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Title: Heft „London 1868“. I. The Economist 1866, Januar–März
Description: Marx’ Exzerpte aus dem „Economist“ vom 6. Januar bis 31. März 1866, im Heft „London. 1868.“.
Author: Karl Marx
Date: 1868
URL: https://marxismo.school/archivo/marx-engels/originales/1868%20Heft%20%E2%80%9ELondon%201868%E2%80%9C.%20I.%20The%20Economist%201866%2C%20Januar%E2%80%93M%C3%A4rz
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*Nach der Handschrift, MEGAdigital (MEGA² IV/19).[^lic] [Traducción al español](https://marxismo.school/archivo/marx-engels/1868%20Cuaderno%20%C2%ABLondon%201868%C2%BB.%20I.%20The%20Economist%20de%201866%2C%20enero-marzo)*

## London. 1868.

*„Economist“* (1866 und 1867) *„Money Market Review“ (1866 und 1867)*

## 1866 „The Economist“ (Jahrgang 1866) vol. XXIV.

### January. 1866.

#### Saturday. Jan. 6, 1866. N. 1167.

##### Eight Per Cent.

Bankrate at 8%. Bank hӓtte früher raise sollen, zu 7%. Dann jezt nicht nöthig, den screw so scharf zu drehn. »We … carry on the trade of the country on the *minimum of bullion* which will suffice; and if the Banks are but a little behind in their *protective* operations, the result may be very serious … . If Peel’s Act is to be worked, the Bank must keep so strong *(its reserve)* at the middle of a quarter that these calculable drains at the end of a quarter shall not become catastrophes in its policy, shall not spasmodically affect the value of money, shall not jerk the money market.«

##### What The Value of Money in 1866 is likely to be.

Unter diesem heading entdeckt der wiseacre: 1) Daß seit dem Freetrade, Abnahme auf einem Markt, Expansion auf dem andern sich compensiren. Vorher we had nur access to a few markets; wenn diese overstocked, all our trade was suffering. Jezt »for the most part, trade augments with regularity«; 2) *Our system of credit is better* than it used to be. Die Bank (the world, sezt er emphatisch hinzu) kannte früher das Geheimniß nicht Bullion festzuhalten durch Erhöhung des Zinsfusses. »When *in old times* our credit system was shaken by catastrophes, our commerce languished for months, and money was cheap because no satisfactory persons wanted to use it.« 3) Now we lend more variously than we used to do … to foreign nations, to compagnies for purposes of work and construction in this country in forms and in quantities wholly unexampled. Daher the *value of money*, the *average value*, has permanently risen in Lombard Street.

We shall still deal very largely with the countries which take our *bullion*, and therefore the *value of money* will be to some extent affected by the abstraction of bullion. In 1866 this cause of dear money will not be *so potent* as in 1864 and 1865, though it will be more potent than in common years. …

*But, now there is no reason to fear the least diminution of credit.* … *As far as our credit goes, we may expect 1866 to be a normal year.*

These variations of the rate of interest the moment a foreign drain sets in are inevitable, so long as we endeavour to conduct a vast trade, or *rather two vast trades, one of selling, the other of lending*, upon *the minimum of bullion which will support that credit*.

##### The Duration of our supply of Coal. ( Jevons’ book )

»At least half the coal raised in Gr. Brit. is consumed by the various branches of the iron trade.« Bei der present rate of increase, our coal exhausted in 100 years. Wir kennen jezt thickness and accessibility of our coal mines. Bleiben in Great Britain, down to a depth of 4000 feet, 80,000 millions of tons. Unsre Jӓhrliche Consumtion 1860 war 80 millions. So die available coal would last 1000 years. Aber Consum increases 3½% p.a.; in 1880 will be 160 millions; und if it continues thus to increase, the whole 80 000 mill. worked out before 1960. Aber früher. Weil gerechnet all coal down to 4000 feet: no coal mine has yet been worked at a greater depth than 2,500 feet. Going deeper *enhances the price* und mit dieser Preiserhöhnung gehn unser rate of progress und special advantages zum Teufel. Mit tiefrem Arbeiten: the heat grows more insupportable, the shafts and passages longer, the danger greater, the ventilation more costly, the quantity of water to be kept out or got out more unmanageable. A very short period may raise engine coal and smelting coal from *5s. to 6s. per ton*. Now a cotton mill of ordinary size will often use for its steam power 80 tons of coal per week; this at 5sh. is £1,000 a year; at 10s. per ton it is 2000. Aber die cotton mill is full of *machinery*; grosses Kostenitem dieser Maschinerie ist coal used in smelting and working the iron of which the machinery is made. Ebenso in den *Transportmitteln*, welche von und zu der Fabrik führen, in den railways und steamboats Kohle grosses Kostenitem.

*The cost of carriage,* therefore, which is a very large item in the contingent expenses of our factories, will be greatly increased both directly and indirectly by a rise in the price of coal.

*Grosse Oekonomie im Gebrauch der Kohle* schon eingeführt; in *smelting iron* we use ⅔ coal less than formerly, in *working the steamengines* ½ less.

It is *only a rise in the price of coal* that will goad us into a more sparing use of it; and *this very rise of price* is the proof and the measure of our danger.

*Of all articles of trade and industry coal* is the most *bulky in proportion to its value*; and it is the fact *of having it at hand* that has given us our manufacturing superiority.

Of *136 millions of tons* now annually raised throughout the world, *Gr. Brit.* produces 80 mill., the *Un. States* only 20.

Their (the U. St.) coal fields are estimated at 196,000 □ miles in extent, ours only 5,400. But this is not all: their coal is often better in quality and incomparably more accessible than ours, especially in the Ohio valley. In some places the cost *at the pit’s mouth* even now is 2s. p. ton in America, against 6s. in England.

#### Jan. 13, 1866. N. 1168.

##### The State of the Money market.

For the present the foreign drain (to the East) is checked; the silver market in London is dull.

Where does our gold go? Früher, in drain to India, silver went, nicht gold. *Grund:* Till a recent period, whatever silver was wanted for India was collected on the Continent and sent here. We sent it on to India. But now there is a French compagny sending silver, and French seamen carrying it from Marseilles without its coming here … Our gold goes to pay for the silver which formerly used to be sent to us bodily; but now it is used on our account indirectly, it is transmitted from Marseilles to India to pay our debts.

Many *people wonder* why, when there is a quick rise of money in Lombard Street, it should be cheap on the Stock Exchange. It is cheap in the latter, because it has quickly changed in the former. The quick change makes people uncertain und dann der easiest market ist der Stock Exchange *„from day to day“*. Discount houses etc deal dann möglichst wenig in bills, use it daher on the Stock Exchange, where they can have it at once, just because they do not feel sure enough of the future to lock up their resources till definite dates.

##### Our Trade with America. (U. St.)

Alarmists raise warnings.

| Our exports to America | up to 31 Oct. | 1864 | 15,403,017l. |
|---|---|---|---|
|  | ditto | 1865 | 14,844,704. |
| Nun 1859 our export to the U. St. |  |  | 24,417,000 |

Wenn also nicht in Nov. und Dec. 9,600,000l. importirt, so geringer als 1859.

England und Europa jezt large buyers of American securities, railway debentures und 5.20 bonds the imports which balance our exports.

##### Market Prices of Investments in the Year 1865.

As a rule, and in the long run, *prices* are the true indicators of *value*.

U. States: debt of more than 600 Mill. l. St. and annual charge upon that debt to be raised by taxation: more than 40 mill. l. St. Our *Railwaystocks* not improved in 1865. Erklärt dieß, weil sonst profitlichere investments. Daher *preference shares* declined. Ferner: the *original* railway stocks possessing no guarantee have been injuriously affected by the recent and prospective commitments of nearly all railway companies to raise additional capital for the formation of new railways. As yet there is *no material decline in dividends*.

*Shares of the banks:* On average prices wonderfully supported in 1865, mit exception of Indian and some other banks.

Nicht so die *Finance Compagnies*. Fall ihrer Prӓmien (z.B. *Credit Foncier and Mobilier of England, Financial Discount, General Credit, International Financial, London Financial, Land Securities, Oriental Financial* ). Obgleich die meisten dieser undertakings »have been in appearance successful and have paid large dividends«.

*Consols* (1865) fallen von 89⅜ zu 87 3/16. Actual decline von beginning to end of the year 2%. Hauptsächlich, weil andre securities profitlicher waren.

##### A Practical Check on Bubble Compagnies.

Consols depreciated, aber noch mehr limited liability shares, manche wholly unsaleable or standing at a disastrous discount, with heavy calls looming in the future …

Limited Liability is not really the sole cause of the present pressure, which is due largely, if not chiefly, to the feverish energy imparted to trade by the inflation of the currency in America and to the derangement of the cotton trade.

Bubble companies for working a patent, or constructing a railway, or „taking over“ a line of steamers, or a private business, or purchasing and working a mine in Mexico, a tea estate in India etc

#### January 20, 1866. N. 1,169.

##### The Effect of the 8%.

No bullion gone out; but none yet attracted from abroad. We have a great though suspended drain to India and Egypt for cotton hanging over the market. Dann hovering about *Ejyptian Railway loan* etc.

##### Market Prices of Investments in the Year 1865.

*Insurance Companies* und *Miscellaneous* (embracing, die latter, the majority of the Limited Liability Companies recently created).

*Insurance Cos.* Meist profitable undertakings; singular steadiness of the market prices of their shares.

Von *97 descriptions of stocks and shares* quoted in the insurance companies’ list of the *Investor Manual* (leztres Beiblatt zum *„Economist“*) nur 16 at a discount, dieser trifling und »belongs chiefly to the shares of the new marine insurance cos«. In den meisten lӓnger etablirten Dingern dieser Art (insurance) Prӓmiums der shares im market.

*Miscellaneous:* In dieser Liste 519 different descriptions of stocks and shares quoted of which *286* mit *limited liability*, 233 aber *unlimited*.

Die 233 descriptions of *unlimited* shares comprise canal, gas, steam marine, dock, water, and other cos, darunter nur a few cos of recent creation. 63 von diesen *233* quoted at the close of 1865 at a discount, der remainder meist at a premium.

Von den *286* denominations of limited liability shares in the miscellaneous list, *80* were quoted at a premium, 94 at a discount, *112* without any market quotation, which in effect may probably indicate that they were unsaleable in the market at any price. Also result at the end of 1865:

| Marketable and profitable | 80 or | 28% on the whole |
|---|---|---|
| Marketable at a loss | 94 or | 33% |
| Unsaleable, involving great loss | 112 | 39 |
|  | 286 | 100. |

So 72% dieser limited liability cos’ shares entailed loss of principal upon the original subscribers at par, or their representatives, the succeeding proprietors. Aber dennoch nicht so large proportion »valueless or even unsound!« By no means, dear me!

»there is not, so far as we can judge from dividends and market prices, anything so rotten in our new mode of speculation as to preclude its resuscitation at a more propitious moment.« Hurrah!

*Insurance* is as unsafe as gambling; or, more correctly, it *is* gambling, if the number of risks to be insured is not enough to ensure an *average result* … Chance is eliminated from insurance by the *number of ventures* (Die Grösse der Area, worüber ausgedehnt:)

##### Un. States Commerce mit France (1865).

| In den ersten 11 Months | exports from U. St.: | 34,492,632f. |
|---|---|---|
|  | Import into U. St.: | 84,456,666. |

Assuming that the month of December averaged the 11 months preceding, 37,376,018f. import to 91,494,749f. export. So die U. St. indebted to France for 54,127,731f. worth of goods. Davon abzuziehn 5,793,000f. of gold coin and bullion und 169,800f. of silver received in the 11 months; also, 5,577,390f. of the payments of silver which French silversmiths call regrets. Rechnet man proportionell ab so viel für December, so bleibt indebtedness der U. St. to France von about 44 Mill. fcs od. 1,760,000l. St. Nicht viel. It only exceeds by a little more than 1 Mill. l. St. what was due at the end of 1864. Jedoch an important portion of the trade between France and the U. St. carried on *via* England, and figures in official returns as done with that country.

#### January 27, 1866. N. 1170.

##### The Memorial of some Liverpool Merchants on the Currency.

They ascribe *„the excessive and usurious rate of interest“* dem Act von 1844 und Bank of England monopoly. Both to be abolished. Jede Person und Compagny soll have power to issue notes, so viel they please, upon *the deposit of stock or Exchequerbill*, and so obtain a sufficiency of currency for the discount of bills and the commercial needs of the country.

Whether the *currency be issued* by 1 person or many, whether separated or combined with banking, it is *equally a part of the credit system of the country*; and that credit system can only be supported in one way. The credit of A means that A will pay gold or silver; it is a believed promise to hand over such and such sums in the precious metals if required. To secure the performance of such promises, a large stock of the precious metals must be kept.

The only known mode of keeping such a stock is by raising the rate of interest.

Das system, verlangt von den Liverpool memorialists, war das in New York before the civil war. Every bank could there issue notes, but every bank was obliged to deposit „security“; but that system did not absolve the banks from the necessity of keeping a stock of gold and silver, and it did not produce a low rate of interest. The normal rate was often very high – higher than the present rate complained of. The banks, as soon as they saw their reserve of bullion getting low, raised the rate of interest, and kept that rate high till the stock was replenished.

