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Arthur William Cutten (July 6, 1870 – June 24, 1936) was an Canadianmarker-born businessman who gained great wealth and prominence as a commodity trader in the United Statesmarker. He was called to appear before the Banking and Currency Committee in regard to the causes of the Wall Street Crash of 1929. He was under indictment for tax evasion upon his death in Chicagomarker in 1936.

Early life

Born in the rural community of Guelphmarker, Ontariomarker, Arthur Cutten was the eldest of eight children by Walter Hoyt Cutten, a prominent Guelph barrister.

After studying at Guelph Collegiate, in 1888 a young Arthur Cutten left home, making his way to the United States where he settled in the rapidly growing city of Chicago. Hired by commodity broker A. S. White & Co., he worked as the company's bookkeeper for $4 a week. Cutten's employer was part of a growing business community that made Chicago a major economic bridge between the established financial community in New York Citymarker and the emerging farm producers of the American Midwest. Having grown up in a farming community, Arthur Cutten understood the up and down nature of farm production and his job with the Chicago broker afforded him the opportunity to learn the intricacies of trading in commodities on the Chicago Board of Trademarker.

After working at the brokerage house for some time, Arthur Cutten felt confident enough to approach his boss with a request to open a trading account. Dismissed out of hand by his employer because of his lowly position and modest means, the frugal Arthur Cutten used his limited savings from his employment income to begin speculating on commodity prices through the purchase of forward contracts. While highly risky, gambling on the future price of commodities could bring enormous profits on a very small amount of invested capital. Cutten built a small fortune speculating on the price of several products but most notably by capitalizing on the rising prices during the boom in demand for midwest wheat. By 1906, his investments had made him a very wealthy young man and he left his employer to set up his own investment operation with a seat on the Chicago Board of Trade. In the next few years, he made and lost a fortune betting on the price of cotton but accepted losses as a normal part of the business of speculating and continued to successfully invest.

Arthur Cutten frequently referred to himself as a "dirt farmer" and in 1912 he bought a farm property not far from Chicago near Wheatonmarker, Illinoismarker in what is now the Hidden Lake Forest Preserve. Cutten called his home "Sunny Acres Farm" and on it he built a large mansion with extensive gardens that included two twelve-foot high, five and a half ton statues representing agriculture and industry that once stood on the second floor ledge above the main entrance to the old Chicago Board of Trade Buildingmarker that had been torn down in 1929 to make way for the Board of Trade's new home. At the same time, Arthur Cutten never forgot his roots in rural Ontario and donated funds for the construction of a number of community charities and local projects.

Speculation charges and death

During the boom years of the 1920s, Cutten rose to national prominence as one of the United States' most important commodities traders. He acquired a home in Atlantic Citymarker, New Jerseymarker and made himself an important player on Wall Streetmarker where his success eclipsed even that of the renowned stock speculator, Jesse Livermore. In 1925, farm prices began a steady fall from which they would not permanently recover for more than fifteen years. Nevertheless, at the time Arthur Cutten remained optimistic about the American economy and was featured in a cover story of the December 10, 1928 issue of Time magazine in a parody as one of the leading market "Bulls." However, less than a year later Cutten had lost more than $50 million as a result of the Wall Street Crash of 1929. The ensuing investigation of the Crash by the United States Senate's Pecora Commission brought a public outcry over rich speculators such as Cutten who had made huge amounts of money by forming trading pools to manipulate market prices. New legislation was introduced to end market manipulation and the U.S. government targeted certain of the high-profile speculators.

Henry A. Wallace, the then United States Secretary of Agriculture charged Cutten with improper trading activities and tried to have him barred from trading on all futures exchanges in the United States. This ultimately went to the US Supreme Court in the case of Wallace v. Cutten, 298 U.S. 229 (1936)

The government then went after him for income tax evasion. The tax suit would only be settled by the executors of his estate because Arthur Cutten, his fortune vastly depleted by the stock market crash and the cost of lawyers to defend him from the government lawsuits, died in Chicago of a heart attack a few weeks short of his sixty-sixth birthday. His body was brought back to his Canadian birthplace and interred in the family plot in Guelph's Woodlawn Cemetery.

References



Additional reading

  • The Rich and the Super-Rich. Lundberg, Ferdinand. New York: Bantam Books, 1969. 1009 pages.
  • The Amazing Life of Jesse Livermore, by Richard Smitten. Greenville, SC: Traders Press.



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