Onion Futures Act

In the 1950s, two men tried to corner the market on onions on the Chicago Mercantile Exchange and manipulate futures contracts. Then Congress took up legislation to expressly forbid contracts for the sale of onion futures.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This is an iHeart Podcast. Guaranteed Human.

• 0:04Holly Frey?

  A rare disease diagnosis can change your life, but it doesn't have to define your future. In season seven of Untold Stories: Life with a Severe Autoimmune Condition, host Martine Hackett continues the conversation with people living with MG, CIDP, and the broader rare disease community, exploring what comes after diagnosis through stories of hope, progress, and connection. Produced by Ruby Studio in partnership with Argonix, listen on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts.

• 0:35Tracy V. Wilson?

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• 1:19Tracy V. Wilson?

  down memory lane for season two, sharing lessons on life, love, and loss. These are the kind of insights that only come from experience. So tune in to Silver Linings with the Old Gays on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Workplace chaos. We've all been there. Deadlines are slipping, projects are piling up, and suddenly you realize the missing piece is the right person. That's when you say, this is a job for sponsored jobs. With Indeed Sponsored Jobs, your job post gets a boost so you can connect with quality candidates faster. In fact, sponsored jobs posted directly on Indeed are 95% more likely to report a hire than non-sponsored jobs. Spend less time searching and more time interviewing candidates who check all your boxes. Get

• 2:04Tracy V. Wilson?

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• 2:12Holly Frey?

  We've all tumbled down an internet rabbit hole trying to self-diagnose, and it leaves us more anxious than informed. Our feeds are full of wellness trends, but how do we know what's real, what's exaggerated, and what's just wrong? Health vs. Hype from the American Medical Association breaks it all down. Emmy-nominated science communicator Trace Dominguez talks to doctors, influencers, and real people trying these trends, not to cancel them, but to understand them. Because when it comes to your health, who you listen to matters. So listen to Health vs. Hype wherever you get your podcasts. Welcome to Stuff You Missed in History Class, a production of iHeart Radio.

• 2:56Tracy V. Wilson?

  Hello and welcome to the podcast. I'm Tracy V. Wilson. And I'm Holly Frey. A few weeks ago, I was on vacation with some friends, and one of my friends asked the room if we had ever heard of the Onion Futures Act. None of us had. His synopsis of this was wild, and then the conversation that followed it became very silly. And I emailed myself just the words Onion Futures Act, and then I returned to being on vacation. And now we have an episode about the Onion Futures Act. And the whole wacky story of the Onion Futures Act only makes sense if you have an understanding of what futures are, at least in a basic sense. So futures are essentially

• 3:40Tracy V. Wilson?

  contracts. They're agreements to buy or sell something at a specific price on a future date. In the world of finance, futures are classified as derivatives, along with options and swaps. These are all contracts whose value is connected to the value of some kind of asset. Futures traders can take a long position, which is typically meaning buying contracts for an asset whose value they think will rise. Or they can take a short position, which is selling contracts for assets whose value they think will fall. So if you're going long, you're trying to buy something for less than you would be able

• 4:20Tracy V. Wilson?

  to sell it for once the price goes up. If you're going short, you're selling the asset, often with the hope of buying it back at an even lower price after the price falls. So short selling in the futures market is a little bit different from short selling stocks. Those nuances are not really relevant to today's episode. Also not really relevant is the fact that a lot of futures contracts trading today, a lot of those contracts are liquidated by buying back or offsetting the contracts. They're not liquidated by delivering actual assets. Like, there's a lot of futures trading that goes on where no one involved

• 5:01Tracy V. Wilson?

  actually owns the asset at any point. That also is a whole other subject. That's not what we're talking about today.

• 5:10Holly Frey?

  Whether they're going long or short, traders use futures to lock in a price with the hopes that it's going to benefit them in the future. For example, in the 1950s, before onion futures were outlawed, someone trading in onions might offer to buy them at $1.60 per 50-pound bag. These contracts were done by the car lot or carload, which is an actual unit of measure in shipping. In this case, a car lot of onions was roughly equivalent to what would fit on a freight car on a train. So that's 650-pound bags of onions. So if you set the price at $1.60 per bag, and the price went up to $1.65

• 5:52Holly Frey?

  by the delivery date, you would make $0.05 on each of those bags, or $30 per car lot. When you put your newly purchased onions on the market, that's how all of that plays out. If the price dropped, though, to $1.55 before you could put them on the market, you would lose that $30.

• 6:11Tracy V. Wilson?

