Heft „1868“. III. Exzerpte aus der Money Market Review, zweites Halbjahr 1867. Ausschnitt aus dem Standard und Register

Nach der Handschrift, MEGAdigital (MEGA² IV/19).¹ Traducción al español

The closing of Railway Accounts. (Money Market Review 6 July. 1867)

Never has been any Capital Account of any Railway Co. in this country closed excepting by absolute compulsion. When the necessity has arisen, the dividend has invariably stopped. Nehmen wir Railway Cos, nicht nur jezt als bad acknowledged, but auch very best.

London and North Western. Charges to Capital Account during last 3 years.

South Eastern.

London, Brighton and South Coast.

Great Northern

Diese 4 Railways together in 3 years more than 16£ St. (Millions) gepumpt. Difference between them: with The Brighton et South Eastern , the last dividends paid palpable illusions, whilst with London and North Western und Great Northern , there was something real, if not all.

---

Pre-Preference Stock. – Great Eastern in Chancery.

This „Railway Cos. Bill“, read a second time in H. o. Lords on 25 June (67) originally introduced by Sir Stafford Northcote und Watkin . It is now no secret that various Railway Cos. in this country have contracted mit bankers, lawyers, contactors, and other creditors, debts which they cannot pay und these Creditors the chief instigators of the Bill before Parliament, whereby they seek, at the cost of others, payment of their claims.

„Receivers“ have been appointed by the Court of Chancery for the Great Eastern Railway Co . Adopting the explanation given by Mr. Baxter, this signifies that the Court takes to itself the net revenue of the railway, and pays both principal and interest to debenture holders with that net revenue. … We cannot have Vice-Chancellors and „Receivers“ as our railway managers, and the nation will sooner or later demand that, whatever the existing condition of the law between railway debtors and creditors, we must have the means of locomotion in its fullest efficiency. Terminable debt must be exchanged for funded or permanent debt. Railway debentures must be changed into Railway Consols, the principal of which will never fall due, but may always be obtainable on the Stock exchange.

---

The London, Chatham, Dover Railway Account with Peto et Co. (Money Market Review 6 July, 1867)

When Peto et Co stopped payment, they classed amongst the assets a sum of more than a million claimed as due from Chatham and Dover Co., und jezt the Directors of the Co claim more than 6 Mill. £ from Peto et Co. Shows how accounts may be muddled and meddled. As means of settling the question, Mssrs. Peto et Co have at last been thrown into the Court of Bankruptcy.

Folgendes die precise figures des accountant employed by the directors. Peto et Co. are charged with stock and shares issued at par thus:

Peto et Co. owe to Co:

Peto et Co are credited by Co:

British Exports of Cotton Goods to East Indian Empire. (Money Market Review July, 13, 1867)

Mostly during last months bad news from the various seats of trade, but cotton manufacture considerably expanded. This Trade ever overdone; namentlich in exports of gray and white shirtings, or, as they are described in the returns, plain cottons, to India, under this description being included the chief portion of our manufactures consigned to that country. It is also interesting to remark the shipments now going forward, by comparison with those for the corresponding period of last year, especially when viewed in relation to the falling off in the total extent of the export trade of the country as shown by the returns of the Board of Trade. Thus total value of British Exports for the 5 months ending 31 May 1867, was £72,123,393, and for the corresponding 5 months of 1866 was £78,227,710, showing for this year falling off in value of £6,104,317, almost 8½%. But the figures published by Samuel Mendel (of Manchester) – which do not give values – show that the exports of plain cottons to India alone, for the 6 months ending on 30 June, 1867 = 356,806,060 yards, against only 221,606,571 yds in the same period 1866. The increase in quantity, therefore, for this year, = 135,199,489 yds, no less than 61% more than the shipments for the corresponding 6 months of 1866.

The relative value of Manchester goods, coupled with the state of the Money Market now, accounts in a great measure for the increased quantity of cotton manufactures lately exported. F.i., in 1866 prices 23 to 25% higher than this year, and rate of discount 1866 between 6 and 10%, this year from 3½ to 2½.

Trotz den very material differences in the quotations for cloth, 1867, as compared with 1866, the total value of exports of Manchester goods to India considerably larger than for same period 1866; therefore, the reduction in aggregate value of the export trade of the country must be accounted for in other departments of business than that connected with India.

From India exported cotton to England, 1859–60: £5,570,000 worth of cotton, 1865–66: £33,500,000. Indian mutiny of 1857 for short period almost paralysed our trade with that country; this was followed, however, by a remarkable rebound in the shipments of cotton goods.

Exports of plain cotton von England und Scotland to India (the 3 ports of Calcutta, Bombay, Madras) von 1857–1867.

These figures show an average yearly export of more than 496 millions yds; we ship, also p.a. to India 281,929 miles calico to India, a quantity which, if placed in a line, would extend beyond the moon, and encircle the earth nearly 12 times. Is the present increased trade to India sound?

Board of Trade Returns. Month ended April, and 4 months ended April.

Amalgamation of Brighton and South Eastern Railway. (Money Market Review July 20, 1867.)

Diese 2 Scheiße amalgamated. South Eastern Co. is to take 55% of the Net Revenue, Brighton 45%; these terms being subject to alteration mit change of time und circumstances.

Pre-Preference Shares. H. o. Lords. 23 July. 1867. (H.o.C. Private Interests)

H. o. Lords rejects on 23 July principle of Pre-Preference Shares – the Confiscation Scheme, sanctioned by H.o.C. Der existing British Railway Preference Stock – that would be attacked by Pre-Preference Shares – 150 Mill. St. Aber alles, priority und other property together, 500 Mill. £. St. Ferner hat das H. o. Lords expunged from the Railway Cos. Act, 1867 just those clauses, whereby railways might be put up to auction and knocked down summarily to the highest bidder. Economist vertheidigte dieß. There was the passing of the Bill through the House of Commons „in most mysterious Manner“, smuggled through it with almost no challenge. Private interests in the H.o.C. sufficiently powerful to carry this bill through, for their own special advantage, and without any apparent opposition. Deputation of railway Proprietors to Duke of Richmond , President, and Cave , Vice President of the Board of Trade, showing that that Bill amounted to confiscation. The memorialists, in regard to the compulsory sale of a railway state, that it must end in the sacrifice of the property, inasmuch as its intrinsic value is too great for ordinary and legitimate competition. Consequently, there being no purchaser, a railway which has cost 20, 30, 40, or perhaps 50 mill. St. must be knocked down at a price far below its price. Ferner: the intrinsic worth of a railway can only be ascertained by a very slow process, so daß value schwer zu bestimmen. Als Beispiel führen die Memorialists an: sale of the Bagnalstown, New Ross, and Wexford line, sold by compulsion; for £25,000 or £1,110 p. mile, while cost £220,000 or £10,000 per mile. In fact, the net sum realised, did not even pay for the cost of rails and sleepers. And a railway which has cost 22 Mill. £. might sell for a smaller relative value than the one which cost only £220,000.

Es war also Bande im H.o.C., die durch Confiscation sich zu Spottpreis in Besitz der Railways setzen und die existirnden Proprietors expropriiren wollte und diese Bande powerful enough to carry clauses to this effect, ohne House of Lords, in Railway Cos. Act, 1867 . Die Geschichte wegen der Pre-Preference Shares kam vor das Haus of Lords nicht mit dem Railway Act, 1867, sondern mit Bill der North British Railway Co., zu diesem Behuf. (Vor H.o.L. Committee)

---

Extraordinary Position of the Money Market. (Money Market Review 3 Aug. 1867)

Dieß 2% Minimum Rate of Discount occurs at a period of widespread discredit.

In both occasions Private deposits have exceeded Private securities, in 1852 by £2,821,000 und this week by £3,272,000. I.e., the B.o.E. received more money from the commercial classes who lend, than it advanced to its discounting customers. The variations shown between the two items of private deposits and private securities (loans, discounts etc) is generally a good index of the State of the Money Market. In 1852, April 17, Total Reserve = 62¾% of the liabilities of the Banking Department to Public; it is now only 53%; but in 1852 the Reserve was £5,391,000 more than ⅓ of the liabilities, and now it is £5,082,000 more than the one third.

Second Reduction to Minimum discount Rate of 2%. July 23, 1862.

The increase now shown in reserves as compared mit 1862, £4,865,000 in total coin et bullion, £3,235,000 in Reserve of notes et coin and £1,878,000 in amount of Gvt securities.

In 1862 Private Deposits £2,379,000 less than private securities, giebt für this week (67) Überschuß (verglichen mit 1862) der Private Deposits over Private Securities of £5,651,000.

In 1862 banking Reserve £2,763,000 more than ⅓ of liabilities to public = 45% of the total amount, against £5,082,000 and 53% respectively at the present date.

In 1852 2% lasted for 37 weeks, in 1862 for 14 weeks. In 1852, notwithstanding the almost nominal nature of the terms for accommodation, there appear to have been very few alterations in the amount of private securities, other than those which occur at the close of every quarter. The tendency was undoubtedly to decline in this item until after the payment of the October dividends. The private deposits also afforded evidence of sluggish demand for money. The Reserve consequently continued to augment, and on 20 June (1852) was £14,700,000 – an increase in 10 weeks of £3,196,000. The coin and bullion attained its highest point of that year on July 10: amount was £22,232,000, being an increase in 12 weeks, after the reduction in rate of discount, of £2,672,000. 1852 year of remarkable ease in money market, also year of general prosperity ; trade was active in almost every department, the working classes were earning good wages, and prices of commodities were high. Cheap money, concurrently with these facts, caused large orders to be sent abroad for all kinds of produce. The reaction in the value of money which occurred at the close of the year was mainly caused by the payments for this produce.

On the second occasion of the 2% Minimum Rate discount, 24th July 1862, it was followed by a partial increase of strength in the accounts of the B.o.E. The fall of value of money in 1862 chiefly to be attributed to the fact that we received gold instead of cotton from America in payment for the large exports of our manufactures. An abundant harvest also assisted the money market. The reaction occurring in the autumn was caused by the demand for bullion and specie for export to the East in payment for cotton.

It will thus be seen that the circumstances which relieved the depression in monetary circles at former periods of extreme ease of money market are not likely to come to our assistance on the present occasion. There are few, if any, inducements for merchants to send out orders abroad for produce, unless the negative one that prices are so low that very little room is left for further reduction. There is probability of average harvest; no chance of foreign loans or undertakings being entertained by capitalists; the late disclosures in the railway would close opening in that quarter; strikes and discontent amongst the working classes interfere with investments in manufactures; in addition, unsettled state of Continental politics checks new enterprise.

