[Congressional Record Volume 144, Number 59 (Tuesday, May 12, 1998)]
[Senate]
[Pages S4745-S4747]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




COMMEMORATING THE 150TH ANNIVERSARY OF THE ESTABLISHMENT OF THE CHICAGO 
                             BOARD OF TRADE

  Mr. McCAIN. Mr. President, I ask unanimous consent that the Senate 
proceed to the consideration of S. Res. 229 introduced earlier today by 
Senators Moseley-Braun and Durbin.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the resolution.
  The assistant legislative clerk read as follows:

       A resolution (S. Res. 229) commemorating the 150th 
     anniversary of the establishment of the Chicago Board of 
     Trade.

  The Senate proceeded to consider the resolution.
  Ms. MOSELEY-BRAUN. Mr. President, this year, the Chicago Board of 
Trade is celebrating its 150th anniversary. Its an anniversary well 
worth celebrating, and not just in Chicago, but all across our country, 
because the vibrant, creative marketplace the Chicago Board of Trade 
created has meant a lot to all of us.
  Whether we are in the food production and distribution system, or 
not; whether we participate in our nation's financial markets or not, 
we have all benefitted from the agricultural and financial marketplace 
the Chicago Board of Trade first established 150 years ago. Food prices 
in the United States are lower than they otherwise would be because of 
the Board of Trade. Interest rates on federal securities--and, 
therefore, all interest rates that are related to rates on Treasury 
securities--are lower than they otherwise would be because of the 
Chicago Board of Trade. The existence of this extremely efficient, 
vital marketplace has saved us all money, whether we have ever 
purchased a futures contract or not.
  It is not by accident that this market is located in Chicago. Due to 
its central location, access to waterways and proximity to farmland, 
Chicago is the natural crossroads of commerce in the United States. 
Before the Board was created, however, problems of supply and demand, 
transportation, and storage created chaos in the agricultural 
marketplace. The solution was simple but ingenious. Eighty-two Chicago 
merchants came together to establish a price discovery mechanism to 
insure against volatile grains prices. The exchange began modestly--
even giving a free lunch to guarantee the attendance of traders--but 
the concept caught on rapidly and spawned the global multi-billion 
dollar futures industry we know today.
  Belying its age, the Chicago Board of Trade remains energetic and 
eternally innovative. In the past ten years, the Board has introduced 
over 100 new products. Four years ago, the Board launched Project A, 
their global overnight electronic trading system, that has enjoyed 
tremendous success and will soon be expanded. This year, the Board of 
Trade will launch the Chicago Board Brokerage, a new electronic trading 
system for the trading of cash US Treasury securities.
  The success of the Board of Trade has not only created huge benefits 
for our nation generally, it has also contributed enormously to the 
economy of Chicago. Chicago's two future exchanges have created over 
150,000 jobs, and put over $10 billion each night in the city's banks.
  Moreover, the Board has also made major aesthetic contributions to 
Chicago. In a city world-renowned for its architecture, the beautiful 
Board of Trade structure stands out as a major example of late Art Deco 
style--and one of Chicago's treasured landmarks.
  The Chicago Board of Trade is a shining example of what a little 
ingenuity and Midwest common sense can accomplish. The resolution my 
good friend from Illinois, Senator Durbin, and I are today introducing, 
congratulates the Board for 150 years of real accomplishment, and 
salutes the Board for demonstrating the kind of leadership that will 
ensure that their markets are as dynamic and useful to everyone 
involved in agricultural and our financial system--and to our economy 
generally--over the next 150 years. The Chicago Board of Trade richly 
deserves to be celebrated, and I urge all of my Colleagues to work with 
Senator Durbin and I to ensure that this resolution

[[Page S4746]]

receives prompt and favorable consideration by the Senate.
  Mr. President, I ask unanimous consent that the editorials from the 
Chicago Tribune and Chicago Sun-Times be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the Chicago Tribune, Apr. 3, 1998]