  So if the price rose dramatically, or if someone had taken a short position and the price fell dramatically, that investor could potentially make a whole lot of money. It was not just about investors and their returns, though. At least in theory, futures could help farmers. Farmers could lock in a price on produce they had not actually harvested yet, or maybe hadn't even planted yet. And then they would be protected if the cash price of those crops dropped by harvest time. Grocers and other merchants who were buying wholesale onions could similarly protect themselves from rising prices. There is an argument that these kinds of protections can help stabilize markets and make things

• 6:56Tracy V. Wilson?

  a little less expensive for consumers. Futures can also help predict where prices are headed. Like, if everybody's locking in contracts for around $1.60 for a bag of onions, that suggests something extraordinary would have to happen for the price to change really significantly once those onions were ready to be sold for cash.

• 7:18Holly Frey?

  At least that is the theory. But a 1956 report from the Commodity Exchange Authority suggested that between 1929 and 1956, there was really quite a lot of volatility in onion prices, in spite of the futures trading that was going on. Trading in onion futures had started to become important in 1948, so they had a few years of data to go on. According to this report, onion prices were also more volatile than many other commodities that were traded on futures markets.

• 7:51Tracy V. Wilson?

  I feel you could have a whole separate conversation about the intrinsic nature of capitalism. That is another completely other subject than what we are talking about today.

• 8:03Holly Frey?

  In the United States, futures trading started with agricultural products in the mid-19th century. Prominent grain merchants in Illinois established the Chicago Board of Trade in 1848, and its purpose was to facilitate trading in grain, including grain that had not been grown or harvested yet. So this was an early version of futures trading. The board still exists today as part of CME Group, which is a derivatives marketplace. Over the next few years, other trade boards were established in other parts of the US, and they started to develop standard terminology and practices around what would

• 8:43Holly Frey?

  become futures contracts. The first formal rules for futures trading were established in 1856. Three years later, the Chicago Board of Trade made its first known attempt to discourage market manipulation by banning what are called corners. It defined a corner as, quote, "making contracts for the purchase of a commodity and then taking measures to render it impossible for the seller to fill his contract for the purpose of extorting money from him."

• 9:14Tracy V. Wilson?

  By the 1880s, bills were being introduced in Congress to regulate futures trading, or to ban it outright, or to tax it. The first federal tax on futures was established in 1898. In the 19-teens, Congress started passing laws regulating various futures, which were challenged before the Supreme Court, and then struck down, and then rewritten, and then passed again. Then the Grain Futures Act was enacted in 1922, and the Supreme Court upheld it as constitutional. In 1936, the Commodity Exchange Act amended the Grain Futures Act, and it expanded the idea of grain to the broader label of commodities,

• 9:59Tracy V. Wilson?

  and then made other additions and adjustments to that earlier law. The list of regulated commodities under this act grew over time.

• 10:09Holly Frey?

  The Commodity Exchange Act and the Grain Futures Act that it amended prohibited contracts that were meant to cheat or defraud, or attempt to cheat or defraud, another person. It was illegal to deceive people in relation to these contracts, and it was illegal to make false reports to a party who was entering into a contract. The Secretary of Agriculture was empowered to serve complaints to anyone who manipulated or attempted to manipulate the market price of a commodity, or tried to corner a commodity. That person could then be ordered to attend a hearing to determine whether they would be stripped of their commodity trading privilege, or perhaps face other penalties.

• 10:51Holly Frey?

  People who were found to be violating these and other terms of the act could be fined up to $10,000 or imprisoned for up to a year and would also have to pay the costs of prosecution. On July 16th, 1955, the Commodity Exchange Act was amended to add onions to the list of regulated commodities.

• 11:12Tracy V. Wilson?

  In the 1950s, onion futures were being traded on the New York Mercantile Exchange and on the Chicago Mercantile Exchange, also called the Merck. The Merck had been founded as the Chicago Butter and Egg Board in 1898, and it still exists today also as part of CME Group. Most of the onion futures trading in the US was happening in Chicago, and the Chicago Exchange had four delivery months on onions futures. Those are November, January, February, and March. But trading actually happened year round, with trading for the November futures starting the previous winter and trading for the March futures, starting the previous late summer

• 11:56Tracy V. Wilson?

  or early fall. Trading continued as long as there were open contracts to be traded. In the years that led up to the incident that led to the Onion Futures Act, onion trading futures volume typically peaked in January and February, and that was for the March future.

• 12:16Holly Frey?

  The events that led to the Onion Futures Act started in October and November of 1955 with onions that were being delivered. And we're going to get into all of that after we pause for a sponsor break.

• 12:31Speaker 03

  First thought is like, wow, how are we going to do all this?

• 12:34Tracy V. Wilson?

  Hey, everybody. It's Tracy from Stuff You Missed in History Class. That's Alan Goya, a planning engineer at AT&T. He's talking about Intuit Dome, home of the Los Angeles Clippers, where every seat, screen, phone, and transaction is connected with AT&T fiber and 5G, defining the fan's experience. And Alan's master plan made it all possible.

• 12:54Speaker 03

  It was good arrival, anything that was already built. And that takes quite a bit of people and different teams to all be on the same page.

• 13:02Tracy V. Wilson?

