the history of the grain trade. At that time it became evident that Mr. Joseph Leiter was at the bottom of the bull movement, and it was known that he had the support of ample capital. On the other side were the elevator interests, headed by Mr. Philip Armour, than whom no more dangerous opponent in a wheat deal could well be found. The operations that followed may well be called a battle of the giants. Leiter was controlling a large quantity of actual wheat, and at the same time held contracts for millions of bushels for delivery in Chicago during December. Apparently most of this amount had been sold by Armour and the elevator people. These were no ordinary short sellers, however, but men already possessed of great wheat holdings and in every way equipped to purchase over a large region and make deliveries with great rapidity. Despite the extent of their sales they meant to deliver actual wheat on all their contracts. Their agents were everywhere making large purchases in the interior, and it was said that the Leiter agents were competing with them at various points to keep the available supply out of the hands of the shorts. Wheat began to pour into Chicago in unprecedented quantities. As fast as it came in it was delivered to Leiter and his associates, who were obliged to take it on their contracts, and make enormous payments. A large amount of the wheat was stored in the elevators belonging to the short interest, and began at once to draw storage charges. Neither side showed signs of faltering. Leiter seemed capable of taking any amount with equanimity, and the price during the month rose to $109, the highest price of the year. The receipts at Chicago during December reached the big total of 6,861,453 bushels. The receipts in November were also heavy. Most of this wheat went to Leiter, who was reported to have taken over about 9,000,000 bushels in one month. The remarkable result of the month's operations seemed to be that despite the great extent of the transactions, an actual delivery of wheat was made to the purchasers of all that they had bought, that this was taken over easily without a break in the market, and that nevertheless there was no sign of disastrous losses on the part of the shorts. They had bought a good deal of wheat at high prices, but their selling contracts had been made at high prices as well. These evidently were not the phenomena of a speculative corner. There was no short interest out at the end of the month, and the market closed weak.

The market throughout this period, however, was highly speculative. Just how much the price was raised by the Leiter

All the conditions of supply

operations it is impossible to say. and demand were making for higher prices throughout the whole period. The single fact that the wheat crops of the world for 1897 were more than 300,000,000 bushels less than those of 1895 and more than 400,000,000 bushels less than those of 1894, is sufficient to explain the largest part of the increase. Yet the persistent buying of the bull faction must have had a stimulating effect on prices, and the most sensational advances, such as the increase to $109 in December, were almost entirely due to the competition for the control of the wheat for a single delivery period.

At the beginning of the new year the Leiter party were left with enormous holdings which they seemed in no hurry to sell, apparently confident that it would all be wanted by consumers at a high price. Naturally after the "bulge" in December the price sagged somewhat. The foreign demand however continued strong, and all the factors were bullish. Leiter was buying May wheat, and as May came nearer he made extraordinary efforts to get wheat out of the country and especially out of the Chicago market. Enormous shipments were made, and Leiter was apparently doing the wheat business for the country. At the end of March he was said to own all the wheat afloat for Europe, and he apparently had a monopoly of all the foreign orders. At how much of a profit he was selling, however, is not to be known. It was repeatedly asserted that he was paying the freight charges, or was granting a discount of 10 or 15 cents a bushel for all wheat taken for export. In any case the shipments in the spring were far heavier than usual at that time of year, but were eagerly absorbed by the foreign markets.

In the meantime it became apparent that, besides his control of the actual shipments, Leiter was working for a big deal in May wheat. Throughout the early part of the year his brokers were continually buying and selling, and his line of May wheat began to assume large proportions. The ambition of the Leiter party seemed boundless. Not satisfied with owning enormous stocks of actual wheat, they kept buying with unparalleled confidence. The trade and the public watched these developments with intense interest. How long could this continue? Many persons felt that these operations were already in excess of what actual conditions warranted, and it is not too much to say that in the absence of extraordinary circumstances the success of the May deal would have been very problematical. But extraordinary events did occur. On April 22nd, war was declared. Soon after,

the French duty on wheat, equivalent to 36 cents a bushel, was suspended, and some other countries adopted the same policy, while for the moment the crop news was less bearish than had been anticipated. The few weeks following the declaration of war were in some ways the most remarkable in the history of the grain market. Foreign orders of extreme urgency came into the market, and the fact that low grades were bought heavily shows that the demand was not speculative. The price went up by leaps and bounds, and the rush of the shorts to cut losses added to the advance. The highest point was reached May 10th, when May wheat touched $1.85 in Chicago, and cash wheat went to $1.91 in New York. From this point there was some reaction, but the price ruled very strong till the end of the month. It was not till the very last day that Leiter let the bottom drop out, the price going from $1.75 to $1.25. Even when the Chicago market fell off because of a feeling that the movement was extreme, the Liverpool market was reported next day as strong as ever. It can scarcely be wondered at that American operators became confident under such circumstances. For the time being it seemed as if Leiter had accomplished the impossible, and it is safe to say that the American public largely forgot their views on speculation in their admiration of the pluck and coolness with which the great deal had been carried through.

