Serving the Futures Industry Since 1934
It was 1933, the country was in the depth of the Depression, and the United States had just gone off the gold standard. At a value of $0.59 compared to the pre-devalued dollar, capital began flowing back into the country and trading activity in stocks, bonds, and commodity futures was beginning to show some life. Nevertheless, traders and those interested in commodities found very few sources of comprehensive information were available to them.
At this time, Milton Jiler, a young reporter for the New York American, was covering commodity exchanges and doing freelance public relations work for some of the exchanges to supplement his income. Gregarious by nature, Jiler soon became known among the exchanges’ commodity traders. He was quick to realize that unless one was actually on the floor of the exchanges, price and volume information was difficult to come by. Although The Wall Street Journal covered the stock market quite thoroughly, there was little if any price information available for commodity futures.
Milton Jiler had a simple idea. If no one was providing information about the commodities markets, trading was limited to those people with direct access to the floor. Increased use of the telephone made communications between customers and their brokers easier, but there was no source of closing prices that could be used to establish trends and trading strategies. This was particularly important to brokers, advisors, and commercial users of the various commodities as well as the speculators who made the markets.
As a journalist, Jiler firmly believed that, “No publication should be started unless it is needed.” What he saw was the need for a medium that would bring information about the futures markets to interested parties on a timely basis. With that in mind he founded the Commodity Research Bureau, with the Futures Market Service as its first publication.
Starting with virtually no capital, Jiler had to convince potential customers and suppliers of the viability of his new idea. He first found a printer willing to produce one issue of the Futures Market Service on credit; an unheard of arrangement in light of the economic times. Additionally, he located a paper supplier willing to provide stock on the same terms.
He then approached several of the people he knew would benefit from his idea. His first calls were placed to some of the leading brokerage houses of the day: Ed Pierce, president of E.A. Pierce and Company, and Harold Bache, president of Bache & Company, were early supporters. They agreed to purchase several hundred copies of the new publication on a trial basis and distribute them to their brokers and key clients. When it finally appeared that the concept would become a reality, Milton convinced his brother, Harry Jiler, to join him as president of the fledgling firm. A Certified Public Accountant and an economist, Harry’s experience and insight would prove to be extremely valuable to the new company.
According to Milton Jiler, “Getting that first issue out required ‘chutzpah.'” But on February 3, 1934, the CRB Futures Market Service made its debut. The report consisted of seven legal-size pages, with typewritten text, divided into multiple sections. The lead article was an overall analysis of the markets headed, “The Outlook for Commodity Prices.” This feature set the tone for the publication and remains as the front page story to this day.
Following the lead report was an analysis of the individual commodities, grouped according to letter grades. In retrospect, this grouping provided an insight to governmental policies as well as general economic conditions of the day. Group A-1 commodities included “those contracts entitled to further price improvement on the basis of actual or indicated statistical improvement.” Group B-1 included “commodities dependent on new governmental aid or international restriction for further price increase.” Group C-1 was classified as “these commodities should join in the general advance. This group has evidently discounted special factors.”
These groupings of commodities remained in effect until World War II, when each wartime issue contained the following statement:
“Our regular readers will note that we have dropped our rating system for the various commodities which, under the present national emergency, might be confused by some as catering to the uninformed speculator.”
The Commodity Research Bureau Futures Market Service became profitable within its first year of existence, allowing the company to pay all its early creditors. Its success was due in large part to its ability to provide information that was not readily available to traders. CRB built a network of more than a dozen sources to provide the current fundamental information for each exchange-traded commodity.
In 1939, CRB published its first Commodity Year Book. Priced at $10.00, this volume incorporated comprehensive statistical information on all of the exchange-traded commodities. Long considered the “Bible of the Industry,” it has been published annually ever since then, with just a brief hiatus during World War II.
Wartime restrictions reduced commodities trading volume as well as trader interest in the Commodity Research Bureau. During the War, shortages, allocations, rationing, and other restrictions precluded a free market of commodities. During the conflict, Milton served in the United States Navy, leaving Harry, who was beyond draft age, to run the company in his brother’s absence.