If the banks keep the rate of interest too low for a time, they make it too high afterwards.

As long as a nation keeps its store of bullion at a minimum, the money market will be most delicate. And as long as bankers, one or many, are guided by their own interest, it will be kept at that minimum.

Die Liverpooler beziehn sich auf den present lower interest in France. Aber the banking power of the B. o. France is infinitely more authoritative than that of the B.o.E., and its *„monopoly“ of the currency is absolute*.

##### Cattle Plague. Government Relief.

Government in Lancashire lieh Stӓdten, damit sie Arbeiter beschӓftigten. The Lancashire loan was not a compensation to capitalists. *It was a loan for utilising men* … Result: good drainage and good pavement in some great northern towns.

Schlӓgt Eine einzige *cattle insurance Compagny* für ganz *England* vor; nicht *to insure* (to prevent fraud) *more than* ⅔ of the value.

##### The Recent dividends of Joint Stock Banks.

1865 rate of interest hoch, aber nicht so hoch als 1864.

|  | Averages of |  |
|---|---|---|
| Bk. of England minimum rates of discount. | 1864 | 1865. |
|  | 7.31 | 4.74. |

##### The Average Rate of Bank Dividends.

Last 4 dividends, Rate % per annum.

|  | 1864 |  | 1865. |  |
|---|---|---|---|---|
|  | June 30. | Dec. 31 | June 30. | Dec. 31 |
| Alliance | 10 | nil | 5 | 5. |
| Bank of London | 20 | 20 | 20 | 20 |
| City Bank | 20 | 12 | 15 | 12 |
| Imperial | 8 | 10 | 8 | 8 |
| Joint Stock | 32½ | 50 | 18 | 22 |
| Metropolitan and Provincial | 7½ | nil | nil | 5 |
| Union | 20 | 20 | 30 | 20 |
| London et Westminster | 28 | 32 | 26 | 34. |

Half Year ended 31st Dec. 1865

|  | Capital. |  | Dividends and bonus | Reserve |  |
|---|---|---|---|---|---|
|  | Created | Paid up. | Rate p. annum | from calls | from Profits |
|  | £. | £. | Per Cent. | £. | £. |
| Alliance (limited) | 4,000,000 | 985,785 | 5 | 3,014,215 | 71,840 |
| Bank of London | 800,000 | 400,000 | 20 | 400,000 | 304,411 |
| City Bank | 1,000,000 | 500,000 | 12 | 500,000 | 144,710 |
| Imperial (limit.) | 2,250,000 | 448,970 | 8 | 1,801,030 | 58,560 |
| Joint Stock | 3,600,000 | 1,080,000 | 22 | 2,520,000 | 315,263 |
| Metropolitan and Provincial (lim.) | 2,000,000 | 337,420 | 5 | 1,662,580 | 14,904 |
| Union | 4,000,000 | 1,200,000 | 20 | 2,800,000 | 350,660 |
| London and Westminster | 5,000,000 | 1,000,000 | 34 | 4,000,000 | 363,204 |

(verte)

Half Year ended Dec. 31, 1865

|  | Liabilities to the Public | Assets |  |  |
|---|---|---|---|---|
|  | Deposits and Acceptances | Cash | Government and other securities | Bills discounted etc |
|  | £. | £. | £. | £. |
| Alliance. | 2,504,168 | 435,930 | 147,913 | 3,007,456 |
| Bank of London | 4,335,877 | 820,497 | 302,167 | 3,985,036 |
| City Bank | 4,859,720 | 579,448 | 329,902 | 4,655,443 |
| Imperial | 1,543,281 | 188,642 | 59,619 | 1,836,741 |
| Joint Stock | 18,215,358 | 867,191 | 1,059,225 | 17,894,010 |
| Metropolitan et Provincial | 860,069 | 125,592 | 90,259 | 984,592 |
| Union | 17,794,263 | 2,816,994 | 1,665,725 | 15,085,836 |
| Lond. and Westm. | 20,779,301 | 1,677,841 | 2,489,412 | 16,600,522 |

Half Year ended 31 Dec. 1865

|  |  | Assets |  |  |  |
|---|---|---|---|---|---|
|  | Liabilities to Public | Cash and Securities | Calls to be made | Total means. |  |
|  | £ | £ | £ | £ |  |
| Alliance (lim.) | 2,504,168 | 3,591,299 | 3,014,215 | 6,605,514 |  |
| Bank of London | 4,335,877 | 5,107,700 | 400,000 | 5,507,700 |  |
| City Bank | 4,859,720 | 5,564,793 | 500,000 | 6,064,793 |  |
| Imperial (limit.) | 1,543,281 | 2,085,002 | 1,801,030 | 3,886,032 |  |
| Joint Stock | 18,215,358 | 19,820,426 | 2,520,000 | 22,340,426 |  |
| Metropolitan and Provincial (lim.) | 860,069 | 1,200,443 | 1,662,580 | 2,863,023 |  |
| Union | 17,794,263 | 19,568,555 | 2,800,000 | 22,368,555 |  |
| Lond. and Westm. | 20,779,301 | 20,767,775 | 4,000,000 | 24,767,775 |  |
|  | 70,892,037 | 77,705,293 | 16,697,825 | 94,403,818 |  |

### February 3. 1866. N. 1171.

#### The Money Market.

Rate immer noch 8%. The demand for silver for the East to pay for cotton is likely to last for a month or so to come. *Ordinary credit is sound.* (! weiser Mann!) The revelations of the *Joint Stock Discount Company* and other such cos are disastrous to those concerned, but they have no diffused effect. The public at large never heard of them. There are *no signs of collapse in industry*, nicht einmal of *mitigated or minor collapse* wie 1865, viel less of such a collapse as in the *spring of 1848 and 1857*.

Durch den hohen Zinsfuß (höher als in Frankreich) französisches money wurde attracted to London. There is a very unusual amount of French money in London. This is now invested in short-dated bills becoming due, and renewed or not renewed, according to the rate. So long as the value of the money continues dear, this French money will stay; so soon as it becomes cheap, *that money will go from us*.

#### The Credit Mobilier and the Finance Companies.

1865 veranstaltete\[ver]ursachte der französische Credit Mobilier die Bank enquête, um die policy der B. o. France umzuwerfen. Dieß Jahr bitterly attacked in *Revue des deux mondes* von Victor Bonnet . Verdoppelt sein Kapital. (Dazu berufen *shareholders 12 February 1866*).

*„Finance business“* hat nur den special and characteristic part that it cannot be carried on, except mit money, either belonging to the lender, or over which *he has* a *long and sure control*. Bekannt in Lombard street, daß *Finance Cos* in London (dieß jezt gezeigt durch ihre reports) invested money left with them in the bills of railway contractors „secured“ by the deposits of shares in lines of railways either in course of construction, or not yet paying, and often in inferior districts of the country. The contractor commonly cannot get the money when his bill becomes due, except the shares should by good luck be then »saleable«, and, of course, they are not a „security“ till they are saleable. Yet, some Finance and Discount Cos have persevered in lending upon them money which was only *left* with them for moderate periods, and which at the end of those periods they knew they would have to repay again.

#### Bubble Cos.

The Master of Rolls recently remarked „that many new Cos were started *merely for the purpose of being wound up*“. … The case of a company quoted in the official list of the Stock Exchange, and having, therefore, complied with *their* rules – the shares mit £15 paid, are quoted at £.12 discount: and why? Because it turns out that the *scene of its operations positively lies within the Arctic circle*. The operations, therefore, can only be carried on during some 90 days in the year, within which very limited period an income sufficient for the whole of the 365 days of the year, cannot, of course, be earned.

#### Combination of Farm Servants in Scotland. Mid-Lothian Protective Society.

Overworked and underpaid. Let the Scotch ploughmen „strike“ for their union wages and terms, there would to-morrow be *Irish* substitutes.

#### English Farming.

Grosser Unterschied z.B. in *Midland Counties* agreements, containing terms and stipulations so one-sided, so onerous and unfair towards the tenant farmers that incredible. Besides regulations as to cropping and farm-management, which place the tenants most completely at the landlord’s mercy, provided that the landlord shall have power to distrain for his rent *a year or 9 months in advance*! Z.B. where a tenancy commenced on 25. March, when one quarter’s rent due on 24. June, the landlord is empowered by the terms to enforce by distress the whole year’s rent to then following 25. March – 9 months in advance! Diese tenants have little or no capital, kaum any live stock of their own, also obliged to let their grass and aftergrass, or to take in stock to keep, in order to consume the produce of their land. In such cases, the hirers of the grass, or the putters out of the livestock, have no idea that their animals can be seized for payment of the tenants’ rent in advance. Yet in some districts the landlord or his agent relies on the opportunity of distraining the stock of strangers to secure the payment of the tenants’ rent. Wenn Dazu reservation und preservation of game, the tenant farmers in a terrestrial purgatory. Lausestand dieser estates, charged too, meist mit debts and encumbrances.

Dagegen Musterfarm of Mr. Robert Leeds, of West Lexham (Graf Leicester landlord), near Brandon, Norfolk. 1200 acres land, 1100 arable, 50 water meadows. »Whoever knows the district will be aware that *the soil* is *light and sandy, only to be farmed* *profitably by being farmed highly*.« 20 years lease, Jagdrecht allein der tenant etc.

„The homestead is fitted up with the best possible machinery, where corn is dressed, chaff cut, seed crushed, and cake ground by steam power. This cake a grand consideration at Lexham, where from 3 to 4 times the rent of the farm is annually expended in feeding stuffs and artificial manures. Er buys [in] forward animals at from 20l. to 25l. each, and puts these on all the *cake and corn* they can eat, but never more than 2 bushels of roots a day. The beasts are on the farm 12–16 weeks, and the yards are continually filled up with animals as those fit are disposed of. Except the bullocks bought in for grazing the water meadows, and which do not require any until July, alles sonst at Lexham is always eating cake, and the flock of ewes are now having ½ pound of cotton cake, with a limited ratio of bran at night. The breeding flock averages 300 ewes, and about 1200 hoggets are fattened during winter.“

#### Money market.

Greatest depression in the shares of the *London Financial Association* , afresh quoted at heavy decline in last week; *Joint Stock Discount* Co., on its Report, fell to 5¾ discount. Rumours. Selling of shares without reference to the positions of the different Cos. *Imperial Mercantile Credit Shares* also considerably lower.

### 10 February 1866. N. 1172.

#### Money Market.

»The *Indian demand* and the *Brazilian demand* having arisen from the same cause – from the cotton payments, have slackened. … Probably, in consequence of the diminished Oriental demand the bullion in the B. o. France has increased 700,000l.«

There is still *much new trade with America*, but under her altered circumstances, America is now a new customer.

There have during the week been *several failures of contractors* and others are still rumoured. The finance and discount cos which hold the bills of such contractors are necessarily affected … These contractors made railways (mainly on their own account) in positions where they could not pay, and they obtained the capital wanted to make them at great interest in Lombard Street.

»No one cares whether „companies“ stand or fall. Their credit is too recent to affect by its cessation the general public, to cause diffused fear.«

On the whole, therefore, *we* (das Orakel) *are not apprehensive as to the state of credit* … *we hope that they* (the Bank of E.) *soon may be strong enough to do so* (i.e. *reduce the rate of discount*.)

Wichtiger dagegen als der Economist selbst wußte, folgender Passus, der halb ironisch ist:

»These (limited) companies give means to great firms in difficulties to get out of them, without a collapse that frightens the world. The „shell“ of a great house once had to stand as long as it could; there was nothing else for it to do. *But now it has a resource* – *it can turn itself into a company*. … The prestige of the great house is diminished easily; it does not fall with a crash. Even if 4 or 5 years afterwards the limited compagny gets into difficulties, no one cares; it affects no one (And Overend et Gurney, wiseacre!) but the company itself. Reid, Irving et Co. would not have failed nowadays. It would have become „Reid, Irving, et Co. Limited“, and lasted over, perhaps succeeded etc.«

#### Cattle Plague.

We cannot feed the country on homegrown cattle. Year by year the amount of meat consumed in the country augments. Following shows how rapidly the trade is augmenting:

Number of living animals imported in the 11 months ended November 30.

|  | 1863 | 1864 | 1865 |
|---|---|---|---|
| Oxen, bulls and cows: | 89,518 | 141,778 | 196,030 |
| Calves | 36,930 | 44,678 | 48,926 |
| Sheep and lambs | 380,259 | 412,469 | 763,084 |
| Swine and hogs | 24,311 | 68,777 | 117,766. |

#### American Protectionism.

The whole argument reduced to essentials amounts simply to this, that free trade is absolutely sound over an entire world, provided that world is governed by Congress. … It is better, f.e., that Louisiana, with its splendid facilities for growing cotton, should grow it and send it to Lowell to be made up than that it should waste a special resource by diverting its supply of labour to the making up.

#### Coal Supply.

*Mr. Hull* , in his useful work, *1861*, calculated that if consumption in England were to proceed at the same ratio as that of the preceeding 20 years, our coalfields would be exhausted in 172 years.

*Sir W. Armstrong* , in his Newcastle address, assuming 2¾ as the average annual increase in the 8 years previous to 1861, exhausted the available supply in 212 years.

*Mr. Jevons* estimated the average annual increase between 1854 and 1863 at 3½%, und exhausted in 100 years at that rate of increase.

