E.B. Harris
Encyclopedia
Everette B. Harris, better known as E.B. Harris, was an American
businessman. Harris served as President of the Chicago Mercantile Exchange
from 1953 to 1978. During this time, he oversaw the diversification of the products traded on the exchange. He was previously the secretary of the Chicago Board of Trade
.
. As a teenager, he hitchhiked to Detroit, Michigan
to find employment as a dockworker. He later returned to Illinois and attended the University of Illinois on an academic scholarship
and studied economics
. While attending the University of Illinois, Harris married fellow student Marguerite Solberg. Harris and Solberg later divorced, but re-married after Harris' second wife died.
during World War II
. After the war he served as an economist for Mandel Bros. During this type he received an master's degree
in economics from the University of Chicago Graduate School of Business. In 1949, Harris was hired as the secretary of The Chicago Board of Trade. Though the Board of Trade had a reputation for hiring Jewish
traders, Harris stood out as a presbyterian
.
cornered
the onion futures market and then drove onion prices in order to profit from a short positions that they held. The collapse of onion prices drove many onion farmers into bankruptcy. A public outcry ensued among onion farmers who were left with large amounts of worthless inventory. Soon the Commodity Exchange Authority
investigated and the Senate Committee on Agriculture
held hearings on a proposed ban on onion futures trading. As the public face of the exchange, Harris lobbied hard against the bill. He described the proposed ban as "Burning down the barn to find a suspected rat". The measure was passed, however, and President Dwight D. Eisenhower
signed the Onion Futures Act
in August 1958.
in 1962. Pork bellies proved to be a popular product and brought fresh growth as meat packing companies joined the exchange. At Harris' insistence, the exchange also began trading in live cattle in November 1964. Harris later described the introduction of live cattle trading as his "monument". Harris celebrated the beginning of live cattle trading by parading an angus
calf around the trading floor. Cattle trading later became one of the mainstay products of the exchange. The Chicago Board of Trade later began offering live cattle trading to compete with the Mercantile Exchange. Harris accused the Board of Trade of "violating an unwritten law of commodity trading" by offering the same product that was launched by a neighboring exchange. Though Harris circulated a public petition which demanded the Board of Trade cease copying the Mercantile Exchange, the Board of Trade continued trading in live cattle futures.
visited the International Commercial Exchange in New York City
, they decided to introduce currency futures trading to the exchange. Harris and Melamed were initially worried about possible regulatory attention and their ability to draw customers to currency trading. They arranged a meeting with Milton Friedman
to discuss the proposal. Friedman was enthusiastic about the idea and published an article in support. Harris and Melamed later met with then-United States Secretary of the Treasury
George P. Shultz
, who also approved of their plan. In 1972, they began trading currency on the exchange and it was a very successful market. The currency trading on the Chicago Mercantile Exchange eventually served as a model for many other currency trading markets.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
businessman. Harris served as President of the Chicago Mercantile Exchange
Chicago Mercantile Exchange
The Chicago Mercantile Exchange is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization...
from 1953 to 1978. During this time, he oversaw the diversification of the products traded on the exchange. He was previously the secretary of the Chicago Board of Trade
Chicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
.
Early life
Harris was born and raised on a 80 acre farm near Norris, IllinoisNorris, Illinois
Norris is a village in Fulton County, Illinois, United States. The population was 194 at the 2000 census. This is a decrease from the 1990 population of 212.-Geography:Norris is located at ....
. As a teenager, he hitchhiked to Detroit, Michigan
Detroit, Michigan
Detroit is the major city among the primary cultural, financial, and transportation centers in the Metro Detroit area, a region of 5.2 million people. As the seat of Wayne County, the city of Detroit is the largest city in the U.S. state of Michigan and serves as a major port on the Detroit River...
to find employment as a dockworker. He later returned to Illinois and attended the University of Illinois on an academic scholarship
Scholarship
A scholarship is an award of financial aid for a student to further education. Scholarships are awarded on various criteria usually reflecting the values and purposes of the donor or founder of the award.-Types:...
and studied economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
. While attending the University of Illinois, Harris married fellow student Marguerite Solberg. Harris and Solberg later divorced, but re-married after Harris' second wife died.
Early business career
After graduating in 1935, Harris initially worked in the advertising department of Southern Indiana Gas and Electric. He then worked for the U.S. Bureau of Labor StatisticsBureau of Labor Statistics
The Bureau of Labor Statistics is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics. The BLS is a governmental statistical agency that collects, processes, analyzes, and...
during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. After the war he served as an economist for Mandel Bros. During this type he received an master's degree
Master's degree
A master's is an academic degree granted to individuals who have undergone study demonstrating a mastery or high-order overview of a specific field of study or area of professional practice...
in economics from the University of Chicago Graduate School of Business. In 1949, Harris was hired as the secretary of The Chicago Board of Trade. Though the Board of Trade had a reputation for hiring Jewish
Jews
The Jews , also known as the Jewish people, are a nation and ethnoreligious group originating in the Israelites or Hebrews of the Ancient Near East. The Jewish ethnicity, nationality, and religion are strongly interrelated, as Judaism is the traditional faith of the Jewish nation...
traders, Harris stood out as a presbyterian
Presbyterianism
Presbyterianism refers to a number of Christian churches adhering to the Calvinist theological tradition within Protestantism, which are organized according to a characteristic Presbyterian polity. Presbyterian theology typically emphasizes the sovereignty of God, the authority of the Scriptures,...
