Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-27T21:16:50.398Z Has data issue: false hasContentIssue false
  • English
  • Français

Buying time: futures trading and telegraphy in nineteenth-century global commodity markets*

Published online by Cambridge University Press:  19 June 2015

Alexander Engel
Alexander Engel*
Affiliation:
Institut für Wirtschafts- und Sozialgeschichte, Georg-August-Universität Göttingen, Platz der Göttinger Sieben 5, 37073 Göttingen, Germany E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Adapting the dictum that ‘time is money’, Western merchants have long promoted and welcomed technologies to accelerate commerce. Thanks to revolutionary changes in communication in the nineteenth century, including the telegraph, information could for the first time travel much faster around the globe than goods. This asymmetric time–space compression created new problems for agents of global trade, as transactions could occur faster than the handling of the goods. Yet this problem also presented an opportunity to establish new forms of trading and ways of thinking about time. In the case of world markets for primary products such as grain or cotton, the new technique of futures trading at commodity exchanges became a tool to redress the time differential between the movement of goods and information. It pushed the commercial community to think in a ‘double time’ of a dematerialized present and a material future with physical goods, and centred global commodity markets on a few marketplaces. The article thus argues that historians need to examine economic understandings of the future alongside political, cultural, and social understandings.

Keywords

commoditiesfutures tradingmarketstime–space compressiontelegraph
Type
Articles
Information
Journal of Global History , Volume 10 , Issue 2 , July 2015 , pp. 284 - 306
Copyright
Copyright © Cambridge University Press 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

I owe a debt of gratitude to Heidi Tworek and Simone Müller for the sheer amount of patience and constructive advice they provided in the different stages of developing this contribution. The text further profited from a number of remarks by two anonymous reviewers, whom I would also like to thank.

References

1 On Cohn, see Walter Braeuer, ‘Cohn, Gustav’, in Neue Deutsche Biographie, vol. 3, Berlin: Duncker & Humblot, 1957, pp. 315–16; Hamburger, Ernest, Juden im öffentlichen Leben Deutschlands: Regierungsmitglieder, Beamte und Parlamentarier in der monarchischen Zeit 1848–1918, Tübingen: Mohr, 1968Google Scholar, pp. 93–5.

2 Cohn, Gustav, ‘Zeitgeschäfte und Differenzgeschäfte’, Jahrbücher für Nationalökonomie und Statistik, 7, 1866, pp. 377–428CrossRefGoogle Scholar. On the historical school, see Quinn Slobodian, ‘How to see the world economy: statistics, maps, and Schumpeter's camera in the first age of globalization’, in this issue, pp. 307–32.

3 Cohn, Gustav, ‘Nachtrag zu dem Aufsatze über Zeitgeschäfte und Differenzgeschäfte’, Jahrbücher für Nationalökonomie und Statistik, 9, 1867, pp. 73–77Google Scholar; Cohn, Gustav, Die Börse und die Spekulation, Berlin: Lüderitz, 1868Google Scholar; Cohn, Gustav, ‘Statistische Untersuchungen über die Wirksamkeit der Spekulation im Berliner Roggenhandel während der Jahre 1850–1867’, Zeitschrift des Königlich Preußischen statistischen Bureaus, 8, 1868, pp. 20–24Google Scholar; Cohn, Gustav, ‘Ueber Wesen und Wirkungen der Creditgeschäfte’, Zeitschrift für die gesamte Staatswissenschaft, 24, 1868, pp. 572–600Google Scholar; Cohn, Gustav, ‘Ein weiterer Beitrag zur Statistik der Spekulation’, Jahrbücher für Nationalökonomie und Statistik, 16, 1871, pp. 282–295CrossRefGoogle Scholar; Cohn, Gustav, ‘Ueber Differenzgeschäfte’, in Gustav Cohn, ed., Volkswirtschaftliche Aufsätze, Stuttgart: Cotta, 1882, pp. 669–704Google Scholar.