Mr. Hunt’s *Mineral Statistics* (1866). Danach die annual production der last 4 years:

| 1861 | 85,635,214 tons |
|---|---|
| 1862 | 83,638,338 |
| 1863 | 88,292,515 |
| 1864 | 92,787,873. |

| *1863* exceeded | *1862* by | 4,654,177 tons |
|---|---|---|
| *1864* | *1863* by | 4,495,358. |

So ultimate catastrophe still more proximate.

Our Number of collieries:

| 1863 | 2,397 |
|---|---|
| 1864 | 3,268. |

British exports of coal.

|  | Amount (tons) | Duty. |  | Rate of Increase p.c. of Exports in 10 years |
|---|---|---|---|---|
|  |  | s. | d. |  |
| 1821. | 170,941 | 7 | 6 |  |
| 1831 | 356,419 | 4 | 0 | 109% |
| 1841 | 1,497,197 | nil |  | 320 |
| 1851 | 3,468,545 |  |  | 132 |
| 1861 | 7,855,115 |  |  | 126 |
| 1862 | 8,301,852 |  |  |  |
| 1863 | 8,275,212 |  |  |  |
| 1864 | 8,800,000 |  |  |  |

##### France.

|  | Production (Metric Quintal) | Consumption. (Metric Quintal) |
|---|---|---|
| 1855 | 68,270,100 | 108,567,800 |
| 1863 | 107,079,800 | 165,800,000 |
| Increase: | 38,809,700 | 57,232,200. |

Imports of Coal into France.

|  | From All Countries. (Metric Quintal) | From England (Metric Quintal) | From Belgium (Metric Quintal) |
|---|---|---|---|
| 1863 | 61,204,500 | 12,966,000 | 37,152,000 |
| 1864 | 62,232,870 | 13,948,124 | 31,582,551 |
| Increase | 1,028,370 | *Increase* 982,124 | *Decrease* 5,569,449. |

The *English treaty with France* has seriously affected the *Belgium coal trade*, wovon der North of France is becoming comparatively independent. Der Belgian supply finds still a market in the East of France und from Brest to Marseilles. The French Gvt. does the utmost to stimulate national production, even at a pecuniary sacrifice. In the neighbourhood of Marseilles, f.i., where the coalfields are being worked, French navigation is exclusively supplied with French coal, which costs more than English; so, also at Brest, the dockyard is supplied with French coal at 36s., whilst British coal could be supplied at 17s. 6d.

Value of French Import of Coals

| 1860 | 107,300,000f. |
|---|---|
| 1864 | 121,300,000f. |

##### Belgium.

The coal-producing district  1/22 of the territory. In 1840, Hainault alone produced more coal than whole of France, and Belgian production is said to have tripled since 25 years, whilst exports quintupled in the same period. English competition will now more and more limit them to their home market.

##### Germany.

British coal hitherto largely imported into Northern Europe. In Prussia and the interior, cheapness of the indigenous coal and facilities of transport bid fair to drive English coal out of the market.

Prussian Production.

| 1852 | 25,788,268 tons |
|---|---|
| 1862 | 65,394,470 |
| 1863 | 71,654,478. |

The most important supplies from the Westphalian coalfields, *the value of which is greatly increased by the proximity to the metal industry*. Production hier *1852*: 38,000,000 Quintals, *1864* dagegen: 140,000,000. Westphalian coal is rapidly excluding English from Holland, and it is expected to do as much in Northern Germany by communication via the Elbe.

##### Austria.

Might be unlimited supply of coal. Production only 4,500,000 tons p.a., half of which of inferior quality. Insufficient and expensive means of communications have limited operations.

##### Russia.

Grosse coalfields, noch wenig exploitirt. The coal of the Moscow basin is of an inferior quality; the value of the Oural district is increased by proximity to iron, and that of the Don District by its easy access to the Sea of Azoff. Russia [spielt] bis jezt keine Rolle im coalmarket. Nur das country accessible from the Baltic und St. Petersburg, where the imports, *chiefly English*, have *tripled* since the Crimean war.

##### U. States.

In Pennsylvania – the largest producer both of anthracite and bituminous coal – the value of coal mined has increased in 10 years at the rate of 179%, whilst the corresponding increase in *all* the States is estimated at 186%.

| Total produce der U. States | in 1860. | 14,333,922 tons |
|---|---|---|
|  | in 1864 | 16,472,410 tons. |

1860–61 the ton of coal sold at Philadelphia at 4 dollars, the *present price* between 11 and 12 dollars. Coal at Boston sells at 17 dollars (3l. 9s. 9d.) per ton, and at Chicago, as high as 22 dollars (4l. 10s. 4d.)

#### The Banking Question.

Even discount bankers and capitalists, who have been reaping a golden harvest at the expense of the mercantile and industrious classes, should, from recent disclosures, perceive the danger to discount companies from the present monetary system.

The evils suffered from our banking laws have arisen, not from a want of circulation, but *from abnormal fluctuations of Bullion* – periodical superabundance with speculation in trade, and periodical scarcity with temporary ruin of trade.

#### Game and Bankruptcy.

Manche kleine farmers (i.e. small capitalists) gehn dadurch kaput. his little capital is exhausted in providing food for the game, and has been literally drained off into the poulterer’s shop, whereto the game killed in the 3 or 4 grand battues of each season has been consigned by the landlord.

So case vor dem London Court of Bankruptcy, of *James Harvey* , late of Church Farm, in the parish of Eversley, in the county of Southampton. His creditors consisted of tradesmen and others living in neighbouring towns. The landlord was protected from all loss by his power of distress. His Debt 1355l., his effects small, deficiency of l.1162. Er stated in crossexamination:

„Never been bankrupt or insolvent before. … farming all his life … Began mit 3500l., had lost all that money. Five years ago he was worth 5000l., had lost the whole of that through the *over-preservation of game* on his farm. In 1862 he had 80 acres of wheat from which he did not get more than 6 bushels, in consequence of the destruction caused by hares, rabbits and other game.“

*Mr. Read* (his attorney): Then, instead of your land producing corn, it produced game for the London markets?

*Bankrupt:* Yes, Sir, and my landlord would not allow me to give up the farm unless I found another tenant.

Der tenant not unfrequently tempted by the apparent moderation of the rental, and then he is rather pleased to find that with his comparatively small capital so large and good a farm should be open to his acceptance. He knows not or heeds not the fact that the more wealthy and enterprising farmers of the district shun the farm as they would a pestilence. Having entered, he is rather surprised at the small returns of his first crops, and a little annoyed at the restrictions he is under for the sake of the game, and at the insolent interference of the game keeper.

### 17 February 1866. N. 1173.

#### Money market.

Oriental demand for silver very much diminished. Supplies of gold coming to the Bank. Continental exchanges improving … we certainly hope that perhaps, even next week, the Directors of the B.o.E. will be able to diminish their rate of discount.

#### The Report of the American Commissioners on Revenue (appointed by the President) (Blue Book.)

1) *Effects of war on people:* „the consumption of *coffee* in the U. St. decreased from the annual average of 200 Mill. pounds in *1860* to less than 80 Mill. pounds in *1863*. During the same period consumption of *sugar* decreased from 31 to 19 pounds per capita; and of tea for the whole country about 23%.“ the rise of price caused by the immense issues of Gvt paper money greatly straitened all classes mit small fixed incomes. Even now the Commissions estimate 60l. before the war as equal to 100l. now. Such a diminution of effectual income contemporaneous mit immense increase of taxation.

2) The original parts of American finance are breaking down. Z.B. die Yankees erfanden wӓhrend des Kriegs *6% tax on the industrial products of the country*, subject to some exceptions and modifications. Nun question: *What is a product?* The law decided that a thing was produced when it was *„made“*. Of course when it is completed, and the only test of its completion is its being sold. But owing to the *division of labour* many articles produced in a 100 places, and the result which the consumer gets is the aggregate of a 100 previous sellings and makings. The law could make no distinction between articles sold to a *manufacturer* and a *consumer*. It would have been baffled by wholesale evasion. It taxed all „makings“ 6%. The Commission describes the curious result: „Under the operation of this law the Gvt. now levies and collects from 8 to 15%, in some instances 20%, on almost every finished industrial product. … A good illustration … is presented in the *manufacture of umbrellas and parasols*, as carried on in the cities of *New York and Philadelphia*. It was formerly the practice of umbrella-makers to manufacture the main constituents of their product as *one business*; but now the business of an umbrella-maker is rather to *assemble the various constituents* of an umbrella or parasol, which *are made separately* and *in different parts of the country*. Thus, f.e., the *sticks*, when of *wood*, are made in Philadelphia and in Connecticut; part of *native* and part of *foreign wood*, on which last a duty may have been paid. If the supporting *rod* is of *iron* or of *steel*, it is the product of still another establishment. In like manner the *handles* of *carved wood*, *bone* or *ivory*; the *brass runners*, the *tips*, the *elastic band*, the *rubber*, of which the band is composed, the *silk tassels*, the *buttons*, and the *cover of silk*, *gingham* or *alpaca*, are all *distinct products* of manufacture, and each of these constituents, if of domestic manufacture, pays a tax when sold of 6% *ad valorem*, or its equivalent. The umbrella manufacturer now *aggregates* all these constituent parts, previously taxed, into a finished product, and then pays 6% on the whole. It is, therefore, evident that under the existing excise system, all the parts of the umbrella are taxed *at least twice*, and, in some cases, *three times*, thus adding from 12 to 15% on the umbrella direct; while we may feel certain, moreover, that each separate manufacturer makes the payment of the 6% tax on his special product an occasion for adding from 1 to 3% additional to its cost price, in some instances over 6%.“

„Again, in the case of books, pamphlets etc, it is claimed that, including licenses and income tax, the finished book and its constituent materials pay from *12 to 15 distinct taxes* before reaching the reader. Every *separate item that enters into the book* – *paper, cloth, boards, glue, thread, gold-leaf, leather* and *type material* – pays from 3 to 6% in the first instance, and then 5% on the whole combined; and this not upon the *cost* of the manufactured article, but upon the *price* at which it is sold.“

The effect of this tax, in appearance so equitable and simple, has been to impose a burden *differing* almost in every instance upon the different industries of the country.

Nor is this all. *The tax of 6% on domestic products* has led to the oddest results when compared with *the tariff on imports*. That tariff is necessarily a tariff on consumable articles: not on the bits and components of such articles. Umbrellas or books come by ship as wholes, and must be taxed as wholes. How then is an *Excise-duty* to be made equal to the *Customhouse system*, and no *more than equal to the Custom-duty*? The Commission describes the present contrast:

„In the case of the *umbrella* and *parasol* manufacture, the *cover*, as a constituent element of construction, represents from ½ to ⅔ the entire cost of the finished article. The *silk, the alpaca and Scotch gingham*, of which the covers are made, are all imported, the former paying a duty of 60% and the latter two about 50% ad valorem, the variation being slight on the quality of the texture. *The manufactured umbrella*, covered with the same material, whose constituent parts are not taxed, either on the material used in their fabrication or on their sale, are, however, admitted under the present tariff at a duty of 35% ad valorem, or at a discriminating duty against the American and in favour of the foreign producer of from 15 to 25%. If we make allowance for the various U. St. internal revenue taxes, it is claimed by the American manufacturer that the discrimination in favour of the foreign producer is fully equal to 40%. It needs hardly to be added that, during the past 6 months imported umbrellas have been sold at auction in New York and Boston, with the *original cost, duty, freight and charges paid in gold, for a less price than the American article can be manufactured*; or that the business of making umbrellas and parasols in New York and Philadelphia, involving a capital of 2,000,000 dollars and employing the labour of some 5000 persons, a majority of whom are females, is threatened with utter destruction. In two instances cited to the Commission, umbrella manufactures have closed their factories in the U. St., and, with a view of exporting to this country, have transferred their capital and skill to Europe. In a communication submitted to the Commission by a committee of umbrella manufacturers, they state that, unless relief is speedily obtained, we can perceive no other possible course to pursue but the alternative of retiring entirely from the field, and leaving it entirely to foreign hands.“

Ebenso mit *books*.

„The Commission would add that at the present time the one article which, above all others, would seem to be a peculiar product of American industry, viz. *Webster’s Spelling Book*, is now being printed in large quantities in London for the use of American schools.“

In practice no system of Excise pressing on all commodities can be made equal to a tariff pressing on all commodities. The *home imposts* cannot be too small, or they will not be worth collecting; the *Customs duty* must not be *too large*, or it will be a prohibition unproductive to the revenue and useful only to the smuggler.

*Repairs:* The Americans put *a tax of 3 6/10%* on the *repairs of every article if the cost of that repair exceeded 10% on the value*. Aristocratic legislation. A repair of trifling cost is more than 10% of an article of small value; much less than 10% on articles of great value: hence, expensive articles of luxury can be repaired *without a tax*, but *cheap articles of common use must pay a tax*. „If“, say the Commissioners, „the *worker in wood* repairs a *wheelbarrow* worth 1 dollar by adding 10 cents to the value, it is taxable; but if he repairs a carriage or piano worth 500 dollars, no tax accrues unless he adds 50 dollars to the value.“

It is amusing to think that the American financiers should have established a system so favourable to *articles of luxury* as well as to *articles of foreign manufacture*.