  That includes field services manager Drexel Jones. His team made sure it all came together and held up on game day.

• 13:08Speaker 04

  Through what Alan's whole crew designed, we connected the event visitors to the world.

• 13:14Tracy V. Wilson?

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• 13:18Speaker 04

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• 13:22Speaker 03

  What the fans experience is incredible. It gave me a lot of pride.

• 13:25Tracy V. Wilson?

  AT&T, connecting fans to what they love.

• 13:28Speaker 05

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• 13:32Tracy V. Wilson?

  So you're considering getting a home security system, but you want something that fits your space. Well, with ADT Blue, it's easy to customize a system that's right for you and set it up yourself. Just pick the kit and monitoring plan that makes sense for your home. Let's say you're worried about package theft. The ADT Plus app can walk you through setting up a new doorbell camera kit. Once it's installed, ADT Pros can help you keep tabs on it 24/7, or you can manage it yourself from the ADT Plus app. There are no long-term contracts, so you can change your monitoring plan whenever you want. The flexibility doesn't end there. You can add to your system as you need to with things like extra cameras or motion sensors. Some life decisions are hard, but thanks to ADT Blue, you can DIY trusted ADT home

• 14:17Tracy V. Wilson?

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• 14:38Holly Frey?

  We've all done it, tumble down an internet rabbit hole trying to self-diagnose. And sometimes doing our own research can leave us more anxious than informed. Your feed is packed with wellness trends telling you to cold plunge, protein max, detox, track your sleep. But what's actually real? What's exaggerated? What's just wrong? That's exactly what Health vs. Hype from the American Medical Association and iHeartMedia's Ruby Studio is here to find out. Each episode, Emmy-nominated science communicator Trace Dominguez, who's racked up billions of views across PBS, Discovery Channel, and YouTube, talks to doctors, influencers, and real people trying these trends.

• 15:20Holly Frey?

  Not to cancel them, not to hype them more, but to actually understand them. Because when it comes to your health, who you listen to matters. Start asking better questions and listen to Health vs. Hype on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

• 15:41Tracy V. Wilson?

  Guess who's back in the house? The old gays return for season two of Silver Linings, their hit podcast from iHeart's Ruby Studio in partnership with ViiV Healthcare. Just wait until you hear what hosts Robert McMillan and Jess A. have in store this time around. They strut back down memory lane, navigating life, love, loss, and everything that shaped them along the way. And as usual, someone just might break into song. From leather bars to bathhouses, dance floors to drag brunch, nothing stays off limits. These are the kinds of insights that can only come from experience. So listen to your elders, honey, and discover the silver linings you can take with you. All sass, zero filter, and decades of perspective from four friends proving that queer joy

• 16:26Tracy V. Wilson?

  only gets better with age on the podcast that never gets old. Listen to Silver Linings, available on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

• 16:41Tracy V. Wilson?

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• 17:25Tracy V. Wilson?

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• 17:57Tracy V. Wilson?

  The person most associated with the events that led to the Onion Futures Act was Vince Casuga of Pine Island, New York. He was born in 1915 and started working as a sharecropper in 1928. Eventually, he saved up $100 down payment and bought his own farm. At first, he grew lettuce on that farm. By the 1930s, he was also growing onions, and eventually he grew celery as well. In addition to that, he was a commodities trader and a registered floor broker on the Chicago Mercantile Exchange. There are a lot of really over-the-top sounding stories about this man, and from what I can

• 18:38Tracy V. Wilson?

  tell, they mostly trace back to the book The Futures: The Rise and Fall of the Speculator and the Origins of the World's Biggest Markets by Emily Landbert, which came out in 2012. It seems like various articles and podcasts and whatnot that came out since 2012 are all kind of tracing back to that book. This is not the kind of book that includes footnotes about where individual details came from. And there's a note at the end on sources that says that most of the information came from interviews with 100-plus people, which frequently, quote, "disagreed with and contradicted each other."

• 19:18Tracy V. Wilson?

  The individual people of these 100-plus interviews are not individually named, and when it comes to today's episode, these interviews would have happened 50 years or more after the events in question.

• 19:31Holly Frey?

  For example, there is a story that Casuga flew his plane until he ran out of gas, crashed, barely survived, and then insisted on going home from the hospital even though he was in a full-body cast. But reporting from multiple newspapers in September of 1948, when this is said to have happened, say that he was a passenger when a small airplane crashed. The pilot of that plane had a concussion and a possible skull fracture, but Casuga's injuries and those of another passenger were described as being minor. Did Casuga also survive another plane crash that doesn't seem to have been reported in newspapers at all? Or did this story become more grandiose over time? It's actually hard to say.

• 20:17Tracy V. Wilson?