Pre-Preference Shares. (Money Market Review Aug. 3, 1867.)

In der North British Railway Co. Bill wegen Pre-Preference Shares Gladstone vertheidigte diese Maßregel; in seiner Evidence vor Lord’s Committee (26 July 1867). Lord House Committee announced 27 July that they had come to the conclusion to strike out all that portion of the Bill relating to Pre-Preference Stock. Nach Times (22 July) Pre-Preference Stock „simplest and most straightforward, and therefore the most honest way of meeting the difficulty.“ Die Times sagt, der case of North British Railway Co „a case of ordinary indebtedness, must be dealt with – upon first principles.“ Danach also its „first principles“ die des pick-pocket, that the simplest and easiest way of dealing mit difficulties zugleich the most honest.

Board of Trade Returns. (Money Market Review Aug. 3, 1867)

We are importing much less cotton and much more corn. Apart from these items our imports of the 5 months are valued at about 4½ Mill. less than in the same 5 months last year, and about 5 millions more than 1865, or about a million difference by month. As to Exports: greater in June 1867 than June 1866, and very much than June 1865 or any preceding June. Diminution in the values of our exports of cotton, linen, woollen, and iron manufactures during the first 6 months of 1867, as contrasted mit corresponding 6 months of 1866 to amount of about 5 Mill.; but apart from these special items, which constitute more than ½ [of] our exports, figures of 1867 and 1866 nearly identical. Im Ganzen die Exports of first 6 months of 1867 13½ millions more than in corresponding months of 1865, or more than 18% increase. (Verte)

Imports. Computed Real Value. Month ended May, 31, 1867.

Import Values of May 1867 larger than May 1866 und much larger than May 1865. Import Values of 5 months smaller than 1866, much larger than in corresponding months of 1865. Chief item of immediate increase in Imports are Cereals, including all farinaceous food.

Declared Value of Exports (British and Irish Produce)

Trotz depression of commerce, exports für June 1867 exceed those of June ’66, 65’ and any preceding June. Chief decline, compared with 1866, in cotton manufactures. Deducting cotton, linen, woollen und iron manufactures, exports almost same as in 1866, und much more than in same 6 months of 1865.

---

„The Railway Cos. Act, 1867“ (schließt Scotland aus, England und Irland ein) und Pre-Preferences. (Money Market Review 10 Aug. ’67)

In diesem Akt (durch die Lords) die Pre-Preferences ausgeschlossen, aber on August 8 ließ das H. o. Lords sie durch a sidewind zu, North British Railway Bill.

One amendment introduced into the Act by the Lords: that no dividend to be declared by Railway Co. until the auditors have certified that in their judgment it had been really earned, und daß, wenn difference between them und directors, the question shall be stated in the Report to the shareholders. Dieß alles Nonsense! Among directors, auditors, and shareholders there is one common interest and object – the support of the dividend and the advancement of the market value of the share. Above all things they seek to prevent any depreciation in the value of the stock.

Money employment. (Money Market Review 24 August 1867)

The circulars of the Mincing-lane brokers show that though an occasional inquiry for certain articles of produce, no business in any market. In many of the great staples, f.i. cotton, coffee, sugar, tea, silk – though the stock comparatively low as regards some of them – demand is languid. It might be supposed that, tempted by the cheapness of money, speculators would come forward and impart something like a tone to the unduly depressed produce markets; but such is not the case. There are few, whether wholesale dealers or retailers, who care to look far beyond immediate wants and the daily supply of their customers, speculators for the present remaining quiet in the background.

Obgleich Zins 2%, a good bill arising out of a bona fide transaction with three good names to it will scarcely pass muster in some (banking) quarters. The extreme points of accommodation, together with high dividends, having been attained prior to the crisis of 1866, we must now rest satisfied until the past is forgotten, and shareholders become clamorous for increased risks and higher returns.

Stocks, shares, and other marketable securities, when largely dealt in, no doubt absorb considerable amounts of surplus money, which do not pass into trading and commercial channels. The interest and dividends derivable from such modes of investment, as forming a portion of the incomes of the investors, are distributed chiefly for the supply of daily or weekly requirements. … if such incomes fail, the retail trade as well as the wholesale, languishes.

In the heyday of speculation in 1864 and 1865 even the most cautious investors were selling their India Stock or their Consols because they were not satisfied with the income yielded, and wished, as others appeared to do, to obtain for the same capital 2 or 3, or, perhaps, 4 × their previous means of annual expenditure. … Now, umgekehrt, the price of Consols, of India Stock, of Bk.o.E. Stock, and other first-class securities, is getting too high even for timid investors … Two or 3 years ago the interest received on deposit of money with bankers or other moneyholders, who guaranteed a return of the principal, suggested almost as good a channel for investment as could be found; but that channel now is closed. Bankers pay but little for deposits, because they can make but little by them. After previous panics, when Gvt securities and other solid means of investment have been absorbed, it has been our custom to turn to foreign stocks, and wherever this symptom has been manifested it has been the practice of our foreign debtors to offer us some new loan at what appears to be a tempting price. With millions upon millions lying idle, we are prone to snatch at the opportunity, but the result … almost uniformly disastrous. We invariably lose our money over those foreign loans.

---

London Joint Stock Banks during last half year (ending 30 June) 1867.

Aus diesem Account folgendes:

The total deposits and current accounts of these 10 banks £62,991,911, acceptances to £15,628,029, making a total liability to public of £78,619,940. The total paidup capital and reserve fund of the whole of the 10 banks amounts to £8,954,292; is in course of augmentation. Capital and Reserve Fund of London and Westminster is to be increased to £3,000,000 by Nov. 16, 1868, of the London Joint Stock Bank to £1,617,839, by Dec. 31, 1867; und London and County Bank to £1,500,000 by Febr. 27, 1869.

---

Exports of British Cotton Goods to Indian Empire. (Money Market Review 24 Aug. 1867)

It is impossible, in the face of a continued decline in the quotations in India for cotton manufactures to say that the large exports of the last few months will result in satisfactory results to all shippers. Losses appear inevitable on these particular shipments, but, where the business has been based on ample resources, they will be small compared to the losses of those who, in addition to the ordinary commissions of buying and selling, have had to pay bankers’ commissions and other charges for accommodation. If any portion of our Eastern trade unsound, it is that carried on by weak capitalists. It is to be hoped that in general previous gain will have more than counterbalanced any previous losses. … The fall in prices, caused by the recent heavy shipments, will promote an increased demand, and consumption of English made cloths. So large advantages may be ultimately obtained.

In the following quinquennial table before 1853 Madras not included, but its shipments not more than 2 or 3% of the whole, daher of little consequence. Increase et decrease are given of each cycle, as compared with the one immediately preceding it.

The Exports during 1840 and 1841 averaged a little more than 6 mill. yds per month. Thus progress in 26 years not quite tenfold. The period 1847–51 decidedly checked the export trade to India, and considerably affected the average for the 5 years. Cycle of 1852–56 includes Crimean war; period of ease in money market, export of plain cottons to India increased by 71¼%. Cycle of 1857–61 embrace panic of 1857 and Indian mutiny of 1861, interfered very little with the average export of that period, as they are again nearly 70% more than average of the preceding cycle.

The values of plain cotton manufactures exported to India during the 20 years ending 1861 varied between 1s. und 1s. 3d. per lb. During the 5 years ending 1866 average value was about 2s. p. lb., but exports decreased only 25¾%, small diminution in comparison to the large increase in the cost. The value of cotton manufactures for India at present 1s. 4d. per lb, and we do not look for material reduction for longtime to come. It is a matter for the consideration of exporters, who have the option, whether they will support the Indian markets by holding their stocks, or still further depreciate values by forcing sales at a sacrifice. There are times to hold and times for selling.

In the summer 1861 Col. Baird Smith made Report to the Gvt. of India on the British piece good trade between Calcutta and North Western Provinces. He stated that 30 millions of people supplied from Calcutta alone mit our manufactures; that vigour of demand determined by the facilities of transport; „the agricultural and poorer non-agricultural population had at that time scarcely become the customers of Manchester at all“ ; he pointed to the serious effects of the periodical famines in India und said in regard to the Manchester piece good trades: „I am inclined to believe that less than ⅓ of the field open to its operations has yet been taken possession of.“ In 1854 there were but 35 miles of railway open in India in 1860 734 miles, in 1865 2747 miles. The receipts from passenger traffick in 1854 £13,647, in 1860 £231,071 und in 1865 £1,302,432. The receipts from the goods traffick in 1854 £604, in 1860 £339,469 und in 1865 £1,815,243. The amount expended on railways at the close of 1859 £23,559,632 und 1865: £58,679,990. The Population of India, European and native, under British administration, nearly 150 millions; but the total population of all India 193,100,963, und extends over area of 1,553,282 □ miles.

The Brighton Railway: The Reports of the (new) Directors, Auditors, and Accountants. Dividends Suspended. (Money Market Review 31 Aug. 1867)

They tell us, that in 12 years the capital has increased from 7¾ to 15¾ mill., so that in this interval the capital outlay has been more than doubled. Ostensibly increase of revenue of £113,000 p.a., but we are told that this was not so, and that the dividends on both the preference stocks and on the original or ordinary stock were fallacious, because interest was charged to capital, and other revenue payments were also charged to capital, which in effect means that dividends were paid out of capital. Ja, the dividends of this Co. for many years past have not only been more or less fictitious, but the Co’s net income for 1866 actually less than 12 years ago, notwithstanding the expenditure in the interval of more than 8 millions, which amounts to more than half the Co’s entire capital.

The new board will have no „suspense accounts“, which mean, in effect, charges to revenue deferred for the time, and ultimately placed to capital.

Dividend, however paid, keeps the directors in seat, wards off committees of investigation, humours the shareholders, supports the market values. Hence!