4 Cohn, ‘Zeitgeschäfte und Differenzgeschäfte’, pp. 380–1.

5 For theoretical background, see Rosa, Hartmut, Social acceleration: a new theory of modernity, New York: Columbia University Press, 2013CrossRefGoogle Scholar. On the roots of modern acceleration in the Sattelzeit around 1800, see Koselleck, Reinhart, Futures past: on the semantics of historical time, Cambridge, MA: MIT Press, 1985Google Scholar. For a descriptive examination of historical accelerations, see Borscheid, Peter, Das Tempo-Virus: eine Kulturgeschichte der Beschleunigung, Frankfurt am Main: Campus, 2004Google Scholar.

6 Franklin, Benjamin, ‘Advice to a young tradesman’, in The American instructor or young man's best companion, 9th edn, Philadelphia, PA: Franklin and Hall, 1748, pp. 375–377Google Scholar.

7 Adam, Barbara, ‘Comment on “social acceleration” by Hartmut Rosa’, Constellations, 10, 1, 2003CrossRefGoogle Scholar, p. 50.

8 Cohn, , ‘Zeitgeschäfte und Differenzgeschäfte’, p. 381Google Scholar.

9 Simone Müller, Wiring the world, New York: Columbia University Press, forthcoming; Wenzlhuemer, Roland, Connecting the nineteenth-century world: the telegraph and globalization, Cambridge: Cambridge University Press, 2013Google Scholar.

10 Belfast Newsletter, 28 July 1866.

11 Müller-Pohl, Simone, ‘“By Atlantic Telegraph”: a study on Weltcommunication in the 19th century’, Medien & Zeit, 25, 4, 2010, pp. 40–54Google Scholar.

12 Giddens, Anthony, The consequences of modernity, Cambridge: Polity Press, 1991Google Scholar, p. 14.

13 Harvey, David, The condition of postmodernity: an enquiry into the origins of cultural change, Cambridge, MA: Blackwell, 1990Google Scholar; Warf, Barney, Time–space compression: historical geographies, London: Routledge, 2008Google Scholar.

14 On different global time regimes, see Ogle, Vanessa, ‘Whose time is it? The pluralization of time and the global condition, 1870s to 1940s’, American Historical Review, 118, 5, 2013, pp. 1376–1402CrossRefGoogle Scholar.

15 Cronon, William, Nature's metropolis: Chicago and the Great West, New York: Norton, 1991Google Scholar; Levy, Jonathan, Freaks of fortune: the emerging world of capitalism and risk in America, Cambridge, MA: Harvard University Press, 2012CrossRefGoogle Scholar.

16 On how opening commodity markets became speculative markets for investors through futures trading and the telegraph, see Hochfelder, David, ‘“Where the common people could speculate”: the ticker, bucket shops, and the origins of popular participation in financial markets, 1880–1920’, Journal of American History, 93, 2006, pp. 335–358Google Scholar.

17 For instance, Topik, Steven C. and Wells, Allen, Global markets transformed, 1870–1945, Cambridge, MA: Harvard University Press, 2014Google Scholar. Kevin H. O'Rourke and Jeffrey G. Williamson, in their seminal monograph Globalization and history: the evolution of a nineteenth-century Atlantic economy, Cambridge, MA: MIT Press, 1999, do not even mention commodity exchanges and futures markets, though they discuss transatlantic price developments. This might not come as a surprise, however, given Quinn Slobodian's observation in this special issue that thinking about economic globalization is usually divided into marginalist and more institutionalist approaches – O'Rourke and Williamson clearly represent the former.

18 Lurie, Jonathan, The Chicago Board of Trade, 1859–1905: the dynamics of self-regulation, Urbana, IL: University of Illinois Press, 1979Google Scholar; Lipartito, Kenneth J., ‘The New York Cotton Exchange and the development of the cotton futures market’, Business History Review, 57, 1983, pp. 50–72CrossRefGoogle Scholar; Rischbieter, Julia Laura, Mikro-Ökonomie der Globalisierung: Kaffee, Kaufleute und Konsumenten im Kaiserreich 1870–1914, Cologne: Böhlau, 2011CrossRefGoogle Scholar.

