Tenth Anniversary Celebration
June 4, 1982
seems like only yesterday:
is the new/old floor at 110 N. Franklin,
The bronze chicken in front of the door,
There are the new wooden desks,
The blackboards and board markers,
The glass recording booth,
The old ticker tape machine,
Ken McKay with a rule book and Walter Kowalski in statistics.
And there is the Western Grand Champion steer, on the floor of
seems like only yesterday:
is the old guard,
Harold Fox with ashes on his tie,
Count DeLattre whispering in French,
Sam Schneider shouting "lackity, lackity,"
And Irving Manaster reminding us to "trade small and last all Fall."
the new guard,
Lou Madda thinking of retiring from action and getting married,
Marlowe King accusing someone of cornering the egg market (or was
And Dave Henner low ticking the bellies (or was it eggs).
And there is Billy Muno screaming at a board marker,
And Lenny Feldman shouting to stop trading because he thinks he
And Jack Sandner making his debut to our family by slapping Eddie
Cahill and punching out Wally Wizlewski.
remember it like it was yesterday:
are all the young Turks, secretly meeting as the "Broker's Club,"
to change the status quo.
And here is our first victory, the election of Bob O'Brien as chairman,
and a new era for the Merc!
Then our 50th Anniversary, we build a Poultry and Egg Building
in Lincoln Park Zoo, and we try to launch Idaho potatoes---for
the seventh time.
it just yesterday when we were told
That you had to have an egg squeeze a month to bring business to
That scrap steel and frozen shrimp were the contracts of the future,
That you could not trade a live commodity, such as cattle,
That pork bellies was the wrong name,
That women on the floor would destroy our ability to think,
That a new building would bankrupt the Exchange,
That the IMM was a loser.
seems like only yesterday
When I sat around with Ron Frost, E.B. Harris and Mark Powers debating
what to call this crazy new division we were about to launch.
I was chairman, so my choice prevailed.
Only yesterday when the price of an IMM seat was ten thousand
and Arnie Ruben rushed to sell it out for eleven.
Only yesterday, when our newly-self-appointed international financiers,
the first IMM board of directors, took their very first European
trip to tell the world about our great idea---and no one came to
And Barry Lind discovered that you can go broke just exchanging
currency from one country to the next.
When Maurice Levy was in charge of closing 36 inactive currency
contracts in line with his version of Interbank prices.
When the gold window was closed, and George Fawcett and I could
not cover our short Swiss francs for the next ten limit ups.
When a high NY bank officials politely asked us to leave his office
in fear we might become violent.
And Fed chairman Arthur Burns, no doubt humoring us, wondered how
Milton Friedman got entangled with a bunch of hog traders from
Just yesterday when the Mexican peso was devalued, and the world
assumed that it meant devaluation of the IMM as well.
Just yesterday when Henry Jarecki scared the daylights out of us
by conclusively proving, with a mile-long computer run, that the
IMM would bankrupt the bank of England.
Only yesterday when Nobel winning economist Paul Samuelson came
to the IMM opening banquet to tell us that the IMM would fail.
Yes, only yesterday when E.B. Harris confided in me that our trouble
was that we did not know it could not be done! So we did it!
We were a bunch of guys who were hungry.
We were traders to whom it did not matter-
whether it was eggs or gold, bellies or
the British pound, turkeys or T-bills.
were babes in the woods, innocents,
in a world we did not understand,
too dumb to be scared.
were audacious, brazen, raucous pioneers!
unworldly to know we could not win.
that the odds against us were too high;
that the banks would never trust us;
that the government would never let us;
that Chicago was the wrong place!
IMM was a building wanting to be built but it was
too grandiose to be realistic
too complicated to be possible
too good to be true.
And yet it was built ... because, Everette,
We did not know it could not be done.
like any other building structure,
It needed architects, designers, engineers,
Some of them are sitting on this dais,
Others are recorded in the historical sketch prepared for this
countless others remain anonymous---
The hundreds of construction workers who laid the bricks and applied
Who made the IMM happen?
I will tell you who:
the presidents of the exchange,
Not the chairman,
Not the officials,
Not the advisors,
Not the Board of Governors.
IMM was made by those same brazen babes in the woods who did
not know it could not be done!
You, the members, made it happen.
IMM like every exchange, cannot succeed, cannot innovate, cannot
produce a successful contract without liquidity
Liquidity, that is the financial name for blood,
the blood which is infused by traders, and brokers.
Just as a human body must have blood to live,
so must a market have liquidity to succeed.
There is no substitute for it,
There is no other formula.
The advisors can advise,
The presidents can proclaim,
The chairman can coerce,
The board can cast its vote,
But, they cannot make a market.
Only the members can!
You made the IMM!
The generals may get the credit, but it is the nameless soldiers
who win the war!
among us all, one person stands out who cannot remain nameless.
One person who is in a category all by himself.
He was the only one among us who counted!
For when we proclaimed the IMM was a great idea,
An idea whose time had come---the world yawned or laughed.
When he agreed it was a great idea, the world took notice.
I know he may stand up here and deny it.
He may tell you he had but a small role
Don't you believe it,
I know better!
Friedman, our guest of honor, is the man who made the critical
His paper, written at our behest in 1971, explaining why a futures
market in currency was necessary was the single most important
factor to give us and our idea credibility.
name was magical!
People who would otherwise not listen, because of his paper, gave
us an audience.
Officials who would otherwise not have approved, because of his
paper, gave us approval.
Presidents, financial ministers, central bankers who would otherwise
not have allowed us near their doors, because of his paper, opened
the door for us.
It was magical.
does he know or realize how often and to what extent his name
made the difference.
If we were told fixed exchange rates are coming back
We responded, Friedman said they are not!
If we were told our market was just for speculators
We responded, Friedman said that is not so!
If we were told that we were crazy
We responded, Friedman did not think so.
And each and every time his name made a difference!
remember the Winter of 1971. We went with Beryl Sprinkel and
Mark Powers to visit the likes of Arthur Burns, George Schultz,
and Paul Volcker.
How did we do? Darn good!
Friedman's message got there before we did.
remember the winter of 1975. The CFTC would not approve the T-bill
contract unless the Secretary of the Treasury acquiesced.
Who do you think called Secretary William Simon on the phone?
Milton Friedman, that's who.
And what do you think happened?
Our contract was approved the same day.
can go on and on, but you get the point.
Milton Friedman is not only the best friend of free enterprise!
He is the best friend the IMM ever had,
So if he now stands up to tell you otherwise,
No matter how convincing he may be,
Don't you believe it.
I can tell you now, he can be convincing.
His very good friend, professor George Stigler of the University
of Chicago, on the occasion of the U of C.'s Nobel Prize celebration
for Milton Friedman, introduced Professor Friedman in the following
he said, will begin a debate by asking you to grant him three
$2 is better than $1;
That the law of diminishing returns is valid;
That individuals do not have complete knowledge of the future.
undeniable assumptions, right? My fundamental advice," said Professor
"Do Not grant him these assumptions. For if you do, you will find yourself
led, by inexorable logic, to conclusions such as these:"
the Federal Reserve System should be abolished,
That the Board of Governors of the Federal Reserve should be put
on Social security,
And that Social Security should be abolished.
is now my distinct honor to introduce to you our Guest of Honor,
Nobel Laureate, Professor Milton Friedman and his wife, Rose.
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