                   CBOT Looks Back and Forward at 150

       As the City of Chicago grew up out of the prairie grasses 
     and farmlands of the American Midwest in the latter half of 
     the 19th Century, the Chicago Board of Trade grew with it. 
     Some would say it was the other way around: The city grew as 
     its status as a trade center grew. They wouldn't be wrong.
       The first ``skyscrapers'' to dominate this particular 
     landscape were giant grain silos, erected to hold the 
     millions of bushels of grain pouring into the city from the 
     west and south. The silos are long gone, but the Board of 
     Trade, which celebrates its 150th anniversary this year, 
     remains a vibrant center of commerce linking the buyers and 
     sellers of the world.
       Founded by 82 Chicago merchants in 1848, CBOT made its mark 
     by revolutionizing how grain was stored and sold. It 
     standardized a method of weighing and grading grains so that 
     all grain of a particular grade could be stored together. The 
     seller was given a receipt for the grain he brought in, and 
     that receipt was sold to the buyer, who redeemed it for the 
     stated amount and grade of grain.
       Of course, it didn't take long for traders to figure out 
     they could make a bundle if they contracted at this month's 
     wheat prices to deliver a load of wheat next month--if the 
     price of wheat were to drop next month. Then they could buy 
     it at next month's low price and sell it for this month's 
     higher price.
       Thus was born the futures market, a centralized marketplace 
     for sellers and buyers of grain that replaced the cumbersome 
     method of exchanging specific loads of grain. From those 
     origins have sprouted the world's largest futures exchange, 
     now making markets in everything from soybeans to U.S. 
     Treasury bonds to the Dow Jones industrial average.
       Just as in the last century development of the railroads 
     and telegraph helped CBOT reach beyond the Midwest, the 
     modern Board of Trade is using cutting-edge technology to 
     forge links with trading partners worldwide. In 1995, it 
     became the first futures exchange to open a commercial 
     service on the Internet, and since then it has established an 
     electronic system for overnight trades.
       This year CBOT has entered into a cooperative agreement 
     with Eurex, its Swiss-German counterpart, and plans are in 
     the works to add a partner in Asia. Eventually, traders on 
     the after-hours electronic system will be able to access 
     those international markets from a single screen.
       That's a long way from a bunch of grain merchants 
     exchanging slips of paper and shouting prices in a cloud of 
     wheat dust. But a remnant of that history lives on even at 
     the board's new multimillion-dollar trading floor, where 
     ``open outcry'' trading still rules during normal trading 
     hours.
       It's a charming, chaotic anachronism--a link to the last 
     century that cannot long endure into the next if the Chicago 
     Board of Trade is to maintain its pre-eminent place in global 
     commerce.

               [From the Chicago Sun-Times, Apr. 3, 1998]

                          150 Years of Success

       What has been here as long as Chicago's first railroad? 
     What arrived here with the first telegraph line and the 
     digging of the Illinois and Michigan Canal?
       What, despite its age, is so healthy and vital that it is 
     one of the city's biggest economic engines, generating 
     150,000 jobs and producing $35 billion in bank deposits? And 
     what is so uniquely successful that cities around the world 
     are trying to copy it?
       Obviously we are not talking about the Cubs or the White 
     Sox. Not even the world famous Michael Jordan can claim this 
     kind of impact. The answer is the Chicago Board of Trade, 
     which today celebrates the 150th anniversary of its founding.
       A far cry from the striking and historic edifice it now 
     occupies at the foot of La Salle Street, the exchange began 
     in 1848 when 83 grain merchants met in rooms over a Water 
     Street flour shop to discuss a creative idea: How to protect 
     themselves against the risks of ever-changing grain prices.
       Their idea caught on as Chicago rapidly became an 
     agricultural and shipping hub. Simply put, the exchange 
     offered traders a chance to buy or sell grain for a certain 
     price at a later date. For some, it offered the security of a 
     hedge against troublesome price fluctuations; for others it 
     offered a chance for lucrative profits.
       It was pure Chicago--innovative, risky, boisterous, 
     expansive, entrepreneurial and gritty. And it grew with the 
     city, from a handful of corn, soybean and other grain 
     contracts to imaginative trading in everything from precious 
     metals, stock options and interest rate futures to pollution 
     emission allowances and, most recently, the Dow Jones 
     Industrial Average index. That growth and its impact on 
     Chicago and the world are detailed in today's Business 
     section on Page 58.
       Its growth has not been without problems. The city's 
     leadership in this form of ``risk management'' is threatened 
     by copycats, such as markets in Britain and other countries 
     where the freewheeling spirit that gave Chicago its start is 
     alive and well and functioning without some questionable U.S. 
     regulations. A 1995 London Business School study, for 
     example, found that the cost of U.S. regulation is 57 percent 
     higher than in Britain. Furthermore, the Chicago exchanges 
     find themselves forever fending off proposals for new taxes 
     and restrictions on futures and options.
       No one should fool himself into thinking such restrictions 
     would affect only a single, high-flying industry. Consider: 
     While banking employment was declining nationally from 1986 
     to 1994, it grew 10 percent in Chicago. Thank Chicago's 
     exchanges, such as the Board of Trade, whose huge volumes 
     created the need for nearby banks, outfits from New York, 
     Europe and Asia--72 foreign banks in all--with their high-
     paying jobs.
       The Sun-Times, this year celebrating its 50th anniversary, 
     can admire this kind of longevity, especially when it has 
     meant for this community continuing prosperity and 
     opportunity for so many. Congratulations, CBOT.