  Did he really lose all his money on wheat futures in the 1930s and then swear off ever trading wheat futures ever again, only to decide later that his knowledge of onion farming might make him do a better job trading onion futures? Did he really have such a good year one year that he bought cars for a bunch of other brokers? Did he really bribe a weatherman to put out a fake frost warning to drive up the price of his onions? All of that is also hard to say, but is in this book and other stuff that has followed the book.

• 20:56Holly Frey?

  He clearly is a big character who, you know, enjoyed embellishments to his lore.

• 21:01Tracy V. Wilson?

  I think that is safe to say.

• 21:05Holly Frey?

  Another person who was involved in this 1950s onion scheme was Sam Siegel, who was another member of the Chicago Mercantile Exchange and president and general manager of national produce distributors. He was also vice president and stockholder of the Dakota Chief Sales Company, which operated a cold storage warehouse in Franklin Park, Illinois.

• 21:28Tracy V. Wilson?

  Together, Casuga and Siegel tried to corner the market on onions at the Chicago Mercantile Exchange in late 1955. They discreetly bought up 928 futures contracts for the November delivery, which was about 45% of the total open interest in onion futures for that month. By November 30th, as the contracts were being settled and onions were being delivered, Casuga wound up with 262 car lots, and that was about half of all the onions that were available in Chicago. We said earlier that a car lot was about 650 pound bags.

• 22:09Tracy V. Wilson?

  So that is more than 7.8 million pounds of onions.

• 22:14Holly Frey?

  But that wasn't even all the onions they had coming in. They were still trading while there were open contracts to trade. And by the start of the year, Kasuga, Siegel, and national produce distributors had a combined total of about 1,000 car lots of onions, or 30 million tons. For all practical purposes, this was the entire supply of cash onions, meaning onions available for sale in Chicago.

• 22:42Tracy V. Wilson?

  In an interview that aired on NPR in 2015, Kasuga's nephew, Harvey Paffenroth, remembered Kasuga having a big corrugated aluminum shed in New York with a conveyor belt going into it, which was where he stockpiled all of these onions. It is absolutely possible that he had exactly such a warehouse, but that might have just been an ordinary part of his New York onion farm. The various federal reports about this incident suggest that all of the onions that were part of this scheme were stored in and around Chicago, not in New York.

• 23:19Holly Frey?

  It seems like Kasuga and Siegel hoped that their futures contract buying spree would drive up prices, but this created a glut of onions in Chicago, and so prices started to dip. This was also more onions than anyone could really deal with at once. Onions are more shelf-stable than a lot of other produce, but they can't just sit around forever. So Kasuga and Siegel were putting them in cold storage. But cold storage onions were seen as inferior quality because of the effects of refrigeration. So putting that much of the onion supply into cold storage was yet another damper on the price.

• 23:58Tracy V. Wilson?

  However, it wasn't like people had another supplier to turn to if they wanted to buy some fresh, non-cold storage onions or any other onions, really. Kasuga and Siegel had bought up basically all of them, and so they could decide how much to sell them for.

• 24:17Holly Frey?

  Kasuga and Siegel apparently wanted to do more than just sell their onions at the price they set on the open market. They went to 13 grower shippers who were selling their onions on the Chicago market and told those grower shippers that unless they agreed to buy some of these onions at the price that Kasuga and Siegel demanded, Kasuga and Siegel would then flood the market with their hoarded onions and drive the price down for everyone. They had multiple meetings in and around Chicago about this.

• 24:48Tracy V. Wilson?

  These growers and shippers and people who did both, they normally sold onions that they grew or shipped rather than buying them to resell. But they all agreed to buy a total of 287 car lots of onions at $1.60 a bag or $960 per car lot. That was a total price of $275,000. And then they would be reselling those onions through the regular channels of trade. In return, Kasuga agreed not to deliver any more of his onions for the remainder of the onion season, which would end at the end of March of 1956.

• 25:29Tracy V. Wilson?

  Instead, he and Siegel would just keep acquiring more onions where they could, creating an artificial onion scarcity and keeping prices higher.

• 25:40Holly Frey?

  During their talks, Kasuga assured the grower shippers that the price on onion futures would go up substantially because of this secret agreement. In the words of the Commodity Exchange Authority's decision on this matter, quote, "Kasuga and Siegel suggested, and it was generally understood by all the parties, that the restrictions against delivery assumed by respondents Kasuga and Siegel were not to be publicized."

• 26:06Tracy V. Wilson?

  But in January and February of 1956, some of the grower shippers started to think that Kasuga and Siegel were not holding up their end of the deal. Most of them had made partial payments and had taken partial delivery on the onions they had agreed to buy. And at that point, all but one of them refused to pay for or accept any more onions.

• 26:31Holly Frey?

  So Kasuga and Siegel started discreetly selling March onion futures, now from a short position, expecting the price to fall. They sold 858 car lots of March onion futures, and they wound up holding 44.3% of the open interest in onion futures for the month. Kasuga and Siegel were in fact the only people holding advantageous short positions on onion futures for March. Everyone else who had a futures contract was on the long position.

