Abstract: Debating and Regulating Futures Trading in the Fin de Siècle: International Comparisons

Alexander Engel


Since the 1870s, futures markets at commodity exchanges have been a notable institution all over Europe and North America, and were discussed especially intensely in the 1890s and 1900s. Was this the ultimate form of effective competitive markets, or a device of gambling speculators ruining the economy? While the United States and Germany are often seen as prime examples of pro-market and contra-market capitalism, the arguments, interests, and the majority attitude on both sides of the Atlantic were in fact rather similar. This paper gives an internationally comparative account of the debates and regulatory efforts regarding futures trading, and shows how the views of publicists and lawmakers developed and settled within three to four decades. After an initial focus on corners and gambling laws, the debate shifted toward questions of power and pricing: How did futures trading affect prices? Was the pricing process arbitrary or effective? And to what degree were producers and intermediaries excluded from it? A first wave of U.S. and German legislative efforts in the first early 1890s aimed at the prohibition of futures, but generally and almost everywhere, the focus shifted toward separating detrimental from legitimate futures trading by establishing ever tighter regulation and control over the exchanges.