Competition among Wheat Exchanges: New York, Paris, London, and the Global Development of Futures Trading (1870s-1914)

One of the main outcomes of the new global wheat market was, aside from new commercial networks, elevators, and information technologies, futures trading. Futures created a new dimension for the speculative actors in the wheat market and became a factor of importance in the global price setting for grain, a kind of barometer for the global wheat market. While we have a clear chronology of the creation of this tool in Chicago, its diffusion is often believed to have been automatic and, at the same time, other exchanges are considered less effective in creating a real futures market. Thanks to the access to new archive sources, this chapter contends the idea of a “spread” from Chicago to the rest of the world, arguing for a pluri-center source of futures trading. Moreover, it discusses the meaning of speculation and of effectiveness in futures markets, analyzing the role of financial institutions in attracting, supporting, and creating new formalized futures markets. The main output is that, in the largest financial centers of the late 19th century, such as London, New York, and Paris, futures emerged autonomously from Chicago. Moreover, these exchanges were not able to attract speculation from outside the strict “wheat world”, hampering the access of global finance to these markets.