nei!r exp5sive nor difficult to c>ry out4 ,po9t ( ,deliv]y ,al?\gh ,*icago is ! deliv]y po9t 9 all ,ex*ange contracts = ref9$ sug>1 x %\ld be pla9ly und]/ood t ! ,ex*ange is = anyone1 any:]e4 ,:e!r locat$ 9 ,*icago1 or 9 ,ro*e/]1 ,baltimore1 ,new ,york or ev5 ,san ,francisco1 a jobb] c advantage\sly use ! ,ex*ange4 ,deliv]ies ( ,ref9$ ,sug> ,futures w be made only f ! ,ex*ange-lic5s$ w>eh\ses 9 ,*icago4 ,b1 reg>dless ( ! prospective buy]'s location1 ! deliv]y po9t is n ( any mat]ial importance z x is an e/abli%$ fact t 9 op]ations on all ex*anges ! p]c5tage ( actual deliv]ies tak5 is exceptionally small4 ,9 fact1 ! examples us$ 9 ?is booklet are all bas$ on ! supposition t ! buy] may f9d x m conv5i5t n to take deliv]y4 ,! usual proc$ure foll[$ 9 sug> ex*ange op]ations is = ! buy] to close out 8 ex*ange transaction prior to ! p]iod call+ = deliv]y & pur*as+ actual sug> f ! ref9]s1 execut+ bo? transactions practically simultane\sly4 ,possibly ! mo/ important problem 9 connection ) ! organization ( any commodity ex*ange is to r$uce ! possibility ( corn]s1 h[ev] remote1 to ! smalle/ possible degree4 ,9 ! case "u discussion1 ! ,*icago deliv]y po9t1 by virtue ( its accessibility = produc]s & consum]s f all p>ts ( ! c\ntry1 op]ates to t end4 ,practically e ref9] ( cane sug>s 9 ! ,ea/ & ,we/1 z well z ! ,s\!rn ref9]s1 c>ries l>ge /ocks 9 ,*icago1 & its favorable location 9 connection ) ! beet sug> indu/ry also makes x highly desirable4 ,its situation 9 reg>d to ! (f]+s ( ! ,l\isiana produc]s is also an additional protection & advantage ( consid]able importance4 ,! ,ex*ange-lic5s$ w>eh\ses 9 ,*icago are "u ! direct & con/ant sup]vision ( ,ex*ange repres5tatives4 ,facilities are provid$ = te/+ & grad+ sug> s z to ma9ta9 ,ex*ange quality /&>ds4 ,:5 are ,ref9]s' ,prices & ,ex*ange ,quotations 9 l9e8 ,s9ce ex*ange quotations = ref9$ sug> futures are net ca% ex-ex*ange-lic5s$ w>eh\se1 ,*icago1 :ile ref9]s' quotations are f4o4b4 ref9]y1 less #b = ca%1 x is obvi\s t !re mu/ be a diff]5ce betwe5 ref9]s' prices & ex*ange quotations4 ,x is equally obvi\s t ! diff]5tial %\ld approximate ! freight rate betwe5 ,*icago & ! ,seabo>d1 :]e ! ref9]s are locat$1 ) all[ance also = ! ca% disc\nt4 ,:5 ! m>kets are 9 l9e su* is ! case4 ,conv]sely1 :5 ! diff]5tial is high] or l[]1 ! m>kets are out ( l9e4 ,!re=e1 9 ord] to tell :e!r ! m>kets are out ( l9e1 or to :at ext5t1 x is necess>y to det]m9e on a diff]5tial to repres5t ! normal diff]5ce betwe5 ! two m>kets4 ,!re is no "o figure1 h[ev]1 t w satisfy all conditions at all times1 = ! reason t !re are v>i\s freight rates betwe5 ! ,seabo>d & ,*icago4 ,x is inaccurate1 = in/ance1 to use #fc z ! basis = ! normal diff]5tial4 ,! #fc rate is "o rate--! all-rail freight rate f ,new ,york to ,*icago4 ,o!r important r\tes & rates are z foll[s3 ,r\t+3 ,freight ,rate3 ,new ,orleans--,*icago 7b>ge & rail7 #j4eja ,new ,york--,*icago 