London in the Global Telecommunication Network of the Nineteenth Century

Abstract

London is one of the best connected cities in the world-from a structural as well as from a functional perspective. The central finance and business districts of the metropolis feature both an extraordinarily well-developed information infrastructure and an unusually high concentration of information-dependent businesses. Outside these core districts, however, global connectivity drops massively. An informational divide rips through the global city. This paper builds on a comparatively recent understanding of 'new electronic communications technologies as part of a long history of rich and often wayward social practices' (Thrift) and seeks to provide a historical perspective on the emergence of global connectivity patterns. Due to its longstanding history as a global financial centre and its central position in the global and domestic telegraph network of the nineteenth century, London will provide a suitable case study to examine the long-term interplay of socioeconomic and structural patterns in the creation of global information networks.

Communication, Differentiation and the Evolution of World Society

“…Modern globalization cannot be understood merely in terms of material linkages and the mobilities of goods and people, insofar as communication technologies also played a pivotal role in the emergence and integration of world society. The emergence of new technologies of (tele-)communication rendered informational networks independent of physical transportation and thus added a decisive new dimension to globalization (Lübbe, 1996;Wenzlhuemer, 2010).…”

Global Exchanges in the HFT Nexus

“…For the first time in human history, messages no longer had to accompany physical movement of goods and people (Pred, 1980). Beginning in the 1840s, the spread of the telegraph in North America and Europe and its international expansion during the subsequent two decades, both overland and undersea, allowed traders on exchanges to receive price and other relevant data within hours domestically and within a day or so globally (DuBoff, 1983;Wenzlhuemer, 2009). Because telegraph networks were created as businesses, telegraph firms targeted major financial, trade, and industrial centers that would generate the most traffic.…”

“…Because telegraph networks were created as businesses, telegraph firms targeted major financial, trade, and industrial centers that would generate the most traffic. As the greatest world finance-trade center, London occupied the hub of the global telegraph network (Wenzlhuemer, 2009(Wenzlhuemer, , 2012.…”

“…Instead of price data about cotton, rice, and tea in Asia reaching the London Exchange by sailing ships and steamers, the telegraph allowed this data and other relevant information to reach the London Exchange in, at most, two days (Farnie, 1969;Wenzlhuemer, 2009Wenzlhuemer, , 2012. This resulted in sharp declines in differences between bideask prices, improved liquidity as more brokers entered trading, and increased competition.…”

“…Great trading houses such as Jardine, Matheson & Company, which dominated Asian trade based on large, fixed infrastructure of shipping, warehouses, offices, and staff, lost out to fast-paced, smaller brokerage houses (Lockwood, 1971;Marriner, 1961). At the same time, brokers in major business centers such as London and Shanghai had quicker access to price quotes and sophisticated market information (Wenzlhuemer, 2009(Wenzlhuemer, , 2012. Thus they could front run and manipulate markets relative to traders situated at lesser business centers.…”