• 27:02Tracy V. Wilson?

  Of course, onions that had been delivered to market in November were not exactly fresh by March. So in January and February, Kasuga and Siegel started shipping their onions out of Chicago to be reworked. So they were culling the unsalvageable ones and then sorting and repackaging the rest before sending them back to Chicago to be sold.

• 27:24Holly Frey?

  Around this time, it seems like Kasuga might have started to have second thoughts about this whole plan. According to testimony at a Commodity Exchange Authority hearing, one of the grower shippers, Dave Slinger, got a call from Kasuga about it. His testimony is pretty amazing, so we're just going to read it. Quote, "Along about the 20th of January, I had onions. I had my onions all hedged, and I got rid of all of them. And then I went on a ski trip and broke my leg, and I was confined to the hospital in Wausau. And along about the 1st of February, I received a call from Mr. Kasuga, and he wanted me to call William Gering and suggest to him that he go short the market. I was completely dumbfounded because I thought they were on the long side of the market.

• 28:09Holly Frey?

  I do not know exactly what was said after he made that suggestion, but I was left with the impression that he had reversed his position, that he was short the market and possibly his conscience was bothering him, and he wanted Gering also to get in on the short side. I told him that I didn't think that. I thought if they were going to reverse their position and go short the market, the group should be called together and should do it together. Mr. Kasuga answered that that would never do. It would wreck the market in a matter of minutes and go down to 50 cents, that the only way to do it was to control it somewhat, and only one person know about it. I said, "All right, I will call William Gering." And so I called him, and William Gering absolutely wouldn't have anything to do with it.

• 28:53Holly Frey?

  He said, "I won't do anything unless all the group acts together." William Gering, for context, had agreed to buy more onions than the other growers, 60 car lots. And aside from a couple of growers who only agreed to buy a few, he was the only one who had paid for and collected the entire promised amount.

• 29:13Tracy V. Wilson?

  When March arrived and the onion futures contracts were settled, the market was flooded with onions. According to Paffenroth's NPR interview, the mesh bags that the onions were packaged in cost 20 cents a piece, and a bag full of onions was selling for 10 cents. At least the onion price part of this absolutely holds up. According to documents from the hearing that followed this, on the last day of trading in March onion futures, the price reached a low of 10 cents before closing at 15 cents, which was the lowest price ever recorded on the exchange. That was down from a price of about $2 earlier in the year,

• 29:58Tracy V. Wilson?

  and the lowest ever price before this was 43 cents a bag. This colossal price drop was not solely because of Kasuga and Siegel's market manipulations. There was also an early harvest of onions from Texas that hit the market at about the same time all of this was going on. And that harvest was both larger and earlier than expected. But this attempt to fix the prices by Kasuga and Siegel was definitely a factor.

• 30:28Holly Frey?

  According to Harvey Paffenroth's NPR interview, Kasuga made $8.5 million on this market manipulation. That doesn't seem to line up with the numbers in case files on the matter, which includes various transactions in the hundreds of thousands of dollars. Various write-ups of this also claimed that multiple onion growers went bankrupt and that some farmers took their own lives, but Tracy didn't find any mention of this in the reporting from the time. She also didn't find anything to confirm the story that there were so many worthless onions in Chicago that people started throwing them into the river.

• 31:06Tracy V. Wilson?

  Yeah, that seems like something there would be at least one newspaper article mentioning, and it's possible there is one that I just could not find in all of my various searching of various newspaper databases, but I did not. We'll talk about what happened next after a sponsor break.

• 31:26Holly Frey?

  We've all done it, tumble down an internet rabbit hole trying to self-diagnose. And sometimes doing our own research can leave us more anxious than informed. Your feed is packed with wellness trends telling you to cold plunge, protein max, detox, track your sleep. But what's actually real? What's exaggerated? What's just wrong? That's exactly what Health vs. Hype from the American Medical Association and iHeartMedia's Ruby Studio is here to find out. Each episode, Emmy-nominated science communicator Trace Dominguez, who's racked up billions of views across PBS, Discovery Channel, and YouTube, talks to doctors, influencers, and real people trying these trends,

• 32:09Holly Frey?

  not to cancel them, not to hype them more, but to actually understand them. Because when it comes to your health, who you listen to matters. Start asking better questions and listen to Health vs. Hype on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

• 32:29Tracy V. Wilson?

  Guess who's back in the house? The old gays return for season two of Silver Linings, their hit podcast from iHeart's Ruby Studio in partnership with Vive Healthcare. Just wait until you hear what hosts Robert McMillan and Jesay have in store this time around. They strut back down memory lane navigating life, love, loss, and everything that shaped them along the way. And as usual, someone just might break into song. From leather bars to bathhouses, dance floors to drag brunch, nothing stays off limits. These are the kinds of insights that can only come from experience. So listen to your elders, honey, and discover the silver linings you can take with you. All sass, zero filter, and decades of perspective from four friends proving that queer joy

• 33:15Tracy V. Wilson?

  only gets better with age on the podcast that never gets old. Listen to Silver Linings, available on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts.

