Commodities: New Job, Old Territory

As a congressional liaison man for J.F.K. and L.B.J., Henry Hall Wilson Jr., 45, was a well-paid civil servant who earned $29,500 a year. Last week, when he accepted the presidency of Chicago's Board of Trade—the world's foremost commodity exchange—he got a raise of $70,500. His $100,000 salary reflects the fact that the commodities trading the 18-man board controls has just hit a record yearly volume of $81.4 billion.

In his new job, Wilson will preside over the activities of more than 600 men who daily crowd octagonal trading pits, flailing the air as they shout "Buy!" or "Sell!" The commodities market is immensely complex, and word of a drought in India or a soaking rain on the Dakota plains has an electric effect on futures trading. Even seasoned brokers, whether they deal in grains, soybean oil or steer carcasses, find the trading nerve-racking and treacherous.

To be sure, many of the tan-jacketed traders are not speculating for their own accounts. They represent big customers—exporters, warehousemen, food processors—who use future contracts to hedge against fluctuations in the price of commodities.

It has been estimated that 90% of the nonprofessional speculators are consistent losers. But like horse racing, the losers continue to come back for more. Because of the low margin requirements—the buyer has to put up a maximum of 10%—risk takers can afford to speculate. The board watches all activity closely, and so does the Commodity Exchange Authority in Washington, which is anxious to see the margin requirement increased to 20% or 25%.

All of which makes Wilson an ideal choice as the Chicago board's new head. He is a man who knows his way not only around commodities, but also Government. Less than a week after his move was announced, the U.S. House of Representatives approved a 3,000,000-ton, Government-subsidized shipment of American wheat and sorghum to drought-stricken India. The plan, proposed by the President and guided through Congress by Wilson, will spur business on the floor of the exchange. Clearly, knowledgeable Washingtonian Wilson, when he takes over in Chicago on June 1, should not have to learn the territory.