By May, 1945, the Futures Market Service (now referred to as the Blue Sheet because of the color of its paper stock) reactivated the staff and resumed publishing on a full scale. Following V-E Day, the Blue Sheet concluded that the country was heading for a temporary slowdown and lower commodity prices.
On May 14, 1945, the CRB predicted:
“…industrial activity will decline. A slight decline has been under way since 1943, owing to labor and material shortages but it will be accelerated as reconversion proceeds. The trend in industrial activity is likely to be lower for the next few months and probably won’t level out until the fall. This means a substantial reduction in the production of war materials.”
“But it does not spell an immediate expansion in the production of civilian goods. The output of civilian goods will be delayed by preparations for reconversion. Hence, on a supply and demand basis, there is little reason to anticipate any weakening of the finished goods price level.”
“…In summarizing, we doubt whether V-E Day is going to influence any protracted price declines in the commodity level…Hence, we doubt whether commodity prices will be faced with a crisis until V-J Day.”
By August 13, 1945 the CRB issued this prescient message:
“…Hence, we believe that the greatest threat of inflation will occur during the immediate post-war reconstruction period because production will not be fully geared to meet all demands. Once production catches up with demand, the inflationary threat will vanish. However, we believe that more favorable buying opportunities will occur before the post-war recovery gets under way.”
As the CRB regained its peacetime footing, the first post-war edition of the Commodity Year Book was published in 1947. Similarly, the Blue Sheet was expanding its reach to new heights. In 1950, the Jiler’s recruited their youngest brother, William, to work on a project during the summer following his college graduation. Not anticipating a career in the commodities industry, Bill earned a degree in chemistry, followed by a business degree in corporate finance. Apparently his hands-on exposure to the business appealed to him and he became an integral part of the operation. In the mid-1950s, Bill felt the need for a printed book of charts as a companion product to the Futures Market Service.
Charts had long been a feature of the Commodity Year Book, so it was fitting that the staff publish these charts on a more frequent basis. On March 2, 1956, the inaugural issue of Commodity Chart Service was published. Bill Jiler believed that this was the first step towards technical analysis. Although most of the narrative of the Futures Market Service was, and still is, based on fundamentals, the text accompanying the set of weekly and monthly charts was the “Technical Comment,” as interpreted by the CRB staff.
This was stated in the first issue:
“The technical views which will be expressed in this column are the opinions of the chartists on the staff of the Commodity Research Bureau. They are not based on any specific traditional charting system, although they may contain elements of a number of previously established methods. Comments in this section will be confined to interesting chart situations either from the technical aspect, unusual interest, or possibly profitable trading opportunities.”
After introducing the Futures Chart Service, Bill Jiler started the Trendline Chart Service, which covered the equity markets. Approximately five years later this service was sold to the Standard & Poor’s Corporation.
Yet another interesting development attributed to Bill Jiler was the development of the CRB Index. According to Jiler, he felt that the industry needed something that better reflected the overall price activity in the commodity markets. The principal competition to the new CRB Futures Price Index was the Dow Jones Futures Index, but the CRB Index quickly took hold among established futures traders, and soon became the dominant index of futures activity. Today, 45 years later, the CRB Futures Price Index remains the global benchmark for measuring commodity price movement.
The CRB Index was originally designed to provide a dynamic representation of broad trends in commodity prices and was more reflective of the overall price of exchange-traded commodities than was the Spot Commodity Index, then compiled by the Bureau of Labor Statistics. Although the BLS index was interesting, it covered only cash transactions and was not as timely as the one compiled by the Commodity Research Bureau. Eventually the government stopped working on their commodity index and turned it over to CRB to calculate.
In order to maintain the usefulness of the CRB Futures Price Index it has been periodically adjusted to reflect changes in market structure and activity. There have been nine modifications to the Index calculation and component commodities since its inception in 1956, the last change occuring in 1995.
