Heft „London 1868“. II. The Economist 1866, April–Mai

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

April 7. 1866. N. 1180.

Corn Duty.

Get rid of the remaining slight corn duty. It interferes with the cheap feeding of cattle, on which the farmers more and more depend every year to pay their rent. Some things can only be done near the market, and fatting cattle is one of them. A long transit makes an animal lean again, and therefore by a natural law an animal should be made fit to eat as close as may be to the place where it is to be eaten. The farmers in the vicinity of great towns have discovered this, and will act on it more and more.

American Finance.

One of the „original“ American taxes which the commissioners do not propose to abolish – is a stamp on matches. One cent on each bunch. Brachte 1865 250,000l. There was raised in America by internal revenue:

Und zwar von 150 heads of taxation. The income of the U. St. in the financial year ending 30th June 1865 was 65 Mill. £; but in the quarter ending 30 Sept. 1865 it was 32,000,000£.

The commissioners recommend: 1) to reduce the tax on distilled spirits from 2 to 1 dollars. 2) recommend a tax of 5 cents per lb on cotton to be „levied and collected from the manufacturer“, where the cotton is worked up at home, and from the merchant at the port of export where it is sent away for use abroad. 3d) income tax to be levied on incomes über 200l. a year statt jezt über 120 l. Customs und Excises werden geben mit den andren taxes 87,000,000l., Expenditure 60 Mill. £, Surplus: 27 Mill. l. St. Schlagen vor 1) to repeal the taxes on many articles of luxury; 2) to repeal a duty on the repairs of engines, ships, cars, carriages etc. 3) a repeal of a portion of the tax on clothing. The great Tax Bill imposes an excise duty levied on the manufacturer of 5% on boots, shoes, gloves, mittens, hats, caps, bonnets, cloth and cotton clothes, and „all articles of dress not otherwise assessed.“ This is taxing the working classes more certainly than any despot would dare to tax them; and it is interfering with trade more than an „old world“ Gvt dared to interfere with. In America this tax has yielded more than 2 millions l. St.

British deer farmers.

The potato blight in Ireland formed the last argument which condemned the Corn Laws; the cattle plague may prove the death-blow of that economical crime so widely perpetrated in this country, the appropriation of useful land to deer forests or game preserves. In every county in England there are dozens, perhaps 100 of game preserves, wherein hares, rabbits and pheasants waste and consume the agricultural products, which naturally and economically would be applied by the farmers in the rearing and fattening domestic animals for meat.

In Scotland, in the Highlands in particular, men no longer wanted as vassals, having been displaced for sheep, the sheep in turn have made way for deer.

Prof. Leone Levi schwatzte at recent meeting of the Society of Arts, on deer forests and Highland agriculture. The management of Highland property vermindre die production of food. Jezt the population of the Highland counties very scanty, only 22 persons per □ mile, obgleich diese districts once full of crofters and small occupiers. A farm is seldom to be met with, and miles and miles may be walked over without coming to a cottage. „The plan of depopulating the Highlands,“ sagt er, „and destroying the crofters has been forced and carried to a point inimical to the best interests of the country.“

The crofters occupied land of which the rental for each holding was little more on the average than 30l. a year, and the plan usually adopted was to turn out the tenants, burn down their cottages (often before their eyes) crowd them into fishing villages on the seashores, and convert all the arable land into pasture, on which sheep in large numbers were fed. Though the climate is unsuitable for wheat, oats and barley could be grown, and with roots and green crops would have largely increased the capacity of the Highlands for sheep breeding. It may be questioned, too, whether some amount of cattle should not have been still bred. The crofters were in the aggregate extensive cattle breeders, though of inferior sorts. Levi sagt: „Under the old system, it is said, the people collected in the glens and valleys between the mountains produced but little corn, and were mainly dependent upon cattle. By the overthrow of the cottier system, the clearing of the glens and the introduction of sheep farms, extensive mountain land, formerly useless, has been made productive etc.“

⦗Depopulation and conversion into mere sheep-walk presented the readiest means of income without outlay. …