7rail & lake7 4#eh ,new ,orleans--,*icago 7all rail7 4#fj ,philadelphia--,*icago 7all rail7 4#fa ,new ,york--,*icago 7all rail7 4#fc ,savannah--,*icago 7all rail7 4#fc ,bo/on--,*icago 7all rail7 4#fc #a ,! *eape/ r\t+ 7#dh7 takes ab\t two weeks' m "t 9 transit ?an ! ,new ,york all-rail r\t+ 7#fc74 ,int]e/ *>ges on f9ances involv$1 etc41 = ?is extra p]iod w br+ ! exp5se ( ?is r\t+ to approximately #ej4 ,aft] a /udy ( ! am\nts ( sug> %ipp$ ov] ^! v>i\s r\tes we h arriv$ at an arbitr>y figure to repres5t ! normal diff]5tial betwe5 ref9]s' prices & ex*ange quotations4 ,we believe t #eg w s]ve z a safe basis = calculation1 b #eh or #ei might be equally--or m--accurate4 ,9 fact1 anyone is entitl$ to an op9ion4 #eg is our op9ion4 ,x is n an av]age ( freight rates1 b is an arbitr>y figure4 ,:5 ! m>kets are 9 l9e1 us+ #eg z a basis = calculation1 #b %\ld be d$uct$ f ref9]s' prices1 & #eg add$ to det]m9e :at ,ex*ange quotation %\ld be4 ,conv]sely1 #eg %\ld be d$uct$ f ,ex*ange quotations & #b add$ to det]m9e :at ref9]s' prices %\ld be4 ,if y are will+ to accept #eg z a safe figure1 y may f9d ! foll[+ *>t useful 9 det]m9+ ! condition ( ! m>ket3 ,,are ,,ref9]s' ,,prices ,,& ,,ex*ange ,,quotations ,,9 ,,l9e8 ,bas$ on a #eg diff]5tial & #b ca% disc\nt ,:5 ,ex*ange ,ref9]s' ,quotations ,prices ,are ,%\ld ,be #d #d4di #d4je #d4ed #d4aj #d4ei #d4ae #d4fd #d4bj #d4fi #d4be #d4gc #d4cj #d4gh #d4ce #d4hc #d4dj #d4hh #d4de #d4ic #d4ej #d4ih #d4ee #e4jc #d4fj #e4jh #d4fe #e4ac #d4gj #e4ah #d4ge #e4bb #d4hj #e4bg #d4he #e4cb #d4ij #e4cg #d4ie #e4db #e4jj #e4dg #e4je #e4eb #e4aj #e4eg #e4ae #e4fb #e4bj #e4fg #e4be #e4ga #e4cj #e4gf #e4ce #e4ha #e4dj #e4hf #e4de #e4ia #e4ej #e4if #e4ee #f4ja #e4fj #f4jf #e4fe #f4aa #e4gj #f4af #e4ge #f4bj #e4hj #f4be #e4he #f4cj #e4ij #f4ce #e4ie #f4dj #f4jj #f4de #f4je #f4ej #f4aj #f4ee #f4ae #f4fj #f4bj #f4fe #f4be #f4fi #f4cj #f4gd #f4ce #f4gi #f4dj #f4hd #f4de #f4hi #f4ej #f4id #f4ee #f4ii #f4fj #g4jd #f4fe #g4ji #f4gj #g4ad #f4ge #g4ah #f4hj #g4bc #f4he #g4bh #f4ij #g4cc #f4ie #g4ch #g4jj #g4dc #g4je #g4dh #g4aj #g4ec #g4ae #g4eh #g4bj #g4fc #g4be #g4fg #g4cj #g4gb #g4ce #g4gg #g4dj #g4hb #g4de #g4hg #g4ej #g4ib #g4ee #g4ig #g4fj #h4jb #g4fe #h4jg #g4gj #h4ab #g4ge #h4af #g4hj #h4ba #g4he #h4bf #g4ij #h4ca #g4ie #h4cf #h4jj #h4da #h4je #h4df #h4aj #h4ea #h4ae #h4ef #h4bj #h4fa #h4be #h4fe #h4cj #h4gj #h4ce #h4ge #h4dj #h4hj #h4de #h4he #h4ej #h4ij #h4ee #h4ie #h4fj #i4jj #h4fe #i4je #h4gj #i4aj #h4ge #i4ad #h4hj #i4ai #h4he #i4bd #h4ij #i4bi #h4ie #i4cd #i4jj #i4ci #i4je #i4dd #i4aj #i4di #i4ae #i4ed #i4bj #i4ei #i4be #i4fc #i4cj #i4fh #i4ce #i4gc #i4dj #i4gh #i4de #i4hc #i4ej #i4hh #i4ee #i4ic #i4fj #i4ih #i4fe #aj4jc #i4gj #aj4jh #i4ge #aj4ab #i4hj #aj4ag #i4he #aj4bb #i4ij #aj4bg #i4ie #aj4cb #aj4jj #aj4cg 7,?is *>t works bo? ways4 ,t is1 :5 ! ex*ange quotation is giv51 if ! m>kets are 9 l9e ! ref9]s' prices %\ld be