In April 1849 there was a Report from a committee of investigation upon Eastern Railway Co; and from this it transpired that Hudson had converted a dividend of 3sh. p. share, earned with difficulty, into 9sh., by a few scratches of the pen, and after this „the accounts were made up in accordance with the books, and did not show that any such dividend had been earned“. The committee also discovered that „out of £545,714 paid as dividends, £320,573 was taken from capital or held in suspense“. Above all, the assistant accountant declared in evidence that „it was a generally understood thing that capital was to bear what revenue would not“. All this happened 18½ years ago. At that momentous period in our railway history there were committees of investigation into the affairs of the Lancashire and Yorkshire, Midland, North British, South Eastern, the York, Newcastle, and Berwick, the York and North Mitland, and other cos; and „financial statements“ were put forth by the Great Western, the London et Southwestern, the London and Northwestern, the Brighton, and others. Result of all, nearly without exception, was either a decline in the dividend, or its absolute suspension; and this, too, from one cause alone – the extravagant outlay of capital, and systematic payment of dividends out of capital, in order to conceal the relatively small accession of profit.

Nehmen wir die 5 Railways – London and Northwestern , London, Brighton etc , Midland , Lancashire and Yorkshire , Great Northern, so haben sie in den 18 months von 31 Dec. 1865 bis 30 June 1867 ihr Kapital (dessen Gesamtsumme am lezten Datum £136,026,509) raised um nearly 17 Mill. £ oder 14.11%, Gross Revenue not quite increase of ¾ Mill. £. oder 5.01%, but at the same time this addition to the gross revenue has been more than absorbed by the cost of working. In a word, net profits are smaller after the outlay of 17 millions than they were without it. The Preference Charges increased in this brief interval no less than £407,324 or 10.78%. Result that there is less for the ordinary dividend by £412,652, or 10.19%, trotz outlay of nearly 17 millions.

---

The Board of Trade Returns. (Money Market Review 31 Aug. 1867)

Danach seems that Value of Imports much smaller in this year than 1866 und Value of Exports about the same, or little less. This points to a further accumulation of precious metals. Zugleich growing Commerce. Guter Herbst, less cereals und import of cotton (value) smaller.

Computed Value of Imports.

Nearly 12 Mill. less for cotton than 1866. The import of cereals was 5½ mill. more than first 6 months 1866, but now good harvest.

Exports, exclusive of Foreign Goods previously imported but not manufactured.

Obgleich in the 7 months ending 31 July 1867 smaller than in 1866, in month July greater. This shows increasing trade. Exports of cotton, linen, yarn and manufactures, iron and steel = ⅔ of the whole, are on a scale far in excess of any estimate 6 months ago, and point to revival of our foreign trade.

Diminution in Profits of B.o.E. Forthcoming Dividends. (Money Market Review 7 Sept. 1867)

Profits for 6 months ending Aug. 1866 exceeded those of any former half year. Rest on 5. Sept. (1866) of that year £3,987,417, and shareholders received dividend of 13 p.Ct. p.a. for the half year, highest amount since passing of Act of 1844. The Rest now amounts to only £3,658,068, being £329,349 less than 1866. It is only £18,422 more than the amount returned at 3d Sept. 1862, which was the smallest sum stated at the close of any half year during the last 15 years.

The gains during the 14 weeks’ infliction of the 10% Rate £672,648. The profits during the whole of the last 6 months not exceeded £650,000.

London Joint Banks last half year. (Money Market Review 7 Sept. 1867) Continuatio (S. 59)

Table I. Assets.

The amounts under „Cash in Hand und Call“ include bei London und Westminster und London Joint Stock Bank nur Cash in Hand und in Bk.o.E., bei den andern cash lent „at call“ or „notice“ with the discount houses.

Table II. Profits and Dividends.

In some cases special losses have occurred during the half year which have been charged to reserves in hand; f.i., the Union Bank has deducted from the £99,437, brought forward from the previous half year £60,000, this being, as stated in the report, an „amount now written off to doubtful debts account“. Properly speaking, therefore, the net profits accruing to that Bk. during the past half year were only £62,043 instead of £122,043. Für Alliance Bank depreciation has taken place on „the value of the securities held against previous bad debts“, which has necessitated the taking of £60,000 from the Reserve Fund. If debited to the past 6 months’ accounts, would have absorbed all the profits, and there would have remained a further debit of £42,945. The Imperial Bank experienced an unfortunate mishap on the last day of the half year which resulted in loss of £19,000, and, by charging the past half year with this item, result would have been loss of £1115.

Net Profits for the whole of the 10 Banks. £545,314; very large sum, considering that trade was inactive, and average Bank Rate only 3%. The 4 largest establishments hold deposits of money to £55,370,937, and an average margin of net profit of 1% p. annum on the employment of this sum would yield in 6 months £275,000.

India Trade and Four Months Usance. (Money Market Review 7 Sept. 1867)

Seit einiger Zeit die usance reduced to 4 months.

The circumstance of a shipper of produce being able to pay for it to a large extent by the negotiation of his draft at 6 months’ sight on his consignee in England, makes many a speculative person a shipper who would not be so, if he had to keep in view the probability of his consignee in England having to come under advance by accepting a bill at shorter usance.

Why are bills of exchange drawn at all against shipments of produce from India and other countries, and why does the shipper not pay for his produce out of his own resources, and wait to be reimbursed by remittances from the country where his produce has been turned into money? A shipper of produce to a large extent would, as the saying runs, require to have the Bk.o.E. at his back, to enable him to keep up a continuous stream of shipments if he did not draw against them. There are Bankers of the old rigid school – narrowminded beings – who look upon the purchases of such drafts as not legitimate banking business. We do not subscribe to this view of the case. Banks such as the Oriental, the Chartered Mercantile, and the Chartered of India have been established for the express purpose, amongst others, of dealing in exchanges, as set forth in their charters; what would the mercantile community do without such facility? Bills of Exchange drawn and negotiated against produce shipped from abroad, at once become representatives of value to a certain extent of that produce. They also become a circulating medium during their currency, and aid the purposes of trade and commerce, which, without such transactions, would be confined to very narrow limits indeed.

---

Effects of a 10% and 2% Bank Rate. B.o.E. dividend. Last half year. 1867. (Money Market Review 14 Sept. ’67)

The Bk.o.E. excluded by its own regulations from discounting bills exceeding 3 months’ currency, wohl aber professes it to make advances on bills of longer currency where the holders keep an account with the Bank. The competition among other banks, discount Cos., and brokers acting for other banks is so strong, that the Bank o. E. rate is often little more than a „dead letter“, only made use of as a basis of information for others to take advantage of, and regulate their transactions.

In certain contracts, such as the hypothecation of bills from abroad with shipping documents, the Bankrate applies to the payment of such bills under discount, and [in] many cases to the retiring or rebating of other bills; but, as indicating what ought to be or is the rate of discount in the open market, it certainly affords no real criterion. When the rate of discount are unusually low, as at present, short dated paper is, of course preferred, as guarding against the contingency of a rise in the rate, more particularly where rediscounting is practised. A 10%, with the prospect of a speedy reduction, tells heavily against the person compelled to discount, but may turn out a considerable source of profit to the money lender. When a 2% rate prevails, the holder of long dated bills will probably find it his best policy to discount it if he can. But such an extremely low rate may entrap the discount Co or Bank bold enough to let out his money at such a charge, in the event of a rapid advance taking place.

---

„ A Sketch of the History of French Railways etc. By Sam. Haughton. Lond. 1867. “ (Money Market Review 14 Sept. ’67)

The pamphlet divides Railway History in France into 3 periods, 1st) von 1823 to 1842, when private enterprise was the rule; 2nd) 1842 to 1852, when cooperation of State predominant; 3d) 1852 to 1866–7, when the largest part of the capital required [has been] furnished by private enterprise, but interest on chief part of it guaranteed by State.

Neither the system in France, much less costly and better devised than ours, nor the English system, produces, as a whole, a fair average rate of interest for the capital employed.

The old arterial lines of France laid down in Louis Philippe’s time, almost as directly as possible connected Paris, the centre, with the frontiers of France, realised large profits, just as our main lines did, and still earn large profits, but the new network belonging to each of these great French systems, inaugurated under the French Empire, so far as they are completed, have not realised more than 2% upon their cost, and their construction would, therefore, have been impossible without a subsidy, both from the State, and the communes or the parishes which they traverse. In a word, it comes to this, that if, either in France or here, there is to be such a system of railway intercourse, as the development of the national resources demands, railway construction must devolve not upon shareholders, but upon the landowners and upon the districts which derive from them the chief gain, and, in the next place, upon the State. In France, the State, instead of paying for the works executed for public benefit, granted to the contractors a monopoly for 99 years, at the end of which time all railways in France become State Property. High Roads have hitherto been paid for by all alike; Railways are now our great High Roads.

After the amalgamations and agreements of the French Railways in 1859, the Cos. had repaid to the State some of the capital advanced under the laws of 1842 and 1852; but then Gvt. and communes agreed to pay subsidies; and in 1861 considerable sums advanced by the State to the Western et Southern Cos to enable them to complete works in hand. Next, in order to raise the capital wherewith to construct the new network of lines conceded to 5 out of the 6 great Cos. of France, it was found necessary to give State guarantees, and in 1863 the capital so guaranteed amounted to £.161,540,000; but at the same time the net revenues of the old lines were made rateable with part of the interest on the new, and the State reserved the right to convert these subsidies into annuities for 92 years calculated at 4½%. In 1865, under this arrangement, the old lines became chargeable with some of the interest on the new, and the dividends on the old were thus reduced, while in the same year the State was called upon to pay a deficiency in the guaranteed interest, amounting to £1,400,000. With all this, question debated amongst French financiers whether the profits declared to have been earned were really earned, and whether, as in our case, they were not made up more or less from capital. In 1866 the old networks paid over for the new a sum equal to more than 2% on their share capital, and the balance – £1,200,000 – paid by the State. It is more than probable, that, with a never failing deficit in the French budget, and an absolute Gvt called upon to pay annually a railway deficiency of its own creation, the precise rights of capital and revenue are not always regarded so rigidly in France as they might be. We have not the pressure here, and yet we pay dividends out of capital. Wie das auch sei, official Result as rendered in the pamphlet:

In addition the writer gives the following comparative table of the best rails in France, England, Ireland:

⦗The dividends for 1866 were – on Northern 14½, Orleans 11⅕, Eastern 6⅗, Paris, Lyon et Mediterranean, 12%, Southern 8%, Western 7%. The amount paidup on the Northern shares is only £19, 4s.⦘

In France, also, trains less frequent than here, receipt per train mile greater than in England; 43% of the Capital of the Northern Railway possesses no priority to revenue, or, is in receipt of ordinary dividend, and on Gvt Southern and Western of Ireland it is 67%. The percentage of working expenses lower on French railways, while the percentage of receipts from goods higher than on English line, and yet this percentage is almost reversed on the Irish Gt. Southern and Western. Railways in France earn larger profits than in England or Ireland und dennoch the profits of rails in France do not yield a sufficient commercial rate of interest for the capital embarked, obgleich in all 3 countries dividends more or less paid out of capital. Author proposes, that railways public property! , and that fares and rates should not be so calculated as to pay interest or principal on the cost of the permanent way, stations etc, but that the permanent way and its belonging should be kept in full efficiency by taxes levied upon the public.