  Mr. DURBIN. Mr. President, I rise today to pay tribute to the Chicago 
Board of Trade, the most influential marketplace for futures trading in 
the world, on the 150th anniversary of its establishment. I am pleased 
to join my colleague, Senator Carol Moseley-Braun, in introducing a 
resolution commemorating this momentous occasion.
  On April 3, 1848, 83 merchants who realized that the grain trade was 
growing rapidly, came together to form a marketplace for grains and 
livestock. Thus, the world's largest futures and options trading 
facility was born, bringing buyers and sellers from all walks of life 
together under one roof for the first time.
  With the birth of the Chicago Board of Trade came a financial 
industry which has spread around the world over the last 150 years. The 
Chicago Board of Trade has been a vital part of Chicago since the first 
railroad, telegraph lines, and the digging of the Illinois and Michigan 
Canal. The Board has weathered through a Civil War, the great Chicago 
fire, The Great Depression, World War I and II, and countless other 
struggles.
  The Chicago Board of Trade is a powerful economic engine that 
generates 150,000 jobs throughout the Chicagoland area and also 
produces $35 billion in bank deposits each year. Over the years, the 
Chicago Board of Trade has grown beyond grain and livestock, and has 
branched out into soybean futures, corn options, and wheat options. 
Last year, the Chicago Board of Trade set the record for the trading of 
soybean futures traded. The Chicago Board of Trade also established 
records for the trading soybean meal, and soybean oil.
  Mr. President, it has been a long time since the days when prices 
were shouted through a cloud of dust on the floor of the Chicago Board 
of Trade. The Board has relocated several times throughout its 150 
years. Currently, the Board is located in downtown Chicago. The base of 
the building spans an entire city block, and is a Chicago landmark.
  Mr. President, I would like to take this opportunity to congratulate 
the Chicago Board of Trade on 150 years of bringing economic vitality 
to Chicago, the State of Illinois, and the world.
  Mr. McCAIN. I ask unanimous consent that the resolution and preamble 
be agreed to, en bloc, and the motion to reconsider be laid upon the 
table, and any statements relating thereto be placed in the Record at 
the appropriate place as if read.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The resolution (S. Res. 229) was agreed to.
  The preamble was agreed to.
  The resolution, with its preamble, reads as follows:

                              S. Res. 229

         
       Whereas the Chicago Board of Trade, which celebrates in 
     April 1998 the 150th anniversary of its establishment, has 
     been an essential contributor to financial growth in Chicago, 
     Illinois, and our Nation;
       Whereas futures markets were developed by finance pioneers 
     in Chicago and today Chicago remains the commercial 
     crossroads of the world;
       Whereas the Chicago Board of Trade, the oldest and largest 
     futures and options exchange, continues its tradition of 
     innovation, functioning as a global financial leader;
       Whereas the Chicago Board of Trade's 150 years of 
     accomplishments include such major achievements as inventing 
     grain futures, founding the world's premier trade clearing 
     system, launching the first stock

[[Page S4747]]

     options exchange, developing the first interest rate futures, 
     advancing the use of technology with its electronic trading 
     system, and constructing the largest and most technologically 
     advanced trading floor in the world;
       Whereas the Chicago Board of Trade and its members have 
     achieved success while adhering to the highest standards of 
     uncompromising integrity; and
       Whereas the Chicago Board of Trade will continue as a 
     world-leading financial institution into the next millennium: 
     Now, therefore, be it
       Resolved, That the Senate--
       (1) congratulates the Chicago Board of Trade and the city 
     of Chicago, Illinois, on the 150th anniversary of the 
     establishment of the exchange; and
       (2) expresses its wishes for continued years of innovation, 
     service, and leadership by the Chicago Board of Trade into 
     the next millennium.

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