Preface to the Japanese Translation of
ESCAPE TO THE FUTURES

By Leo Melamed

1997

My special affinity for the Japanese people can of course be attributed to the most obvious reason: Japan and its people saved my life as well as the lives of my parents. And while that singular reason is more than compelling for these memoirs to be translated into Japanese, there are several other and equally important reasons for the friendship between myself and the Land of the Origin of the Sun.

In 1940, I was only eight years old when the Trans-Siberian train brought us to Vladivostok, our gateway to freedom --- far too young to appreciate the extraordinary deed of the Japanese official who had made our flight to safety possible. It wasn't until many years later that my father recounted to me the story of Sugihara, the Japanese Counsel General to Lithuania who defied orders from his own foreign ministry in order to save the lives of some 6,000 doomed refugees.

In the beginning, even my father didn't know the full truth of Chiune Sugihara's courage. The details of this Schindler-esque story weren't immediately available to the world at large. But what my father did know was that this uncommonly humane Japanese official recognized the plight of Jews trapped in this Lithuanian corner of the world who were about to be consumed by the insane hatred-flames of the Nazis. Sugihara did the one thing in his power to do: he granted the refugees a lifeline --- a transit visa through Japan.

Years later we all discovered the full magnitude of Sugihara's deed. Not only did this great and honorable man save the lives of thousands, he acted against the orders of his government who three times had rejected his pleas for authority to do the right thing. In Visas for Life, the life story of Chiune Sugihara written by his wife Yukiko, she recounts how her husband brought together the members of his family --- including her younger sister Setsuko and their three sons, Hiroki, Chiaki, and Haruki --- to advise them of his decision: "I may have to disobey my government," he said, "but if I don't, I will be disobeying God." In following the dictates of his conscience, Chiune Sugihara became one of this world’s sacred righteous. As the old Jewish proverb states: He who saves one life, saves a whole people.

I did not return to Japan until several decades later, in May 1985. I was now leader of the Chicago Mercantile Exchange and invited to speak in Tokyo at a financial seminar together with my friend and mentor, Nobel Laureate Milton Friedman. The seminar, sponsored by Arthur Andersen, offered the Japanese business community a chance to hear Professor Friedman, one of the brilliant economic minds of our century, lecture about free markets, and afforded me an opportunity to speak about futures markets.

Indeed, futures markets are another and equally important reason for translating this book into Japanese. It is no secret that I have devoted almost my entire adult life to the understanding and furtherance of futures markets, particularly financial futures. And while futures markets have been in existence from time immemorial, their official beginning on an centralized exchange did not occur until the Dojima Rice Market was organized in Osaka in 1730. Thus Japan has a special and unique tie to my life’s work in the promotion of organized futures exchanges throughout the world.

Of course, the futures markets I was advancing were very different than the rice tickets traded at the Dojima Market centuries ago. I was championing futures contracts on foreign exchange, interest rates, and stock indexes --- financial futures. This was a new concept in futures markets, introduced in 1972 at the International Monetary Market of the Chicago Mercantile Exchange. Today, financial futures have become an indispensable tool of risk management throughout the world with financial futures exchanges developed in nearly every center of finance. Indeed, the phenomenal success of these instruments during the past two decades has few equals in the business world and symbolizes the power of an idea whose time had come.

The first financial futures contract to be offered in Japan was on the long-term government bond contract, the JGB, listed at the Tokyo Stock Exchange (TSE) in October 1985. This was followed in June 1987 by the launch of the Stock Futures 50 contract --- a basket of Japan’s 50 leading stocks --- on the Osaka Securities Exchange (OSE). In 1988, the Japanese Ministry of Finance passed the Revised Securities and Exchange Law and the Financial Trading Law, lifting the ban on Japanese investors from trading futures and options in any product that was not backed by a physical commodity. Following the lifting of this ban came the introduction of stock price index futures in 1988, and the introduction of stock price index options and an OTC government bond futures options market in 1989. I was greatly privileged to be the guest of honor at the opening of the Nikkei 225 Stock Price Average futures contract at the OSE on September 2, 1988. And with the introduction of the Financial Futures Trading Law, which opened up new opportunities for risk management and investment on an international scale, in June 1989, the Tokyo International Financial Futures Exchange (TIFFE) was organized and began trading its first product, the three-month Euroyen interest rate futures contract.

It was during this time period that I rediscovered the beauty of the Japanese people and the reason for my fascination with them as a youngster years before. Memories of our short but happy stay in Kobe came flooding back. I was again reminded of the sensitivity and beauty of Japanese culture, its many forms of the fine arts and folk arts: flower arrangement, woodblock printing, calligraphy, dance, theatrical plays, puppet theater, and Kabuki. I was again awed by Japanese reverence for ancient customs and rituals; its deference for elders; its consideration for foreigners. I was again taken by Japanese sense of color, their orderliness, cleanliness, and awareness of natural beauty. Indeed, childhood feelings and experiences that had remained frozen in my memory were suddenly released to be revisited in my adulthood. It was a unique and joyous occasion.

My friendship with the Japanese people continues today. Not only have I made many lasting personal friends during my frequent visits to this country, not only have I delivered business lectures and held seminars, not only have I offered my expertise to government officials in matters concerning futures markets, I have had the honor of establishing a partnership arrangement with one of Japan’s premier banking institutions, the Sakura Bank.

This country saved my life. It afforded me the opportunity to extend to the world the Japanese-inspired idea of an organized futures market. In publishing my memoirs in Japanese, in a sense I have come full circle. I am forever grateful.

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