In England, landowners have not only derived special profits from the introduction of railways, but affected to have been called upon to make sacrifices, and were therefore entitled to compensation. We go with the pamphlet: instead of railways being taxed for landowners, landowners should be taxed for railways.

---

Stock Markets. Week ending Sept. 14, 1867. (Railway Speculations) (Gvt. Securities) Der Philister.

Gvt. has lately taken advantage of cheap money market to reduce rate of interest on the March Exchequer Bills from 3 to 2%.

Railway Markets firm, general advance of 1%. A plethora of money and nominal rates of interest are almost invariably taken advantage of by the great speculators in the North to obtain large loans to the purpose of taking railway stock of the market. For some weeks past this policy has met mit success. The currency of loans, however, must terminate eventually. Questionable when the bulls attempt to reap their harvest, whether so remunerative as it appears at present. Public will scarcely take the stocks off their hands, for in nothing is there less disposition to invest than in home railway undertakings, and of bears there are left few.

Joint Stock Enterprise has done wonders for this country! But! The facility with which men of wealth utterly unacquainted with business – ladies, officers, clergymen, lawyers, individuals of every conceivable class – can become bankers, brewers, carriers, steamboat proprietors, and financiers has engendered chaos. Directors are a very fallible race after all.

Scarcely 2 months ago the newspapers teemed with letters denoting a determination to force definite accounts from the directors at the ensuing half-yearly meetings. The meetings are over, and what results have we? In certain cases, where the game had been carried on so long that borrowing was no longer practicable, the inevitable crash came, and every one was stupefied at the proven rottenness of cos. which had always been considered thriving. (In diesen Fällen der gewöhnliche Philister Indignation und Verwunderung, moralisches Geschrei, Committees of Investigation and so forth!) What has come of these warnings? The chairman of one Co. can coolly announce that estimates have been exceeded, and that further borrowing powers must be obtained from Parliament to an amount which does not even venture to estimate. Another Co. presents its accounts in an absurdly brief form, and debits a proportion of the directors’ fees to capital, and yet a protest is scarcely heard. So long as cash is provided for dividends, and dividends are moderately good, there is no idea of inquiry as to whence these funds are derived. Is not the instinct of self-preservation sufficiently strong to induce the shareholders to demand more lucid statements of their real position, instead of waiting until it shall be supplied to them by a committee of investigation?

So jedoch ist der moderne Geldphilister und wird sein in seculum seculorum!

---

Board of Trade Returns and Money Market. (Money Market Review 5 Oct. 1867.)

Show that Imports decline, Exports increase, hence Accumulation of Gold. We want less cotton at lesser price. More food at higher price than 1866. These 2 items about ½ of our Exports. But cotton so much heavier item, regularly, that corn sinks greatly in importance by contrast. Hence fall of general Imports.

Imports Computed Value.

Decrease in 7 months of 1867, compared mit same period in 1866, £13,209,480 or nearly 10% less.

Thus, while in the 7 months 1865 cotton und cereals not much more than ⅓ of our import values, more than ½ in 1866, und nearly ½ in 1867. Taking the 7 months of the 3 years together; Cotton und Cereals (£.161,333,801) = 46%. Other articles (189,466,587) = 54%. (Zusammen £350,800,388 = 100%).

Striking out cotton und cereals import values of 7 months ’65, ’66 und ’67 nearly identical. Beweist daß diese 2 items chief causes affecting import values und money market. The relative proportion of cotton and cereals are changing rapidly. In 7 months of 1866 Cotton Imported valued at 53½ mill., same months 1867 at 35¾ millions; while in same period 1866 cereals valued at 16 mill., in 1867 at 22 mill. We had more cotton in 1867 für less money und less cereals for more money. Cotton cheaper und less in demand 1867 als 1866, wheat dearer und more in demand.

Exports. British und Irish Produce. Declared Value.

¾ of our exports in value consist of cotton, linen, woollen manufactures und Iron. In August 1867 higher than in August ’66 und ’65. Vergleich der Imports und Exports, (speziell cotton und cereals für Imports) zeigt general international Balance, foreign Exchanges, current of Bullion, Money Market.

---

The Money Market. Reduction in the B.o.E. Discount Business. (Money Market Review 12 Oct. 1867.)

In open market for best bills rate of discount 1¼%, in B.o.E. 2%, 60% difference on the actual sum paid for discounts. On Oct. 11, 1865 the Private Securities were £6,992,000 more, banking Reserve £9,508,000 less, Gvt. Securities £3,084,000 less than the same items in present return. In 1864, 1863, 1862 the Private Securities were £21,923,000, £22,592,000 und £19,752,000 respectively, Reserve und Gvt. Securities much less than now. 2% at the Bk.o.E. means 3, 4 and 5% for manufacturers und traders Bills.

---

The „Times“ on Trade and Commerce and Prosperous Condition of Country (Money Market Review 12 Oct. 1867)

Nach Times in Art. of 1 und 2 Oct. entdeckt, daß trotz Stagnation of Money Market etc „Trade Returns show at least an average extent, with at least the usual profit. In short, profits are accumulating with rapidity in the form of capital“ und hence „result is an accumulation of unemployed capital beyond all example or belief“. Also der enormous amount of gold in B.o.E. not capital withdrawn from trade, but the rapidly accumulating profits now actually to be derived from trade! Ferner sagt die Times 2 Oct. „It is almost humiliating to find that the impoverishment of many hundreds, we may say thousands, of families makes hardly any difference in the labouring mass. (And East End of London etc!) Gardeners and coachmen may not get places quite so easily, and fashionable shopkeepers may find their customers ordering little and paying less, but the great tide of incomings and outgoings flowing in the deep channels of trade shows no falling off, and tells us how little individuals, and even whole classes, are compared with the whole.“ Die Trade Returns (sieh p. 67 und diese Seite) zeigen für 7 months imports und 8 Months Exports falling off in exports of 4 Mill. £ und Imports upwards of 13 Mill. £. Amount of Exports no sure guide of state of prosperity; we may be compelled to export goods at low und unremunerative prices, tempting the foreigners to buy, because we are too poor to consume them at home, and have large amount of debt abroad, and no other means to pay them. Large exports may therefore indicate poverty at home, loss et ruin among the producers of those goods. Large imports may, under ordinary circumstances, indicate prosperity, aber nicht so always. The nature of the imports may show that we import, not because we have surplus wealth, but because we are labouring under great wants. Z.B. Deficient Harvest. Dieß Jahr 9 mill. £. (of imports) (articles of food) to make up deficiencies in food. Manufacturers etc must go on producing, whether they realise profits and wages of their labours or not. Capitalist und Foreigner who buy receive more, the producer less. If the oxen cannot eat whilst they labour, as at present, they will be in danger of perishing in the midst of the abundance they have created. If commerce pays 10%, this shows, nach Times Wort, that they can pay it.

---

Bank of England from October 2 to December 25 1867.

Operations of Clearing House from October 2 to December 25 1867.

Bank of France from Oct. 5 to Dec. 1867.

Notices to Moneymarket.

Week ending 5 Oct. 1867:

B.o.E. Heavy Gvt. und other disbursements at turn of the quarter verursacht considerable draught upon public und private deposits, entailing large increase in the active circulation, und decline of £1,422,638 in Reserve. Owing, however, to the abundant supply of money in the general market, increase of demand at Bank Discount Office small, da Increase in Private Securities only £131,052. Of £413,000 gold sent in from abroad, except £46,272, the whole drawn out again in coin for internal circulation.

Stock Markets: Unsettled Politics checks all spirit of enterprise. Funds again lower, notwithstanding the great facilities given to speculators for a rise by banks anxious to employ their unprofitable balances in the present stagnation. Foreign Securities, without exception, declined. The rise of the past month in Railway stocks sufficient to cause many of the speculators for a fall to close their accounts. Daher business in this department diminished of late, und evidences to realise some of the numerous investments recently made on borrowed money. Weder rise noch fall induced the public to take any action. Bona fide purchases und sales as rare as ever. Unavailing attempts to sell on the part of speculators for a rise. Fall most marked in Midland, which für some time past favourite vehicle for speculation.

Mercantile Embarrassments: Rumours of difficulties in Cotton Trade at Liverpool. Glasgow: failure of manufacturing firm und worsted agent, liab. in each case not over 15,000£. Ferner Failure (Glasgow) of Peter Buchanan et Co in Folge von Buchanan, Hope et Co (Canada West) not placing them in funds to meet their acceptances. New York failure of Gill, Gillets, and Noyes (Tea Merchants) for £100,000 through buying goods for gold and selling for currency. Boston: bankruptcy of George L. Schuyler, liabilities of £800,000 and no assets whatever.

Week ending 12 Oct. 1867.

B.o.E: Diminution of £385,081 in coin und bullion; und da result of exports und Imports addition of £66,000 to Bankstock of precious metals, good deal of coin gone into provinces, part to Abyssinia. Mercantile Embarrassments: Liverpool Suspension of Colin Campbell et Son, cotton merchants und brokers. Liabilities at £200,000. Due to immense fall in value of cotton. Glasgow: Failures: Hutton et Baird, General Warehousemen, liab. £39,000. Davy et Co, powerloom manufacturers (Rothesay). Stock Market: Excitement of last few months in Home Railway Shares almost entirely subsided, shares now in the general dullness.

Week ending Oct. 19, 1867.

B.o.E. draught upon gvt. Deposits (dividends der Staatsgläubiger); hence decrease of Reserve of £1,314,832. Decline in coin et bullion £847,672, wovon £462,000 sent abroad, bulk of balance taken away by the receivers of dividends.

---

⦗October 26, 1867. Monetary Panics und Lord Overstone.