The talents of each of the Jiler’s meshed very well in their role as the management team of the Commodity Research Bureau. According to outside observers and long-time staff members, Milton was the “idea” man. Developing the company and its initial products, and with his many contacts within the industry, he was responsible for marketing and promotion. The older brother, Harry, knew how to implement Milton’s ideas and run the operation on a business-like basis. Bill, the youngest brother, was considered the innovator and developer of new products. He recognized the value of developing companion products and services, most of which became successful in their own right. CRB began to publish books, such as Guide To Commodity Price Forecasting, Techniques of a Professional Commodity Chart Analyst, and Modern Futures and Options Trading to name a just a few.
In the early 1980s, the Jiler brothers received several offers for the company and its publications. At first they resisted, but with Harry and Milton both in their seventies, they finally agreed to an offer from Knight-Ridder Financial Publishing (KRFP). On December 1, 1984, KRFP acquired the Commodity Research Bureau including its products, subscriber base, and the classic CRB books that were still being published. William Jiler remained with the company through the rest of the decade, adding to the development of products as well as consulting with several futures exchanges.
Knight-Ridder Financial Publishing initiated a switch from hand-drawn charts to computer-generated charts. The company already owned Commodity Perspective, a Chicago-based futures market charting service it had purchased in the early 1980s, so after acquiring CRB the company published both Commodity Perspective and Futures Chart Service until the two services were merged into one in 1996. The newly merged publication was named CRB Futures Perspective and it continues to be published every Friday afternoon, immediately after the markets close.
Computers and electronic databases were becoming more and more common as a business tool at the time Knight-Ridder Financial Publishing acquired CRB. Shortly after the acquisition, the staff of KRFP began the arduous process of copying into an electronic database the entire commodity price history CRB had collected and cataloged on paper since 1934. Price data from exchanges, cash markets, and third party sources, some going back into the 1800s, was painstakingly hand-transferred to the new computerized database. After the project was finally completed, KRFP released a new product they named InfoTech. The InfoTech product was a CD-ROM that contained the entire CRB historical database, both historical prices and the supply and demand information that had appeared in every CRB Commodity Yearbook since 1965. At that time, CD-ROMs were so new that KRFP included a CD-ROM player with every InfoTech order because very few computers had one. Daily price data updates were delivered to the new computerized customers by direct modem connection to KRFP-maintained servers in New York, Chicago, London, Singapore, and Hong Kong.
The acquisition of CRB by Knight-Ridder Financial Publishing presented a logistical challenge as well, operating a publishing business from two different cities, Jersey City and Chicago. KRFP began by moving CRB from Jersey City back into New York’s financial district. By 1990, KRFP had consolidated all of the CRB operations into one location at the Knight-Ridder Financial corporate headquarters at 75 Wall Street. In 1993, the Commodity Research Bureau was moved to Chicago, home of the world’s largest futures community, and incorporated into the Knight-Ridder Financial Publishing organization there, where it continues its operations today.
A futures contract on the CRB Futures Price Index was introduced on the New York Futures Exchange (NYFE) in 1986, and quickly became the most watched contract on the exchange. Bill Jiler worked with the NYFE in creating the contract that ultimately generated considerable additional exposure for the Index. The contract continues to actively trade today on the NYFE division of the New York Board of Trade (NYBOT).
In 1997, Bridge Information Systems Inc., purchased Knight-Ridder Financial, including KRFP and the Commodity Research Bureau. The organization that had been known as KRFP took on the name Bridge Commodity Research Bureau (Bridge/CRB).
On September 7, 2001, Logical Systems, Inc. of Chicago, the largest supplier of Internet based Commodities and Futures data, purchased the CRB division from Bridge Information Systems, Inc., and returned the name Commodity Research Bureau (CRB). CRB continues to publish the Futures Market Service and distributes it in both hard copy and via e-mail. CRB Futures Perspective continues to be printed and mailed every Friday afternoon. The CRB Commodity Yearbook, in both hard cover and CD-ROM format, is published annually every May. Additionally, Electronic Futures Trend Analyzer (EFTA), a pioneer computerized trading system CRB developed in the 1970s, is available online. Subscribers can also obtain Final Markets End-of-Day price data, daily Futures Market Service commentary, EFTA, and daily news summaries via the online CRB DataCenter.