Onions are so delicious and a great staple of any grocery store. As a gardener I think it is neat plant, but as they say around the world “enjoying onions you have to cry”. In 1955 two men, Vincent Kosuga and Sam Siegel, partnered together in a greed-fueled run to corner the Chicago onion market. Vincent Kosuga was a farmer of onions, celery, and lettuce who had a habit of playing the futures market. Allegedly he one time he bribed the Chicago region U.S. Weather Bureau (now known as the National Weather Service) to issue a frost warning to pump the price of onion futures, but in the fall of 1955 he decided to go for a big hit on the onion futures market. By Emily Lambert’s estimates Kosuga and Siegal had purchased 98% of available supply of onions in Chicago (roughly 30,000,000 lbs) via purchasing onions and onion future contracts. The price of onions skyrocketed with this squeeze. You are probably thinking Austin onions spoil why would they choose this? Well Sam Siegel wasn’t just a hat rack for Kosuga he owned a grocer and cold-storage facility for acquiring and storing the onions. Now came the next step of this master scheme. The two food barons talked with onion growers and negotiated a deal to sell onions back to them and not sell their stock on the open market and crash the price. Let this be a lesson to always get a deal in writing, because the duo backstabbed the farmers and begun selling the onions. The price went form $2.75 per 50 lb bag of onions (similar bag goes for $27.29 today; adjusted for inflation the squeeze had the price at $28.61) to just 10 cents for a 50 lb bag ($1.04 today) the following spring! All the onions couldn’t be sold even after being reconditioned and onion farmers not part of this scheme were absolutely devastated. Suicides and bankruptcies unfortunately followed. Kosuga and Siegel made millions at the expense of their fellow men of the roots. The National Onion Growers lobbied Congress to act and formerly congressman Gerald Ford brought forward the Onion Futures Act prohibiting the trading of futures. A representative from Chicago Mercantile Exchange protested the bill likening the bill to “burning down the barn to find a suspected rat”. Eisenhower signed the bill in 1958 just 3 years after the plot began. The bill also banned the sale of movie ticket futures, but that is a story for another day.
Why Can’t Onion Futures Be Traded?
Onions are so delicious and a great staple of any grocery store. As a gardener I think it is neat plant, but as they say around the world “enjoying onions you have to cry”. In 1955 two men, Vincent Kosuga and Sam Siegel, partnered together in a greed-fueled run to corner the Chicago onion market.