of manipulating the market—and the public has probably been

speculating increasingly. It is plausible, then, to suppose that the dealing syndicate primarily, and the speculations of the public secondarily (secondarily, because in all likelihood the effect of its operation would be much less in magnitude), may account for the change.

Table calculated from Weekly Prices between the 1st of October and the 31st of July in each Year.

“Futures” are not used in all markets—for instance, they are not to be found at Bremen; and in those in which they are used they play parts of different prominence—at Havre, for instance, the transactions in “futures” are of Price movements in different markets. incomparably less relative importance than they are at Liverpool. But it is futile to seek the effect of much dealing in “futures” in the differences between price movements in the various markets, because (1) demand expresses itself in different ways—in Germany, for example, spinners buy to hold large stocks—and (2) the markets are in telegraphic communication, so that their price movements are kept parallel. Mr Hooker has shown with reference to the wheat market how close is the correlation between prices in different places,^[1] and the same has been observed of the cotton market, though the correlations have not been worked out.^[2] It is worthy of note that Liverpool “futures” are largely used for hedging by continental cotton dealers.

Conceivably some indication of the working of “futures” might be gleaned from observation of the relations of near and distant “futures” to one another and of both to “spot.” The complete explanation of changes in Differences between
the prices
of near and
distant
“futures.” these relations is still a mystery.^[3] Probably an infinitude of subtle influences came into play, and among these there seems reason to include the intentional and unintentional “bulling” or “bearing” of the market. Some examples of the diverse relations to be found, even when all the “futures” fall in the same crop year, may be quoted here—quotations running into the new crop year are obviously affected by anticipations of the new crop.

As we pass from the “future” of the month in which the quotation is made to the most distant “future” it will be observed that in the first and second cases price rises continuously, in the second case even passing “spot,” whereas in the third case it falls first and then rises. Instances might be given of its falling unintermittently. It seems a plausible conjecture that if “futures” were “bulling” the market in the first case, they were at least “bulling” it less in the second case ceteris paribus, and probably “bearing” it in the last case. A closer examination will reveal further that the magnitude of these gaps varies a great deal; and