Cornering or capturing a market is not an easy thing to do. It’s when you gain control over enough of a resource or commodity to totally control the market and set the price at whatever you want. Usually, people try it with things like diamonds, gold, silver, rare heavy metals, etc. However, once there was an onion king, and he became so powerful that laws had to be passed to stop him.
Vince Kosuga, son of Russian immigrants, was a somewhat colorful guy. He stood about 5’4″ and carried a .38 revolver and a billy club with him at all times. He was a licensed pilot and survived a serious plane crash when his plane ran out of fuel. He was also an onion farmer, and had a 5,000 acre onion farm in Orange County, New York. Oh, one more thing, he liked to dabble in agricultural futures commodities trading. His dabbling in wheat futures brought him to the verge of bankruptcy and his wife made him quit futures trading.
Except, he didn’t. His farm business necessitated constant traveling between New York and Chicago, and while he was in Chicago he still liked playing the Agricultural futures market. In 1955, he and his friend Sam Siegel (another onion trader) decided that maybe the way to play the commodities future game was to actually corner the market, so they developed a plan to do just that. Kosuga and Sam began buying up all the onions and onion futures contracts that they could. Through futures contracts, they controlled 98% of all the onions in Chicago, which is the major hub of all agricultural futures trading. Millions of pounds of onions began being shipped to Chicago to fulfill the contracts Vince and Sam had purchased, and they soon had 30 million pounds of onions stored in Chicago. Then, they forced onion growers to buy their inventory by threatening to flood the market if they didn’t. They promised to keep a major portion of the inventory stored in order to support prices. Even though everybody had to buy onions from Vince Kosuga, prices remained high so that was ok. Except that while Kosuga controlled the onion market and everyone was buying from him, he was also buying short-sell onion futures as fast as he could, meaning that if the price dropped in the future sales of onions, he could still profit substantially.
The onions that they still had stored in Chicago in order to keep prices up had begun to rot, so Vince and Sam had all the onions shipped out of Chicago to be reconditioned (the bad parts removed), cleaned, repackaged, and shipped back to Chicago. Traders, thinking that these were even more new onions coming in, began expecting a flooded market and onion prices dropped like a rock. Vince and Sam released their entire inventory on the market and prices dropped even further, which was ok with Vince since the greater the price drop the more he profited. However, it was not ok with everyone else. The price of onions dropped so low that a 50 pound bag of onions that sold for $2.75 the year before was now selling for 10 cents. The net bag that held the onions cost 20 cents by itself.
Vince and Sam, by playing both ends of this game, made millions. The outrage in the agricultural community was huge and the sudden price swings caught the eye of the Commodity Exchange Authority which started an investigation that was continued by the House and Senate Agriculture Committees. When Vince Kosuga was called to testify before Congress, he argued that he had done nothing illegal, that it was the perishable nature of the commodity that causes such things to happen, and “If it’s against the law to make money… then I’m guilty”.
Still incensed by what he saw as “unprincipled gambling,” then congressman Gerald Ford sponsored a bill known as the Onion Futures Act, which would ban onions from agricultural commodities future trading. The Onion Futures Act was signed into law by President Eisenhower in August 1958. Onions are the only agricultural product in the country to be banned from futures trading. So that is how the Onion King cornered the onion market and became responsible for the creation of the law of onions.
But, you may ask, whatever happened to the Onion King? Vince Kosuga stayed in New York and continued running his onion farm as a simple local farm. He opened a restaurant called “The Jolly Onion Inn’ where he was the full time chef. He became well known for philanthropy, giving large amounts of money to the church, but cynics might say this was because he had acquired the nickname of “the most evil businessman in history.” Because of his philanthropy, he was named citizen of the year by the Pine Island Chamber of Commerce in 1987. After his death in 2001, his wife Polly continued his philanthropy using the fortune he had amassed by becoming the Onion King.