z %[n 9 ! fir/ column47 ,x %\ld be borne 9 m9d t ! above calculations are bas$ ^u a normal diff]5ce 9 price ( #bj p] hundr$ p\nds betwe5 beet & cane sug>s1 :i* is ! rul+ diff]5ce z quot$ 9 ! ,ex*ange contract4 ,%\ld beet ref9]s elect to sell at great] disc\nts ?an #bj po9ts "u cane ref9]s' ,seabo>d prices1 ! am\nt 9 excess ( #bj po9ts w\ld h to be subtract$ f our arbitr>y figure ( #eg4 ,! ,function ( ! ,sug> ,brok] ,if y %\ld organize y\r company s t x c\ld att5d to all ! details ( sug> buy+ economically1 y w\ld probably /ill pr(it f ! assi/ance ( a sug> brok] ^: specialty is sug> buy+1 ^: horizon is a sug> horizon1 ^: ?\ghts are sug> ?\ghts & :o mu/ necess>ily "k m ab\t sug> ?an ! av]age buy] w\ld ev] consid] x desirable to "k4 ,! sug> brok]'s s]vice to y is unaffect$ by prices--8 prices & all o!r brok]s' prices are ! ,ex*ange prices2 8 commissions are bas$ on ! same p]c5tages z all o!r brok]s' commissions4 ,8 only di/9ction c come f ! actual s]vice he c r5d]4 ,?is s]vice may be good or poor1 dep5d+ ^u :e!r 8 exp]i5ce1 8 organization1 8 in=mation & 8 judgm5t are good or poor4 ,if1 add$ to 8 k ( sug>1 he also possesses a broad k ( economic fundam5tals & a p]spective ^u & contact ) _w activities z !y affect all phases ( ! bus9ess ( sug>1 8 s]vice w be _m times m valuable ?an if he 7 limit$ by a small organization1 by a def9ite locality or by exp]i5ce 9 only a few phases ( ?is bus9ess4 ,a sug> brok] :o m]ely accepts & transacts ord]s is giv+ no s]vice wor? ! "n4 ,to give s]vice 9 accordance ) ! highe/ mod]n /&>ds1 he mu/ /& z an advis]1 z a con/ant seek] aft] opportunities :i* w b5efit 8 cli5ts1 z a p>tn] ^: int]e/ 9 8 cli5ts' pr(its & progress equals 8 int]e/ 9 8 own4 ,our exp]i5ce has conv9c$ u t ! cli5t secures ! greate/ am\nt ( protection 9 fill+ 8 sug> ne$s :5 "o brok] h&les all sug> transactions4 ,^! ex*ange op]ations %\ld be c>ri$ out :5 ! m>ket is out ( l9e 9 y\r favor4 ,y ne$ ! be/ k9d ( advice1 bas$ on an intimate k ( y\r bus9ess4 ,a s+le brok]age h\se becomes ?or\ghly acqua9t$ ) ! cli5t's bus9ess & p]sonnel1 ) ! result t ! two organizations "w 9 h>mony virtually z p>tn]s1 confusion & misund]/&+s are avoid$1 quick] & m advantage\s transactions are made possible4 ,! *oice ( t brok] %\ld be a matt] ( great c>e1 = 9 addition to ! will+ness to s]ve1 he mu/ h ! facilities & ! f9ancial /ability4 ,=1 be> 9 m9d t ! brok] ) :om y deal is ! responsible p>ty = ! fulfillm5t ( ! contract4 ,y\r contract is z good only z ! reliability ( y\r brok]4 ,lamborn ,company has become kn[n ?r\gh\t ?is c\ntry & abroad z an in/itution = ! s]vice ( all ^? :o h a bus9ess int]e/ 9 sug>4 ,lamborn ,sug> ,s]vice is r5d]$ ?r\gh our head (fice at #acb ,front ,/reet1 ,new ,york1 & ?r\gh bran* (fices 9 ,philadelphia1 ,*icago1 ,savannah1 ,new ,orleans1 ,kansas ,city1 ,mo4 & ,san ,francisco4 ,lamborn ,s]vice 9 all its phases is available to y z a jobb]4 ,we %all