In 1857, Overstone (bei Gelegenheit der suspension des Bank Act) said: „It was impossible to deny that the suspension of the Act, twice repeated, did create serious difficulty, and he thought the Gvt. were entitled to say that the Committee, which was in existence, ought to direct its attention to the question whether, while maintaining the provisions of the Act of 1844, which were essential to maintaining the solidity of the monetary system, and placing the exchange under proper control, they could not add, without relaxing these principles unsafely, an elastic power applicable to peculiar and exceptional circumstances.“ Said in another part of the same speech: „By suspending the Bank Act the Gvt. had intercepted the natural action and legitimate remedy for an unwholesome system, and therefore had rendered it incumbent upon Parliament to find some other remedy for the future.“ Verbosity and mysterious intricacy! The „provisions“ of the Act of 1844 were to be maintained. But to these „provisions“ which in the next sentence have become „principles“, „an elastic power“ was to be added to relax the provisions to be maintained and the „principles essential to preserve the solidity of the monetary system“. But the provisions or principles were not to be relaxed „unsafely“, and, therefore, the elastic power was to be „applicable only to peculiar and exceptional circumstances“. Exactly those circumstances in which, according to all the previous teaching of the Overstone school, the principles and provisions ought to be maintained und under which the Act had been twice suspended. By suspending the Act, Overstone said, „they had intercepted the natural action and legitimate remedy for an unwholesome system“ und therefore he incontinently proposed that Parliament should in future neutralise this „natural action and legitimate remedy“ by providing an „elastic power to accomplish the same purpose as a suspension of the Act namely, the restoration of an unwholesome system“. The Act and its principles and provisions were to be maintained for the preservation of „the solidity of the monetary system“ and, at the same time, they were to be relaxed and neutralised to destroy that solidity, and substitute an unwholesome system.⦘ In Folge dieses collapse, aggravated by that of Liverpool Royal Bank, great alarm in Railway Market. Almost panic. Next morning panic – was discounted.

---

Week ending 26 Oct. 1867.

B.o.E. Gold withdrawn for Export about £289,000; da aber decrease £474,796 coin still absorbed in the provinces.

Mercantile Embarrassments: Braybrook und Slater, spinners und manufacturers of Livesey near Blackburn, liabilities £30,000. London: Vivanti, Annett und Balfour, silk trade, owing to speculations on Stock Exchange. Liverpool: Royal Bank und Canada Commercial Bank.

Corn Trade: Late Rise in Cornmarket, natürlich prices partly forced up by Speculation. About (Dornbusch list published 19 Oct. ’67) 247 Cargoes of wheat expected to arrive for orders within next 3 months from South of Europe, California, Australia; since 19 Oct. 70 cargoes have arrived, and 50 remain off the coast for sale. 21 Oct. cornmarket written 3s. lower per qr und floating cargoes fully 5s. cheaper, owing to heavy arrivals mit the fact that speculators realising their profits. Doch diese supplies nicht sufficient. France has deficient crop, was large buyer in our homemarket. Von Americans nichts zu erwarten bis spring; they are only shipping a little. St. Petersburg is about closing und prices dort quoted leave positive loss to importers. In Trieste dealers were failing und merchants in many instances have paid forfeit und cancelled contracts.

Week ending Nov. 9, 1867.

Mercantile Embarrassments: Mincinglane: Suspension of Th. Kraus et Co., commission merchants (branch at Liverpool) Hauptgrund holding about 6000 bales of cotton. Suspension of Welch Miller und Fawcett, 2 underwriters at Lloyd’s. Stockmarket: Now that cry of repudiation has almost died away, U. States 5-20 Bonds again largely purchased, both for home et Foreign Account. No department more want of confidence than in British Railway Stocks. Successively the actual condition of North British ; London, Chatham et Dover ; Great Eastern ; Great Western ; London, Brighton and South East Cos. were revealed to their proprietors. At the Midsummer halfyearly meetings a few more questions than usual were asked, and that was all. The chairmen und directors made plausible speeches, denounced the bears, und dividends greedily accepted. But from that time sales began. Speculators at Liverpool und Manchester, reckoning on nothing the balance of interest by borrowing money in an overstocked market, absorbed the first supply. They thought to wait, and, with returning prosperity, to resell to the public with a profit. Aber public show no disposition to relieve the speculators of their engagements. On the contrary, sales continue, und now a „bear“ party has been organised whose object it is to foster the prevailing distrust. Soundest line in England perhaps the Lancashire und Yorkshire . And they have, during the last 2 years, added to capital an amount almost equal to that which they paid in dividends.

Week ending 16 Nov. 1867.

Stockmarket: General Fall in Joint Stock Bank Shares in Folge der Revelations der Royal Liverpool Bank. Steadily declining prices of all British Railway Stock. Decided by the Vice Chancellor that issue of preference Stock in lieu of dividends is illegal. Announcement of this verdict caused fall of 1% in the Stock of Great Western; 1% fall in London und North Western ; 3% in Lancashire und Yorkshire , 2% in London und South Western et Caledonian has closed at 78, the lowest price of the week, 9% below that current last week.

Week ending 23 Nov. 1867.

B.o.E. Gold taken from it exceeded receipts from abroad by abroad by about £130,000, coin is returning from the Provinces.

Mercantile Embarrassments: Loewe und Langford (New London Street) „in consequence of the great falling off in the shipment of cattle from France und general Dullness of Trade“. Liabilities about 22,500£. Manchester: Yates et Corkling, commission merchants, liabilities between £30 und 40,000.

Midland Railway Co , directors apply to raise fresh Capital over the £3,282,867 raised in Year ending July 1867. Hence fall of 3%, from which price the stock has still further declined.

North Eastern Railway Co galt als Muster. Fletcher’s data – he being an engineer of the line – held up as model. Now on the line to which Fletcher attached, comes out, charges on revenue under the mark by £130,000 a year; charged to capital for new rolling stock von June 1864 to June 1867 £1,002,000. Capital Account increased in these 3 years by £6,700,000. Mileage increased by the same Co. during this time 134 miles, £50,000 p. mile, while original cost of the railway was £30,000 p. mile. At this rate increased mileage ought to amount only to £4 Millions; of difference of 2,700,000 ⅔ represented by charges for rolling cost and cost of old line. Since publication of these charges Extraordinary General Meeting of shareholders held. Chairmen praised the concern, ditto the chief engineer, chief accountant und auditor of the Co. Trotter’s remarks in reply quite unheeded, shareholders true to policy to support directors so long as they declare dividends, chairman’s explanations voted satisfactory unanimously. Main cause of flatness during week in railway shares has been the anxiety of the bankers to lessen their engagements in this class of property. Loans are being called up and pawned stock thus brought to market.

Week ending 30 Nov. 1867.

B.o.E. £298,000 withdrawn from it for Exportation, aber its Diminution nur £177,600; must have been made up by Return of Coin from the provinces.

Week ending Dec. 7. 1867.

B.o.E. Its resources are diminishing. Diminution in Private Deposits, Revival of Discount Business. Amount of gold withdrawn von Bank für Export £394,000 und diminution in coin und bullion £314,126. Mercantile Embarrassments: J. Baynes, manufacturer, Blackburn, liabilities about 80,000£; ditto a cotton spinner at Ashton-under-Lyne, liab. 10,000. Ritter et Co, timber merchants, Fenchurch Street. Otto Hoz et Co, chiefly in silk trade, about 10s. in £.

Week ending Dec. 14. 1867.

B.o.E. Discount business reviving. Gold withdrawn from abroad (Export) £209,000, diminution shown only £53,885. Hence coin reflux from provinces where circulation swelled by requirements of the harvest.

Week ending Dec. 21. 1867.

B.o.E. Increase in Gvt. Deposits largely attributable to the carrying to that account a sum of £700,000, which the Treasury has obtained from the Bk. as an advance on Exchequer Bonds; hence the increase of that amount in the Gvt. Securities. Bank, during week, received from abroad £43,000 in gold more than it parted with for exportation, and as its Increase £277,152, Evidence of a steady reflux of coin from the internal circulation.

Mercantile Embarrassments: Haden et Sons, irontrade, Dudley, liabilities £60,000, Cohen (Birmingham) merchant und factor, liab. 30,000, offers 5s. in £. Australia: W. S. Anderson (Melbourne), import trade, liab. £15,000, chiefly due to creditors in England. Drymen et Co (Sydney) warehousemen, Liab. 25,000£. Stockmarket: Course during week generally downward.

Week ending 28 Dec. 1867.

Late Demand for bullion for export has fallen off, and further supplies of gold are shortly expected from America and other places. Another disturbing cause the practice of Jt. Stock Bk. Cos to restrict their advances, by asking higher terms during the few weeks preceding the issue of their reports and balance sheets, in order to show a large amount of cash in hand. Brokers have not been able lately to work at rates much lower than the „Parlour“ market (B.o.E. Discount). Discount Rates raised von 1⅛ or 1 ¼ to 1⅞ or 2%.

---

10% Rate of Discount. Manufacturers, Producers, Trade. (Money Market Review 12 Oct. 1867)

Nach Overstone , Times, Hubbard , Fawcett : „there is no harm in a 10% rate, as it shows how profitable trade is, or they would not pay it.“ With pending engagements they must pay it, whether their trade is profitable or not. If they cannot pay it out of profits, they must pay it out of capital, as at such a rate is generally done. This soon eats up the capital of the small trader, and he speedily falls out of the ranks. It consumes more or less of the capital of the large trader also, but he struggles to hold on till better times come, and supplies with paper the place of the capital absorbed, and thus in too many cases commences a career which, unless he be enabled to retrieve his position in the mean time, may end at no distant time in Bankruptcy Court or deed of arrangement.

