Chicago Board of Trade

“ It appears in this record that the Chicago Board of Trade is a voluntary association of individuals, who meet together, at a certain building owned by the association, for the purpose of there transacting business. ”

“ On the Chicago Board of Trade the speculative trades in “futures” are fifteen times more than the sales of grain and provisions, and so of the exchanges of all other large cities. To support these speculative operations fresh money is required to be constantly poured into the pool, and it is drawn from every class in the community. ”

“ The railroads of the country accommodate themselves to the interstate function of the Chicago market by giving shippers from Western states bills of lading through Chicago to points in Eastern states with the right to remove the grain at Chicago for temporary purposes of storing, inspecting, weighing, grading, or mixing, and changing the ownership, consignee or destination and then to continue the shipment under the same contract and at a through rate. ”

“ Purchases of grain 'to arrive' are made argely from country dealers and farmers throughout the whole territory tributary to Chicago, which includes besides Illinois and Iowa, Indiana, Ohio, Wisconsin, Minnesota, Missouri, Kansas, Nebraska, and even South and North Dakota. The purchases are sometimes the result of bids to individual country dealers made by telegraph or telephone either during the sessions or after ”

“ No more does the fact that the contracts thus disposed of call for many times the total receipts of grain in Chicago. The fact that they can be and are set off sufficiently explains the possibility, which is no more wonderful than the enormous disproportion between the currency of the country and contracts for the payment of money, many of which in like manner are set off in clearing houses without any one dreaming that they are not paid, and for the rest of whch the same money suffices in succession, the less being needed the more rapid the circulation is. ”

“ And that the said Henry C. Wallace, Secretary of Agriculture, is authorized to designate the said Board of Trade of the City of Chicago as a 'contract market' under the said act of Congress for and during the same period without requiring said board of trade to comply with the conditions and requirements of section 5 of said act in the several respects above mentioned. ”

“ Sales 'to arrive'; that is, agreements to deliver on arrival grain which is already in transit to Chicago or is to be shipped there within a time specified. On every business day sessions of the Board are held at which all bids and sales are publicly made. Spot sales and future sales are made at the regular sessions of the Board from 9:30 a. ”

“ Such transactions cannot be separated from the movement to which they contribute and necessarily take on its character. The commission men are essential in making the sales without which the flow of the current would be obstructed, and this, whether they are made to packers or dealers. The dealers are essential to the sales of the stock farmers and feeders. The sales are not in this aspect merely local transactions. They create a local change of title, it is true, but they do not stop the flow ”

“ On the Board of Trade proper nothing smaller than a 5000-bushel lot of grain or a 250-package111 lot of provisions can be dealt in. On the other side of the street, however, is the Open Board of Trade, to the floor of which strangers are admitted free, and where one may deal in 1000-bushel or even 500-bushel lots. Here is a place where quick action may be had for one’s money. The intending speculator may make his deal, watch the blackboard, close out and walk away $50 richer or $50 poorer, as the case may be, inside of ten minutes. ”

“ Membership on the Board of Trade is different from a mere chose in action, like a simple claim or debt asserted against another, and only to be enjoyed after its satisfaction enforcement. It is a continuously enjoyed 'incorporeal right.' Hyde v. Woods, supra. The Board of Trade is the member's trustee, while it maintains and holds all its facilities for his use and enjoyment. ”

“ Chicago is the leading grain market in the world. Its Board of Trade is the commercial center through which most of the trading in grain is done. The character of the organization is described in Board of Trade v. ”

“ The city's foreign trade is close to $2,000,000,000 a year. Federal government figures show the city's foreign trade as being about $100,000,000 a year. The reason for this is that the government gives credit for shipments to the port of entry, or exit. Therefore the seaboard cities get entire credit for the business that is really done in Chicago, and merely passes through these ports. Under the British system, credit for foreign trade goes to the point of origin, not to the city through which the business happens to pass on its way to its destination. ”

“ The products of Chicago manufactures are valued at $325,000,000. In 1881 the receipts of hogs amounted to 6,474,844 head, and in 1882, 5,817,504 head. The wholesale mercantile trade has fallen off somewhat, as it has all over the country, owing to depression that seems to be universal. In manufactures the city is making wonderful development. In growth she is still unchecked and without a rival in the world among large cities and business centres. ”

“ It speaks only of the seller's 'lower' price and of that only to the extent that it is made 'in good faith to meet an equally low price of a competitor.' The Act thus places emphasis on individual competitive situations, rather than upon a general system of competition. Respondents are here seeking to justify delivered prices which discriminate in favor of buyers in Chicago and at points nearer, freightwise, to Chicago than to Decatur, by a pricing system involving phantom freight and freight absorption. ”

“ Were such a system in force in the United States Chicago's export business would be shown to be close to two billion dollars annually.
The packers and the manufacturers of agricultural machinery are among Chicago's heaviest exporters and their products are shipped all over the world. Many other lines likewise have many foreign markets and a movement is on foot to have “made in Chicago” stamped on all products of this market that the city's importance as a producing center may be brought home to the rest of the world. ”

“ These circumstances have contributed to make it the greatest grain and live stock market in the world. But its accessibility to the raw materials of industrial development has also made it a great manufacturing city. Chicago has more than 10,000 factories and the output of its manufacturing zone is probably more than $3,000,000,000 annually. The principal industries and manufactures are meat packing, foundry and machine shop products, clothing, cars and railway construction, agricultural implements, furniture, and (formerly) malt liquors. ”

