ABSTRACT
The effect of the dealers’ action then is in the first place to raise price and so to check consumption (and some times to attract goods from other districts), and later on to keep price lower than it would have been by putting the goods again upon the market. The first effect is naturally unpopular; the latter is not realized and there fore not appreciated. It will be seen that both the dealer's profit and the good result to the community depend on the correctness of his forecast. If he under-estimates or over-estimates the future supply he not only loses part or the whole of his profits, but partly or wholly fails to benefit the community. The dealer, therefore, must be better able to judge of the future course of prices of the commodity in which he deals than are other people. He is able to do so because he is a specialist; he spends his time in studying trade literature and reports of all kinds, and in talking to and bargaining with his fellow-dealers. In some branches of trade the dealers have agents, who supply them with elaborate reports as to crop prospects, etc. It is this special knowledge which earns the dealer’s profits; the result, as we have seen, is to level prices. Where there are highly organized markets in time of peace, though there are constant small fluctuations, the points between which the fluctuation occurs are not far apart. Through the action of the dealers, goods are moved from places where they are relatively plentiful to places where they are relatively scarce. Also, by holding back a commodity when they foresee a shortage, they raise the price and so restrict consumption; later on when the dealers foresee the end of the shortage they sell the commodity and so lower price and thereby increase con sumption. Thus consumption is regulated in time. The dealers, by buying and selling very large quantities, make their profit from the small fluctuations in value.
