Mr. Scott E. Early
Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, Illinois 60611-3608

Dear Mr. Early:

By letters dated January 7, 2000 through June 6, 2000, the Merchants' Exchange of St. Louis, L.L.C. ("MESL" or "Exchange") applied to the Commission, pursuant to Section 6 of the Commodity Exchange Act ("Act"), 7 U.S.C. �8, for designation as a contract market in the St. Louis Harbor Barge Freight futures contract and the Illinois Waterway Barge Freight futures contract.

The Commission has reviewed the materials submitted by MESL and has designated MESL as a contract market in the St. Louis Harbor Barge Freight futures contract and Illinois Waterway Barge Freight futures contract pursuant to Section 5 of the Act, 7 U.S.C. �7.

Concurrent with designation, the Commission approved, pursuant to Section 5a(a)(12)(A) of the Act, 7 U.S.C. �7a(a)(12)(A), MESL's proposed Operating Agreement and proposed Rules 101-129, 201-213, 301-312, 401-421, 501-516, 601-615, 701-719, 801, 802, 901-904, 901A-908A, 901B-908B, and 1001-1006. In addition, the Commission has approved proposed Rules of the Board of Trade Clearing Corporation ("BOTCC") for MESL 101-104, 106, 108-112, 116, 117, 120-122, 218, 219, 222, 501-505, 507-516, 518, 601-604, 607, 701-704, 708, 804 and 808.

The Commission's approval is based upon, among other things, written submissions, explanations and representations provided by the Exchange describing the manner in which the MESL System will operate. Any material modifications to the operation of the MESL System (e.g., changes to order entry procedures, trade-matching algorithm, clearing procedures, security systems, etc.) must be submitted for Commission review.

The Commission's approval is also based upon written submissions, explanations and representations provided by MESL and the National Futures Association ("NFA") concerning how NFA would assist MESL in performing the Exchange's self-regulatory obligations. Any material modifications to the operation of MESL�s self-regulatory program, including those services provided by NFA, must be submitted for Commission review. Moreover, the Commission considers those employees of NFA and Exchange Cubed who are involved in providing services to MESL to be "employees" of MESL for the purposes of Commission Regulation 1.59. Accordingly, like any other MESL employee, these NFA and Exchange Cubed employees are prohibited from trading any futures or options contract on MESL.

The Commission will not at this time require holders of MESL trading privileges who do not trade on behalf of customers to register as floor traders under Commission Regulation 1.3(x). This condition may change if in the future the Commission determines it necessary or appropriate to revisit the issue of registration of proprietary traders on electronic systems.

In approving MESL's proposal, the Commission is not approving either the agreement for clearing services between MESL and BOTCC or the agreement for compliance and surveillance services between MESL and NFA. In this connection, MESL must submit to the Commission any material changes to either of these agreements. The Commission underscores that the MESL Operating Agreement and Rules approved by the Commission supersede the terms of those agreements and, further, the MESL itself remains directly responsible to the Commission for ensuring the performance of all self-regulatory functions required of it as a designated contract market under the Act.

cc:��� Robert Stewart, MESL
������� Yvonne Downs, NFA
������� Nancy K. Brooks, BOTCC