3) The great revenue now to be raised will necessarily bring about in America a great political change. (Hierüber kohlt aber *„Economist“* nur das Oberflӓchliche der Commission nach über die Nothwendigkeit stehende skilled collectors zu haben und dem finance minister neue Stellung zu geben.)

On the whole, the finance management of America is falling back into the old humdrum inevitable channels of Europe, just as the finance itself is falling back. Money can only be got by certain modes and by certain men, whether on the eastside of the Atlantic or the West.

#### The Bill authorising loans for the Construction of Houses for the Poor.

One half the population of Gr. Brit. now lives in towns. The Metropolis has a population equal to that of Scotland, twice that of Denmark, necessarily 3 × that of Greece. London receives new inmates at the estimated rates of 300 a day. This packing has now reached a point at which it threatens to be destructive – typhus has become endemic in London … The railways become a *swath* of erased houses, until it is officially calculated that, within this single year, 16 000 houses have been marked for destruction, and upwards of 80 000 persons will be thrown upon quarters already overburdened. This cannot go on without one or 2 results – *pestilence* or *an attempt on the part of the dispossessed to obtain a remedy by force* … . Besides, a population so overcrowded must deteriorate in virtue, civilization, and in the capacity for works.

*Mr. Childers’ bill* , sanctioned by Gladstone, authorises the *Commissioners of Public Work Loans* to lend money at 4% to municipalities, vestries, companies and private persons to construct dwellings for the poor, the security being the buildings, and the duration of the loan 7 years.

### DWELLINGS FOR WORKING CLASSES.―MR. TORRENS’ ACT.―

The last Act of the late session was to provide better dwellings for artizans and labourers. The preamble states that it is expedient to make provision for taking down or improving dwellings occupied by working men and their families which are unfit for human habitation, and for the building and maintenance of better dwellings for such persons. The Act is to apply to the metropolitan and other districts of the United Kingdom as set forth in the schedule. The mode of procedure under this statute is very simple. It provides for the appointment of officers where necessary, and if in any place to which the Act applies the officer of health finds that any premises therein are in a condition or state dangerous to health so as to be unfit for human habitation he is to report the same, and notice forthwith is to be taken to remove or to improve the same. Action is to be taken by local authorities on the report of surveyors against the owners to make them comply with the directions, subject to an appeal to the Quarter Sessions. On four or more householders living in or near to any street representing in writing to the officer of health that any premises in or near that street are in a condition or state dangerous to health he is to inspect them and report, but the absence of any such representation is not to excuse him from inspecting any premises and reporting thereon. In the event of the local authority declining or neglecting for the space of three months after receiving such report to take any proceedings to put the Act in force, the householders who signed the representation may address a memorial to the Secretary of State, and he may direct the local authority to proceed under the Act. On the owner of premises being required to execute the works, and in his default, the local authority may either order the premises to be shut up or to be demolished, or may themselves do the work. Where the local authorities execute the works they may apply to the Quarter Sessions for an order charging on the premises the amount of all costs and expenses in and about the execution of the works, and the Quarter Sessions, when satisfied of the amount so expended, is to make an order charging the property with the amount and 4 per cent. interest which charge is to have priority over all other charges, and to be deemed a mortgage. If the requirements of the order involve the total demolition and not the improvement of the premises, the owner is within three months after service of the order to remove the same, and if he fails then the local authority is to execute the order and pay him any balance that may remain after the expenses from the sale of the materials. Instead of effecting the improvements required by the local authority, the owner may take down the premises. Where an owner executes the work required by a local authority he is to have an annuity as compensation for the expenditure incurred by him in the shape of a charging order. The annuity is to be £6 for every £100, and to be payable for 30 years. Every charging order on premises in Middlesex and Yorkshire is to be recorded in the Registry-office. With the view of a general adoption of the Act–and there are many places where the working classes “most do congregate”―the Public Loan Commissioner may make advances, and the local authorities may borrow money for the purposes mentioned. Many public improvements are being carried out and contiguous to the same are wretched dwellings; they could be improved or demolished, and the principle involved in the preamble that they were unfit for working men and their families as “human habitations”could be easily established.―*Times*.

*The Social* *ECONOMIST.* (London) [OCT. 1, 1868.

#### James Rothschild on Banks and Currency (als Zeuge vor dem französischen Bank Enquête Committee)

„As to the order of making the B. o. France invest money in foreign securities … the gravest fault it could commit. Such a measure a constant menace to foreign banks, and a cause of serious disquietude and distrust. If, f.i., the B.o.F. had in its portfolio 3 Mill. St., it might at a given moment throw them on the market, and produce a great perturbation in commerce. In presence of that eventuality, if the rarity of money were felt by the B. o. England, and it were forced to raise its rate of discount, it would have to raise it higher and more rapidly than if that circumstance had not existed.“

*Financial shares:* The apprehension felt and expressed concerning some of the financial cos, has been in part dispelled by the former appearance of the money market. Speculators had entered too ready into operations for the fall. The very considerable decline that has taken place followed by a reaction influenced by the re-purchases of some holders: indisposed to transfer their holdings, and by the efforts of bears to cover their outstanding sales of shares. … *Diffusion of the shares of the various cos. over a larger area* … one of the results.

### 24 February 1866. N. 1174.

#### Reduction in Bankrate from 8 to 7%.

Eastern demand for silver suspended, if not exhausted. Gold retained und foreign gold received.

#### Corresponding Week ended 24 February.

Die Bankdaten beziehn sich auf *B. o. England* .

|  | 1856. | 1863 | 1864 | 1865 | 1865 |
|---|---|---|---|---|---|
|  | £. | £. | £. | £. | £. |
| Circulation of Notes incl. Bank Post Bills | 19,254,614 | 19,715,828 | 20,207,871 | 20,101,978 | 20,973,521 |
| Public Deposits | 4,141,551 | 7,901,658 | 8,153,601 | 6,665,364 | 5,048,777 |
| Other Deposits. | 14,762,364 | 13,367,153 | 12,406 673 | 14,140,885 | 12,591,493 |
| Gvt. Securities. | 11,946,006 | 11,043,079 | 11,174,584 | 11,023,211 | 9,915,483 |
| Other Securities. | 19,185,177 | 18,569,000 | 19,233,243 | 18,790,280 | 18,020,480 |
| Reserves of notes and coin. | 6,508,872 | 10,147,041 | 8,794,497 | 9,590,713 | 8,260,305 |
| Coin and Bullion. | 10,757,392 | 14,614,096 | 13,819,412 | 14,600,233 | 13,822,935 |
| Bank rate of discount. | 6 and 7% | 4% | 6% | 5% | 7% |
| Price of Consols | 91⅜ | 92½ | 91⅛ | 89¼ | 87⅝ |
| Average Price of wheat | 69s. 2d. | 46s. 6d. | 41s. 1d. | 38s. 4d. | 45s. 9d. |
| Exchange of Paris (short.) | 25. 25. 50 | 25 17½ 22½ | 25 25 35 | 25 12½ 20 | 25 22½ 32½ |
| Amsterdam (ditto) | 11 18½ 19½ | 11 5½ 16 | 11 17½ 18 | 11 16 16½ | 11 18 19 |
| Hamburg (3 months) | 13 11½ 11¾ | 13 7¼ 7½ | 13 8 8½ | 13 7¾ 8¼ | 13 10¼ 10¾ |

#### James Rothschild’s Examination continued.

*J. Rothschild.* „We are much less advanced than the English *with respect to credit*. Twenty years ago you could not have travelled in France with a banknote – no one would have received it, or change it. to time you must leave the task of developing credit.“

It has been said very truly that it is the *great speculations made at Liverpool in cotton which are the cause of the present crisis*, and that they made the B.o.E. raise its discount – to *force holders of cotton to sell*.

The Bank of England leads all the other banks of Europe. When money is seen to be *rare in England*, people open their eyes, not only at Paris, but at St. Petersburg and everywhere. The situation is quite different to ours; the measures taken by the B. o. France do *not produce the same effect abroad as those taken by the B.o.E*.

*The President.* In France *the limit in the issue of notes is left to the appreciation of the Bank*, to its prudence and experience.

#### Mr. Michell’s Report on English Trade with Russia.

The *duty on Tea* formed a principal item in the Russian revenue, and the trade was a strict monopoly at Kiachta. *In 1861* the monopoly was abolished and legal importation has increased 42%.

We have ample evidence *of a retrograde movement in Russian agriculture*, and in *essential national industries*, such as *linen, hemp*, and *leather*, whilst the important *tallowtrade* has fallen to nearly *half its former amount*. Theils wegen cattle plague, but principally from the diversion of capital and labour durch die high protective duties für künstliche Industrien, cotton etc.

Mr. Michell estimates the total importation of manufactured articles into Russia in 1864 at 2,930,000l. paying a duty of 645,333l., about 22% on the Russian valuation, but at least 50% *ad valorem*. This throws the greater part of the import trade into the hands of the smuggler; and the operations of the latter are on a proportionate scale. *Differential duties in favour of importation by the land frontier* also favour smuggling. Houses are established for the systematic smuggling of goods into Russia at a premium of 35%; and under this system British trade mit Russia, except as regards bulky articles, such as iron, machinery and coals, is rapidly dwindling into a contraband trade; whilst the trade over the frontier has facilitated the introduction of imitations of English goods with fraudulent trades marks. The interests of the Russian ports and Russian mercantile marine are also sacrificed by these differential duties, and the rate of freights for Russian exportations is materially increased.

As the result, Mr. Michell calculates that comparing 1859 with 1863, our trade with Russia has decreased 11%.

#### The New Finance and Discount Companies.

With the increased numbers of money lenders created by the new joint stock banks, discount houses, and finance cos, the number of money borrowers has in some degree corresponded to the supply.

While *premiums* were in the ascendant, and were *the leading consideration* with the subscribers to these new constitutions created specially for the purpose of lending money, the subsequent struggle for place and dividends were little cared for by promoters and allottees.

Zwei ganz verschiedne sorts of business undertaken by the new cos. The discounter of bills of exchange requires a knowledge of men and their means; the finance manager, of securities and their value. The discounter has to look to the return of his principal at a specified moment; the finance manager to the intrinsic worth of the securities he holds, their market value in fact or in prospect, and their consequent negotiability. The discounter may take money on deposit for short periods with safety; the finance Co. can only borrow for long periods with any degree of safety.

Aus dem Report der *Joint Stock Discount Co.* folgt, daß ihre embarrassments und call of 5l. p. share, weil der manager Wilkinson took to *financing*. Railway contractors *making railways*, as is now commonly the case, for *payment in shares* or *„Lloyds bonds“*, offered these securities to Mr. Wilkinson for loans, no doubt at very tempting rates of interest; and the money borrowed at comparatively low rates, and for short intervals, thus became „locked up“ in securities for which there is no market and cannot be converted. The lenders on deposit must be paid. Hence call for the shareholders. The *Joint Stock Discount Co.* had taken on deposit on 31 Dec. last, nearly 3½ millions, against which were held securities to the amount of 4½ millions; but a large portion of the latter is locked up on securities by railway contractors.

Railway contractors’ securities of the class they now take in payment for their work, sind in der That keine securities. Hence the *„London Financial Association“* compelled to admit recently some degree of embarrassment on account of advances of this nature.

Session after session we have seen bills passed for millions upon millions of outlay upon railways, and we have seen, too, the railways themselves started into existence without shares or any market shape. Now we begin to see that *the new money lenders* have been *their chief support*, and that the high terms bid by railway contractors have not only induced the new Discount and Finance Cos to incur injudicious risks, but have contributed to no small extent to the *high value of money in this country, for the last 2 years*.

A far as the *official figures* go, there is nothing very alarming in the position of our new Discount and Finance Cos.

December 31, 1865.

|  | Capital. |  |  |  |
|---|---|---|---|---|
| Limited Cos. | Subscribed £. | Paid up. £. | Net Profits. £. | Last dividend rate % per annum. |
| International Financial | 3,000,000 | 750,000 | 91,014, for the year | 10% |
| Joint Stock Discount | 2,000,000 (call of 5£ p. share now made.) | 8,000,000 | 19,595 für the ½ year | nil |
| General Credit | 5,000,000 | 1,000,000 | 202,632 for the year | 15% |
| Consolidated Discount | 1,000,000 | 200,000 | 1,384 for the ½ year | nil |
| London Financial | 2,000,000 | 600,000 | 40,422 for the ½ yr. | 10% |
| Imperial Mercantile Credit. | 5,000,000 | 500,000 | 91,862 für the ½ year | 20%. |

|  | Average Dividend. |  |  | Surplus Profits after last Dividend. £. |
|---|---|---|---|---|
|  | 1863 | 1864 | 1865 |  |
| International Financial. | 15% | 10% | 10% | 59,473 |
| Joint Stock Discount. | 5 | 7 | 3 | 56,169 |
| General Credit | 10 | 15 | 15 | 20,072 |
| Consolidated Discount | 0 | 0 | 0 | 594 |
| London Financial | 15 | 17½ | 12½ | 160,108 |
| Imperial Merc. Credit | ... | 14¼ | 20 | 94,169. |

December 31. 1865

|  | Liability to the Public. (Deposits etc) | Assets |  |
|---|---|---|---|
|  | £. | In Hand (as valued) £ | Calls in Reserve £ |
| Internat. Financial | 682,833 | 1,549,445 | 2,250,000 |
| Joint Stock Discount | 3,461,290 | 4,349,407 | 1,200,000 |
| General Credit | 1,117,372 | 2,473,015 | 4,000,000 |
| Consolidated Discount | 1,862,797 | 1,941,685 | 800,000 |
| London Financial | 795,088 | 1,593,062 | 1,400,000 |
| Imper. Merc. Credit | 4,707,655 | 5,392,042 | 4,500,000 |
|  | 12,627,035 | 14,150,000 | 17,298,656 |
|  |  | *Total of Assets* = 31,448,656. |  |

The one point upon which these official figures convey no comparative information is the *all important mode of valuation of* the assets in hand. The *International Financial and General Credit Cos.* took the *market prices* of their securities as their rule for valuing their assets on 31 Dec. last; but the *Joint Stock Discount Co.* apparently valued their assets *at the amount of money advanced* on their security. Und da darunter viele securities of railway contractors, *the official figures really afford no insight whatever into their real position*.