From the depth of a sheep-walk, the lower deep of a deer forest has been a common change in the Highlands. The sheep are now turned out for the sake of wild animals, as men were once turned out to make room for sheep.⦘ „It is estimated (says the Professor) that there are in Scotland upwards of 2 Millions acres of forests; ⦗and one can walk from the Earl of Dalhousie’s estates in Forfarshire to John o’Groats, without ever leaving forest land.⦘ I might mention the forests of Alyth, Athol, and Dummie, in Perthshire; of Balnagowan and Lewis, in Rossshire; of Boyn and Glenavon, in Banffshire; of Mar and Birsa, in Aberdeenshire; of Gajak, in Inverness-shire; and of Platers in Forfarshire. ⦗In many of these the fox, wild cat, the marten, the polecat, the weasel, and the Alpine hare are common; whilst the rabbit, the squirrel, and the rat have lately made their way into the country. Immense tracts of lands, much of which is described in the statistical account of Scotland as having a ‚pasturage in richness and extent of very superior description‘, are thus shut out from all cultivation and improvement, and are solely devoted to the sport of a few persons for a very brief period of the year.⦘ It has been gravely asserted that there is only a difference in the kind of meat produced. But who will compare beef or mutton with venison? Who eats venison as food? Beef is the sustenance of the many; venison is the luxury of the few.“ High rents are or rather have been obtained for deer forests under the influence of fashion. Such rent is not wealth – it is not derived from the soil – it is simply the price paid by some overwealthy individual for the luxury of plunging for a few hours into the sports of the wilderness. Is not this what was done by our Norman conquerors? … Allowing that a certain amount of produce is extracted from the chase in venison and grouse, the market value of such produce is inconsiderable and altogether incommensurate with the expenditure incurred for such forests, while the permanent injury committed on the land, and far more, the withdrawal of such large portions of land from productive purposes, especially from sheep and cattle, must be considered as most injurious to the country at large.

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April 14. 1866. N. 1181

The State of the Money Market. (Prophezeiungen)

Folgende köstliche Klugscheisserei à l’envers:

Many persons, especially those old enough to remember past times, and so to form their standards by those times, have great difficulties in comprehending the present times. A new element has been introduced which they do not appreciate, and of which they do not follow the effect. Formerly great disasters occurred together. A fancied cycle of 10 years has been laid down for their recurrence. But now failures happen at comparatively distant intervals. After a period of excited business like 1863 and part of 1864 many failures are inevitable. The number of mistakes is so great as to ensure an equal number of ruins, and these are now happening from day to day. First the Joint Stock Discount Co. , then another Co., then a private firm … But the misfortunes of these people now hurt no one but themselves. The Bank of England now manage well and they used to manage ill. The directors used to let the reserve run low, and at every period of consecutive failures there was then the probability of a panic. Now the B.o.E. manage well, keep their till full, and the failure of 50 discount cos., and the depreciation of all manner of shares, produces no real effect on the world at large. We are now carrying on the trade of the country with a sufficient balance at our bankers; we used to carry it on with an insufficient balance. … Der wiseacre prophezeit, daß money auf 5% fallen wird. Our Credit is on the whole excellent.

As to bullion: The peculiar cause which has affected our cash balance of late years was the necessity of paying in bullion for cotton.

Imports of Cotton in the Two Months ended Feb. 28.

Aber die increase owing to the new imports von den Un. St., für welche in commodities und nicht in bullion gezahlt wird. Taking the difference of price into account, the Oriental demand is less than last year for past imports, and while cotton falls as now, no speculative outlay is likely.

The imports of corn much heavier this year than last, nämlich:

Imports of Corn in the two months ended Feb. 28

The American Paper Money.

An irredeemable currency is a local currency. It only affects trade within the state, has no effect on trade between that state and other states.

F.i. An English merchant ships goods to New York, sells them for greenbacks, cannot use them in and have them remitted to England. He must buy one of 3 things with them, other goods or gold, or a bill of exchange. When he buys either of these he suffers by the depreciation of the currency as much as he gained before. »At first, the depreciation of the currency acts upon some commodities and not on others; those articles desired by the first possessors of the new currency are the first to rise, and then those desired by the second possessors, – those who have sold their goods to the first, and so on through society. But there is no general rule that imported products should feel the influence of new money first; it all depends upon what the first purchasers want to buy: those articles rise first, the rest rise afterwards.«

Isaac Pereire’s Evidence before the Banque Enquête.

Is. Pereire. Whilst the B.o.E. escaped from the consequences of the crisis of 1847, owing to the power of extending its issues, it was by the sale of its rentes to Russia, that is to say, by the realisation in coin of the immobilised portion of its capital, that the Bank o. France attained the same object. The year following, in 1848, the capital of the B. o. France being again placed in rente, it was obliged to solicit from the Gvt. the suspension of the cash payments for its notes. … the B. o. Engld. only needs the power of issuing more notes, the B. o. France is in need of more money.

There is no mutual dependence between the 2 establishments. The B. o. France might easily maintain its discount when the B. o. Engl. raises it rate. The proof is that now (26 Dec. 1865) there is a difference of 2% between the 2 banks. The discount is at 4 in France, and 6 in England, and yet gold from that country is constantly flowing in here, which indicates sufficiently that the B.o.F. has nothing to fear from the B. o. Engl. If the difference were to attain 3 or even 4%; the same would be the case, if the exchanges were in favour of France. That fact, besides, is not new, for in 1847 a difference of 3% long existed in the discount of the 2 countries.