During May Leiter's operations were apparently of every sort. He sold out a good deal of his May wheat on very high prices. At the same time he bought about all the cash wheat coming into the market, and much of this probably at a high price. He sold large amounts of cash wheat at very substantial prices in Europe, and he bought heavily for the July and September deliveries. It was generally felt that, if Leiter had made every attempt to curtail his transactions and quietly market his holdings, he would have come off with complete success. On the other hand, it may be that his further purchases were necessary to maintain the price of his cash wheat in the face of the reaction in price at the end of the month. Whatever the reason may be, he did not see fit to furl sail, and the inevitable result followed. His extraordinary audacity hitherto had been supported by extraordinary events which raised the price at critical times. This could not happen continuously, however, and his position began to weaken. Despite the high price for May wheat in Chicago the later options had been ruling comparatively low, the July option part of the time being 60 cents under May, a most abnormal condition. The reports at this time all pointed to

large crops for 1898, and, though the reserve stocks were low, there was nothing to indicate the continued maintenance of high prices as had been the case in the fall of 1897. On June 13th it became known that Leiter could no longer carry his tremendous load, and that the great deal had at length come to an end. The reason given was that in view of Leiter's excessive purchases, his father would no longer advance the necessary capital. Every effort was made to lessen the effect of the collapse by putting the holdings of wheat into strong hands. A large part of the cash wheat was taken over by Mr. Armour. The price, however, was bound to tumble. The June option fell from $1∙14 to 84 cents, the July option from 94 to 75 cents. It is not fair to say that the fall was from $1.85 to 84 cents, as was sometimes stated at the time. The abnormal prices of early May, which were not after all prices of Leiter's making, had long since given way to a more conservative condition of the market.

This brief statement of the main points of the great wheat operations of 1897-98 is not meant as an account of the methods adopted for carrying the deal through. Those were far more complicated than the simple statement indicates, and are only known to the operators themselves. At just what times and how far Leiter was selling or buying this option or that option, taking profits or cutting losses, trying to advance the price, or to hold it in check; just how many markets he was manipulating, or how he was playing one against another; how far the foreign orders at critical times were partly of his own making, or how far his foreign shipments netted a profit over all expenses; to what extent he bought and sold puts and calls and their effect on the market, all these and a hundred other details must remain largely matters of conjecture.

These operations have been referred to in this connection only in order to point out the way in which they differed from the ordinary attempts at market manipulation. There was no corner " in the strict sense of the word either in December or May. In both months the extreme prices were registered in the second week, probably before the bull faction were ready for such a wild market, since a high price so early could only result in inconveniently heavy shipments to the market. There is reason to believe that in December, for example, Leiter tried to keep the market down for this reason. The prices then, though due to speculative causes, were not the result of a carefully planned squeeze," as was the case, for example, in the September corner of 1888. There was no short interest left in the market

at the end of either December or May, and the market closed weak in both cases. In other words, the Leiter deal from start to finish was in the main a deal in real wheat. It is this fact which makes it the most interesting incident in the modern history of the grain trade, for the continued maintenance of operations on so vast a scale without depending for success on the temporary exigencies of the short interest has hitherto not been considered possible. And it is this fact also that made the results of the deal so much more important than those of a speculative corner.

It should not be inferred from this, however, that the market conditions were normal during this period, or anything else than highly speculative. From the time when the bull clique first made itself strongly felt, conservative brokers advised their customers not to risk themselves at all in so uncertain a market. The December conditions in Chicago, despite the fact that the contracts were settled by actual delivery, were purely speculative. Armour's achievement in bringing millions of bushels into that market was a brilliant coup, but it was a movement of wheat which was directly opposed to the requirements of normal business. The mere fluctuations in price in May showed the complete control of the speculative factor, while the abnormal conditions are emphasised still more by a comparison of different prices. The July option ruled from 30 to 60 cents under the May price in Chicago, whereas it ordinarily stands somewhat above May wheat, or in any case but a few cents below, since the new wheat first comes in during July. On the other hand, during May the price of July wheat in Minneapolis and Duluth was at times 40 cents or more above the Chicago price, while the divergence between Chicago and Liverpool was slightly less. On May 27th there was in Toledo a discount on May wheat under Chicago of 50 cents. In ordinary times such divergences could not stand for a moment without being met by enormous shipments and so equalized.

It is no part of the purpose of this article to attempt to trace the effects of the bull operations of this period. Enough has been said to make it evident that the high prices of wheat from August to June were not mainly the work of Mr. Leiter. For the first time in many years the bears in the wheat market were destined to learn the lesson that the production of wheat might run far short of the required needs, and, whatever direction the efforts at manipulation had taken, the price of wheat was bound to make remarkable advances in the season 1897-98. Leiter