“ The average pay-roll of Chicago manufactories amounts annually to $175,000,000, and in the value of manufactured products Chicago ranks second in the list of American cities.
In the wholesale trade dry goods lead with $200,000,000, produce $160,000,000, groceries $100,000,000, boots and shoes $60,000,000 and the mail order business, which enters all lines, $90,000,000. Manufactured articles are carried chiefly by rail; raw material, such as coal, iron ore, grain and lumber, etc., as largely as possible by water in the six months' open season. ”

“ The absorptive power of the New York market, to digest not only the surplus foreign exchange of the Chicago market, but that of the entire United States as well, has been demonstrated for many years. The reason for this can be attributed to the fact that international trade balances are at the present day, and always will be, adjusted by the financiers of New York City. ”

“ Among the more important general manufactures of the city may be mentioned those of railway cars, locomotives, agricultural implements, mining appliances, clothing, electrical apparatus, lumber products, furniture, pianos, organs, leather, cigars, chemicals, beer, spirits, and flour. The steel and iron industry is conducted on a large scale, and the city has some large rolling mills. Chicago is also one of the leading publishing centers of the United States, and is an active jobbing center for the book trade. ”

“ But our American tall building will be strictly for business, a serious affair, the office of a great life-insurance company.” There is a single American factory which makes 1500 railway locomotives every year. There is a company for the manufacture of harvesting-machines in Chicago whose plant covers 140 acres, whose employees number 24,000, and whose products go all over the world.
Undoubtedly it was the desire to promote industrial development that led to the adoption of the protective tariff as an American policy. ”

“ Beginning in July 1933, the industry held a series of meetings in Chicago for the ostensible purpose of drafting a code of fair competition to govern it under the National Industrial Recovery Act, 48 Stat. 195. These meetings resulted in an understanding and agreement among those attending, including respondents, to sell lead pigments 'on the basis of flat delivered prices to customers within designated zones, with uniform differentials applicable as between such zones . ”

“ Fifth Avenue and Market Street being prominent centres of the wholesale dry-goods interests, and State Street the centre of the retail trade. In Chicago there has been a noteworthy development of the department store, establishments here ranking among the largest and most complete in the United States. Manufacturing establishments are found in various parts of the city, while the great live-stock and packing industry centres in the famous Union Stockyards, 475 acres in extent, some five miles southwest of the City Hall. ”

“ Delegates were appointed to what it was proposed to call "The Amalgamated Council of the Building Trades of Chicago," from the following trade and labor organizations: Carpenters, Painters, Derrickmen, Hod-carriers, Steam-fitters, Lathers, Gas-fitters, Galvanized-iron and Cornice workers, Slaters and Stair-builders.
A meeting was held at Greenebaum's hall on Sunday, April 17th. A constitution and by-laws were adopted and officers were elected as follows: President, J. H. Glenn; Vice-President, P. A. Hogan; Secretary, Ed. Bates; Financial Secretary, J. Burns ”

“ One hundred heavy trains arrive and depart from it daily. It has a commerce commensurate with its magnitude. It employs about 70,000 tons of shipping, nearly one-half being steamers and propellers. The lumber-trade, which is chiefly carried on with Buffalo, is becoming very profitable. The exports of Chicago, to the East, of bread-stuffs for the past year, exceeded 13,000,000 bushels; and a city which, in 1840, numbered only 4000 inhabitants, is now one of the largest exporting grain-markets in the world. ”

“ New York alone, among American cities, has a greater trade. Chicago is the greatest railway centre, the greatest grain market, the greatest live-stock market and meat-packing centre, and the greatest lumber market of the world. ”

“ The realization of a profit from the Indian trade had never entered into the calculations of the founders of the factory system, yet, as has been shown, a steady profit was realized from the Chicago factory, at least from the year 1807 on. How well the factory fulfilled its primary function of regulating the prices of the private traders is significantly shown by the unconscious testimony of Black Partridge and Petchaho, the latter the brother and successor of Gomo, the head chief of the Illinois River Pottawatomies. ”

“ Of the great elements of civic success, we consider manufactures the most important; but, to make a city of the first magnitude, it is obviously necessary to have all the resources of food, industry and commerce. Chicago is remarkable chiefly as a grain city—like Odessa, on the Baltic. But, whence is the grain derived? By the construction of railroads, at that point, from Indiana, Illinois, Missouri, Wisconsin and Iowa, the whole mass of surplus grain in that (p. 223) region—amounting to more than twenty millions of bushels per annum—has been exported from Chicago. ”

“ Baker, “than this reversal of the order of rate-making as manifested in the tariffs east of Chicago, so that beef, the high-priced product, is shipped at 181⁄2 cents, while cattle, the low-priced product, is shipped at 231⁄2 cents, simply to enable the Trust to close the Chicago market—the best market in the country for export cattle—to thousands of western cattle growers? They cannot afford to ship live-stock to Chicago at 231⁄2 cents when the Trust can ship the products of the same cattle, weighing only 60 or 70 percent as much as the live animal, at 181⁄2 cents. ”

“ How great that evil is in Chicago alone appears from the committee’s sober estimate that the annual loss in lives is 5,000 and the annual profit of those engaged in the trade is $15,000,000, which latter figure has since been raised four-fold. It has often been pointed out in these columns and elsewhere that, if there were any other single drain upon a city that cost it 5,000, or let us say even 2,500, lives a year, the community would be up in arms about it. ”

“ Thus the 'delivered price' under these latter circumstances required a Chicago (non-basing point) producer to 'absorb' freight costs. That is, such a seller's net returns became smaller and smaller as his deliveries approached closer and closer to the basing point.
Several results obviously flow from use of a single basing point system such as 'Pittsburgh plus' originally was. One is that the 'delivered prices' of all producers in every locality where deliveries are made are always the same regardless of the producers' different freight costs. ”