When the Bk.o.E. raises its discount, a certain superfluity of bills of exchange payable at London comes naturally to Paris to find an easier and more advantageous market. The B. o. France, in such a case, instead of following the B.o.E. in its usurious policy – to take itself part of these bills of exchange, and so aid our neighbours. This indirect assistance, which would give it the opportunity of very usefully employing parts of its funds, would promptly put an end to the ephemeral crises which arise each year; it would enable the B.o.F., if necessary, to exercise a salutary action on exchanges, or … by the negotiation of those same bills when the price of paper on London should have a tendency to rise, in a proportion disquieting to its till. The Bank o. F. could besides if necessary employ those bills on London to purchase gold in England.

Cotton during the civil war.

(Der Kerl übersieht, rechnet nicht ein, die Schwarzerde etc)

The (British) export of yarn and manufactured goods in 1862, 1863, 1864, more than equalled all the supplies of cotton during those years; the former amounting in weight to 1,208,920,000 lbs; and the latter, after deducting the raw cotton re-exported, and reducing the remainder to its equivalent weight in yarn, being only 1,187,369,000 lbs. Folgt daher:

1. on 1. Jan. 1862 in the U. Kingd. stock of raw cotton and cotton manufacturers more than sufficient to supply the home consumption for 3 years; and that the people here have been provided during this period with clothing, whose material previously here accumulated.

2. The enhancement of prices, which, within the period named, amounted to 100%, was not really paid by the people of this country, taken collectively; viz., so far as the stocks on Jan. 1 1862, belonged to natives or residents in this country. … The advance (vor dem 100% Aufschlag) of cotton prices already materially before the end of 1861, and attained their highest range in the summer of 1864; from which there was a decline of 25% before the end of the year. But the prices of yarns and manufactures had risen but little before January 1862. In 1865 a lower range of prices on the whole prevailed, and the supplies were more than sufficient to cover the export: being equivalent to 580,714,000 lbs of yarn against 478,240,000 exported, the difference, however, furnishing only ⅔ of the estimated home consumption.

(All dieß stüzt sich auf report of Messrs. Ellison and Haywood, published in der annual review des Economist 10 March 1866) This relates solely to the prices paid for cotton and cotton goods in this country, which do not seem to have occasioned a direct national loss during the period of the great rise of prices. The effects of the diminished supply of cotton in the enforced reduction of consumption, the curtailment of wages, loss of interest on capital invested etc, certainly constitute a very serious national loss.

Statistics of Cotton in the U. Kingd. 1862, 1863 und 1864.

April 21. 1866. N. 1182.

The State of the Money Market.

Drain of silver to the East has almost died away; bar silver at former prices is almost unsaleable etc. tendency to expect cheaper money.

Some gold was taken for Paris; it is said in connection with the German Political difficulties, but rather perhaps with the large amount of foreign money now in London, which would leave us when the value of money became much lower than when that money was sent here.

Failure of Barned’s Banking Co: (Liverpool) Banks which have advanced largely on speculative securities, or lent on cotton, at treacherously high prices, and either with no margin or a margin which faded away just when it was wasted, must fail.

The main doctrine for the times is (d.h. die ruling Dummheit im head des Economist) … that the failures of those who have done bad business will in the present state of credit hurt no one but themselves; that what we now have is a gradual and successive weeding out of unsound speculators, whereas in old times they all failed at once in a mercantile crash and national disaster. Weiser Salomon!

The National Debt.

Remove a defective quality in the soil, or, by a railway f.i., the distance from a good market, and the farmer remains as he was: the improvement in the land is a benefit not to the hirer of the land but to the owner of the land – it enables him to raise his rent.

It is often said by those who advocate the payment of the debt, that we are squandering, or have squandered the wealth of posterity. But we can only spend what exists. Whether we raise money for a war by taxes or by loans, we equally raise it at once: it comes equally out of the present money of the living nation. Those who succeed are injured, but it is in a manner more refined. The expense of raising the interest, the expense that is of transferring a certain sum from A, B, C, D, E, F, etc, who are the nation, to X, Y, Z, the, in comparison, few creditors of the nation … Posterity is injured by the use of loans by a former generation, and the non-payment of those loans, not in having lost the capital which those loans represent; that capital would have been equally lost if raised by taxes; but in having a constant annual expense in shifting the interest from one man to another, and in being obliged to use all the best taxes in that manner, and having consequently no good taxes (or at any rate fewer) in readiness for a sudden emergency. „Taxing posterity“ means making posterity pay more taxes and worse taxes.

Share Market.

Railway shares firmer, the doubt and anxiety prevailing with regard to some of the financial and banking cos. leading to investments in stocks. The American securities firmly maintained; advance in the U. St. 5% bonds, close at 70 to 70¼. Colonial securities steady. In India there is a firm market.