---

The Caledonian Railway Co. (Money Market Review. 12 Oct. 1867)

Nach last halfyearly Accounts dividends maintained by means of charging to Capital various expenses which ought to be borne by the revenue. If made up according to true principles, the charges upon the 16 Millions of loans and preferences, combined mit cost of maintenance und renewals, would have absorbed bulk of available asset, and left comparatively little for dividend on ordinary stock. The directors have declared dividend of 5¼%. Net earnings, as stated on paper, were not over £97,000. 5¼ dividends p.a. auf den ordinary stock (Caledonian) of £4,734,000 would [require] £123,500 or £26,500 more than the directors pretend to have earned. They say, it comes from the Premium Account; i.e. a sum of money obtained through the premiums on the issue of shares. It amounted at beginning of the year to £150,000. Davon £30,000 taken on 31st Jan. to augment the dividend for 2nd halfyear 1866 und jezt £26,000 to raise the dividend for 1st halfyear 1867; so dwindled down von £150,000 in 12 months to £93,000. Will soon be all gone. The premiums arise out of transactions in which there are heavy losses as well as gains. The losses are all put to the debit of Capital; aber die gains nicht to credit of capital, sondern to small dividends, to keep up appearance of fictitious prosperity. And this premium account – apart from the losses credited to capital – has ceased to be an income to the Co. The directors acknowledge that they received only £2,272 for premiums in the past half year (1867) but take away from the fund £26,500 to augment the dividend; just 12 × the amount received in the same period. Vicious system of dividend manufacture. Selbst 4% dividend only arrived at by starving renewals in some cases, and charging them to capital, in others. It is said that the general manager obtains a commission on the alleged net earnings. Dieß explains much! In der That haben die Auditors not certified the Accounts at all. Sie sagen z.B. „£75,013. 15s. 5d. charged for new plant placed on the line, or in course of construction, which, it is stated, is necessary for the working of new branches und extensions … Subject to these explanations … the accounts contain a true statement.“ The auditors protect themselves by these saving clauses, shirk the question. The bulk of the charge was for renewal of rolling stock, a charge of „wear and tear“ belonging to revenue as much as the wages of the Co’s servants. If this sum debited to Revenue, let alone other questions, small dividends und collapse of the Co’s credit. Colonel Salkeld chairman of this Co. Nach Money Market Review of 26 Oct. 1867: Caledonian Railway Stock was worth, not very long ago, in the market £130 for every 100, and within the last few days it has been as low as £85. 6 years ago Capital der Caledonian Railway Co 9 mill. St., now 21 Mill. £. Gross Revenue has kept pace; f.i. in halfyear ending 31 July 1861 it was £387,201, in halfyear ending 31 July, 1867: £872,576. But Preference charges risen from £135,636 to £393,843. Ebenso Premiums aufgegessen als Dividends. In halfyear ending 31 July, 1861, the capital expended £94,216, und in half year ending 31 July 1867 to £482,937, equal to 5 × the amount officially declared to have been earned for dividend. Was there any dividend at all?

---

2 November. 1867. The Accidental and Marine Insurance Co. (Revelations)

Just Report issued on that Co., which during last 12 months undergoing slow process of liquidation in the Winding-up Court. This Corporation was composed of several amalgamated Cos, including Accidental Death Insurance Co, founded in 1849, führte gut Geschäft for some years. In 1862, its capital being already too small for its proper business, it commenced underwriting; 1865 discovered that its marine insurance business checked by its inappropriate name. Directors proposed to change title, remodel its constitution, obtain larger capital, und thus „Accidental and Marine Insurance Co.“ formed. Prospectus proposed to raise capital of 2 Mill. £, 80,000 shares, £25 each, of which £20,000 were to be issued at first. At the head of the directors Stephen Cave (firm: Prescott, Grote, Cave et Co, the bankers, of Threadneedle street); Alfred Smee, F.R.S., Edward Solly F.R.S., und 2 others, as chairmen und directors. Then follow Tabor (described as a director of the Imperial Bank) und two others, described as chairmen und directors of Gresham Life Assurance Society. Next Frederick Doulton, M.P., member of the Metropolitan Board von Works, G. Smith und J. C. Tollemache Sinclair, declared recently by Disraeli (at Edinburgh) as his „most intimate and particular friend“. Bankers of the New Co. London and County Bank, its bankers Mullens, Marshall et Co, the Gvt. Bankers. Array of Names und Guarantees of Respectability. By the terms of the amalgamation the new corporation acquired the business of the Accidental Death Co by the allotment to the shareholders in that Co. of 10,000 shares in the new Co., the latter taking all the assets und liabilities including considerable amount of debenture debt of the former Co. Public took only 4,752 shares, so that altogether (mit den above 10,000) 14,752 shares actually issued out of the £40,000 to be issued. This happened in July 1865. Da aber die Directors 1 Mill. Capital berechnen to be raised by subscribed capital of £40,000 shares, how could they attempt to carry it on with less than 15,000 shares, without that capital? 16. Oct. 1866 it became clear that they had lamentably failed. On that day the Co. passed into the Windingup Court. The charges now made against the directors refer to certain dealings und transactions with the shares of the Co. in the interval between July, 1865 und October 1866.

Co. has many creditors at Liverpool; diese appointed Committee of Investigation, of which A. B. Forward appointed chairman. In Report of Forward’s Statement: „On or about 16 March 1866, 6 members of the board of directors transferred 21,713 shares, standing in their respective names, from themselves to various persons, but principally to a mere clerk of the Co., leaving each of those directors the holder of 250 shares only. On the 21st of the same month (March), about 5 days after the last-mentioned shares had been so transferred, the Co. made a call of £5 per share.“ „On the 3d October (’66) the directors held a meeting at which 4 out of those 6 directors were present, and they forfeited, for the benefit of the company, the shares above referred to, in respect of which the call had not been paid. The total number of shares forfeited was 5,014, which included the shares before referred to as having been transferred by the six directors.“ „Prior to this meeting (on 3d Oct.) other shares had been transferred which were likewise forfeited; and out of the 5,014 shares so forfeited 3,213 were shares standing in the name of the clerk of the Co before referred to.“ „On 16. Oct. (’66) the Co. passed into liquidation.“ „Apart from the shares so forfeited, 3,353 other shares had been transferred from time to time, within 12 months prior to the winding up of the Co, the larger proportion being transfers from the directors and officials of the Co, and upon the greater portion of which the calls yet remain unpaid.“ The outstanding liabilities on these shares, which were improperly forfeited, und those transferred within 12 months more than £100,000. The Committee urged the liquidators to take steps against these parties, but liquidators object, except they be provided with funds for that purpose, because „they are advised“, they say, that „whatever liability attached to these shareholders in respect to these transactions would only be applicable to debts contracted prior to and at the dates of the respective transfers“. The fact that those assets would be applicable to the debts of a sanction of the creditors only, does, jedoch, not concern the liquidators. Besides, nearly the whole of those transactions took place within, or nearly within, 12 months of the date of the winding up order. Bei „legal frauds“ ausserdem date gleichgültig. Who are the 6 directors implicated, who the 5 not implicated?

---

Railway Finance and its mysteries. (Money Market Review 16 Nov. ’67)

Whitehead und Coles have just put forth statement of figures relating to 23 British Railways, chief part of our railway system, weil at midsummer last ihr aggregate Capital 365 Millions.

Ordinary Stock: 158 Millions. Preference Stock ⦗viz. debenture bond und stocks, guaranteed stock, Preference Stock⦘ 206 Millions.

During year ending last midsummer, the 23 Railway Cos spent nearly additional Capital of 28 Millions, 20% upon ordinary capital possessing no priority of claims upon Revenue. Nun Question: if this 20% upon the ordinary capital had not been raised und charged to Capital, would there be any dividend? Open Capital Account true source of the mystery.

B.o.E. Money Market Review 23 Nov. ’67

Demand for Gold Export lately made itself felt. Culminating point 18 Sept. 67: £24,498,447; this is £2,266,309 more than in any former plethora. Since Sept. 18 Abnahme of £2,262,219. On 18 Sept. Active Circulation £23,706,425; is now £23,899,915, increase of £193,420. Aber Total Reserve at the corresponding dates £15,792,002 und £13,336,313 resp., also decline of £2,455,709. Drain, as invariably the case, entirely upon the Reserves of Banking Department. B.o.E., as discounter, has for a long time withdrawn from the Market.

The Panic and its Extent. 23 Nov. ’67

What greatly operated to produce the Panic was the imitation from France of the Credit Mobilier System, and the perversion of Banking which ensued. Trafficking in Lloyd’s Bonds und debentures. A Lloyd’s Bonds, secured by the acceptance of a Contractor, no mercantile bill. Banks who held them, could not realise their depreciated bonds, and whatever they could sell they had to hold in reserve to meet the demands upon them consequent upon the suspicions to which they were subjected. Legitimate banking largely departed from by the banks connected mit foreign und colonial business, engaging directly and indirectly in mercantile operations, or fostering those of their directors und relatives. The mischiefs of crisis aggravated und its evil results propagated by the Bank Act. The panic of 1866 a noncommercial panic, brought about by the diversion from commerce of Bank funds. There was not the old plea about the Exchanges. How is it we have heard nothing for some time of the old recipe for winding up the Exchanges? Indeed, all the accustomed and consecrated Political Economy is out of gear just now; but it will be set going again.

One part of the measure of our loss in such an epoch the loss of labour to an enormous amount, at least of half million men in last year … Age of enlarged competition; China, India, Japan, containing perhaps half the population of globe, thrown open und new countries peopled on the shores of the Pacific. Enormous stimulus by railway, steam etc communication.

Railway Dividends. Parliamentary Return down to 1865. Now issued. Money Market Review. 30 Nov. 67.

Now shown that the rates of dividend paid upon railway shares in 1865 were simply delusive. Nach dem Return Railway Capital Ende 1865, 455½ Mill. Aber Lloyds Bonds nicht included, sicher 50 Mill. more. Since that time, at the smallest estimate, 50 or 60 Mill. more spent, so bis jezt cost der Gr. Brit. und Ireland Railways to £550,000,000; wahrscheinlich mehr. Von den 455½ Millions said to have been spent at 31st Oct. 1865 219½ „Ordinary Capital“, i.e. possessing no priority over the remainder; 98 Millions in form of debenture bonds (terminable debentures, redeemable at fixed periods), debenture stock (funded debentures, only redeemable durch purchases on the Stock Exchange) diese 14 Millions stated. Next in order preference stock to 124 millions. Thus the sum total is made up, not including Lloyd’s Bonds und many millions in addition due to bankers, moneylenders, contractors, lawyer etc. Such state of the case nearly 2 years ago.

---

Speculation in Railway Shares. Money Market Review 30 Nov. ’67.

A buyer or holder in stock with real faith in its value, oft, ohne speculator zu sein, will take advantage of the backwardation offered by „Bears“. On the other hand, if it sought to sustain the price against the ordinary course of the market, artificial scarcity created by taking up stock in bankers’ names.

