By John J. Lothian
Murray Borowitz independently thought up the idea and helped create the very
first financial futures contracts at the International Commerce Exchange
back in 1970 with the introduction of foreign exchange futures contracts.
That was two years before foreign currency futures were launched and
successfully developed at the Chicago Mercantile Exchange. Murray was never
given a title of honor as the “founder” of financial futures, like Leo
Melamed, or the “father” of financial futures like Dr. Richard Sandor.
However, given Murray’s roots in the trucking business and his role in
independently coming up with the idea of financial futures contracts on
foreign exchange (and on the Dow Jones), according to NYBOT Executive Vice
President Joe O’Neill, perhaps Murray should be honored as the “First Mover”
in financial futures.
Mr. O’Neill was hired by the then newly formed and now defunct ICE to create
these financial futures contracts, so he too deserves some of the credit as
“First Mover” on financial futures. Joe was hired away from the Coffee,
Sugar & Cocoa exchange, where he worked in clearing, to start up these
The ICE was formed after the New York Produce Exchange had problems
following “The Great Salad Oil Scandal” of the late 1960s. Both the New
York Produce Exchange and the Chicago Board of Trade suffered repercussions
following a fraud in the deliverable supplies of soy bean oil, which was
traded at both exchanges. While the CBOT survived this deliverable stocks
fraud, the New York Produce Exchange did not and it was merged into the new
ICE. Eventually the ICE members would be offered certain trading privileges
on the New York Mercantile Exchange, according to records on the Commodity
Futures Trading Commission web site
Murray Borowitz approached the New York Produce Exchange with the idea of
financial futures on foreign currencies and was made the non-executive
chairman of the International Commerce Exchange to help make it happen,
according to Mr. O’Neill.
The contracts did not work, despite the forward thinking of Mr. Borowitz.
Perhaps the market place was not ready, as the Bretton Woods Accord was
still in place. Or maybe it was the difficulty of getting the Japanese Yen
out of Japan, as Mr. O’Neill suggested. Or perhaps it was that the new ICE,
following on the footsteps of the problems at the New York Produce Exchange
with the soybean oil scandal was not the venue of this new product.
Regardless, Murray Borowitz should go down in history as the “First Mover”
in financial futures, with an honorable mention to Joe O’Neill of the NYBOT
as well. The only mention of Murray’s role in the creation of these
contracts I can find on the web was in a paper “Negotiating a Market,
Performing Theory: The Historical Sociology”
(http://www.ssu.ssc.ed.ac.uk/pubs/Mackenzie_millo.pdf). This paper is a
good story, mostly about the creation and development of the CBOE, though it
also covers some of the IMM’s story.
There is no mention of Murray Borowitz on the NYMEX web site, or the NYBOTs
when Borowitz is entered into a search. For that matter, there is no
mention of Murray Borowitz on the CME’s web site either.
Murray Borowitz is a victim of his own version of “Survivor Bias,” as
mention of his unsuccessful foreign currency contracts has been largely lost
to history. Joe O’Neill remembers. He was there and shared this story with
me when we sat down in the lobby of the Palace Hotel in Burgenstock,
Switzerland last week during the Swiss Futures & Options Association’s
Foreign exchange futures started trading on the ICE on April 23, 1970, which
I propose be declared to be “Murray Borowitz Day.” He may not have
ultimately been successful with his idea, but he should be remembered for
his innovation and creation as the “First Mover” in financial futures.