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The Grain Traders: The Story of the Chicago Board of Trade.

The Grain Traders: The Story of the Chicago Board of Trade William Ferris's "story" is that of the traders who made the market, those who cornered it and became wealthy, those who came close and failed. It is a story told in the style of a front-page column in The Wall Street Journal as befitting a retired journalist who was market editor of the Associated Press in the years immediately following the Second World War. His principal references are contemporary newspaper accounts, since few traders left careful records of attempts to manipulate the market, but he has also read the important scholarly works relevant to his subject. He provides the human dimension so often missing in what many academics would consider more serious scholarship. This is not the meat and potatoes of serious business history. It is dessert, and students of the Chicago Board of Trade and other futures markets would be remiss to skip this dessert.

The names that resound in this book are familiar to historians of Chicago: J. Ogden Armour, Arthur Cutten, Benjamin Hutchinson, Joseph Leiter, Peter McGeoch, and James Patten. With the exception of Armour, they are little known beyond Chicago, although their role in relation to the nation's food supply was no different than that of the more familiar Wall Street speculators in relation to corporate finance.

Through these individuals, Ferris tells his story of the development of commodity futures trading at the Chicago Board of Trade. He documents the unethical and dishonest trading practices of some, and how that contributed to attempts to regulate trading, first by the board itself and ultimately by the federal government. The book ends with the adoption of federal regulation in the administration of Franklin Roosevelt, but Ferris adds a short epilogue to include the present.

In the history of regulation, the Supreme Court's decision in Munn v. Illinois (1877) stands as a pivotal case. Ira Munn had served as president of the Board of Trade, and his elevators contained grain for delivery to those holding contracts bought and sold on the board. Ferris's approach provides a unique dimension to this oft-told tale. Populism, the wellspring of the events that included the Munn decision, was especially concerned with the effect of speculation on food prices; yet, in the years before the Great Depression, the Board of Trade successfully maintained a program of self-regulation while many other targets of the Populists succumbed to the federal juggernaut. The attempts to deal with "bucketshops" and the pressure on the board during the First World War are other exceptionally well done aspects of Ferris's book.

There is little to be gained from dwelling on the questions this book does not raise or the questions it raises and leaves unanswered. Suffice it to note that The Grain Traders does not fill the need for a comprehensive history of such a fundamental economic institution as the Chicago Board of Trade. Those who have never devoured an inviting dessert prior to the entree may cast stones, but Ferris has captured some of the flavor of a bygone era about which we know too little. It is an era unlikely to return, even in the absence of the Commodity Futures Trading Commission.

Louis Cain is professor of economics at Loyola University Chicago, visiting professor of economicss at Northwestern University, and a member of the editorial board of this journal. His current research includes the evolution of the zoo and aquarium business.
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Author:Cain, Louis
Publication:Business History Review
Article Type:Book Review
Date:Jun 22, 1990
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