¹ I wish to acknowledge my indebtedness to the Baker Library and Business History groups of the Harvard Graduate School of Business Administration for a summer research grant and for the courtesies extended to me while I completed the work on which this publication is based.

² In the period prior to 1868, the amount of wheat exported in any year never exceeded 15 per cent of the total wheat crop of the nation. U. S. Department of Agriculture, Year book for 1921, p. 154. Quantities of U. S. grainstuffs exported (1821–1893) are given in Senate Reports, 53 Cong., 2 Sess., No. 259, vol. II, pp. 13–15.

³ This statement is based on the receipts of wheat, wheat flour, corn, and oats at Buffalo and at New Orleans. U. S. Treasury Department, Bureau of Statistics, Monthly Summary of Commerce and Finance, vol. VII, N. S. (January, 1900), pp. 1959, 1978Google Scholar.

⁴ In 1844 the farmers of Knox County, in southern Indiana, complained that: “The uncertainty of the time of shipment, and the short period during the season, have prevented the merchants of this country embarking as regular dealers in the produce business. The consequence has been, the farmers have, much to their injury, been compelled to ship their own products….” Senate Documents, 28 Cong., 1 Sess., No. 241, p. 3.

⁵ New York State Assembly Document, No. 59 (1831), p. 16.

⁶ Ibid.

⁷ New York State Assembly Document, No. 229 (1835), p. 155.

⁸ Maryland Pocket Annual for 1840, pp. 75–77, cited by Charles Kuhlman, B., The Development of the Flour-Milling Industry in the United States (New York, 1929), p. 70.Google Scholar

⁹ Waggoner, Clark (ed.), History of the City of Toledo and Lucas County, Ohio (New York and Toledo, 1888), p. 450.Google Scholar

¹⁰ Julius P. Bolivar MacCabe (ed.), A Directory of the Cities of Cleveland and Ohio for the Years 1837–38, advertising section. For a fuller description of this marketing system see Odie, Thomas, “The American Grain Trade of the Great Lakes, 1825–1873” (Ph.D. dissertation. University of Michigan, 1952), pp. 57–60.Google Scholar

¹¹ Crary's Directory for the City of Bulalo, 1841, p. 22; H. N. Walker's Buffalo City Directory, 1842, p. 63.

¹² Guthrie, S. S., “History of the Buffalo Board of Trade,” Buffalo City Directory, 1870, pp. 29–30Google Scholar; Smith, Henry P. (ed.), History of the City of Buffalo and Erie County (2 vols., Syracuse, 1884), vol. I, pp. 211–12Google Scholar; Graham, Lloyd and Severance, Frank H., The First Hundred Years of the Buffalo Chamber of Commerce (Buffalo, 1945), pp. 17, 26.Google Scholar

¹³ U. S. Treasury Department, Bureau of Statistics, Monthly Summary of Commerce and Finance, vol. VII, N.S. (January, 1900), p. 1959Google Scholar.

¹⁴ See Odle, “The American Grain Trade of the Great Lakes, 1825–1873,” pp. 43–48.

¹⁵ Hunt and Roby to Mr. S. Fargo, September 10, 1846; Hunt and Roby to I. K. Brown and Co., October 6, 1846; Hunt and Roby to D. S. Bennett and Co., December 11, 1848, Correspondence of H. M. Hunt and T. Roby, 1846–1852, Thomas Palmer Papers (Burton Historical Collection, Detroit Public Library).

¹⁶ Colwell, Stephen, The Ways and Means of Payment: A Full Analysis of the Credit System, with its Various Modes of Adjustment (Philadelphia, 1859), pp. 188–200, 444–53.Google Scholar At the time Colwell wrote these practices were in process of change.

¹⁷ Hunt and Roby to T. S. Forsey, October 29, 1846; see also a similar letter, Hunt and Roby to B. J. Redfield, April 19, 1847, Thomas Palmer Papers.

¹⁸ Cutter and Coye to C. L. Bissell, October 31, 1856, Charles L. Bissell Papers (Burton Historical Collection, Detroit Public Library).