#### The Sound State of American Banking at Present.

»It is very generally believed, or feared, that there will be a sudden crisis – some collapse of credit in America.« Dieser englische Aberglauben sehr schön! Die Krise war unter ihren Füssen, zu London – sie sahen sie aber nur *jenseits* des Atlantic. Und der friendly *„Economist“* sucht sie zu beschwichtigen durch Darstellung der Solidität des jetzigen amerikanischen Bankwesens!

»The *Un. States Government* stands in America in the same monetary position (vis-à-vis den banks) in which the B.o.E. stood here.« (vis-à-vis den country banks während der suspension of cash payments.) It has issued *inconvertible* paper, 90 Mill. l. St. in round numbers, for the present much depreciated as compared with gold. They are »legal tender«. If an American bank has enough of these notes, it will pay its way.

Before the civil war *no national system*. Each state had *its own banking law*. Annoyance of a currency so multifarious in a country where locomotion so constant and so distant. A Chicago note was at a discount at Washington, and a Delaware note was difficult to pass at Chicago. *„Exchange“* dealings between the different states of the Union complex by the difference of currency. *Chase* provided a national uniform currency to replace the various States currencies.

The *Act of Congress* , to this purpose, interferes *not only with the issue of currency*, but with the *trade of banking* (d.h. securities for the *deposits*, not only for the *notes)*. The Act permits no bank to be organised „with a less capital than 150,000 dollars, nor in a city whose population exceeds 50,000 persons with a less capital than 200,000 dollars“; though with the permission of the Secretary of the Treasury, a bank with a capital of *no less than 50,000 dollars* may be „organised in any place of which the population does not exceed 6,000 inhabitants.“ In the principal cities of the Union each bank must keep *in lawful money 25% of its circulation and deposits*, and banks in less important places *15%*; and every bank is bound to carry * 1/10 of its profits* to the reserve fund before declaring a dividend, till *that fund amounts to 20% of its capital stock* etc. The *aggregate circulation* is limited to *60 Mill. l. St.*, and is *divided amongst the banks* according to the following singular clause: „The amount of such circulating notes to be furnished to each association shall be in proportion to its paid-up capital, as follows, and no more: To each association whose capital shall not exceed 500,000 dollars, *90% of such capital*; to each association whose capital exceeds 500,000 dollars, but does not exceed 1 mill. dollars, 80% of such capital; to each association whose capital exceeds 1,000,000 dollars, but does not exceed 3 mill. dollars, 75% of such capital; to each association whose capital exceeds 3 millions dollars, 60% of such capital. And that *150,000,000 dollars of the entire amount of circulating notes* authorised to be issued shall be apportioned to associations in the States, in the district of Columbia, and in the Territories, according to representative population, and the remainder shall be apportioned by the Secretary of the Treasury among associations formed in the several States, in the district of Columbia, and in the Territory, having due regard to the existing banking capital, resource, and business of such State, district, and territory.“ The whole circulation is secured by the *deposit of U. St. bonds* with 10% margin. This deposit of U. St. bonds was of course, for the Finance minister, the primary point of the Act. Mr. Chase was sorely in want of money. The existing bank circulation was secured *by state bonds*; and it was of the first importance to him to replace it by a currency secured by *Federal bonds*. He thus got a loan for the national Exchequer out of funds before used by the State exchequers. At any other time such a proposal would have excited the old controversy of State right versus Federal right, and would most likely have been lost. In the civil war – Mr. Chase passed his Act.

Such an interference of Gvt. with country banking, or half such an interference, would have been *impossible* in England, but in *a democratic country the inhabitants do not look on the Gvt. as something apart from themselves* as we do, and do not feel humiliated by its interference; it is only *themselves in another form* enforcing what they think right, and so they do not mind it.

Chase coaxed the existing banks. He offered them tempting terms to become, instead of State banks under the old system, national banks under the new system. And all but an insignificant fraction have become so. „In about 2½ years“, boasts Mr. McCulloch (*finance minister* under Johnson), „from the organisation of the first national bank, the whole system of banking under State laws has been superseded, and the people of the Un. St. have been provided with a circulation bearing upon it the seal of the Treasury department as a guaranty of its solvency.“

With the bold completeness which is its characteristic, the American gvt *compels the publication* of the most elaborate accounts by every bank in the Union, and the Comptroller of the currency publishes annually a report giving those accounts in detail for each banks, and a summary of them all. The following letzte Publication:

Liabilities

|  | (dollar taken at 4sh.) £. |
|---|---|
| Capital Stock paid in | 78,631,441 |
| Surplus Fund | 7,742,676 |
| Notes in Circulation | 34,264,380 |
| Individual Deposits | 99,195,962 |
| United States Deposits | 9,634,076 |
| Dividends unpaid | 986,211 |
| Due to national banks | 18,008,967 |
| Due to other banks | 4,877,236 |
| Profits | 6,470,145 |
| Old Circulation outstanding issued by National banks while still State Banks: | 11,953,795 |
| Other items | 188,810 |
| Total | 271,953,614 |

Assets.

|  | £. |  |
|---|---|---|
| Loans and Discounts | 97,062,805 |  |
| Overdrafts | 371,221 |  |
| Real estate, furniture, and fixtures | 2,940,656 |  |
| Expense Account | 907,905 |  |
| Premiums paid | 517,100 |  |
| Remittances and other cash items | 14,461,970 |  |
| Due from national banks | 17,995,796 |  |
| Due from other banks | 3,478,646 |  |
| Un. States bonds deposited to secure circulation | 54,526,840 |  |
| Other U. St. bonds and securities | 31,019,420 |  |
| Bills of other banks | 3,249,448 |  |
| Specie | 2,993,228 |  |
| Other lawful money | 38,618,872 |  |
| Other items | 3,809,702 |  |
| Total | 271,953,614 |  |

No banks in the world such amazing solidity.

Liabilities of the National American Banks to the Public.

|  | £ |
|---|---|
| Notes in Circulation (old and new) | 46,218,175 |
| Private Deposits | 99,195,962 |
| Public Deposits | 9,634,076 |
| Due to other banks | 4,877,236 |
|  | 159,925,449. |
| Against this they have in actual cash: | £ |
| Specie | 2,993,228 |
| Lawful money | 38,618,872 |
|  | £41,612,100. |

Also über 25% ihrer liabilities. B.o.Fr. und B. o. England keep larger amount; am 15 Febr. (1866) B. o. France über 37% ihrer total liabilities, die B. o. England (am 14 Feb.) 34¾%. Aber diese reserves, besonders in England, are the banking reserves of the whole country. The amount of specie held in the tills of the London and provincial banks of this country is a trifle in proportion to the liabilities; it is not regulated by these liabilities; it is simply *the ready money of the day*. Um die reserve (metallic) der B.o.E. mit der der American Banks zu vergleichen, muß man sie im Verhältnis zu den total liabilities der English Banks betrachten. We do not know those liabilities. Aber 3 banks alone, *London und Westminster* , *Union* und *London Joint Stock Bank* haben 56 Mill. £. liabilities, während die der Bank of England nur 42 Mill. £. The American banks hold in mere cash *25%* of their liabilities when thrown together; if the English banks were thrown together, we doubt if they would hold *5%*.

Ferner, die *securities der American banks*:

|  | £ |
|---|---|
| Cash | 41,612,100 |
| Government security | 85,546,260 |
| Remittances and other cash items | 14,461,970 |
| Total | 141,620,330 |
| Liabilities | but just over 160,000,000l. |

That a bank should have  14/16 oder ⅞ of its liabilities either in Gvt. security or cash is to an Englishman perfectly astounding. An English Bank which holds ⅖ considers itself an example of caution, and many of the best banks in the country hold a proportion very much smaller.

The American banks are able to hold so large a reserve, and yet advance a large sum to their public because their capital is so enormous. An English bank does not consider it begins its proper business *till it begins to deal with the property of others*; but an American bank lends mainly its own money, and so can keep almost all its customer’s money in hand and tangible. In round numbers the American national banks:

*Advances:* 97,500,000l. gegen *A Capital of* 78,631,441l. und *Reservefund of* 7,742,678l., Zusammen 86,374,119l.

No English bank lends only 14% of *its own money*.

Der wiseacre schließt aus diesem state der American Banks daß kein *credit collapse* in U. St., möglich, wie 1837 oder 1857, wenn the State Banks of America kept very small reserves and failed by wholesale.

If banking credit, sagt er, stands firm, no general failure of other credit is likely. Individual failures may happen there as here, but no wholesale bankruptcy of ordinary traders.

### March 3. 1866. N. 1175.

#### Board of Trade Returns.

Shipments of British goods and Produce.

|  | £. St. |
|---|---|
| 1863 | 146,602,342 |
| 1864 | 160,449,053 |
| 1865 | 165,862,402 |

| Also: Increase is our exports in 1865 | *gegen 1864* of £5,413,349 |
|---|---|
|  | gegen *1863* of 19,260,060. |

Increase or Decrease in export of some articles 1865 and 1864.

| Articles. | 1864 | 1865. | Increase. | Decrease. |
|---|---|---|---|---|
|  | £. | £. | £. | £. |
| Worsted stuffs (pure wool and mixed.) | 10,800,521 | 13,321,855 | 2,521,334 |  |
| Arms (small fire) | 348,850 | 425,857 |  | 49,027 |
| Beer and ale | 1,841,637 | 2,060,369 | 218,732 |  |
| Coals | 4,165,773 | 4,431,492 | 265,719 |  |
| Cotton yarn | 9,083,239 | 10,351,049 | 1,267,810 |  |
| (Manufactures. piece goods) | 43,917,471 | 44,860,239 | 942,768 |  |
| (Thread) | 794,597 | 753,438 |  | 41,159 |
| Earthenware et porcelain | 1,422,014 | 1,442,934 | 20,920 |  |
| Haberdashery and milinery | 4,797,552 | 5,013,757 | 216,205 |  |
| Leather, wrought, boots, shoes | 1,484,421 | 4,334,273 | 220,566 |  |
| Linen yarn | 2,991,969 | 1,462,309 |  | 22,112 |
| Linen manufactures. Piece goods | 7,607,502 | 2,505,497 |  | 486,472 |
| Thread | 492,194 | 558,865 | 916,463 |  |
| Machinery – Steam Engines | 1,617,117 | 1,952,658 | 335,541 |  |
| Machinery Other sorts | 3,231,475 | 3,260,872 | 29,397 |  |
| Metals – Iron, pig et puddled. | 1,412,352 | 1,591,063 | 178,711 |  |
| Bar etc | 2,568,049 | 2,213,123 |  | 354,926 |
| Railroad | 3,305,086 | 3,541,296 | 236,210 |  |
| Castings | 670,111 | 771,124 | 101,013 |  |
| Hoop, sheet | 1,776,652 | 1,597,604 |  | 179,048 |
| Wrought | 2,257,406 | 2,494,371 | 236,965 |  |
| Steel. unwrought | 890,395 | 779,487 |  | 110,908 |
| Copper. unwrought | 586,147 | 496,957 |  | 89,190 |
| Wrought | 2,912,137 | 2,290,850 |  | 621,287 |
| Lead. Pig | 779,174 | 582,569 |  | 196,605 |
| Tin. Wrought. | 482,147 | 499,401 | 17,254 |  |
| Plates. | 1,263,246 | 1,482,766 | 219,520 |  |
| Paper. | 425,257 | 351,233 |  | 74,024 |
| Silk. Thrown. | 568,781 | 474,957 |  | 93,824 |
| Silk Manufactures | 1,460,520 | 1,409,221 |  | 257,253 |
| Wool (Sheep and lambs) | 673,446 | 901,659 | 228,213 |  |
| Woolen and Worsted. Yarns. | 5,417,377 | 5,424,047 | 6,670 |  |
| Woolen Manufact. Cloths | 4,533,519 | 4,062,382 |  | 471,137 |
| Flannels | 554,543 | 431,955 |  | 122,588 |
| Blankets | 797,023 | 613,115 |  | 183,908 |
| Carpets and druggets | 861,499 | 861,564 | 65. |  |

