Potato Historic Site: The World Trade Center & Potato Futures
Future prices of round white potatoes were the only vegetable commodity traded on The New York Mercantile Exchange, a part of The World Trade Center complex until 9/11/01. Here's a brief history.
After Germany invaded Paris in 1940, wheat open interest dropped 37 million bushels in just six days as prices plummeted on the idea that an Allied surrender might bring the war to a quick conclusion. According to data collected by the Commodity Exchange Authority, no corn trading occurred on U.S. markets from July 1943 through July 1944, with just one million bushels (200 contracts) exchanging hands in August 1944. The soybean futures market was closed from March 1943 through July 1947.
In New York, NYMEX hit a string of trouble in the 1970s that nearly closed the exchange. It began with the default of nearly 50 million pounds of potatoes on the May 1976 contract, which alienated producers, members and regulators. Potato volume dropped 45 percent versus 1975 and membership values plummeted to $5,000 from $47,000. Despite reforms to the contract and exchange procedures, another crisis struck three years later when stocks delivered against the March 1979 contract did not pass inspection; the exchange acted quickly to suspend trading in the March contract and liquidated the April and May offerings. (NYMEX delisted this potato contract in 1987, and introduced an improved version in 1996.
The NY Mercantile Exchange trading floor and offices were located in the World Trade Center complex destroyed on September 11, 2001. The trading center has since relocated elsewhere in the city.
In the 17th and early 18th century, the World Trade Center site was farmland originally settled by Dutch and Belgian colonists. Potatoes were most certainly one of their most important crops.
Click here to read about the history of the NY Mercantile Exchange.