19 Williams, Jeffrey C., ‘The origins of futures markets’, Agricultural History, 56, 1982, pp. 306–316Google Scholar.

20 See Engerman, David C., ed., ‘AHR forum: histories of the future’, American Historical Review, 117, 5, 2012, pp. 1401–1460CrossRefGoogle Scholar.

21 Scammell, Geoffrey Vaughn, The world encompassed: the first maritime empires, c. 800–1650, Berkeley, CA: University of California Press, 1981Google Scholar.

22 John J. McCusker and Cora Gravestejn, The beginnings of commercial and financial journalism: the commodity price currents, exchange rate currents, and money currents of early modern Europe, Amsterdam: NEHA, 1991. See also Joad Raymond, ed., News networks in seventeenth-century Britain and Europe, London: Routledge, 2006.

23 McCusker, John J., ‘The demise of distance: the business press and the origins of the information revolution in the early modern Atlantic world’, American Historical Review, 110, 2005, pp. 295–321CrossRefGoogle Scholar.

24 Slauter, Will, ‘Forward-looking statements: news and speculation in the age of the American Revolution’, Journal of Modern History, 81, 4, 2009, pp. 759–772CrossRefGoogle Scholar.

25 See, for instance, Jacques Savary des Bruslons, ed., Dictionnaire universel de commerce, Paris: Estienne, 1723–30; Jacobi, Johann G., Neues vollständiges und allgemeines Waaren- und Handlungs-Lexicon, 3 vols., Heilbronn: Claß, 1798–1800Google Scholar; MacCulloch, John Ramsay, ed., Dictionary, practical, theoretical and historical of commerce and commercial navigation, 3rd edn, London: Longman, 1844Google Scholar.

26 Engel, Alexander, ‘Selling Indian indigo in traditional and modern European markets, 1780–1910’, in Hartmut Berghoff, Philip Scranton, and Uwe Spiekermann, eds., The rise of marketing and market research, Basingstoke: Palgrave, 2012, pp. 27–47Google Scholar.

27 Ibid., p. 31. For more on the creation of markets for dyestuffs, see Engel, Alexander, Farben der Globalisierung: die Entstehung moderner Märkte für Farbstoffe, Frankfurt am Main: Campus, 2009Google Scholar.

28 Fuchs, Carl Johannnes, ‘Die Organisation des Liverpooler Baumwollhandels in Vergangenheit und Gegenwart’, Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich, 14, 1890, p. 109Google Scholar. On cotton, see Beckert, Sven, ‘Emancipation and empire: reconstructing the worldwide web of cotton production in the age of the American Civil War’, American Historical Review, 109, 5, 2004, pp. 1405–1438CrossRefGoogle Scholar.

29 ‘Sample’, in MacCulloch, Dictionary, p. 1085.

30 Fuchs, , ‘Organisation’, p. 115Google Scholar.

31 Kaukiainen, Yrjö, ‘Shrinking the world: improvements in the speed of information transmission, c. 1820–1870’, European Review of Economic History, 5, 2001, pp. 1–28CrossRefGoogle Scholar.

32 Fuchs, , ‘Organisation’, p. 115Google Scholar.

33 Cronon, , Nature's metropolis, pp. 109–119Google Scholar. See, more generally, Hill, Lowell D., Grain grades and standards: historical issues shaping the future, Urbana, IL: University of Illinois Press, 1990Google Scholar.

34 The following description of the working of futures trading will not be referenced in detail. It is primarily based on the study of different contemporary accounts of futures trading, most of which were published in Germany, including Fuchs, Carl Johannes, Der Waren-Terminhandel, seine Technik und volkswirtschaftliche Bedeutung, Leipzig: Duncker & Humblot, 1891Google Scholar; Weber, Max, Die Börse, II: der Börsenverkehr, Göttingen: Vandenhoeck & Ruprecht, 1896Google Scholar; Emery, Henry Crosby, Speculation on the stock and produce exchanges of the United States, New York: Columbia University Press, 1896Google Scholar.

