By George Castle, Special to Chicago Jewish News
Leo Melamed sounds like a super scout for a professional sports team in analyzing the makeup of a good commodities trader.
“It depends more on psychological makeup than physical makeup,” said the chairman emeritus of CME, formerly known as the Chicago Mercantile Exchange. He knows of what he speaks, as Melamed was down in the pits in the exchange by the mid-1950s, prospered and eventually ran the whole shebang. He’s now a spry 85.
Continuing his narrative, Melamed painted a picture of the skills and reactions of a good trader as similar to that of a well-honed athlete who has perception, anticipation and the ability to shrug off a setback.
“It’s personality, the ability to withstand pain, the willingness to handle defeat in the open. A (good) trader figures as soon as he’s in a losing position, get out…People who cannot admit defeat, go broke.
“It’s the ability to not look back,” Melamed said. “Mistakes and errors have to teach you something. You learn over the course of time, admitting you made mistakes and be ready to work (to make gains) the next day.
Melamed, who has rubbed shoulders with world leaders such as Ronald Reagan and international business titans, may have been the most daring trader of them all. He was the ultimate man unafraid of risk. After a childhood journey that took him more than halfway around the world, always one step ahead of hell, Melamed could go out on any limb in the pits or executive suite.
The story of the stress-training he received as an 8-year-old was recalled when Melamed recently was awarded the Order of the Rising Sun, by the government of Japan. The order is the highest honor Japan can confer on someone who is not a head of state or royalty, and is comparable to the Presidential Medal of Freedom. The honor was established by Emperor Meiji in 1875.
Melamed was recognized for three things — initiating financial futures worldwide; for his outstanding contribution to the Japan-U.S. relationship; and for promoting recognition of the deeds of Chiune Sughihara, the Japanese counsel general to Lithuania, who saved thousands of Jews during the Holocaust by providing them with transit visas to Japan and out of Europe. Among the recipients of the visas were Melamed and his parents.
“I am both honored and humbled to be bestowed the Order of the Rising Sun, Gold and Silver Star decoration by the Emperor of Japan,” said Melamed when the award was announced. “My ties to Japan run deep. And it was at my urging that CME Group set up its first Asian office in Tokyo exactly 30 years ago. Since then, we have been working very closely to further the development of Japan’s futures markets.”
Born Leible Melamed in Poland, the future business friend of Japan and China was one of those lucky visa recipients along with mother Faigle and father Moishe. They crossed the Soviet Union via the Trans-Siberia Railroad. The Melameds found safe haven in a Japan where the people were welcoming while the militaristic government began laying plans for war with the United States. Eventually they made their way to Seattle in April 1941, seven months before Pearl Harbor.
The family had been in double jeopardy. They got out of Bialystok, in northeast Poland, soon after the Nazis invaded in Sept. 1939. But in Soviet-occupied Lithuania, Moishe Melamed was in danger of being a marked man. He had been an anti-Stalinist before the war. They were not safe until they reached Japan.
“My mother said in the course of our escape, to believe that danger is around every corner,” Melamed said. “She said we needed to accept that risk was all around us. I was just seven years old. There is no question that influenced my psychology and makeup in recognizing risk in life.
“I call it the Bialystok Syndrome. Mom had that syndrome, that there is danger around every corner. While trading, that was equally true. My parents endured life-and-death situations. I accepted a life with risk.”
Most memories from age 7 or 8 are blurred with the passage of time. But for Melamed, they stayed in sharp, crystal-clear focus and can be easily recalled. “It was close,” he said. “The incidents were so unusual they left a strong memory. I remember most of the horrid situations.”
The blitzkrieg that swept the Nazis into Bialystok is his first memory. Melamed did not understand the rape committed by German soldiers in the cemetery across the street. “But I understood the Gestapo coming for my dad, and slapping my mom around because he wasn’t there,” he said. “I remember the minutia of her wearing a green dress.
It wasn’t long after, that Moishe Melamed decided it was time to leave. “I consider my father one of the wisest men I have ever met,” he said of Moishe Melamed, a math teacher (Melamed is the Yiddish word for teacher). “He had the intuition to get out of there. His answer from the first week of the occupation was it was time to go.”
Moishe Melamed went ahead to Lithuania, then sent for his family. They literally took the last train out of Bialystok.
“It was horrid, like in a movie, where you see a mob of people trying to cram on the train. We got on. Mom held my hand all the way.
“For a time we were pretty safe in Lithuania, until the Soviets came (on June 15, 1940). After that, we used to hide in the forests. We were lucky to get a visa from Sughihara.”
