The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

As exchanges go, the New York Mercantile Exchange had not exactly enjoyed the most distinguished career. It had been founded in 1872, the same year that John D. Rockefeller launched “our plan” to take over the American oil industry and squeeze out the competition. The exchange had more modest ambitions, reflecting the interests of sixty-two merchants in New York City who were looking for a place to trade dairy products. Its original name was the Butter and Cheese Exchange. Eggs were soon added to the menu, and in 1880, it became the Butter, Cheese, and Egg Exchange. Two years later, it changed its name again, to the New York Mercantile Exchange. By the 1920s, egg futures had been introduced and were being traded, in addition to the eggs themselves. Then in 1941, a new commodity entered the portals of the exchange—the Maine potato. Later, futures were added for yellow globe onions, apples (McIntosh and Golden Delicious), Idaho potatoes, plywood, and platinum. But the Maine potato was the mainstay of the Mercantile Exchange until, unbeknownst to most of the world, the American supply-demand balance for potatoes began to change dramatically. Maine potatoes were losing market share to potatoes produced elsewhere in the country; moreover, the absolute volume of Maine potatoes produced each year was also dropping. As a result, the Maine potato futures contract was running into trouble. In 1976, and again in 1979, scandals hit the potato contract, including the mortifying failure...