be v glad to expla9 ei!r 9 p]son or by lett] :at a brok]age relation%ip ) u involves1 h[ x may be accompli%$ & h[ transactions may be c>ri$ out4 ,,lamborn ,,company ,sug> ,headqu>t]s #acb ,front ,/reet3 ,new ,york #g ,wall ,/reet3 ,new ,york 7,securities7 ,havana & ,ci5fuegos1 ,cuba ,p>is1 ,france ,,! ,,lamborn ,,company ,,lamborn ,,cie ,bran*es 9 ! ,unit$ ,/ates ,philadelphia ,savannah ,new ,orleans ,*icago ,kansas ,city ,san ,francisco ,memb]s (3 ,new ,york ,c(fee ,sug> ,ex*ange1 ,inc4 ,new ,york ,/ock ,ex*ange ,new ,york ,cotton ,ex*ange ,new ,york ,produce ,ex*ange ,*icago ,bo>d ( ,trade ,london ,produce ,cle>+ ,h\se1 ,ltd4 ,cable ,address3 ,lamborn ,contract betwe5 ,memb]s ( ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc4 ,! ,/&>d ,f9e ,granulat$ ,sug> contract is z foll[s3 ,sold = 444 to 444 #hjj bags 7( #ajj lbs4 net ea*7 ( ,/&>d ,f9e ,granulat$ ,sug> at 444 c5ts p] p\nd1 manufactur$ 9 ! ,unit$ ,/ates or insul> possessions1 pack$ 9 cotton-l9$ burlap bags1 deliv]able f lic5s$ w>eh\se 9 ,*icago betwe5 ! fir/ & la/ days ( 444 inclusive4 ,deliv]y )9 su* "t to be at ,sell]'s option1 ^u sev51 eight or n9e days' notice to ! buy]4 ,if ,dome/ic ,beet ,/&>d ,f9e ,granulat$ ,sug> be deliv]$ 9 fulfillm5t ( ?is contract1 ,sell] to make an all[ance ( #bj p] #ajj lbs4 ,! ,sell] %all h ! "r to deliv] ,=eign ,cane ,/&>d ,f9e ,granulat$ ,sug> 9 fulfillm5t ( ?is contract by mak+ an all[ance to ! ,buy] ( #be p] #ajj lbs41 & =eign beet /&>d f9e granulat$ sug> by mak+ an all[ance ( #de p] #ajj lbs41 provid$ su* sug>s comply ) ! ,types adopt$ z ,/&>d by ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc41 & all duties h be5 paid !reon4 ,?is contract is subject to an adju/m5t = duty1 z provid$ 9 ! ,sug> ,trade ,rules4 ,ei!r p>ty to h ! "r to call = m>g9s z ! v>iations ( ! m>ket = l deliv]ies may w>rant1 :i* m>g9s %all be kept good4 ,?is contract is made 9 view ( & 9 full accordance ) ! ,by-,laws1 ,rules & ,conditions e/abli%$ by ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc4 7,writt5 across ! face is ! foll[+7 ,= & 9 consid]ation ( "o doll> to 444 9 h& paid1 receipt :]e( is h]eby ackn[l$g$ 444 accept ?is contract ) all its /ipulations & conditions4 ,brok]s' ,commissions ,! brok]'s commission = ei!r buy+ or sell+ ea* contract ( #hjj bags ( sug> dep5ds ^u ! price at :i* ! transaction is execut$4 ,! foll[+ table gives a range ( prices & ! correspond+ commissions3 ,= ! sale or pur*ase ( ea* lot ( #hjj bags3 ,contract ,price ,commission#b ,up to #i4ii1 p] p\nd #ae4jj #aj to #ab4ii1 #ag4ej #ac to #ag4ii1 #bj4jj #ah & above1 #be4jj #b ,^! commissions apply to transactions 9 ! ,unit$ ,/ates1 ,porto ,rico & ,cuba1 f non-memb]s ( ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc4 ,m9imum ,trad+ ,basis ,a lot ( ref9$ sug> consi/s ( #hjj bags ( #ajj lbs4 ea*1 or #hj1jjj lbs4 ,?is is ! m9imum am\nt :i* c be sold on ! ,ex*ange4 ,deliv]y ,! date ^u :i* sug> %all be deliv]$ on an ,ex*ange contract is at ! option ( ! sell]1 provid$ t date come )9 ! mon? nam$ 9 ! contract4 ,notice ( ! date ( deliv]y mu/ be giv5 to ! buy] sev51 eight or n9e days prec$+ ! day on :i* deliv]y w be made4 ,if y are n go+ to fill y\r actual sug> ne$s by accept+ deliv]y f ! ,ex*ange w>eh\ses1 y %\ld close out y\r contracts )9 two weeks1 or1 at ! late/1 t5 days ( ! fir/ ( ! mon? 9 :i* deliv]y is specifi$1 z aft] notification ( deliv]y has be5 giv51 !re is usually n suffici5t "t to make o!r plans4 ,ord]s ,except 9 ne>by localities1 ord]s %\ld be s5t by wire1 address$ to3 ,,sug> ,,futures ,,dep>tm5t1 #acb ,front ,/reet1 ,new ,york1 ,n4,y4 ,inquiries or ord]s w be giv5 prompt att5tion at any ( our (fices1 b "t w be sav$ & execution facilitat$ if !y are s5t direct to ,new ,york4 ,unless o!rwise specifi$1 ord]s are good only = ! day on :i* !y are receiv$4 ,if !y _c be execut$ at ! price nam$ be=e ! clos+ ( ! ,ex*ange on t day1 or if !y %\ld arrive aft] ! ,ex*ange closes1 x w be und]/ood t !y are automatically cancell$ unless specific in/ructions are giv5 = ! execution ! foll[+ day or unless =mally r5ew$ by wire4 ,if y desire to place an ord]1 good until c\nt]m&$1 y c d s4 ,! g5]al t]m appli$ to su* ord]s is ord] good till cancell$4 ,! g5]al abbreviation 9 ! trade is ,g4,t4,c4 ,ex*ange ,trad+ ,h\rs ,h\rs = trad+ on ! ,ex*ange are f #aa3jj a4m4 to #b3ej p4m41 except on ,saturdays4 ,saturday h\rs are f #aj3cj a4m4 to #aa3ej a4m4 ,deliv]y & ,w>eh\s+ ,*>ges ,if y make deliv]y on ! ex*ange1 ! foll[+ are y\r *>ges3 ,/orage #c p] #ajj lb4 bag ,h&l+ 9 & out1 *>g$ ) fir/ mon?'s /orage #e p] #ajj lb4 bag ,negotiable w>eh\se receipt #ej ,if y accept deliv]y on ! ex*ange1 y\r *>ges are3 ,c>load+ #a-a_/d p] #ajj lb4 bag ,acceptance ( y\r ord] ,! =m ( our acceptance ( y\r ord] reads z foll[s3 ,9 accordance ) y\r in/ructions we h ?is day made ! foll[+ transactions 9 ,,/&>d ,,f9e ,,granulat$ ,,sug> = y\r acc\nt & risk1 subject 9 all respects1 & 9 accordance )1 ! ,rules1 ,by-,laws1 ,regulations & ,cu/oms ( ,,! ,,new ,,york ,,c(fee ,,& ,,sug> ,,ex*ange1 ,inc41 & ! ,rules1 ,regulations & ,requirem5ts ( its ,bo>d ( ,directors1 & all am5dm5ts t may be made !reto4 ,all transactions made by u = y\r acc\nt contemplate ! actual receipt & deliv]y ( ! ,,sug> & paym5t !re=4 ,! "r is res]v$ to close transactions :5 m>g9s are exhau/$ or ne>ly s1 )\t notice4 ,bags ( ,ref9$ ,sug> ,mon? ( ,deliv]y ,price ---------------------------------------- ------- ,b\ght ,sold --------------------- ,raw ,sug> ,futures ,prior to ! inauguration ( trad+ 9 ,ref9$ ,futures1 ,raw ,sug> ,futures 7 us$ by _m jobb]s = h$g+ & protect+ _! ,ref9$ requirem5ts4 ,! !ory ( op]ation is t ! raw price w be ab\t equival5t to ! ref9$ price aft] duty & ! *>ge = ref9+ are add$4 ,:ile ! ,raw ,sug> m>ket w at times get out ( l9e ) ref9$1 bo? favorably & unfavorably1 ?is _c