Value of British exports to different countries. 1864 et 1865

|  | £ | £ | £ | £ |
|---|---|---|---|---|
|  | 1864 | 1865 | Increase | Decrease |
| 1) India. | 19,951,637 | 18,254,570 |  | 1,697,067 |
| 2) Un. States | 16,708,505 | 21,235,790 | 4,527,285 |  |
| 3) Hanse Towns | 13,418,826 | 15,091,313 | 1,672,547 |  |
| 4) Australia | 11,857,213 | 13,352,357 | 1,495,144 |  |
| 5) France | 8,187,361 | 9,034,883 | 847,522 |  |
| 6) Holland | 6,884,937 | 8,111,022 | 1,226,085 |  |
| 7) Brazil | 6,249,260 | 5,668,089 |  | 581,171 |
| 8) Egypt | 6,051,680 | 5,985,087 |  | 66,595 |
| 9) Turkey, Europe | 4,481,222 | 4,931,742 | 50,520 |  |
| 10) Asia Minor | 1,070,827 | 695,377 |  | 375,450 |
| 11) Syria, Palestine | 1,366,608 | 1,339,665 |  | 26,943 |
| 13) British Nth. America | 5,595,591 | 4,705,079 |  | 890,512 |
| 12) Italy | 5,597,496 | 5,376,886 |  | 220,610 |
| 14) China (ohne Hong Kong) | 3,092,611 | 3,609,301 | 516,690 |  |
| 15) Spain | 3,084,778 | 2,249,822 |  | 834,956 |
| 16) Cuba und Portrico | 3,002,025 | 2,207,511 |  | 794,514 |
| 17) Russia | 2,846,409 | 2,921,496 | 75,087 |  |
| 18) Brit. West India | 2,649,539 | 1,945,466 | 704,073 |  |
| 19) Belgium | 2,301,291 | 2,921,300 | 620,109 |  |
| 20) New Granada | 2,058,843 | 2,372,497 | 913,654 |  |
| 21) Cape of Good Hope | 1,814,319 | 1,454,540 |  | 359,779 |
| 22) Mexico | 1,809,753 | 1,898,056 | 88,303 |  |
| 23) Argentine Confederation | 1,757,457 | 1,951,048 | 193,591 |  |
| 24) Chili | 1,683,580 | 1,603,753 |  | 581,171 |
| 25) Hong Kong | 1,618,867 | 1,561,851 |  | 57,016 |
| 26) Foreign Westindies | 1,370,941 | 1,157,960 |  | 212,981 |
| 27) Peru | 1,361,692 | 1,193,335 |  | 138,357 |
| 28) Gibraltar | 1,206,168 | 1,116,659 |  | 189,509 |
| 29) Singapore und Eastern Straits | 1,181,680 | 1,442,450 | 260,770 |  |
| 30) Denmark (incl. Iceland) | 1,152,767 | 1,263,953 | 111,186 |  |
| 31) Prussia | 1,134,399 | 2,102,714 | 968,315 |  |
| 32) Channel Islands | 1,015,985 | 752,048 |  | 263,937 |
| 33) Dutch India (Java etc) | 796,850 | 928,642 | 131,792 |  |
| 35) Brit. Guiana | 795,831 | 740,553 |  | 55,278 |
| 33) Uruguay | 993,951 | 813,448 |  | 180,503 |
| 36) Ilberia, Croatia, Dalmatia | 792,119 | 725,789 |  | 66,330 |
| 37) Norway | 772,095 | 677,458 |  | 94,637 |
| 38) Philippine Islands | 765,719 | 945,624 | 179,905 |  |
| 39) Malta et Gozo | 753,113 | 633,887 |  | 119,226 |
| 40) Sweden | 731,294 | 900,959 | 169,665 |  |
| 41) Ceylon | 826,333 | 685,308 |  | 141,025 |
| 42) Bermudas | 657,045 | 62,659 |  | 594,386 |
| 43) Mauritius | 655,852 | 596,848 |  | 59,004 |
| 44) Hanover | 689,978 | 399,933 |  | 290,045 |
| 45) Japan | 627,383 | 1,520,895 | 893,512 |  |
| 46) Western Africa (Foreign) | 565,962 | 642,467 | 76,505 |  |
| 47) Greece (ohne Ionian islands) | 433,887 | 583,253 | 149,366 |  |
| 48) Natal | 427,885 | 223,420 |  | 254,465 |
| 49) Venezuela | 482,988 | 387,032 |  | 95,956 |
| 50) Ionian islands (from 1st June) | 310,084 | 437,236 | 127,152 |  |
| 51) Western Africa (Brit.) | 272,896 | 403,383 | 130,487 |  |
| 52) Belize (Brit. Honduras) | 204,625 | 160,445 |  | 41,180 |

#### James Rothschild Evidence (Continuatio)

*J. Rothschild:* „It is precisely those discoveries which came to our relief. But for them, we should not have been able to do what we have done. There has been a substitution of Australian gold, new or native gold, in place of the specie which we have sent to China or to India, and which will be long before it returns, if it ever does return. … There was a moment when I trembled for a crisis in Germany, because silver had disappeared: so much had been bought to send to China and India; it had become so scarce at Hamburg, Frankfurt, and in many other towns of Germany, where silver is the only circulating medium, as in China and India, that we knew not what to do. Silver was for a time at from 30 to 40f. premium per mille.“

*President:* Do you not think that the corrective of foreign investments, loans, railways etc. is to be found in *commercial operations themselves,* and that, f.i., a nation which borrows in the French market 300 or 400 millions, does not withdraw them entirely, but employs a part to pay for goods paid there?

*J. Rothschild:* Yes. ⅞ or  15/16 are employed in buying goods – locomotives f.i; it is impossible to say how many we send abroad. I speak from experience.

*Michel Chevalier:* If at a given moment there is a tendency among traders to export gold and silver, why should the Bank oppose it by any measures whatever? It does not trouble the export of wheat and wine, why should it trouble the export of gold?

*J. Rothschild* . Everybody has the right to defend himself, and if the Bank finds that too much gold and silver is being exported, and may consequently fear that in case the reimbursement of its notes should be demanded, it could not make it, – it is its duty to say: I will reduce my discount … so as to be in a situation to re-imburse my notes. … The raising of interest makes the *rarity of money*. Leave the interest of money at its ordinary rate, at a moderate rate, nobody is disquieted, nobody takes precautions; whereas the raising of interest always causes something unpleasant to be feared. I, f.e., am seated at my desk; I receive a letter from Alexandria, „Send me a million in 5f. pieces.“ The discount is at 4%, I see no danger. I can send the money. But if the discount of the Bank be raised, I say to myself: „I must take precautions“, and I do not send the money. Knowing that I shall have payments to make at such and such an epoch, and not knowing that money will not be still rarer at that moment, I keep my funds, and I renounce a profit of 3 or 4%, rather than send my money.

*M. Chevalier:* But if the sum be due, you cannot avoid paying it; even if the discount should be 12 or 15%, the money must be sent.

*J. Rothschild.* No doubt; but I put the hypothesis that I owe nothing.

*President.* Then you consider the raising of the discount as not being able to paralyse forced and obligatory operations, but … as preventing supplementary exportations, which would be the consequence either of too great security, or of too great facility in undertaking new operations.

#### Rates of Discount (this week) in the chief continental cities:

|  | Bankrate % | Open Market % |  |
|---|---|---|---|
| Paris | 4 | 3¾ |  |
| Vienna | 5 | 5 |  |
| Berlin | 6 | 6 |  |
| Frankfurt | 4 | 4 |  |
| Amsterdam | 6 | 6 |  |
| Brussels | 4 | 4 |  |
| Madrid | 9 | Uncertain |  |
| Hamburg |  | 3½ |  |
| St. Petersburg | 6 | 5¾ – 6. |  |

### 10th March, 1866. N. 1176.

#### The State of the Money Market.

The affairs of the *Joint Stock Discount Co* have caused a diffused alarm – they are considered as specimens … of a very large class of recent business. Great *many small railways* have been made which never ought to have been made, and the money found for them in *Lombardstreet* . These undertakings being a heavy loss, that loss must fall somewhere, and a good deal of it is now falling on the lenders in Lombardstreet. The *year 1864* was remarkable for several things, and one of the most characteristic was the invention of a new verb. *„Finance“* used to be a substantive only in English, but it then became a verb also … Generally sound and cautious people (in money matters) like to *nibble* a *little* at questionable securities. They do not like to be quite out of the world, they count the high profits; they are unwilling to be called slow. This class is sure to be left with the bad security. The clever, quick people who *concoct the delusions* have a much better chance of getting out of the ruin; they move much quicker than the slower race, and have much better information when the delusions are breaking up and it is advisable to get out of them.

#### The Workhouse Hospitals.

Die infirmaries of workhouses are properly intended nur für die *infirm poor*. Sie sind es nicht who crowd the wretched infirmaries of our London workhouse hospitals. Persons actually sick of diseases, more or less acute, and requiring more or less active medical care, are crowded into the workhouse hospitals by order of the parish doctor and the parish relieving officer, who rid themselves of the trouble and the responsibility of attending to such cases by combining to get them into the workhouse. Of these cases, there are now over 6000 in the 41 London workhouses, giving about 150 really sick persons to each; in addition to this there are no less than 10,500 of the class properly called infirm, aged and feeble persons needing more than ordinary pauper care, of whom at least *half* want medical care as well as additional comfort, and 1,800 imbeciles or idiots. So that the poor who are properly infirm poor are crowded out of their proper accommodation by no less than 7,800 persons who do not really belong to workhouses at all, 6000 of whom should be in ordinary, well conducted hospitals, and 1800 of whom ought to be in asylums for the imbecile, or the insane. Daher the most terrible misery not only to the wretched patients themselves, but to the scarcely less wretched poor. Lord Carnarvon (in public meeting über dieses theme) stated that in one workhouse hospital, with 300 patients, the physician, who is never paid more than £150 a year, has at most 1½ minute with each patient, for he cannot give more *than 3 hours* to the hospital if he is to support his family. The same overcrowding makes the *nursing* disgraceful in the extreme. The Boards of Guardians do not like to increase the rates. Hence they do their very best to keep down the expenses of these miserable hospitals. Old crones who are too infirm themselves for activity, too ignorant for intelligent nursing, and too habituated to misery and dirt to see the evil of inflicting misery and dirt upon others, are nominally appointed nurses, by which they gain some trifling addition to their allowances and the power of making the patients even more wretched than they would be without any nurse at all. These creatures are often drinkers occupied only in devices to get a little more spirit for their own allowance, and their mode of dealing with the sick is of course summary in the extreme. One nurse avowed that instead that of attending to the doctor’s orders, she gave the medicine 2 or 3 times a day to those who seemed very ill, or only 2 or once, as they seemed to get better. (Viele geben dieselbe Medizin an Kranke, für die sie gar nicht bestimmt sind) The male nurses are quite as bad. One *head* nurse was a broken-down potman, appointed by the influence of the guardian who used to drink in the pothouse where the man came from. Another admitted that he had never given any medicines for 3 days to a patient very ill with gangrene, because the said patient’s mouth had been sore. Nor is even this the worst. One workhouse lets the premises outside to a carpet-beating Co. for 600£ a year, and the unfortunate patients get their lungs filled with dust and their ears with noise. Other workhouses leave their patients in the most filthy condition imaginable. A guardian of *St. Giles’* workhouse said that none of these statements were true of his workhouse hospital … But the public have not yet quite forgotten the shocking case of *Richard Gibson* , who *really rotted to death there* in the most horrible filth, without help or hope; and the indignant virtue of the St. Giles’ Guardian seems therefore rather superfluous.

These things are gross abuses, public cruelties in short.

Das meeting *in Willis’s Rooms*, unter Lord Carnarvon, (*3 March*, 1866) carried resolutions proposing that the workhouse hospitals should be consolidated, supported by a general metropolitan rate, and placed under *uniform* management in connection with the Poor Law board. (Ueberall *Centralisation* und centralised Gvt. action unvermeidliches Schicksal der modernen Gesellschaft!)

#### The Late Railway dividends.

The new, or perhaps rather the renewed, feature of our recent railway reports and accounts, is the sudden addition to the *capital expenditure* attendant upon the rapid extension of our railway system, and thereby the effect upon dividends and market values. As a rule, the effect of a sudden and excessive expenditure of capital by a railway Co. is a fall in the dividend. The money spent upon new works yields nothing at first, perhaps very little for years, and possibly never produces a fair average profit, while in the interval of unproductiveness the investor expects his dividend or interest, and the productive section of the undertaking is made to bear the cost.

The Southeastern, and the London, Brighton, and South Coast Cos. charged their *capital accounts with some part of the dividends and interest* paid to the share and bondholders; in fact, *returned them back again as interest and dividend a portion of their own capital*. (Dieß, was der Economist hervorhebt, keineswegs the pith of the thing. Unter *capital account* verstehn die Railway Accounts cookers *Anleihn*, Pump, aus dem sie xxx Theil der Dividenden zahlen.)

