Baker's entry begins:
I guess it shouldn’t be much of a surprise that one of the things I am reading is about cotton: Sven Beckert’s prize-winning book Empire of Cotton. Barbara Hahn and I knew this book was on the way while we were writing The Cotton Kings, and we had read Beckert’s earlier articles, but as often happens, especially in academic publishing, his book came out after our manuscript had gone in to the publisher.About The Cotton Kings, from the publisher:
What we were doing was looking at one small but significant part of the story of cotton in a very narrow period of time at the end of the nineteenth century and the beginning of the twentieth, about twenty-five years, and trying to explain a particular thing about how the cotton trade worked. Beckert’s book is sort of the opposite. It takes the story of cotton from all over the world, starting literally thousands of years ago, and follows it to the present. More importantly, he uses that story to explain the development of capitalism in the West and also to provide a new interpretation of...[read on]
The Cotton Kings relates a rip-roaring drama of competition in the marketplace and reveals the damage markets can cause when they do not work properly. It also explains how they can be fixed through careful regulation. At the turn of the twentieth century, cotton was still the major agricultural product of the American South and an important commodity for world industry. Key to marketing cotton were futures contracts, traded at exchanges in New York and New Orleans. Futures contracts had the potential to hedge risk and reduce price volatility, but only if the markets in which they were traded worked properly. Increasing corruption on the powerful New York Cotton Exchange pushed prices steadily downwards in the 1890s, impoverishing millions of cotton farmers. The U.S. Department of Agriculture tried to solve the problem with better crop predictions and market information, shared equally and simultaneously with all participants, but these efforts failed.Learn more about The Cotton Kings at the Oxford University Press website.
To fight the cotton market's corruption, cotton brokers in New Orleans, led by William P. Brown and Frank Hayne, began quietly to assemble resources. They triumphed in the summer of 1903, when they cornered the world market in cotton and raised its price to reflect the reality of increasing demand and struggling supply. The brokers' success pushed up the price of cotton for the next ten years. However, the structural problems of self-regulation by market participants still threatened the cotton trade. More corruption at the New York Cotton Exchange appeared, until eventually political pressure inspired the Cotton Futures Act of 1914, the federal government's first successful regulation of a financial derivative.
The Page 99 Test: The Cotton Kings.
My Book, The Movie: The Cotton Kings.
Writers Read: Bruce E. Baker.