And If You Know Your History...

27/08/15 -- A very interesting potted history of the Liverpool Corn & Feed Trade Association - the oldest still functioning grain trade body in the world!

Prior to 1806 Liverpool Corn Market used a building near to the town hall to trade grain.

In 1806 a company was formed issuing 100 x £100 shares on the site later used in 1851.

The Association also used the Atlantic Building in Brunswick Street where the Newsroom was established. The London Newsroom was called “The Baltic” and Liverpool’s “The Atlantic”.

Prior to 1845 Liverpool was only involved in a small volume of export of grain as high domestic grain prices supported by the Corn Laws prohibited imports.

With a quickly rising and more urbanised population Robert Peel PM realised the need to repeal the Corn Laws which happened in that year. Imports then flooded the country into mostly West Coast ports from newly colonised lands. making Liverpool of supreme importance in feeding the country and fuelling the continuing industrial revolution. So the merchants set up the LCTA

In 1853 the association of the Liverpool Corn Trade was founded - making it the oldest grain trade in the world still functioning, with Robert Woodward as the first Chairman

In 1883 the name was changed to the LCTA with Edmund Taylor as President - offering the first future delivery contracts for various wheat grades. This was accompanied by the first move in the world to binding grain contracts in law with stamps issued as legal tender by the association to be affixed to official contract forms.

In 1886 the association was incorporated. The Atlantic Newsroom transferred to the Corn Exchange Buildings to allow spot and the new idea of “Futures” trading - that'll never catch on!

The Association also laid down rules for Arbitration, Grain Standards, and through port Charges, a Clearing House, and Payments for goods.

In 1886 these rules were amalgamated into one to rationalise the trading.

In 1891 the first futures contract was traded.

In 1893 a clearing house for C.I.F contracts was opened, including contract registration, margin calls and delivery allowing the new ideas of hedging etc on the Chicago model of 1871.

This was possible only after the first successful transatlantic cable partly sponsored by Liverpool merchants was finished in 1875.

1897/9 a Mr Leiter of Chicago attempted to ‘corner’ the Liverpool futures market which looked like working until the strength of the Liverpool merchants held fast with Mr Leiter eventually losing a fortune as he attempted and failed to liquidate his paper profits. The CBOT seeing this adopted many of the practices embodied in the LCTA.

Futures trading - these sales meant the need for extended storage and during the period Liverpool had more portside stocks than the rest of Europe! This grain was all brought in in bags and handled and stored that way.

By 1868 the Association ran new purpose built facilities in Waterloo and East Float, Birkenhead for grain in bags or the more towards bulk. These were the only places in Europe that could take and unload 5,000 ton vessels, unloaded via ‘skip’ whether bulk or bags. Tonnage continued to increase leading the association to commission the granary at Alexandra Dock which with further expansion made Liverpool the greatest warehousing and storage centre for grain in Europe.

The UK imposed a levy on wheat, which was vigorously opposed by the LCTA. This lead to less US wheat being imported and the rise of Argentina as the main supplier up until the outbreak of the Great War.

1914-1921 - Control was set on the import and movement of Grains within the UK. However due to its geographical position during this time Liverpool was the UK "Bread Basket" - at the end of the war 62 ships were awaiting discharge at Liverpool to feed the hungry populace. Nineteen LCTA members were lost in the hostilities.

1921-1930 - In these years of depression trade continued to increase through Liverpool as did the use of the hedging facility of the futures market. With better communications not only UK and US traders were taking advantage of this, but also those from the new and old European counties formed after Versailles. During this period LCTA established silos in Manchester via the Canal. Both ports then became delivery points.

1930 showed the first signs of a crack in this growth and through to 1939 with US drought and Russian market uncertainties futures no longer held the attraction they had. This was compounded by Government acts in the UK and Canada which severely limited international trade.

1935-1945 - Futures trading was suspended. The LCTA was charged by the Government to keep the whole of the North West of the country and North Wales supplied with grains and Animal Feeding Stuffs. Twenty nine LCTA members again paid the ultimate price for their country.

1941 - The Corn Trade Building was destroyed in the Blitz.

Restrictions remained in force until 1953 - the LCTA’s 100th year and also the date of the laying of the foundation stone for the new Corn Trade Building to replace the one destroyed in 1941.

1981 - The LCTA was reformed as Liverpool Corn and Feed Trade Association.

Many thanks to Eric Thomas for all the info!