Measured by *dividends earned* instead of by *dividends paid*, the market values of some of our lending railway stocks diverge just now more strikingly from intrinsic worth than for many years past.

|  | Dividend earned. Rate per annum |  | Dividend paid. Rate p. annum |  |
|---|---|---|---|---|
|  | Half year ended. |  | Half year ended. |  |
|  | 1864 | 1865 | 1864. | 1865. |
|  | About P.C. | Per Cent. | P.C. | P.C. |
| South Eastern | 4¼ | 2⅓ | 5¾ | 4½ |
| London, Brighton etc | 4¾ | 3¾ | 6 | 6½. |

#### Trade Returns.

Computed Value of the Principal Articles imported

|  | £ |
|---|---|
| 1863 | 204,533,512 |
| 1864 | 226,161,840 |
| 1865 | 219,751,324. |

#### Discount and Money market.

The Stock Exchange Consols settlement has acted rather more than usual on rates, owing to disquieting rumours and the acknowledged unfavourable position of the affairs of the *Joint Stock Discounting Co* . After the decision taken by the directors a few weeks back, the committee of investigation has reduced the proposed call of £5 to one of 2£. 10s, which was actually made, when, as it now appears, not only was one or the other sum insufficient, but the affairs of the co. in so desperate a state as to render *their winding up necessary*. The general opinion expressed at the meeting, where the committee of investigation delivered their report, was adverse to the shedding of too much light on the conditions of the account open. It is, however, to be regretted that the steps taken on that occasion were *of a nature likely to mislead the general public, who might in many cases have escaped the loss in which they have since become involved by the purchase of shares on the representations then made*.

* * *

### March 17, 1866. N. 1177.

#### The Fall in the Value of money.

Bankrate *reduced to 6%*. There is much foreign money in London attracted by high rates of interest, which is sure to go if the market falls to a low rate. The demand to the *East* might again revive. The number of schemes on the watch of our capital is now so great, that any monetary surplus is instantly drawn away from us.

#### Mr. Thiers on Protection to French Agriculture.

Thiers says: rent has increased of late years, *taxation* has increased, and the supply of labour has decreased owing to the *emigration of 3,500,000 persons into the great cities*, until less than 18 fcs per hectolitre will not pay, and less than 20 will not yield a remunerative profit.

*Economist* says: The English remedy under these circumstances is to throw farms together till they tempt man with capital to try an expensive mode of cultivation, and this remedy we frankly admit cannot be tried in France. The manners and institutions of the country, together with the passion for proprietorship, do not admit of so vast a social revolution. But nothing in these circumstances prevents the *combination of groups of little proprietors to work their land in common*, and thus securing at once the high cultivation which is the merit of the English system, and the independence and comparative energy of the peasant which is the merit of France. *A commune* can be cultivated by its owners acting together quite as well as by *one owner*, *a theorem now being demonstrated in Holland*.

#### Emile Pereires’ Evidence at Banque Enquête. (7 Nov. 1865 diese evidence)

*Emile Pereire .* The crisis of 1863–4 was caused solely by the measures adopted by the Bank o. France. That crisis had no intrinsic, no real cause, having its root in the situation: on the contrary, there was unequalled prosperity. For a long time the country had not had so good a harvest; and yet it was after that harvest that the restrictive measures were taken by the Bank. … By the generalisation of commercial relations, by the multiplicity and low price of means of carrying, we succeed every day, and still do so more and more in rendering *crisis arising from scarcities* much less prejudicial to circulation …

The Bank o. F. has *no capital*, or rather its capital is entirely immobilised. The following was its situation, according to its balance sheet of 2nd November (1865):

Liabilities.

|  | f. | c. |
|---|---|---|
| Capital | 182,500,000 | 0 |
| Profits in addition to capital | 7,034,778 | 2 |
| Reserves in securities | 22,105,750 | 14 |
| New fixed Reserve | 4,000,000 | 0 |
| Total | 215,640,528 | 16 |

Assets

|  | f. | c. |
|---|---|---|
| Immobilised rente, and advances to the Treasury | 209,430,488 | 0 |
| Hotel and Buildings | 8,475,341 | 0 |
| Total immobilised | 217,905,829 | 0 |

Thus the B.o.F. has immobilised a sum of 2,265,300f. above its capital and the totality of its reserves. With such a situation, it is impossible on the least derangement for the equilibrium not to be broken … the Bank desires to do all with nothing, for it has no capital. Notes payable at sights cannot be issued against *immobilised stock*. The first measure to be taken to avoid crisis should be to sell the *rents* of the Bank, and to constitute a *reserve in paper on foreign countries*. When one has *bills of exchange* in one’s portfolio, one has gold, because they can be exchanged at London for gold. But that is not even necessary; it would suffice to prevent the export of gold, *if the exchange were unfavourable to exportation* for the Bank to negotiate paper on London … I know this objection: „The Bank of England could do the same thing; it could have paper on Paris, and negotiate it at the same time as you do.“ But the mechanism of exchanges is very simple. Paper on Paris cannot be demanded and rising at London, at the same time that paper on London is demanded and rising at Paris. It is the contrary which takes place; and is the forced consequence of this change of the debit or credit balance. Paper on London rises at Paris, when paper on Paris falls at London, and reciprocally. So that it suffices to negotiate paper on London, in order to stop the export of gold from France to England …

On Oct. 5 (1865) the B.o.F. raised their rate suddenly, because they learned, by telegraph, that the B.o.E. had done so. … I only know 2 banks in Europe, that of France, and that of England. These 2 banks are the regulating establishments of commercial and public credit in Europe. They have each, independently of their mutual dependence, a speciality. England, by her old connection with all the world, is the market in which all the gold and silver of the New World and of Australia arrive … This monopoly is assured to England by her innumerable steam vessels. A steamship now leaves New York every day für England. In 1822, at Bordeaux, letters were only received 2 a week from Paris, and Bayonne only got letters 2 a week from Bordeaux. But now every day letters are received at London from New York. It is at London that all the precious metals arrive. … They are in great part spread over the Continent, and are centralised at Paris. It is at Paris that the great trade in the precious metals is carried on. Paris is also the principal exchange market, and that in which is concentrated all the bills of exchange drawn on England. Consequently, generally speaking, the metals destined to pay in Europe the transactions not settled by bills of exchange, return to Paris.

The *par of* the *sovereign sterling at London* is in the trade 25f. 16c. and at the Bank of England 25.20. The cost of displacing being estimated at about 7c., it results that gold may be *imported* from England when bills on London are from 25.10 to 25.12½, whilst it is only possible to *export* at 25.37½ or 25.40 on account of *the loss sustained by the melting down of French gold pieces*.

The *American dollar sold at par* is 5f. 16c. The expenses are 1%. The quotation must therefore be *below 5.11* to render *importation into France* possible, and above 5.21 *for exportation*.

The *gold napoleon* is worth in Ejypt 77 6/40 piastres; which, with the cost of carriage, puts the rate at nearly 5.27 per Spanish piaster. (Spanish piaster = 5f. 17c.) To *export gold coin from France* to Ejypt, the rate must be superior to that price; to import *into France* it must be below 5.23.

All these calculations are made in estimating gold at par. If these were a premium, the parity would be changed.

If now we apply these different operations to the quotations of 4. Nov. 1865, we see that the quotation on London being 25.20 to 25.22½, and the premium on gold 3%, the price of London is reduced to from 25.13 to 25.15½. Therefore, we can at the present moment (7 Nov. 1865) neither import English gold into France, nor export gold to England.

The rate at New York against gold is 5.16. At that rate, which *represents par*, no operation of importation or exportation can be made without losing the cost of carriage.

On the 5. of October, when the B. o. France raised its discount, the rate of exchange rendered gold export absolutely impossible. The rate of bills on London was 25.25, on the 9. October London paper was worth 25.28. In beiden cases export et import equally impossible.

* * *

### 24. March 1866. N. 1178.

#### Should the Bank of England allow interest on Deposits?

The *Private Deposits* of the *B.o.E.* nearly *the same* as *10 years* ago: *1856:* £12,107,000. *1866:* £12,478,000. Dagegen immense growth der private deposits der London and Joint Stock Banks. Z.B. *Deposits* of *London and Westminster* Bank in *1856*: £11,170,000. *1866:* £19,224,000.

According to our system, the *B.o.E.* is the *„Bankers Bank“*; the holder of the sole unused store of money of the nation.

*Credit means confidence in pecuniary payments.* Yet, after the suspension of cashpayments, the *B.o.E.* for 20 years did not perform its pecuniary promises; and no one thought the worse of it. … The Bank holds a great many *public funds*, money of corporate and quasicorporate bodies which can hardly go anywhere else … The *bankers deposits* are between 2,500,000l. und 4,000,000, and probably are generally over 3,000,000. Those deposits are most plentiful when they are most required. Most deposits at a time of difficulty and disaster tend to ebb away; the influence of distrust and the influence of high profits combine to attract them. But the bankers’ deposits at the B.o.E. augments at a time of panic, they rose to over £6,000,000 in 1859, and in any little difficulty of credit their rise is as sure as the rise of the tide at London bridge.

#### Emile Pereire’s evidence. Continuatio.

*E. Pereire.* The B. o. England puts its discount at 7%, and we have it at 3. It is commonly said: „Since our discount is at 3, we will send all our money to England to supply it at 7.“ But it is not necessary in order to do that to send money at England. Bills of exchange on London can be taken and kept in portfolio: in that way the discount of 7% is secured without any displacing of money, for … gold cannot leave France unless the exchange on London accounts to 25f. 37½c, in which case the banker who might have taken London paper to get 7%, would have had besides the profit coming from the rise in exchange. But in such circumstances a rise of exchange is not to be feared. The bills of exchange of all Europe are in great part centralised at Paris, and thence they go in different directions: consequently one can find at Paris as much paper on London as one wants, especially when France, for the balance of her own exchanges, is not the debtor of England. There is now (7 Nov. 1865) a difference of 2% between the discount rate of B.o.F. and of B.o.E. According to the prevailing prejudices speculators might profit by the difference of 2% to empty the till of the B.o.F. and fill that of the B.o.E. But that is not done. There goes not and cannot go a sovereign to England, because exchange is at 25f. 22½c. It is impossible to send gold from here to London, and yet there is a difference of 2% in the rate of discount. Ask the first bill brokers at Paris, they will tell you that at this moment the sovereign sterling in *short* paper on London is bought at Paris at 25f. 22½c., and in paper of 3 months at 25f. 27½c., *less the discount* of 7%. A small profit is, therefore, made on this difference of discount paper is taken at a higher price when it is *long* in order to obtain a higher discount. What is true for 2%, is true for 3 or 9, not for 10 or 20% … If 3% at B.o.F., 7% at B.o.E., there would be a difference of 4, could not be continued long. How *would it be corrected*? By gold leaving the B.o.F. or returning to the B.o.E.?

If, during a month or two that state of things were to exist … there would be such an advantage in taking at Paris paper on London, that none or much less would be presented to the B. o. England, which would permit that Bank to reconstitute its stock of notes, by the falling due of bills in its portfolio; and thus the equilibrium prescribed to it by the bill of 1844 would be promptly re-established, without the least of the world producing on the till of the B. o. France *a drain* … a level is re-established without displacing capital by the single fact of the *temporary retention at Paris of the bills of exchange of the Continent*.

*M. d’Eichthal:* What does Pereire tell us? That if the discount be 3% at Paris, and 7% at London, bankers will hasten at Paris, the great market of exchanges, to take bills on London: they will sell their securities, and receive in exchange paper on Paris with which they will buy paper on London. But suppose the contrary case. All the bills that I have on London I send to London, and I realise my capital to buy bills on Paris. The effect of the difference of the rate of interest, when it is higher at London than at Paris, is then to keep out of England, by the attraction of high interest, bills of exchange which but for that would go to be negotiated at London by the Bank of England. What does the Bank of England do in raising its rate of discount? It *compels all bills* which would be presented to it to be discounted, to remain on the continent, and that renders the money less rare in England, and dearer in France. You are mutually dependent, and in that state of things the exchange necessarily rises. No, it is not necessary to send coin abroad: but when capital becomes rare and dear amongst our neighbours, if you do not detain it in France, they will come to take it; or in other terms, the *debt which England has contracted remains in your hands*, and it is your capital which pays the goods England has bought. You have no cotton to buy in Ejypt. Granted; but the debt of England comes into France, and you give credit to England.

*E. Pereire.* We lend to England. We give her credit for the amount of our productions, for those which we have exported; but we *do not lend her money*. There is consequently no danger for our *metallic reserves*.

*d’Eichthal:* rechtzeitige Herabsetzung des Zinsfusses nöthig, sonst nicht operations reduced at right time etc.

*E. Pereire.* You have too much experience of banking business to maintain that when English commerce is a debtor to foreign countries for very large sums, an elevation of the exchange on London is to be feared at Paris. The contrary takes place. If England owes a great deal for the cotton, wool, wheat and cattle she imports, that must augment the number of the bills of exchange drawn on her. Those bills arriving at Paris in larger quantities must bring down the exchange, and not make it rise. Now the fall of exchange prevents the sending away of gold.

*M. Pastré:* The *exchange* is not at all a determining element. In India the interest is 14 to 15%. The exchange indicates a very trifling profit; but as the discount is at 14 and 15%, masses not of gold, but of silver, are sent to India.