Visa in hand, the Melameds embarked on their thousands-mile train trip across Siberia. All the while, Moishe Melamed had to wonder if he was being watched – and would soon be apprehended.
“It was a one-track route,” Melamed said. “The eastbound train got off onto a siding when the westbound train was coming. It was exceedingly cold. My father became my teacher at the time. He showed me the difference between fahrenheit and centigrade. They meet at 40-below. One day, he said tonight we will stop at the place where it’s 40-below.
“The train stopped many times, and mom didn’t know when it would start again. Dad went out to buy food and we worried if he would miss the train. The NKVD (Soviet secret police, precursor to the KGB) was everywhere. They were easy to recognize. They were in plainclothes, but you could tell them by virtue of their very short haircuts.”
Once out of the Soviet Union, the family could breathe a sigh of relief. Nothing similarly sinister awaited them in Japan, even as more war clouds gathered.
“Militarists (at the time) did not take over the Japanese people,” Melamed said. ”People couldn’t have been nicer to us. People took us in. They were extremely courteous to us. Japanese are courteous to their guests. It was an unbelievably fine experience.”
After traversing the entire length of the Soviet Union, a trans-Pacific ocean crossing was the last long step of Melamed’s journey to freedom. He still has clear images of a pre-war America as an absolute contrast to what he left behind.
“We came to Seattle, and took the train to New York,” he said. “We were stunned by the size of America and the beauty of its people. It was literally paradise.
“I’m still a strong patriot.”
The memory of one fulcrum point of his journey would never fade. Melamed was determined to never let Sughihara’s righteous acts be lost to history. As he advanced in the business world, he transformed his Chicago office into a “mecca for anyone associated with Sughihara.
“I met his son, Hiroki, 40 years later,” said Melamed. “We made a pact to maintain his memory. Other members of his family passed through my office. The mayor of the small (Japanese) port where we landed helped perpetuate his memory. I helped make his name so well-known.”
Sughihara has been honored as a righteous gentile in saving lives during the Holocaust at the Yad Vashem memorial museum in Israel. Melamed ensured further remembrance as one of the original council members building the U.S. Holocaust Museum in Washington, D.C.
Safely in America, Melamed aimed for a career in the law, attending Chicago’s John Marshall Law School. While in school, he heard of a part-time job at Merrill Lynch, Pierce, Fenner & Beane, which he assumed was a law firm because of its many names. He was hired as a $25-a-week runner conveying Mercantile Exchange orders to a trading clerk. Upon graduation, he had a full membership, moving transactions in the agricultural goods sector in which the exchange specialized. Meanwhile, he practiced general law when he was not on the floor.
Melamed is forever grateful for mentors who steered the young trader away from too many misjudgments in the frantic flood bidding.
“It wasn’t a very Jewish business when I began,” he said. “The key was to figure out the market. Being Jewish or Italian didn’t make a difference. If you figured out the market, you were a hero. The floor was one of the few equal institutions in America. Everyone on floor was equal to anyone else.
“Jesse Jackson once came to visit me, to make sure we hired African Americans. Jackson looked at the floor to see 30 percent of the traders were black.”
Advanced to chairman of the Merc at age 37 in 1969, Melamed presided over many changes. He’s recognized as the founder of financial futures markets. Melamed was instrumental in the creation and launch of CME Group’s interest rate and stock index futures markets and the company’s electronic trading system. He began the computerization of trading in 1986. He effected a merger with the rival Chicago Board of Trade in 2007.
Melamed was named by the Chicago Tribune as one of the 10 most important Chicagoans in business in the 20th century. Now a consultant as chairman and CEO of Melamed & Associates, a global consulting group, he remains a firm advocate of free trade and an opponent of Trump-era tariffs aimed at China.
“The Chinese are glorious people,” he said. “They love Americans. Look how many Chinese are studying and working in our country.
“It’s not a question of Chinese, Japanese, U.S. goods. It’s bad economics. Tariffs don’t work. Look at 1930. Smoot-Hawley instituted tariffs, and made the Great Depression much worse. The president’s intentions are good, but using those tools are bad. Larry Kudlow (Donald Trump’s Jewish top economic advisor) knows tariffs are bad.”
Melamed has developed a sideline as an author. He’s written several books, including “The Tenth Planet,” a science fiction novel.
As for handling risk, he practices it every day, developed on his long, laborious, never-forgotten route to freedom. But Melamed will never risk his forever-commitment to thank a Japanese diplomat who saved his life and the lives of so many other Jews.