35 Gelderblom, Oscar and Jonker, Joost, ‘Amsterdam as the cradle of modern futures trading and options trading’, in William N. Goetzmann and K. Geert Rouwenhorst, eds., The origins of value: the financial innovations that created modern capital markets, Oxford: Oxford University Press, 2005, pp. 189–205Google Scholar.

36 Cohn, , ‘Statistische Untersuchungen’, p. 21Google Scholar.

37 Cohn, , ‘Zeitgeschäfte und Differenzgeschäfte’, pp. 420–428Google Scholar.

38 Rosenthal, Caitlin, ‘From memory to mastery: accounting for control in America, 1750–1880,’ Enterprise & Society, 14, 4, 2013, pp. 732–748CrossRefGoogle Scholar.

39 Headrick, Daniel, The tools of empire: technology and European imperialism in the nineteenth century, New York: Oxford University Press, 1981Google Scholar; Griset, Pascal and Headrick, Daniel R., ‘Submarine telegraph cables: business and politics, 1838–1939’, Business History Review, 75, 3, 2001, pp. 543–578Google Scholar.

40 Cohn, , ‘Zeitgeschäfte und Differenzgeschäfte’, p. 382Google Scholar.

41 Ibid.

42 Document 45, ‘Testimony and report of the Special Senate Committee appointed to investigate the system of making corners and dealing in futures’, in Documents of the Senate of the State of New York: one hundred and sixth session, vol. 5, Albany, NY: Weed, Parsons and Company, 1883.

43 Ibid., pp. 713–14.

44 Ibid, p. 709. See also Fuchs, , ‘Organisation’, pp. 114–115Google Scholar.

45 ‘Testimony and report of the Special Senate Committee’, p. 709.

46 Lipartito, ‘New York Cotton Exchange’.

47 Aron, Siegmund, Ueber Lieferungsgeschäfte und kaufmännischen Schwindel, Berlin: Lüderitz, 1875Google Scholar, p. 19.

48 Ibid.

49 Lew, Byron and Cater, Bruce, ‘The telegraph, co-ordination of tramp shipping, and growth in world trade, 1870–1910’, European Review of Economic History, 10, 2006, pp. 147–173CrossRefGoogle Scholar.

50 Schaede, Ulrike, ‘Forwards and futures in Tokugawa-period Japan: a new perspective on the Dojima rice market’, Journal of Banking and Finance, 13, 1989, pp. 487–513CrossRefGoogle Scholar; West, Mark D., ‘Private ordering at the world's first futures exchange’, Michigan Law Review, 98, 2000, pp. 2574–2615CrossRefGoogle Scholar.

51 Ricard, Jean Pierre, Le négoce d'Amsterdam, Amsterdam: Lucas, 1722, pp. 52–61Google Scholar.

52 Mortimer, Thomas, Every man his own broker: or, a guide to exchange-alley. In which the nature of the several funds, vulgarly called the stocks, is clearly explained, London: Hooper, 1765, pp. 92–99Google Scholar.

53 Birla, Ritu, Stages of capital: law, culture, and market governance in late colonial India, Durham, NC: Duke University Press, 2009Google Scholar, ch. 4.

54 Ibid., pp. 152–3.

55 Owen, Edward R. J., Cotton and the Egyptian economy, 1820–1914: a study in trade and development, Oxford: Clarendon Press, 1969Google Scholar; Goldberg, Ellis, ‘Marketing commodities does not happen on commodity markets: the Egyptian Bursat Al-‘Uqud and oil futures markets’, in Clement M. Henry and Rodney Wilson, eds., The politics of Islamic finance, Edinburgh: Edinburgh University Press, 2004Google Scholar, pp. 81–103; Raafat, Samir and Hilmi, Abbas, The Egyptian bourse, Cairo: Zeitouna 2010Google Scholar.

56 Barrows, Adam, The cosmic time of empire: modern Britain and world literature, Berkeley, CA: University of California Press, 2011Google Scholar; Ogle, ‘Whose time is it?’