• 33:29Tracy V. Wilson?

  For any small business owner, there's a moment when you realize the next hire could be the difference between staying busy and actually growing. The challenge is finding the right person without wasting time sorting through candidates who aren't the right fit. That's where Indeed Sponsored Jobs comes in. When workplace chaos hits and you need someone who can step in and make a difference, this is a job for Sponsored Jobs. It helps put your job in front of candidates who match the criteria that matter most to you, whether that's skills, experience, certifications, or location. And you're certainly not alone in using Indeed. Join the 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs. That's millions of businesses turning to Indeed to help solve hiring challenges and

• 34:13Tracy V. Wilson?

  find people who can help drive results. Spend less time searching and more time actually interviewing candidates who check all your boxes. Less stress, less time, more results. Get your $75 sponsored job credit today at indeed.com/podcast. Terms and conditions apply. Hiring now, then this is a job for Indeed Sponsored Jobs.

• 34:42Speaker 06

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• 35:09Tracy V. Wilson?

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• 35:46Tracy V. Wilson?

  As we said earlier, market manipulation and deceptive contracts were illegal under the Commodity Exchange Act. In June of 1956, as he was empowered to do under the Act, Earl L. Butts, Assistant Secretary of Agriculture, issued a complaint against Vincent Casuga, Sam Siegel, and National Produce Distributors. Quote, "The complaint charges attempted manipulation and manipulation of the price of onion futures on the Chicago Mercantile Exchange and attempted manipulation of the price of cash onions in violation of Section 6B and 9 of the Commodity Exchange Act. Included in the complaint are charges that the respondents, after first entering into

• 36:29Tracy V. Wilson?

  a conspiracy with a group of growers and shippers to increase or prevent a decrease in the price of onions, engaged in a separate conspiracy among themselves by means of which they depressed the price of the March 1956 onion future." Casuga and Siegel were ordered to appear at a public hearing in Chicago on July 24, 1956, before the Department of Agriculture's judicial officer. Fifteen witnesses testified at this hearing, and attorneys filed briefs and made oral arguments. It was clear that Casuga and Siegel had bought up a massive number of futures contracts, had various secret communications with the growers-shippers, and flooded the market with onions.

• 37:14Tracy V. Wilson?

  But their actions were still seen as open to interpretation. In the words of the Commodity Exchange Authority decision, quote, "At this final stage of the proceeding, it is apparent that there is little or no dispute about the basic facts put in evidence. The inferences and conclusions to be drawn from the basic facts are, however, subjects of controversy." Ultimately, the Commodity Exchange Authority decided that there was not clear evidence that Casuga and Siegel had tried to manipulate the market upward in November of 1955, when all they were doing was buying up lots and lots of futures contracts. But Casuga, Siegel, and National Produce Distributors had tried to manipulate onion

• 37:59Tracy V. Wilson?

  prices in November and December, when they started making these secret agreements with the growers-shippers. And they had also tried to manipulate the price downward in March. That was an unlawful market manipulation, all of that under the Commodity Exchange Act, even if their only goal was to try to stabilize onion prices, which Casuga and Siegel claimed was all that they were trying to do as part of their defense. Regarding the lack of evidence for trying to manipulate the market upward by buying up all the futures contracts, the decision said, quote, "Drawing a line between legitimate trading and trading with manipulative intent is sometimes a very difficult task."

• 38:42Tracy V. Wilson?

  We have here the physical facts of Casuga's trading in the November 1955 future and some statements by Casuga to growers-shippers at the time of the events leading to the second charge of the complaint, to the effect that he had received more deliveries in November than he had expected. Moreover, from the record, it appears that manipulations in onion futures upon the exchange were not uncommon. On the other hand, Casuga's statements to the growers-shippers could be interpreted to mean that Casuga had not forecast market movements correctly, as well as being open to the inference argued by complainant. We also have Casuga's case for trading long in the November future, principally extensive

• 39:26Tracy V. Wilson?

  flood damage to harvested onions, and his defense for taking deliveries, namely that for him, a large long to do otherwise would have demoralized the market to his financial detriment. We conclude that the evidence falls just a bit short of tipping the scale enough to warrant an inference of manipulation intent in a quasi-judicial proceeding such as this. Consequently, the charge in this connection should be dismissed. So that one charge was dismissed, but the others were not. The decision was announced in 1960. Casuga, Siegel, and National Produce Distributors, Inc. were all stripped of their trading privileges in all contract markets for 10 months.

• 40:11Tracy V. Wilson?

