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The Government of MarketsThe Wild Midwest

The Government of Markets: The Wild Midwest [This chapter introduces the business, institutional and governance problems at the Chicago Board of Trade (CBOT) during the interwar years. After World War I, the grain markets reopened in total chaos while, at the same time, the Board was under threat from (legal and illegal) competition, US State anti-gambling provisions, farmer-run cooperatives that could bypass the exchange, and general poor market function, both legal and manipulative. Additionally, no one, including the CBOT members themselves, understood how the markets as a whole did, should and could operate. Information was a scarce resource withheld due to monopoly tendencies, as well as ignorance, by the Board members. Importantly for the story of modern futures, the CBOT at the time was in no position to effect the necessary changes itself. This set the stage for the legislative solution that was to come in 1921 and then 1922, as well as other innovations in the mid-1920s.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

The Government of MarketsThe Wild Midwest

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References (12)

Publisher
Springer International Publishing
Copyright
© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2018
ISBN
978-3-319-93183-8
Pages
51 –86
DOI
10.1007/978-3-319-93184-5_2
Publisher site
See Chapter on Publisher Site

Abstract

[This chapter introduces the business, institutional and governance problems at the Chicago Board of Trade (CBOT) during the interwar years. After World War I, the grain markets reopened in total chaos while, at the same time, the Board was under threat from (legal and illegal) competition, US State anti-gambling provisions, farmer-run cooperatives that could bypass the exchange, and general poor market function, both legal and manipulative. Additionally, no one, including the CBOT members themselves, understood how the markets as a whole did, should and could operate. Information was a scarce resource withheld due to monopoly tendencies, as well as ignorance, by the Board members. Importantly for the story of modern futures, the CBOT at the time was in no position to effect the necessary changes itself. This set the stage for the legislative solution that was to come in 1921 and then 1922, as well as other innovations in the mid-1920s.]

Published: Dec 22, 2018

Keywords: Collective action; Grain futures; Manipulation

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