---

Great Eastern Railway. Director against Director. Money Market Review 30 Nov. ’66. (Internecine War)

The Great Eastern quarrel is becoming quite sensational. Auf meeting (shareholders) 22 Nov. ’67 for the purpose of demanding the resignation of those members of the Board, who had not yet offered to resign unconditionally und for nomination of new Board. Resolution passed reducing the directors to 11, and ejecting from existing Board 4 of the Directors. Chairman des Meeting was Mr. Turner. Another Resolution passed: continuing the powers of the Committee of shareholders recently appointed, and giving that Committee authority to accept any resignation they may think proper, and apply to Parliament for powers to reconstruct the Board of Directors in what way they pleased. Major Jervis, whose ejectment is suggested and enforced, one of the dissentient directors has published a letter: that he had declined to sign a circular for making Watkin chairman of the reconstituted board, as Watkin’s time fully employed; that now intended to keep the present chairman in office, though proved incompetent; that the solicitor is not to be removed, obgleich „severely censured by the Chairman in the Dunmow transaction“. Certain Directors who had ostensibly resigned, had done so „on the understanding to be re-elected“ und „some who signed the late circular, protected themselves by a legal document against their own signatures“. Colonel Palmer, another dissentient Director, declines to relinquish his seat into the „hands of a packed committee“ one member of which is the present „chairman’s (Turner’s) hatter at Leeds “. „Certain members“, he says, „of the board of directors of the Gr. Eastern Railway obtained in 1865 the position they now occupy by effrontery, intrigue, and imposition, making use of proxies surreptitiously obtained from a portion of the owners of 14 Mill. £. Stock, to whom they applied at the expense of you, the shareholders; and who are endeavouring now, by the same course, upon the plea that it is necessary that 1 Mill. £. Stock should be represented at the meeting, their real object being to maintain their pay and power.“ Josselyn, another director refusing to resign his seat, states: the Committee nominated on 8 Nov. was selected at a private meeting of a few shareholders at Manchester „with whom the present Chairman, Mr. Turner, was in communication“. Mr. Goodson, one of the remaining dissentient directors, is a director of 19 other Cos.

---

Board of Trade Returns. Dec. 7 ’67.

Railway Accounts. (14 Dec. ’67 Money Market Review)

Times macht als wenn Shareholders in Railway Cos had been altogether duped and misled. Fact: sometimes one is willing to be duped when deception accords with one’s pockets and one’s interests, and this has been pretty much case mit Railway Shareholders. Shut their eyes to „principles of accounting“. The cooked accounts have given dividends und dividends have given market value. The idea of railway Co. not being able to raise capital was considered out of question. But panic of 1866. London, Chatham und Dover led the way to ruin, and could pay nobody. Then came Great Eastern , North British und Brighton and no one knows where it is to stop. False Reports may damage a Bank, as everyone knows, that banks owe at all times more than they can pay at a months notice. All the „Bears“ in England could not damage a railway permanently; if they sell stock they do not possess, they must buy it back again.

Cotton Price. (Money Market Review 14 Dec. 1867.)

12 months ago middling Orleans over 1s. 3d., now 8d. per lb. Decline in 12 months of nearly ½.

Computed Stock in London und Liverpool December: 1866: 720,000 bales. 1867 about 576,000. In Europe same dates ending November: 1866: 918,000. 1867 bls 654,000 und 1865 bls 456,000

Daher decline of cotton nicht of the absolute quantity of supply erklärlich, aber Manchester is consuming much less cotton than 12 months ago. Consumer is becoming choked mit cotton manufacture.

---

Railway. Wear and Tear. (Money Market Review 21. ’67)

Nach Paper recently read by R. P. Williams, at Institution of Civil Engineers, „On the Maintenance and Renewal of Permanent Way“, the average cost p. mile p.a. of maintenance of way and works, and of station, has varied, for a period of years, wie folgt: London und Northwestern has charged to its Revenue Account for this special purpose £370 p. mile p.a., Northeastern £206, Midland 225, London und South Western 257, Great Northern 310, Lancashire et Yorkshire 377, the South Eastern 263, Brighton 266 und Sheffield 200. Dieß hauptsächlich difference of „Account“. The smaller charge is adopted because its adoption is necessary for a good dividend and the larger charge is put forward because it can be supported by reason of revenue being superior.

The cost of maintaining the road does not depend so much upon the wear and tear of the traffic passing over it, as upon the quantity of wood, iron, and bricks, and mortar exposed to the atmosphere. A month of severe winter will do more damage to the road of a railway than a year’s traffick.

---

Railway Reform. – Uniformity of Railway Accounts and Gvt Audit. (Money Market Review 28 Dec. 1867.)

Losses of the public have been enormous. But lately Caledonian Stock selling at £115, now only £71. Brighton Stock fell with rapidity von £120 to £50, the price at which it is now quoted. Shareholders deceived and heavily mulcted whilst the directors were frittering away their property, and the auditors – the humble servants of the directors – were looking on mit subservient humility. We must have a uniform system of exhibiting the Results of the Railway Accounts; halfyearly accounts und balance sheets subjected to searching judgment of auditors appointed by, and directly and solely responsible to the Gvt of the country. Present Accounts framed to conceal as much as possible, and to reveal as little as possible, and it has been found impossible to prevail upon directors or auditors to give any better. Daher nöthig daß some general form authoritatively settled und uniformly enforced in all cases by the Legislature.

---

London Bullion Market, during December 1867. (Money Market Review)

First Week. ending 7 December ’67.

Gold: Owing to the scarcity of bills on Paris, demand for gold has been very good, and the arrivals being but small, £525,000 withdrawn from the Bank. On the other hand £28,000, in sovereigns, chiefly from the Brazils, have been sent in. About £774,000 now on way from Australia, of which £306,000 may be considered as due. The Mandingo has brought £12,730 from the Cape; the City of Baltimore £1000 from New York; the Shannon £6,460 from Brazils, the Hammonia £2,330 from New York, Zusammen: £22,520. The Tamar has also arrived from West Indies mit £340,000, of which about half is expected to be Gold.

Silver: The Deutschland brought £20,000 in Dore Silver. The market not active, last price 60½d. per oz. standard.

Mexican Dollars quiet, scarcely any business since 28 Nov. owing to absence of arrivals. On 7 Dec., this day, the Mexican dollars by steamer Tamar sold to day at 4s. 11d. (also 59d.) p. ounce.

Second Week, ending 14 Dec. ’67.

Gold: No active Demand for export, only £107,000 withdrawn from the Bank; this, together with the undermentioned arrivals, has been sent abroad. The Rifleman brought £57,000 from Sydney; the Scotia 8000, the Denmark 11,300, both from New York. Total £76,300. The Oneida has taken £57,800 to Brazils und the Roman £30,000 to the Cape. The vessels now on their way from Australia are: The Anglesey mit £211,000; the Ninevah mit £38,500; the Lincolnshire mit £336,000 und the Kent mit £130,000; total: £715,500, of which £249,500 may be considered due.

Silver: Silver ex Tamar sold at 60d. 7/16 p. oz standard, but the demand is not now so active; we quote the nearest price as 60⅜d. p. oz. standard. The Oneida has taken £8000 to the Brazils, but the demand is chiefly for the Continent.

Mexican Dollars remain at 59d. per oz., but as the demand is principally for refining purposes, this price not firm. The Bavaria has brought 17,000£ Mexican, and the Zeta about £20,000 of Chilian und Bolivian dollars. The St. Laurent has also arrived at Brest, mit £67,000 from New York; the portion on English Account is not yet known. On 14 Dec: Owing to a diminished demand of the Continent and expected arrivals from Mexico and New York, quotations for bar silver and for Mexican dollars have declined ⅛d. p. ounce, viz. to 5s. 0⅜d. und 4s. 10⅞d. respectively.

Third Week ending 21 Dec. ’67.

Gold: Arrived: Ninevah from Sydney mit £38,000; the Cuba from Boston mit £5,500; the America, from New York mit £18,400; City of Paris, von New York, £2000; the La Plata, from the West Indies £68,650; the Delta (overland, from Melbourne) mit £57,119; the Ethiope, from Africa, mit £5000. The whole of the above has been taken for exportation, and in addition £53,000 withdrawn from Bank, while 107,000 sovereigns have been sent in Demand for export sufficiently active to absorb all immediate arrivals. Anglesey (from Melbourne) fully due, may be daily expected.

Silver Market inanimate, but without change in price, the small amount by the la Plata sold at 60⅜d. p. oz. standard, for the Continent, there being no demand whatever for the East. The La Plata, from the West Indies, brought £101,350 in bar silver and silver coin, chiefly from the West Coast of South America.

Mexican Dollars sold at 58⅞ p. oz. being decline of ⅛. The Panama has arrived at St. Nazaire, from Vera Cruz, mit £19,260, on English Account.

Fourth Week ending 28 Dec. ’67.

Gold: Shipments of gold on a considerable scale have commenced from New York, and seem probably to continue for some time; the amounts hitherto received, detailed below, have been taken for export, but enquiries not very numerous, the continental exchanges having lately risen to a degree that somewhat diminishes the demand. The Flamsteed brought £62,650 from the Brazils; Pennsylvania £13,500 von New York und ditto von New York: Persia £121,600; Weser £28,530; Etna £60 000; France £12,000. Total £298,250. The Ripon has taken £26,990 to Alexandria. Von B.o.E. withdrawn £19,600, sold to it £.35,000.

Silver: Quiet Market. No change in rate. The Ripon has taken £6,130 to Shanghai, but the operation is quite exceptional. Demand for bar silver chiefly for the Continent, price has a drooping tendency.

Mexican Dollars. Ripon has taken £24,590 to Hong Kong on Gvt. Account; but demand for China is not general, and this description of coin taken chiefly for refining purposes. The dollars ex Panama have been sold at 4s. 10⅞d. p. oz., same rate as last Week.

---

Th. Thornburn: Annual Report on Scotch Iron Trade, Dated Dec. 26. 1867.

„After a cycle of 6 prosperous years, one year without buoyancy in the Iron Trade. Nach den ironmasters returns quantity of pig iron produced in 1867 is 1,031,000 tons, increase of 37,000 tons gegen 1866. The deliveries by railways, the shipments, foreign und coastwise, combined mit der local consumption, 1,068,000 tons, falling off, vgl. mit 1866 of 68,000 tons. The stock of pig iron in Scotland is 473,000 tons, decrease of 37 000 tons compared mit 1866. During the year the price has fluctuated von 51s. 6d. – the lowest point to which it fell in July – to 55s. 6d. – the highest attained in October – average for the year: 53s. 6d. per ton. The malleable iron works, the foundries, and shipbuilding yards have felt increased languor.“

Australian Gold.

