Industry And Trade; a Study of Industrial Technique And Business Organization; And of Their Influences On the Conditions of Various Classes And Nations

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254 CONSTRUCTIVE SPECULATION: ORGANIZED PRODUCE MARKETS II, V, 2. As a rule the manufacturer who has not contracted to deliver, but works for the general market, desires to be insured against a fall and not against a rise in the price of his material: he stands to lose by such a fall; since purchasers, unless specially pressed for time, will decUne to buy his finished product at a price much above that which corresponds to the current price of the material. There is no simple means of insuring
...against this risk, which corresponds to a contract for delivery of ma- terial at a fixed price; but the two sets of risks are in oppo- site directions, and it is obvious that much economy might be effected by setting these to neutralize one another. In spite of the abuses connected with them, organized markets for dealing in standardized produce, render many services to business men and to the world at large; and perhaps the chief, though not the most prominent of these is their indirect effect in so concen- trating risks, that those of them which, like those just considered, are in opposite directions, will tend to extinguish each other.

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