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The cover jacket of "The Futures: The Rise of the Speculator and the Origins of the...

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The cover jacket of "The Futures: The Rise of the Speculator and the Origins of the Biggest World Markets" by Emily Lambert.

Frozen River

The story begins in the mid-19th century, when Chicago became a hub of rail and water transport. In the late autumn and winter, farmers along the river sold grain to merchants, who hauled it to town for sale, Lambert says. If waterways froze early, the merchants would converge on Chicago after the thaw, driving down prices. So they began signing contracts to deliver corn in the future at prices below today’s.

Speculators now had something to buy and sell, and they gravitated to the Chicago Board of Trade. Abuses followed, as operators such as Benjamin Hutchinson cornered markets. The shenanigans, which continued into the 1920s, were immortalized in fiction, a Parker Brothers game and D.W. Griffith’s “Corner in Wheat.”

Over time, the Board became associated with Irish members. Theirs wasn’t the only show in town. A few blocks away stood their “embarrassing little sister, ” the Chicago Mercantile Exchange. The Merc, which specialized in eggs, was known for its Jewish members.

Photographer: Fred Tiefeld/Basic Books via Bloomberg

Author Emily Lambert, author of "The Futures: The Rise of the Speculator and the Origins of the Biggest World Markets."

Author Emily Lambert, author of "The Futures: The Rise of the Speculator and the...

Open Photographer: Fred Tiefeld/Basic Books via Bloomberg

Author Emily Lambert, author of "The Futures: The Rise of the Speculator and the Origins of the Biggest World Markets."

“The joke was that if Murray was your last name, you belonged at the Board, ” Lambert writes. “If Murray was your first name, you belonged at the Merc.”

Pork Bellies

Like grain, eggs were seasonal in the days before growers tricked hens with light and heat. Eggs kept the Merc busy from September through January. Trading got slow after that. Looking for other things to trade, members hit on pork bellies, the hog meat used for bacon. Forget Jewish dietary law; Merc members “were not the types to let religion get in the way of business, ” Lambert says.

That venture set the pattern for what followed, as the Chicago boys developed ever more futures. We get chapters on currencies, bonds, stocks and the rest, enlivened with sketches of people who nudged the market forward.

Hog Broker

The memorable include Charlie Andrews, who grew up on a 4, 000-acre ranch and promoted cattle futures. Harold Heinold, a powder-blue-suited hog broker, set up commodity offices across the U.S. Richard Dennis famously turned a grubstake of a few hundred dollars into millions and funded causes such as the decriminalization of some drugs.

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LIVESTOCK-CME hog futures end mostly higher on short-covering  — Reuters
Packers may again try to pressure cash prices this week by drawing from cattle that were contracted against the futures market, traders and analysts said.

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