1897 - Agriculture

Agriculture

The drought that began on the U.S. western plains in 1886 finally comes to an end.

Europe's wheat crop falls short of its needs, and speculators bid up wheat futures on the Chicago Board of Trade as Joseph Leiter, 29, makes a spectacular effort to corner the market. Son of the onetime Marshall Field partner Levi Z. Leiter, young Leiter has recovered $1 million by his father to start a real estate business but instead has started to buy wheat futures at 65ยข per bushel and made a neat profit which he invests in more futures, continuing to buy until he has acquired 12 million bushels for December delivery, 9 million of them from meat packer P. D. Armour. Leiter refuses to take his profit of several million dollars in hopes of still higher profits, but Armour discovers that grain elevators at Duluth are bulging with wheat, charters 25 lake vessels and tugs that can break through the ice to Duluth, and sends them north to get wheat that will break Leiter's corner in the market (see 1898). U.S. farmers reap profits of millions of dollars as wheat prices rise to $1.09 per bushel, highest since 1891, partly as a result of Joseph Leiter's buying of futures.

The Berlin Exchange bans trading in futures after seeing what has gone on in Chicago; German grain traders, merchants, and speculators shift their operations to Amsterdam and Liverpool.