¹⁹ Henderson, John J., Annual Statement of the Trade and Commerce of Buffalo for 1857 (Buffalo, 1858), p. 28.Google Scholar Henderson was the secretary of the Buffalo Board of Trade. The general conditions of the American economy at this time are described in, Van Vleck, George W., The Panic of 1857 (New York, 1943), pp. 19–21.Google Scholar

²⁰ Taylor, History of the Board of Trade of the City of Chicago, vol. I, p. 146. See also Barton, Elmer E., Industrial History of Milwaukee, the Commercial, Manufacturing and Railway Metropolis of the Northwest (Milwaukee, 1886), p. 45.Google Scholar

²¹ Still, Bayrd, “Patterns of Mid-Nineteenth Century Urbanization in the Middle West,” Mississippi Valley Historical Review, vol. XXVIII (September, 1941), p. 199.Google Scholar

²² Smith, History of the City of Buffalo, vol. II, p. 193.

²³ Odle, Thomas, “The Commercial Interests of the Great Lakes and the Campaign Issues of 1860,” Michigan History, vol. LX (March, 1956), pp. 7, 10, 11Google Scholar; Odie, Thomas, “Great Lakes History and the St. Clair Flats,” Detroit Historical Society Bulletin, vol. XV (February, 1959), pp. 10–11.Google Scholar

²⁴ Barton, James L., Commerce of the Lakes (Buffalo, 1847), p. 53.Google Scholar

²⁵ New York Herald, September 29, 1847, cited in Fergus, Robert (comp.), Chicago River and Harbor Convention, July 5th, 6th, and 7th, 1847, An Account of Its Origin, Proceedings, and Statistics (Chicago, 1882), pp. 18–22.Google Scholar

²⁶ Fergus, Chicago River and Harbor Convention, pp. 10, 52–68; see also Williams, Mentor L., “The Chicago River and Harbor Convention, 1847,” Mississippi Valley Historical Review, vol. XXXV (March, 1949), pp. 607–626.CrossRefGoogle Scholar A sequel to these events occurred following the low water of the season of navigation of 1854. Under the leadership of the Buffalo Board of Trade, a St. Clair Flats Convention assembled in Buffalo on April 19, 1855, with delegates present from most of the Western Lake ports. On this occasion self-help succeeded; the convention raised $18,000 for dredging work at the Flats, and in addition obtained $20,000 for the work from the Canadian governmentl The U. S. War Department permitted the executive committee of the convention to use the government dredge at Detroit. Improvement operations were commenced at the south channel of the Flats in July, 1855. Odie, “Commercial Interests of the Great Lakes and the Campaign Issues of 1860,” pp. 13–15.

²⁷ Plumb, Ralph G., “Early Harbor History of Milwaukee,” Wisconsin Academy of Sciences, Arts, and Letters, Transactions, vol. XVII (1914), pp. 187 ff.Google Scholar; Taylor, Charles H. (ed.), History of the Board of Trade of the City of Chicago (3 vols., Chicago, 1917), vol. I, pp. 155, 188, 203.Google Scholar

²⁸ Taylor, History of the Board of Trade of the City of Chicago, vol. I, p. 188.

