by borrowing against elevator receipts and contracts. Third, the risks of deteri-
oration andfluctuating prices were no longer concentrated on the owners, but
were transferred from the growers to the traders, who could bear them more
easily. Fourth, the sheer size of the Chicago market gave it an insatiable
appetite for grain. It gave railway companies and elevator operators the con-
fidence to pursue speculative extensions into uncultivated regions in the
Northwest and into Canada. They were prepared to do so on the grounds
that they might achieve an effective‘line monopoly’, allowing them to receive
a reliable return on their capital investment.
13.3‘A Buckler to Defend Villainy’?
The growth of the grain trade in the Midwest occurred organically, with only a
light interventionist touch from the courts and legislatures. When the courts
were asked to adjudicate, their broad inclination was to interfere as little as
possible. As Jonathan Lurie observes, the judiciary was inclined to trust the
Board of Trade’s capacity to self-regulate. It was essentially a private club, but
one which understood the workings of the markets and had a vested interest
in preserving their integrity. The Board of Trade, says Lurie:
acted like a legislature in passing certain rules and regulations that were binding
upon its members. It acted like a judge when it heard complaints, issued penalties
and tried to mediate disputes. In enforcing the rules it adopted, the Board demon-
strated executive authority. (Lurie 1979, p. 9)A robust challenge to unregulated markets came from the agrarian movement,
which gathered a head of steam in the 1890s. Farmers laboured in a world
remote from the commodities market, where distrust of potential speculative
abuses festered. There was particular anger about the so-called bucket shops,
unofficial tradingfloors which blurred the line between speculation and
gambling. The agrarians crusaded for anti-option legislation, in an attempt
to forbid the trade in non-existent grain. A petition to Tennessee Senators
Isham Harris and William Bate from the‘farmers and citizens of Shelby
County’offers a taste of their complaint against‘these great combines, trusts
and monopolies’that‘obstruct legitimate commerce by inextricably blending
and interweaving future contracts’and thereby‘kill off the real article’:
Senators! God never made a richer land than ours...but the hands of men exerted
and extended from afar in evil combination are robbing us of our industry and
plundering us by the capitalistic ledgerdemain of‘futures’...
Through the subtle and devilish perversions of reasoning practiced by the
brightest prostituted minds of the age, retained and employed as paid attorneys
and lobbyists by evil capitalistic syndicates with sinister designs, the ConstitutionNick Cater