cont9ue = any long p]iod4 ,:5 ! ,raw ,futures m>ket is favorably out ( l9e1 x may be m to y\r advantage to use ?is m>ket1 r ?an ! ,ref9$ ,futures m>ket4 ,at ! pres5t "t !re is ! add$ advantage t ! volume ( trad+ is great] 9 ,raw ?an 9 ,ref9$4 ,:5 buy+ or sell+ ,raw ,sug> ,futures1 y may figure t ! v>iation on a m9imum lot ( #ej tons w\ld be equival5t to ! same v>iation ( #aabj bags or #cbj b>rels4 ,we give y bel[ h]e) details ( contract & trad+ conditions3 ,all contracts = future deliv]y %all be = #ej tons ( #b1bdj p\nds ea* & multiples !re(4 ,,contracts3 ,sold = 444 to 4441 #ej tons ( #b1bdj p\nds ea* ( sug> 9 bags1 deliv]able f lic5s$ w>eh\se 9 ! port ( ,new ,york1 betwe5 ! fir/ & la/ days ( 444 inclusive4 ,! deliv]y )9 su* "t to be at sell]'s option1 ^u #g1 #h or #i days' notice to ! buy]4 ,! sug> to be ( any grade or grades ( ,raw sug>s bas$ on ,cuban ,c5trifugal ( #if degrees av]age pol>ization outturn at ! price ( 444 c5ts p] p\nd 9 bond1 net ca% ) additions or d$uctions = o!r grades accord+ to ! rates ( ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc41 exi/+ ^u ! aft]noon ( ! day previ\s to ! date ( notice ( deliv]y1 & %all embrace all ,c5trifugals fir/ runn+4 ,! =eign sug>s deliv]able o!r ?an ,cuban ,c5trifugals1 are3 ,c5trifugals f ,briti% ,we/ ,indies1 ,dem]>a1 ,sur9am1 ,san ,dom+o1 ,brazil1 ,p]u1 ,java1 ,mauritius1 ,v5ezuela & ,haiti1 all basis ( #if degrees av]age pol>ization outturn at 4#beab c5ts p] p\nd 7diff]5ce 9 duty7 less2 b no lot ( #ej tons is to consi/ ( sug> f m ?an "o c\ntry ( orig94 ,all[ances on ,c5trifugal sug>s to be 4#jcabe c5ts p] p\nd p] degree above #if degrees1 up to #ih degrees & 4#jfbe c5ts p] p\nd p] degree bel[ #if degrees1 d[n to #id degrees & 4#jicge c5ts p] p\nd p] degree bel[ #id degrees1 d[n to #ib degrees1 ) fractional degrees pro rata4 ,ex*ange ,trad+ ,h\rs ,h\rs = trad+ 9 ,raw ,sug> ,futures are f #aj3de a4m4 to #b3de p4m4 on week days & f #aj3ae a4m4 to #aa3de a4m4 on ,saturdays4 ,trad+ ,diff]5ces ,a fluctuation ( #a p] #ajj p\nds is equival5t to #aa4bj p] lot ( #ej tons4 ,m>g9s ,an orig9al m>g9 9 ,new ,york funds mu/ accompany all ord]s1 we res]v+ ! "r to call = v>iation m>g9s :5 contract %[s depreciation4 ,we also res]ve ! "r to close transactions :5 m>g9s are exhau/$ or ne>ly s )\t fur!r notice4 ,! am\nt ( ?is orig9al m>g9 w ( necessity fluctuate ) conditions exi/+ at ! "t ord]s are plac$4 ,at ! pres5t "t 9 localities t are 9 position to make prompt remittance = any v>iation m>g9s requir$1 ! m>g9 is #djj4 ,commissions ,= ei!r buy+ or sell+ ea* contract ( #ej tons ,bas$ ^u a price ,bel[ #d c5ts #ab4ej #d c5ts to #i4ii #ae4jj #aj c5ts to #ab4ii #ag4ej #ac c5ts to #ag4ii #bj4jj #ah c5ts & above #be4jj ,,note3 ,all ord]s = ,raw ,sug> ,futures %all be 9 accordance ) ! ,by-,laws & ,rules ( ! ,new ,york ,c(fee & ,sug> ,ex*ange1 ,inc4 & ! ,new ,york ,c(fee & ,sug> ,cle>+ ,association1 ,inc4