Good Derivatives: A Story of Financial and Environmental Innovation

Chapter 4

The Chicago Board of Trade Years

The Commodity Futures Contract

Architecture starts when you carefully put two bricks together. There it begins.

—Mies van der Rohe

My new job was the crowning achievement of all I had been working on for the past 10 years. But I was also apprehensive, having left the comforts of academia for the uncertainties of the business world. I had no idea about the unprecedented changes that were going to take place in the agricultural markets.

Ellen and I settled down in an old brownstone apartment in the Lincoln Park neighborhood of Chicago. The neighborhood was in transition and yuppies were buying and remodeling the buildings. I vividly remember the very first drive to work on July 1, 1972. As the taxi drove south on LaSalle Street, I could see the CBOT building at the foot of the street. When completed in 1930, it had been the tallest building in the city of Chicago.

My first tasks were to staff the department, change existing contracts to reflect the current economic situation, and develop new contracts. We recruited a diverse group of individuals whose competencies spanned agriculture, economics, and finance. They hailed from all parts of the world: the United States, England, Israel, and India. The employees of the exchange joked about the little United Nations contingency in our department. It was like being in graduate school again. Warren suggested that I consider hiring a secretary who had been with the exchange for some time. I agreed ...