So obvious are the advantages of insurance that every one accepts it as a benefit. We have now to see how the same service which is performed for the producer by the insurance company is performed for the merchant by the speculator. Among the greatest risks in commerce is that of price changes due to great events (wet seasons or dry seasons, war or peace, etc.) which the merchant can neither control nor foresee. A grain merchant, for instance, who has bought some excellent wheat in Dakota, has made advantageous arrangements for its transportation, and is confident of finding a ready sale to an English miller, may find the whole transaction results not in profit but in loss, if the level of wheat prices falls before his sale is accomplished, by reason, perhaps, of the unexpected yield of wheat in a distant country, or by the conclusion of a great war. Why does he not sell the wheat in advance to the miller, and so protect himself from this danger? He would simply be shifting the burden to shoulders still less able to bear it. The miller is a manufacturer, who needs to give all his thought to the technical details of his business, and who can ill afford to buy wheat when it is high, only to find when he comes to market the flour that it has dropped in price, in sympathy with a decline in wheat. =394. Services of the speculator to commerce.=—The class of speculators has grown up in the course of the century, to assume such risks. It can do great harm to business by creating risks where none naturally existed, producing artificial scarcity by “corners,” etc.; this danger should not blind us to the benefits it confers when it confines itself to its legitimate business. Let us see how, in practice, this business of speculation serves commerce. A merchant who has bought wheat or cotton in America, for sale in the Liverpool market, sells immediately an equal quantity for _future delivery_, at a time when he expects to have his ware ready for sale in England. It makes no difference to him then whether the general price of his ware goes up or down. If prices go up he will have to pay more to “cover” his sale of futures, but he will also get more for his real ware. If prices go down he may not be able to get as much for his real wheat or cotton as he expected, possibly not as much as he paid for it; but he will make up just the difference, by the low price at which he can cover. He renounces all chance at great gains, but also secures himself against great loss, and is glad to pay the speculator’s commission to attain this result. He makes his profit by the differences in the price of wheat or cotton not at different times, but in different places; reference to the section above, in which the description of the modern merchant was quoted, will suggest how he earns his living. In a manner similar to this many manufacturers (millers or cotton manufacturers) protect themselves against variations in the price of their raw material.