2 - The Commodity Markets of London and Liverpool

Summary

Britain was home to international commodity markets in London and Liverpool in the nineteenth and first part of the twentieth centuries. There was a rising volume of international trade as Britain became the first industrial nation, a major importer of these commodities for its own needs, an entrepȏt, and a centre for organising distribution elsewhere. The London and Liverpool markets facilitated distribution through time with forward dealings. Futures contracts went a step further: actual delivery was not contemplated, and trades were settled by paying price differences. The markets and the trade associations whose members worked in them engaged in private law-making - the way that the markets were constituted and governed; the controls over those using them; the system of rules for transactions on them and how these were cleared and settled; the standard form contracts used for dealings; and the arbitration procedures for dispute settlement. State law intervened in only the most egregious cases of market abuse attracting public condemnation and threatening confidence. Until the twentieth century, lawyers were not regularly engaged in formulating the rules and contracts of the London and Liverpool commodity markets or in advising on how disputes were to be settled or arbitrated.