*E. Pereire.* It is not for the purpose of making investments that silver is sent to India, but principally for the balances in purchases of raw materials. When purchases of cotton have to be made in India or Ejypt, it is not a difference of 1 or 2% in the interest on a bill of exchange which will stop such an operation. When you buy cotton at Alexandria, the complete operation is effected in 3 months, – that time being necessary for sending, receiving, realising the affair. Difference of interest of 2% p.a. is ½% für 3 months, does not prevent the operation. You and all the other merchants of Marseilles undertake the operation only if you have a margin of from 12 to 15%. When you take the chance of losing or gaining 10, 15, 20%, no ½% of a temporary augmentation of interest will stop you. The warnings (durch raising der Bankrate) referred to, and which it is alleged must be given to prevent certain operations, warn no one: ½% cannot be an obstacle to an operation of this kind. But it embarrasses all other operations of commerce and industry.

*Pastré:* Nicht für die gewöhnlichen Operations, für France alone. It consumes only 30–35000 bales of cotton of Ejypt. Even if 30 000 or 35 000 other bales were taken for Switzerland, it would still matter little.

*E. Pereire:* *The rate of interest does not indicate the abundance or rarity of money.* England buys with her productions all the silver necessary für her commerce with India: she even manages to supply you with the coin you send to Ejypt: she is *the great purveyor of the precious metals*. She pays for her cotton from India and Ejypt with the silver drawn from the country in which that metal is produced, *Mexico* f.i., paying for it with her productions. At this moment, on all our coasts of the Channel and the Atlantic, she is buying up our grain because she wants it and we have too much: she is carrying off all the fresh vegetables, all the poultry, all the oxen that we can supply, so that England is our debtor. You cannot change that: the exchange cannot modify that situation. We are sellers to England.

*Pereire:* The extraordinary investments (in bills on England, when high discount at London) rarely exceed 60 or 80 Mill. fcs. The resources employed are not all taken from the Bk. o. France, and besides, as regards England, *France only exports gold there very exceptionally*. The B.o.E. raises its *discount*, not because it has *no coin*, but because it is not permitted to issue *enough notes*. The void is made up by delays, by credit. It is filled up from Paris, Brussels, Lyons, everywhere, because there is always everywhere disposable capital. The contents of the till of the B.o.F. are not  1/100 of the disposable capital in the county. … The consequence of a different rate of interest between France and England is that on the Continent – at Paris, Amsterdam, Berlin, Antwerp, Brussels, and in Switzerland, bankers retain English bills of exchange which bring in 7%, and greatly prefer taking them to accepting paper on Paris at 4 or 5. But as the demand for bills on London at 7% augments the demands for bills at a long date, the price rises, and the difference disappears – the level is re-established. … The bills of exchange on London, which the elevation of interest keeps naturally on the continent, not being presented for discount at the B. o. England, the demand for rates declines, and the equilibrium is re-established.

#### The Apprehended mercantile convulsion in America

(Der English clown, der diesen Artikel schreibt, heißt *Bonamy Price* . (Bon ami Price!)

»A *commercial convulsion* is *apprehended in America*. (nicht in England, where it came to *pass in a week’s time*!) Whether it comes to pass, or whether it is averted, in either case alike it furnishes a striking illustration of the mischievousness of that form of tax which consists in levying money by means of an inconvertible paper currency.«

#### Professional and Amateur Farmers.

We all recollect that Mr. *Mechi* , when most loudly proclaiming the profitable character of his own farming, could never be induced, either by taunt or persuasion, *to publish his balance sheet*.

#### Money Market.

*Discountmarket* tending to lower rates. The reduction of the rate in Paris to 3½% is also indicative of growing ease.

Heavy decline in the value of the shares of financial cos this week has carried alarm amongst holders. Commencing in a speculative movement, it was accelerated by rumours carelessly or maliciously repeated, and ended in a condition of the markets rarely seen save in times of panic. Happily, the state of the money market is such that a run upon any of the institutions alluded to is *improbable* etc.

##### Railways and other shares.

*Banking shares* have, in common with the shares of the financial and discount cos., suffered somewhat, though in a much smaller degree. *Indian guaranteed stocks* have to some extent, participated in the general decline, and are lower. *Financial shares* have been rudely shaken *by a rapid succession of sales*, for which those most interested and best informed are totally unable to account. The shares of the *International Financial Society* declined rapidly from ¼ prem. to ¾ discount on rumours, completely unfounded, of an impending call. Ditto decline in the shares of the *General Credit Co* . It is remarkable that the shares of these 2 cos. should have been singled out for *bear operations*, as it would be difficult to injure their position or to succeed in any object affecting them, except so far as the loss to *individual shareholders sacrificing their shares in the general alarm* might be concerned. The shares of both cos. are 20£, and the deposits in the hands of the two are hardly worth naming. On the shares of the *International Financial* 5l. is paid, on those of the *General Credit* 4£, *Hudson’s Bay shares*, *fully paid up*, have also shared the general depreciation, and in several other cos. the decline in value very considerable.

*Closing quotations this evening (24 March): International Financial Society*  4/16 to  7/16 discount. *General Credit* , par to ⅛ premium. *Credit Mobilier and Foncier* 1¼ to 1½ premium, show a fall of 1l. in the day. *Overend, Gurney et Co* at 1¾ prem., are also lower. *Imperial Mercantile* , at ¾ to ½ discount, also lower. Some few orders from shareholders at a distance have tended to the further decline of most of these shares, *but* ! the *state of public opinion* and *feelings* in *town appears to be more satisfactory*.

### 31 March 1866. N. 1179.

#### The good and bad Mode of making minor railways.

At this moment all persons concerned in making many of the newest *minor* railways are half ruined by it – the shareholders and directors who have been led to incur personal liability rather than that the line in which they are interested should stop in the middle; the contractor who took his payment in shares of the co. now worthless; the finance cos. which lent money on „Lloyd’s bonds“ of the Co. and on bills of the directors-bonds now all but worthless, and bills hard to get paid.

*Three motives* induce people to make minor railways in England: 1) The greatest number are made *out of contention*. (Theils auf debateable land zwischen 2 grossen cos. Dann the co. worsted in the mixed district, invaded the antagonist cos’ peculiar district; that co. retaliated and so on in a course surprising, for both parties half knew they were lessening their income.) 2) *On speculation*. A contractor who sees a district which 2 great cos. both want, makes a line there, and sells the line to the highest bidder. His trade being construction, he generally gets a fair profit of his adventure, and a large profit if the rival cos. are eager bidders, though of late the high rate of interest and the quantity of such *securities* in the market have made it difficult for him to get money on terms which would pay, have always made his trade difficult, and often ruined him altogether. 3) *On vanity*. An engineer and a lawyer, sure to gain, induce gentlemen of a district „on public grounds“ to take shares in a railway and to become directors of it. Letztre oft ruined.

To insure good faith and solvency of the promoters, Parliament tried two ways:

1) It prescribed a *„subscription contract“* to be signed in sufficient amount by solvent persons pledging themselves to make the railway. The subscription lists were filled with unsatisfactory names, schwer to detect. Committee (Parliament) in London no judge of persons in province etc. System broke down.

2) *Present plan*: Parliament required *a certain sum of money or stock to be deposited by the promoters of the line*. The promoters simply borrow that money or stock on their credit or on their securities; very commonly the lender’s name is placed in the books of the B.o.E. along with that of the promoter’s; the stock or the money does not go out of his possession, and when the bill is passed, the borrowed capital is returned to the lender and is not used to make the railway. Just before the „depositing“ season all banks are besieged to lend their stock for this purpose, and its deposit, in fact, shows neither *bona fides* nor solvency; it shows only that the promoters can get a certain sum into hands upon a secured promise to return it. There is often no company when the bill is passed, even if there is afterwards. (So this plan has also broken down.)

*Many non-paying railways* exceedingly benefit the places through which they pass, and do so even when no manipulation of fares would make them pay any better. It may often be *for the substantial good of a whole district* to have a railway, though that railway, after the most remunerative settlement of fares, will only just meet working expenses, and never yield a dividend. The reason is that the railway benefits the *stationary property* which you cannot charge as well as the *conveyed property* which you do charge. You can only make a line pay its shareholders by taxing the people and things that travel on the railway. But besides these the *whole saleable value of the land* of the district is enhanced sometimes almost fabulously. A pretty residence near London, suitable to a man of substantial business, if near a railway, will sell for a price that could never pay the purchaser 2%. But if that residence was far from a railway, it would not get into the market … The case *of building land of poor quality is still stronger*. The London Chatham and Dover railway does not pay a dividend, perhaps it is not likely to do so; yet, it is well known, that it has enhanced the value of the estates through which it passes, often very much. An estate used to be worth 41,000l. becomes in a few years worth 60,000l., and other similar figures. In many cases no tariff will make these railways give a good dividend … Yet this *maximum rate (for goods’ and passengers’ fares)* may not to be enough to do more than keep the railway open, while all round the rails the *land and the houses* may be rising rapidly in price.

Richtige Methode *in Switzerland und France*. The railway, or portion of it, is *made out of the canton or country rate*. The sum is borrowed at once and paid off annually during a term of years. Thus the stationary property benefited pays its fair part of the charge. The canton or department investigates which line suit the locality best, selects the line, and raises by *local taxation* the necessary funds.

#### Meetings of Agricultural labourers.

The agricultural mind is disturbed. The *Mark Lane Express* is unhappy. Cattle plague und nun obendrein: the helpless labourers are becoming less patient and less helpless in the *matter of wages*. Even in husbandry, there is in many districts a demand for labour not altogether easily supplied. In *Scotland*, the meetings of the ploughmen and other farm workmen have been numerous, and indicated much purpose and good sense on the part of those workmen.

Lately, however, there has been a *meeting* of *agricultural labourers at Maidstone*, *Kent* „for the purpose of taking into consideration their present low wages, with the view of taking steps for an increase thereof“. 4–500 labourers from all the neighbouring parishes. It was agreed: „That this meeting is of opinion, considering the great rise in provisions and other necessaries, together with the fact that nearly every branch of industry had received an increase of pay, that the farmers in this district be solicited to grant their labourers an advance of 6d. p. day upon their present scale of wages.“ They also resolved „that an increase of 2d. on the shilling upon the present scale of piece work be sought for as commensurate with that of day-work“. Endlich: „that it is the duty of the employers to permit their men to leave their work at 4 o’clock on Saturday afternoon.“ Of course it must depend on the state of the labour market in Kent whether the rural labourers have or have not any prospect of success … The attempt, however, shows that there are some circumstances rendering success to be apparently possible. At an adjourned meeting 600 labourers were present, and then it was determined to memoralise the farmers of West Kent in conformity with the foregoing resolutions. A 1000 signatures were rapidly attached to such memorial. Doubtless many farmers will regard such a movement much as the workhouse dignitary regarded Oliver Twist when asking for more. That seems in part the spirit in which the *Mark Lane Express* deals with it. Our *contemporary also applies the sort* of *„mutual confidence“ argument so often and so absurdly directed towards the farmers themselves on the part of their landlords*. … This is not a question of sympathy at all. The landlord has made a hard bargain with his tenant, giving him scant security, and many burdens, and drawing as much rent as can be got; while the farmer, in his turn, drives the hardest bargain he can with his men. … This pressure on the part of their labourers arises out of the improving circumstances of the country, its continuance is inevitable, its increase more than probable. What is their remedy? They must relieve themselves from some of the pressure they sustain from above; insist on rational leases; shake off the game and the gamekeeper; require their landlords to do the necessary landlords’ improvements, render their farms fit for the occupation of enterprising and capitalist tenants. Let them do this, and they will find there is a power, at present latent, in the soil to produce more profits and higher wages.

#### Discount and Money Market.

Money is steadily cheapening. Abroad, wie in England, besonders in France, the accumulation of capital goes on, and paper of London is readily taken as an investment at the higher rates prevailing here. Dennoch at Bank und in open market a sustained inquiry, owing to the approach of the quarter and the consequent necessity of providing for matured engagements in commercial circles. Some of the discount houses and financial establishments have also found themselves under the necessity of providing against the probable withdrawal of deposits by the public. The foreign exchanges, already high, seem likely to be supported, as the wool sales just concluded have proved heavy, and a larger amount than usual is likely to be exported from this country.

*Foreign stocks.* Considerable fall in almost all securities. State of Affairs in Germany, Fenian demonstrations in America. Jedoch little doubt that *forced sales of stock* to meet the losses incurred on financial and miscellaneous shares, with those effected in consequence of the closing of many loan accounts, have had much more to do with the decline.

*Railway shares:* In England Railway prices steady or rather higher.

*Indian stocks and shares* have recovered from the decline, from now at higher prices than those previously attained.

*Banking shares* in a few cases lower. The amount of acceptances afloat gives colour to the rumour that „financial“ business entered into more or less extensively by several of the less cautious joint stock banks.

*Financial shares:* A call of £5 announced in 2 instalments on the shares of the *Imperial Mercantile Co.* proved the signal for a fresh downward movement. On the settling day, however, the accounts showed a tolerably even state of things; perhaps the *bear accounts* were the most numerous. It was evident that *a large number of sales had been effected* by persons more or less alarmed at the prevailing rumours, but on the other hand fresh investors seem to have carried off the shares thus brought to market. While *Imperial Mercantile* and *Overend, Gurney etc* shares were heavy at lower prices, the markets were firmer in *General Credit, International Financial , Credit Mobilier, and Foncier* , and some few others that have all along presented stronger features than the rest.

#### Manchester Market.

*Manchester market, March 29*, inactive; owing to the continued report of considerable quantities of cotton, prices slightly declined.

* * *

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[^lic]: 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.