Imports of Australian Gold into U. Kingdom in 9 years ending 1866.

Reduction of Rates stimulating Business. Atlantic Telegraph Company.

Altered on 1 Dec. (’67) charge for message from £10 to £5. 5.s. Since that date the receipts have shown an average daily excess of £200 over those of the preceding time.

---

Standard 4 December 1868

(FROM OUR OWN CORRESPONDENT.)

NEW YORK, Nov. 21.

The great “Erie Railway war” has been renewed. The present contest is even more remarkable than that of last year. On Tuesday Mr. August Belmont, the well known banker, and E. B. Lucke, brought suit against the Erie Railway Company and about 20 other defendants, who have been engaged in speculation in Erie shares, to restrain them from buying or selling certain shares of the common stock, said to have been fraudulently issued by the directors. The complaint is supposed to have been made in the interest of English capitalists, holders of Erie, who have become thoroughly alarmed by the manner in which the value of their property has been diminished. The complaint sets forth, in substance, that by law the directors are commanded to issue no more than $16,500,000 of common stock; but that, in violation of this command, they have issued, first 58,000 shares of common stock, and subsequently shares to the amount of $36,000,000; that the amount of common stock has been fraudulently increased to more than $60,000,000; that the directors have cleared more than $40,000,000 by these operations; that they now hold some $16,000,000; that last year, finding that Daniel Drew, treasurer of the company, had in vast speculations lost a large amount of the company’s money, they induced him to resign, and that he was permitted to settle all claims by payment of $1,000,000; that, desiring to secure the resignation of the president, Mr. Eldridge, they bought, at his request, $5,000,000 of the bonds of the Boston, Hartford, and Erie Railway (owned by Eldridge’s friends), paying in two instalments $4,000,000, toward the purchase; that they have secreted the $16,000,000 held by them; that they have used this sum to “lock up” money, and thereby create a stringency of the money market; that they have made large purchases of real estate and other property, among the transactions of this nature, specified being the purchase of Pike’s Opera House for the sum of $850,000, property in New Jersey for $300,000, another piece of property in that state also for $1,500,000, nine houses in Twenty-third-street, steam boats on Lake Erie $300,000, real estate in Buffalo $300,000, and other large purchases, taking the titles to the property, or some of it, in the names of Fisk and Gould; that they have made contracts for leases of other railroads, these three directors being interested in purchases, and receiving bonuses in stock and money to the amount of $1,500,000 for their individual use; and finally, that they have altered and falsified the books of the company, in order to cover up their transactions. These allegations are sustained, or supposed to be sustained, by affidavits of Daniel Drew and others. The statement of Mr. Drew is remarkable for its frankness. He admits that while treasurer of the company he used the stock in his hands to increase or depress the price of Erie and otherwise affect the money market; that for permitting two of the directors (Fisk and Gould) to take from the company’s office 50,000 shares, and for agreeing to sell to Fisk, at a figure below the market price, $5,000,000 of the company’s bonds, he received a cheque from Fisk for $375,000. Drew proceeds to give the history of the “Erie war” of last summer. He alleges that Eldridge, former president of the company, received $1,000,000 in cash for resigning. He says that the earnings of the Erie Company are from $14,000,000 to $15,000,000 a year. He confesses that he used the company’s money to “lock up”* the money market, and so produce tightness and panic. Upon hearing the complaint and affidavits, Judge Sutherland, of the Supreme Court, made an order forbidding the directors to issue any more stock, or to remove or conceal any of the books, papers, or funds of the company, and commanding them to pay into some solvent bank the money in their hands, retaining only a sufficient amount to meet the legitimate debts and expenses of the company.

Two sides to every question may be naturally looked for. In the Supreme Courts on Wednesday morning Mr. C. M’Intosh, who says that he owned 200 shares of stock, appeared as plaintiff in a suit in which all the parties to the suit of “Belmont von the Erie Railway Company,” are named as defendants. He asked that investigation be made to show whether or not the issue of Erie common stock is limited by law; further, that all parties be forbidden to commence the prosecution of actions founded on alleged fraudulent issues of stock; and finally, that a receiver be appointed to take, hold, and disburse the earnings of the company. An affidavit of James Fisk accompanies this prayer; it recites confessions by Mr. Drew, who is by this instrument placed in even a more contemptible position than by his admissions. Judge Barnard issued the order of injunction, stopping all suits on either side; the same order appointed Jay Gould, president of the company, receiver.

*“Lock up.” This is a new and remarkably successful invention of the Wall-street swindlers. A few speculators combine and borrow all the paper currency that can be obtained from the banks; depositing gold and stocks as “collateral” security. When merchants, dealers in produce, &c., go into the street to buy currency, they find themselves compelled to pay exorbitant prices (sometimes 2 and 3 per cent. a day); the conspirators, of course, make great profits not only on loans of greenbacks, but by operations in stocks. This is a trick that can be repeated indefinitely, and there seems to be no means to prevent it.

Register.

Seitenzahl.

1) Bank of England. (resp. France) und Moneymarket.

• 1866. Returns of B.o.E. May. (p. 1, 2) July (p. 3) August. (p. 7, 8) 29 August – 17 Oct. (p. 9–10) 7 Nov. – 26 Dec. (p. 17) Bank o. Fr. von Week ending 15 Sept. – 29 Dec. ’66.
• 1867: Returns of B.o.E. (B.o.F. und Clearing House) Von 2 Jan. 1867 – 1 May ’67 (Clearing House) (B.o.F.) p. 19. 20. Notices p. 21, 22. May 1 – 26 June (p. 43–44) Notices (p. 45) Week ending 3 July – 25 Sept. (46, 47) Notices (p. 48–50) Oct. 2 – Dec. 25 (p. 69, 70) Notices (p. 71, 72) Bullion Movement 9 Jan. – 24 April 67 (Vgl. 1852) p. 33. Gold Movement ’65, ’66 und ’67 First quarter (p. 34) London Bullion Market during Month of December 1867 (p. 76, 77.) 10% Discount Producers. (73) Money Market. Nov. ’67 (p. 74) The Panic and its Extent (74)
• B.o.E. Minimum Rate, Price of Wheat and Cotton. Prices of ’47, ’57 und 1866 (p. 11)
• Profits of B.o.E. since Bank Act of 1844 (12, 13)
• B.o.E. Rates of Discount for 22 years (13, 14, 15)
• Evils of 2 distinct departments (16)
• Currency Theories and Currency Facts (23)
• Rate of Discount in 1866 (27, 28) Reduction to 3% Rate. Former Rates. (p. 28)
• Diminution of Profits of B.o.E. (63, 64)
• Effects of a 10% and 2% Rate (64, 65)
• Reduction of B.o.E.’s discount business (68)
• Unprecedented Accumulation of Gold (p. 37) (June 67)
• London et Westminster Bank (since 1862) (p. 4) Die 4 Great London Joint Stock Banks (36) (59)
• Clearing House (p. 42)

2) Stock und Share Market. Investments etc.

• Debt. (35) Contango, Backwardation (46)
• Stockmarket. May. 1867 (p. 34) Rise of Funds (June, ’67) (p. 35) Rebound June ’67 (37) Colonial Loans (41)
• Extraordinary Position of Money Market , Comparisons (adxxx) (p. 54–57) Money Employment Ende August 67 (58–59)
• Foreign Trade Table on Reduction of Private Securities von June 6 ’66 bis Oct. 24. [(16)]

3) Cos.

• Successful Jt. Stock Banks. (28, 29)
• Aberaman Iron Works Co. (lim.) (24, 25)
• Limited Liability Cos. Zahl und Kapital (25, 26)
• City Building Co. (41)
• Accidental and Marine Insurance Co. (73, 74)
• Dealings in Bank Shares (32)
• Parliamentary Inquiry into Limited Liability Act (37)

4) Trade.

• Board of Trade Returns: 1866: bis Oct. 31, ’66 (p. 24) Full Returns of ’64, ’65 und ’66 (29, 30)
• Foreign Trade of U. Kingd. (1854-’66 incl.) (p. 46) 1867: für March und April ’67 (p. 53) June (57, 58) etc (62, 67, 68, 75)
• The „Times“. On Trade and Commerce and Prosperous State of the Country ’67. (p. 68)
• Cotton Price. 1866 und 1867 (p. 76)
• Indian Exchanges. Past and Present (30, 31, 64)
• Petroleum (27)
• British Export of Cotton Goods to East India (53, 54, 59–61)
• Scotch Iron Trade (1867) (p. 77, 78)
• Australian Gold. ’67, ’66, ’65. (p. 78)
• Gold in New Zealand, ending July ’66. (p. 15)
• British Mining Cash Book System etc (37, 38)
• State of Minnesota (27)

5) Railways.

• Their Discredit. March ’67. (p. 31) Solicitor Bills (31, 32) Stock Market, March ’67 (32) Collapse (32, 33, 34)
• Caledonian Railway 17 years ago (34. 35.)
• Committees of Investigation (35)
• Pre-Preference Shares (35, 36, 37, 51, 52, 54, 57)
• War between Railway Shareholders und Railway Boards (37)
• Brighton Railway (38–41) Schuster’s Reply (41–42) (61–62)
• Railway Capital during last 15 years (46) Closing of Railway Accounts. July ’67 (51)
• London, Chatham und Dover and Peto. (52)
• Railways Cos Act 1867 (58)
• French Railway System (65, 66)
• Railway Speculation, Stockmarket. Philister Sept. ’67 (p. 66–67)
• Caledonian Railway Co (73)
• Railway Finance and its Mysteries (74)
• Railway Dividends (75) Speculation in Railway Shares (75)
• Great Eastern Railway Directors Internecine War (75)
• Railway Accounts (p. 75)
• Railway Wear and Tear (p. 76)
• Railway Reform (p. 76)

---

1. Text nach MEGAdigital (Berlin-Brandenburgische Akademie der Wissenschaften), MEGA² IV/19, Lizenz CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/); der editorische Apparat der MEGA ist nicht wiedergegeben. ↩