.
Chicago mercantile exchange
In 1953, the Chicago Mercantile Exchange hired Harris for the position of President and doubled the $10,000 salary he was paid by the Board of Trade. Harris then suggested that the two should merge, but this was not a popular idea at the Board of Trade so he moved to the Mercantile Exchange. At that time, the Mercantile Exchange was much smaller than the Board of Trade. While serving as president, Harris was the most public representative of the exchange. He served as president until retiring on his 65th birthday in 1978.Onion futures scandal
At the time he was first hired, the most traded products on the Chicago Mercantile Exchange were futures and options on onions, followed by potatoes and eggs. In 1955 two onion traders, Sam Seigel and Vincent KosugaVincent Kosuga
Vincent Kosuga was an American onion farmer and commodity trader best known for manipulating the onion futures market. Though he made millions of dollars on commodity trading, his actions were highly controversial and attracted government scrutiny...
cornered
Cornering the market
In finance, to corner the market is to get sufficient control of a particular stock, commodity, or other asset to allow the price to be manipulated. Another definition: "To have the greatest market share in a particular industry without having a monopoly...
the onion futures market and then drove onion prices in order to profit from a short positions that they held. The collapse of onion prices drove many onion farmers into bankruptcy. A public outcry ensued among onion farmers who were left with large amounts of worthless inventory. Soon the Commodity Exchange Authority
Commodity Exchange Authority
The Commodity Exchange Authority was a former regulatory agency of USDA. It was established toadminister the Commodity Exchange Act of 1936; it was the predecessor to the Commodity Futures Trading Commission ....
investigated and the Senate Committee on Agriculture
United States Senate Committee on Agriculture, Nutrition and Forestry
The Committee of Agriculture, Nutrition and Forestry is a committee of the United States Senate empowered with legislative oversight of all matters relating to the nation's agriculture industry, farming programs, forestry and logging, and legislation relating to nutrition and...
held hearings on a proposed ban on onion futures trading. As the public face of the exchange, Harris lobbied hard against the bill. He described the proposed ban as "Burning down the barn to find a suspected rat". The measure was passed, however, and President Dwight D. Eisenhower
Dwight D. Eisenhower
Dwight David "Ike" Eisenhower was the 34th President of the United States, from 1953 until 1961. He was a five-star general in the United States Army...
signed the Onion Futures Act
Onion Futures Act
The Onion Futures Act is a United States law banning the trading of futures contracts on onions. In 1955 two onion traders, Sam Seigel and Vincent Kosuga, cornered the onion futures market on the Chicago Mercantile Exchange. The resulting regulatory actions led to the passing of the act on August...
in August 1958.
Cattle trading
After the loss of the lucrative onion trading market, the Chicago Mercantile Exchange was brought to the brink of bankruptcy. In order to stay solvent, they began trading in pork belliesPork belly
Pork belly is a boneless cut of fatty meat derived from the belly of a pig. Pork belly is popular in Asian cuisine, and forms a part of many traditional European dishes such as the Alsatian Choucroute garnie, the Swiss Berner Platte, and the German Schlachtplatte...
in 1962. Pork bellies proved to be a popular product and brought fresh growth as meat packing companies joined the exchange. At Harris' insistence, the exchange also began trading in live cattle in November 1964. Harris later described the introduction of live cattle trading as his "monument". Harris celebrated the beginning of live cattle trading by parading an angus
Angus
Angus is one of the 32 local government council areas of Scotland, a registration county and a lieutenancy area. The council area borders Aberdeenshire, Perth and Kinross and Dundee City...
calf around the trading floor. Cattle trading later became one of the mainstay products of the exchange. The Chicago Board of Trade later began offering live cattle trading to compete with the Mercantile Exchange. Harris accused the Board of Trade of "violating an unwritten law of commodity trading" by offering the same product that was launched by a neighboring exchange. Though Harris circulated a public petition which demanded the Board of Trade cease copying the Mercantile Exchange, the Board of Trade continued trading in live cattle futures.
Currency trading
Although these proved to be profitable products for the exchange, Harris believed that the exchange was too dependent upon these two products. After he and Chicago Mercantile Exchange chairman Leo MelamedLeo Melamed
Leo Melamed is a former chairman of the Chicago Mercantile Exchange , current board member of CME Group and chairman of the CME Group Foundation. He is a longtime executive in the field of global derivatives....
visited the International Commercial Exchange in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, they decided to introduce currency futures trading to the exchange. Harris and Melamed were initially worried about possible regulatory attention and their ability to draw customers to currency trading. They arranged a meeting with Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
to discuss the proposal. Friedman was enthusiastic about the idea and published an article in support. Harris and Melamed later met with then-United States Secretary of the Treasury
United States Secretary of the Treasury
The Secretary of the Treasury of the United States is the head of the United States Department of the Treasury, which is concerned with financial and monetary matters, and, until 2003, also with some issues of national security and defense. This position in the Federal Government of the United...
George P. Shultz
George P. Shultz
George Pratt Shultz is an American economist, statesman, and businessman. He served as the United States Secretary of Labor from 1969 to 1970, as the U.S. Secretary of the Treasury from 1972 to 1974, and as the U.S. Secretary of State from 1982 to 1989...
, who also approved of their plan. In 1972, they began trading currency on the exchange and it was a very successful market. The currency trading on the Chicago Mercantile Exchange eventually served as a model for many other currency trading markets.