  Once their ban was lifted, though, Casuga and Siegel went back to trading, but they did not go back to trading in onion futures. Onion futures trading specifically had been outlawed at the federal level on August 28, 1958, under legislation introduced by Gerald Ford, who was then representing Michigan in the House of Representatives that had then been signed into law by President Dwight Eisenhower. Onion growers in Michigan, who had been affected by this 1955 market manipulation, had gone to Ford about it. Congress took up the legislation, even though those market manipulations had already been illegal under the existing Commodity Exchange Act.

• 40:55Tracy V. Wilson?

  Some of the people who advocated for this law were also of the opinion that it wasn't just this one thing that Casuga and Siegel had done, but that futures trading hurt farmers in general and should be outlawed. This law reads in part, quote, "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled that A, no contract for the sale of onions for future delivery shall be made on or subject to the rules of any Board of Trade in the United States. The terms used in this Act shall have the same meaning as when used in the Commodity Exchange Act. B, any person who shall violate the provisions of this section shall be deemed guilty of

• 41:37Tracy V. Wilson?

  a misdemeanor and upon conviction thereof be fined not more than $5,000." The Chicago Mercantile Exchange filed suit in the U.S. District Court for the Northern District of Illinois, arguing that this law was unconstitutional. The court found against them. They did not pursue an appeal, and this law still stands today. Another legal action that's connected to all of this was a lawsuit Casuga filed against one of the growers, Jack Kelly, who had paid Casuga for only 13 of the 50 car lots that Kelly had agreed to buy.

• 42:14Holly Frey?

  Kelly had agreed to buy more onions than anyone else other than William Gering, and he had a bigger outstanding debt to Kasuga than any other grower. But Kelly alleged that this sale was in violation of the Sherman Antitrust Act, so he should not have to pay for the rest.

• 42:32Tracy V. Wilson?

  This went all the way to the Supreme Court. Associate Justice William J. Brennan, Jr., authored the court's opinion, which was delivered on February 24, 1959. He found in Kasuga's favor in a decision that said in part, "Petitioner evidently is willing to take the bitter as well as the sweet from this passage. If the defense of illegality is to be allowed as a collateral method of enforcement of the antitrust laws, as the breadth of the petitioner's argument suggests, it must be said that his theory creates a very strange class of private attorneys general." This case has been part of the precedent for a couple of other court cases

• 43:16Tracy V. Wilson?

  about the limits of antitrust defenses.

• 43:21Holly Frey?

  There have been other crimes in the world of commodities futures since then. For example, the December 1963 Great Salad Oil Swindle. Anthony DeAngelis, known as Tony, owned Allied Crude Vegetable Oil Refining Corporation. He filled a warehouse with fake soybean oil by doing things like putting a layer of soybean oil at the top of tanks that were otherwise filled with water. He used that nonexistent oil as collateral to trade in various vegetable oil futures, and he tried to corner the soybean market. He was convicted and sentenced to 10 years in prison.

• 43:59Tracy V. Wilson?

  There have been various other laws about futures trading in the U.S. since the 1950s as well. A major one was in 1974, when Congress passed the Commodity Futures Trading Commission Act, which was signed into law by President Gerald Ford. This overhauled the Commodity Exchange Act and established the Commodity Futures Trading Commission, which replaced the Commodity Exchange Authority. And then the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in 2010, and that was in the wake of the 2008 financial crisis. Speculative trading in derivatives played a part in that financial crisis, although

• 44:41Tracy V. Wilson?

  there is debate around exactly how large a part Dodd-Frank led to new regulations for financial markets, including derivatives markets, and it established the Consumer Financial Protection Bureau, among other reforms.

• 44:56Holly Frey?

  There have been other attempts to outlaw trading in specific futures since the passage of the Onion Futures Act, but the only one that has been successful was also in 2010. The Motion Picture Association of America lobbied to have trading in box office futures banned. The relevant part of the U.S. Code now reads in part, "No contract for the sale of motion picture box office receipts, or any index, measure, value, or data related to such receipts, or onions for future delivery shall be made on or subject to the rules of any Board of Trade in the United States." Violation of this law is still classified as a misdemeanor with a fine of up to $5,000.

• 45:41Tracy V. Wilson?

  If you're wondering what happened to Kasuga and Siegel after this, I don't know what happened to Siegel. Was not able to find that out. But Kasuga went back to both farming and futures trading. Once his ban was lifted, he sold his farm in Pine Island, New York in 1966 for a reported $2 million. By that point, he had started a restaurant, The Jolly Onion Inn, which his wife Polly said they started because they felt like there was not a restaurant in the area that could really cater to the drivers who hauled the produce from all the region's farms. Kasuga also had other businesses, including a cold storage facility, and he made various donations to the Catholic Church, including

• 46:24Tracy V. Wilson?

  his local St. Stanislaus Catholic Church. By some accounts, he gave so much money to the Catholic Church that he had private audiences with three different popes. That also seems like the kind of thing that might get publicly mentioned somewhere. Just didn't find it. He was named Citizen of the Year by the Pine Island Chamber of Commerce in 1987, and he died in 2001 at the age of 86. And that's the Onion Futures Act. If you have documented knowledge about all of the exploits of Vince Kasuga and his potential

• 47:07Tracy V. Wilson?

  three different audiences with three different popes, I mean, I would, I would love to see that.