²⁹ The relationship between the wider use of “to arrive” contracts and the establishment of standard grades of grain on the Lakes has long been known. The relationship, however, between the inadequacies of the acceptances system and the wider use of “to arrive” contracts is one that, so far as I have been able to determine, does not appear in the literature of the subject. For an expression of the first relationship see Peterson, Arthur, “Futures Trading with Particular Reference to Agricultural Commodities,” Agricultural History, vol. VII (April, 1933), pp. 70, 72.Google Scholar Perhaps the second relationship has escaped attention because the wide use of “to arrive” contracts was at the time popularly ascribed to the effect of the railroads, and since that time this interpretation has been accepted uncritically. Moreover, one finds in the literature upon the subject of standard grades the unsupported belief that the railroads exerted pressure on the merchants to establish standard grades. The facts are that the railroads in Chicago, for example, owned a large number of the grain elevators and controlled others. They strongly opposed inspection and standard grades and their opposition was felt from the late 1850's up into the 1870's. Taylor, History of the Board of Trade of the City of Chicago, vol. I, pp. 241, 256, 401, 410; Goldstein, Benjamin F., Marketing: A Farmers Problem (New York, 1928), pp. 28–29, 50–51.Google Scholar The adoption of standard grades by the joint action of the merchants was simply a modification of the certificates and samples they formerly had used individually in their “to-arrive” transactions with their Buffalo correspondents. Standard grades were a convenience for the grain merchants, but the new practice forced a change in procedures (and costs) upon the railroad warehouseman.

³⁰ Taylor, History of the Board of Trade of the City of Chicago, vol. I, p. 241; Larson, Henrietta M., The Wheat Market and the Farmer in Minnesota, 1858–1900 (New York, 1926), p. 71Google Scholar; Toledo Blade's Seventh Annual Statement of the Trade and Commerce of Toledo for the Year Ending December 31st, 1864 (Toledo, 1864), p. 5.

³¹ Hunt and Roby to Coats and Folger, April 7, 1848; Hunt and Roby to Azra Lewis, April 7, 1848, Thomas Palmer Papers. “To arrive” sales were commonplace in Buffalo by 1855. See Cutter and Coye to C. L. Bissell, May 9, 1855, Charles L. Bissell Papers. In this letter the Buffalo firm informed Bissell that, “Sales were made yesterday at 80¢ to arrive on or before 20th June.” The various kinds of sales utilized by the grain trade in the United States in the 1930's were: consignment, F. O. B. shipping point, delivered, on track, and to arrive. Clark, Fred E. and Weld, L. D. H., Marketing Agricultural Products in the United States (New York, 1932), p. 41.Google Scholar

³² New York State Senate Document, No. 35 (1860), p. 10. The source here is the Select Committee on Canals, Minority Report on the Petitions and Bills for Imposing Tolls on Certain Railroads. The report ascribes the change wholly to the impersonal agency of the railroad interest, and it is correct that the change was related to the spread of the railroad network. However, if the grain merchants of the Lakes had been unable to take advantage of their opportunities – that is, had been unable to take effective action collectively – it is hardly possible that the abandonment of the acceptances system could have been carried out.

³³ Senate Executive Documents, 60 Cong., 1 Sess., No. 116, p. 1.

³⁴ “Sales at this port [Buffalo] have been gradually declining in volume in consequence of the increase in Option trading’ at Milwaukee and Chicago.” The words are those of William Thurstone, Secretary of the Buffalo Board of Trade. U. S. Treasury Department, Bureau of Statistics, Report on the Internal Commerce of the United States, 1876, appendix, p. 145. The futures market (speculative option trading) was a development that became possible upon the establishment of standard grades of grain. In turn, this development made possible the development of hedging. For studies of these later developments see Crosby, Henry C., Speculation on the Stock and Produce Exchanges of the United States (New York, 1896)Google Scholar; Goldstein, Marketing; Hoffman, George W., Future Trading Upon Organized Commodity Markets in the United States (Philadelphia, 1932).CrossRefGoogle Scholar

³⁵ On these practices see, Cole, Arthur H., “Evolution of the Foreign-Exchange Market of the United States,” Journal of Economic and Business History, vol. I (May, 1929), pp. 384–421Google Scholar; Hidy, Ralph W., The House of Baring in American Trade and Finance: English Merchant Bankers at Work, 1763–1861 (Cambridge, Mass., 1949)CrossRefGoogle Scholar; Usher, Albert P., The Early History of Deposit Banking in Mediterranean Europe (Cambridge, Mass., 1943).Google Scholar

³⁶ On the change in practices in the East-West merchandise trade, see Foulke, Roy A., The Commercial Paper Market (New York, 1931), pp. 227–28.Google Scholar