Commodity exports were the mainstays of peripheral economies in the 19th century. Agricultural products were among these. Initially, these were inputs into industrial processes, often in the textile industry: think of Indian dyes, American cotton, and New Zealand wool. Near the end of the 19th century, consumer demand enlarged markets for other ‘soft’ agricultural…
London’s ports, exchanges, merchants, and bankers may have been the most numerous and active across most areas of Britain’s commercial life, particularly in international trade and finance. But there was one city that specialized in an increasingly important niche in which London was far less dominant. Liverpool became the primary port for the import…
The organization of commodity exchanges and the creation of instruments like futures contracts have made it easier to connect buyers and sellers. They have also increased the role and impact of intermediaries like commodities traders. Occasionally, these intermediaries have accumulated positions, either as buyers or sellers of a commodity, that were large relative to…
In the United States, Canada, South Africa, and Australia, 19th century gold rushes either brought people and capital to far corners of the world or shifted people around these regions from farms into mines or goldfields. They differed in their precise effects but were almost always the most significant economic events in their respective…
Discoveries of oil in the 20th century, especially when prices were high or rising, stood a good chance of enriching a country. However, there are negative economic consequences of oil production to other sectors of the economy that have to compete for labor and capital with the oil producers and other firms related to…
The advent of futures markets allowed purchases and sales of various commodities to become standardized, with transaction size and delivery conditions specified so that prices could be determined, and locked in, more quickly and with lower transaction costs. Unfortunately, this market can and has been abused. In 1955, two schemers set about implementing a…
In the late 17th century, European merchants were accumulating huge fortunes in India. Some of these were the employees of the official trading companies there, like the British East India Company. However, it was not by their salaries that they became rich but by their own private trade, which was often illegal since the…
Like other financial markets, commodities exchanges have hosted a lot of speculative activity and outright manipulative trading. Prior to the 20th century, this trading venue, like the stock and bond markets, was essentially unregulated, at least by governments. In the United States, a series of events brought the activities of commodities traders and exchanges…
For centuries, investments in mines have been particularly speculative. As such, they tend to attract small investors rather than institutions. Also, their share prices can be subject to very large and swift movements once news, or mere rumors, get out. At the end of 1969, mining shares in Australia surged higher before very swiftly giving…
Mining can be a very capital-intensive business. Prospecting for gold by panning in a river may not be, but digging mine shafts and building any accompanying infrastructure to extract metal from deeper reserves most certainly is. So, to develop a mine, new companies with little history raise money by issuing shares to a large…