• 47:13Holly Frey?

  I know. I'm like, which popes would those have to be, right?

• 47:16Tracy V. Wilson?

  What a great question. I did not go look into the timeline.

• 47:19Holly Frey?

  I'm gonna, I'll have it ready for Friday.

• 47:21Tracy V. Wilson?

  Okay. I have some listener mail. This listener mail is from Janine. Janine wrote an email titled "Lightning Safety Standards," which I am in favor of knowing as much as we can about lightning safety standards. So Janine wrote, "Hi, Holly and Tracy. I just listened to the court cases episode, great episode, fascinating, and had to write about the listener mail. I was really interested to hear about the drop in lightning deaths. I wouldn't have guessed it, but it makes total sense. I have kids and volunteer with youth organizations, and the standard here now is that everyone goes inside when the

• 48:04Tracy V. Wilson?

  lightning strikes are within 10 miles. Depending on conditions, you often can't even hear thunder at 10 miles away. This is only possible because of the prevalence of lightning apps on everyone's phones. I don't know what the official rule was when I was growing up, but I'm sure adults were calculating distance by watching the lightning and counting till they heard thunder. So storms got a lot closer to us before we started for cover. Furthermore, the standards for what constitutes acceptable shelter have gone up. Just as one example, when I was a teen, I volunteered for a day camp held at a local park. As an adult, I'm still volunteering with that day camp, but we can't hold it at the park anymore because

• 48:46Tracy V. Wilson?

  there's no true indoors. There are picnic shelters and gazebos, but not a fully enclosed area, and that's simply not up to standard anymore. It can be frustrating to interrupt activities or have to go pack it in over a storm passing just inside the 10-mile radius, but I can't argue with the results. 450 annual lightning deaths to nearly none is amazing progress. Thanks for the show. It's always a pleasure to listen to. For pet tax, I've attached pictures of my kitties, Walnut, the Tabby, and Hildegard All Black, looking sweetly at me from various places on the stairs. They are very picturesque when lurking on the staircase. Janine." Thank you so much for this email, Janine. We do have pictures of two kitty cats sitting on stairs.

• 49:29Holly Frey?

  Babies.

• 49:30Tracy V. Wilson?

  Mine love to sit on the stairs. We have a banister railing, and Onyx in particular likes to get on a very high step and stick her head out through it and look at the world below. I also definitely remember adults when I was a child seeing the lightning in the distance and counting a number of seconds to decide whether we should go inside.

• 49:53Holly Frey?

  I learned that from the movie Poltergeist.

• 49:55Tracy V. Wilson?

  Yeah?

• 49:55Holly Frey?

  Yeah, because they do it in that.

• 49:57Tracy V. Wilson?

  I don't remember that, but sure.

• 49:59Holly Frey?

  That movie traumatized me deeply as a child, but also is brilliant. So, you know, combo burrito.

• 50:05Tracy V. Wilson?

  I, I was reading an article recently about how, in addition to it being an enclosed space, if you are trying to shelter from potential lightning, it's also important that there is plumbing, because the plumbing pipes redirect the electricity away from the interior of the structure. Otherwise, if you are in just a shed that has no sort of plumbing or anything like that to redirect the electricity away, and the lightning strikes that structure, it just goes from the structure into a person's body, potentially. So yeah,

• 50:48Tracy V. Wilson?

  those standards have evolved a lot since my childhood, for sure. So, thank you, Janine, for that email and for the adorable cat pictures. If you would like to send us a note, we are at [email protected]. If you would like to see the show notes for this episode or many of our other recent episodes, that's at our website. You can get to that by typing in missedinhistory.com. Today's show notes include links to the various federal decisions on the matter of this large onion market manipulation. You can also subscribe to the show on the iHeartRadio app and anywhere else you like to get your podcasts.

• 51:36Tracy V. Wilson?

  Stuff You Missed in History Class is a production of iHeartRadio. For more podcasts from iHeart Radio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.

• 51:51Holly Frey?

  A rare disease diagnosis can change your life, but it doesn't have to define your future. In season seven of Untold Stories: Life with a Severe Autoimmune Condition, host Martine Hackett continues the conversation with people living with MG, CIDP, and the broader rare disease community, exploring what comes after diagnosis through stories of hope, progress, and connection. Produced by Ruby Studio in partnership with Argenx. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

• 52:21Tracy V. Wilson?

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• 52:57Speaker 06

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• 53:25Tracy V. Wilson?

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• 54:25Speaker 00

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