Page:Stabilizing the dollar, Fisher, 1920.djvu/67

. 2] 2. Profiteers, Speculators, and Middlemen

Much is said to-day of profiteering and of speculation in general. Speculation is always stimulated when prices are changing. It feeds on price movements. Thus when prices are expected to rise in the future, speculators buy goods and raise their prices in the present; and when, in the future, they sell their holdings, prices are kept below what they would otherwise have been. The normal effect of such, as of most, speculation is to reduce or "even-up" price fluctuations.

Occasionally speculation causes or aggravates fluctuations; but, in such cases, speculators usually come to grief as a consequence. This was true of the speculative rise in prices that occurred immediately at the outbreak of the war, in August, 1914, and was promptly followed by a fall. Speculators who thus try artificially to mark up prices when other causes are not about to produce a rise are like the comedian who said he could "command $1000 every night" but added, "the only trouble is it won't come!"

Similarly cold storage is a stabilizer of prices and, on the whole, has probably mitigated the rise of prices instead of aggravating it. Equally far from the truth is the popular idea that the rise of prices is due to "the middleman." It is true that the processes of distribution are often wasteful, but probably they have, on the whole, been growing less wasteful rather than more wasteful. Index numbers show that the average margins between wholesale and retail prices have, on the whole, actually diminished during most of the rise in