Financial shares had recovered in several instances from 5s. to 25d. per share when the news of the suspension of Barned’s Bk. Co. produced fresh gloom. The shares of the General Credit Co firm; of International Financial Society steady. Those of Credit Mobilier and Foncier have slightly relapsed, and the quotation of Imperial Mercantile and Overend, Gurney et Co shares is lower, after operations of considerable amount. In Banking shares, Alliance Bank have fallen to 2½ to 2 disc. Many of the new associations have suffered in price.

Liverpool. April 19. Prices Current. Cotton Trade.

The cotton market was heavy on Friday, and on Saturday a further and decided decline was submitted to, quotations becoming almost nominal. This extreme depression attracted the attention of buyers, particularly for consumption, and a large business was done on Monday and Tuesday, accompanied by a rally in prices. Yesterday upon later advices of full receipts in the American parts the demand again fell off, and prices gave way. This morning the existing want of confidence increased by the announcement of the difficulties of a local bank, and business was checked; as the day advanced there was more steadiness, but the quotations still show a decline of about 1½d. to 2d. from last week’s rates.

Manchester, April 19.

With the exception of Tuesday, when a momentary check to the downfall of prices was felt, every day this week has shown increasing depression, to-day increased by rumours of banking disaster in Liverpool, where nearly a million bales of cotton may be said to be almost in view. Sellers of both yarns and cloth have been eager for offers, but buyers have lost confidence day by day. A considerable amount of orders has been cancelled to spinners and manufacturers who had failed to deliver in stipulated time, and some needful portion of such orders has been re-bought in the market at a lower figure.

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April 28, 1866. N. 1183.

„Finance Paper“ and The Rate of Discount.

Facts [which have] become public during the last few weeks explain a considerable number of the phenomena of the money market during the last 2 years (1865 und 64) or more. The lists of creditors of Mr. Savin , the great contractor for Welsh railways; of Mr. Watson , another contractor; of the Contract Corporation ; of Smith, Knight and Co (Limited), also contractors; and of some others, show very clearly the sort of financial influence by which the 100 of Railway bills before every session of Parliament are suggested and sustained, and also the kind of financial devices by which the works themselves are started and carried forward.

Twenty years ago or less, when a railway was projected … people of some sort were found to subscribe beforehand for the shares, and to bind themselves to pay future calls till the line was made … with all the delusions and iniquities of subscription contracts, it is substantially true that until within a late period the costly public works of this country were made by virtue of a previous agreement among a large number of bona fide subscribers, each prepared, or believing he was prepared, to find his quota. In the numerous cases where the adventure was a mistake, the loss and suffering were diffused and severe, and the unlucky contributors were driven to straits and economies painful to contemplate. … The pressure of the period of excessive railway construction, from 1845 to 1853, fell directly, as it ought to do, on the savings of the country. The payments to the contractors were raised by calls from the shareholders, and the shareholders paid the calls by saving out of income, or by the sale of previous investments. But this system was gradually exploded, and for the last few years has been given up altogether. A project for a railway, dock, pier, or other public work, requiring a large conversion of floating capital into fixed, is now concocted by a knot of 4 or 5 persons, consisting of a solicitor, an engineer, a parliamentary agent, a contractor, and a financier. Some of the party have the command of the few thousands necessary to pay for surveys and indispensable preliminaries. They have, in most cases, name and position enough to enable them to borrow as much money as carries them as far as the Royal assent. That once obtained, the Act becomes a lively instrument of Credit. The directors issue Lloyd’s bonds, debentures, stock, preference shares, and the like to the contractor, and he in his turn finds avenues in the money market where, for rates of interest and commission almost fabulous, cash is to be had on these securities. Now, these securities are a mere speculation on the future, and a speculation subject to one principal and many smaller casualties. I) The line must be finished and placed in actual working before the obligations representing its cost can have any ascertained value at all. An unfinished railway or dock has no value whatever. II.) The line must not only be finished and actually worked, but in order to impart value to the bonds and shares there must be a positive profit surplus. The difference between securities such as these – wholly dependent on future and uncertain events to happen at distant and irregular dates, and liable to become worthless by the premature stoppage of the undertaking – and the class of securities which experience has shown to be best suited to the requirements of bankers and money dealers –, is not only marked in its character, but so wide and glaring as to prepare any prudent person to expect mischief. Mischief has certainly followed in no limited measure.

There has been in the money market for some time past a very large amount indeed of these „financial securities“. Sicher no less than 5 or 6 millions or more. Many of them have been pushed off among banks who ought to have known better than listen to the temptation of extravagant rates on the bills of persons … wholly engaged in contracts more or less hazardous. Of course, there was the collateral security of bonds, debentures or shares. But both the promissory note or acceptance of the borrower and the collateral security were alike beyond the range of prudent bankers or discount brokers. The Joint Stock Disc. Co. with its millions of liabilities on one side falling due day by day, and its millions of finance securities on the other falling due goodness knows when or where, is the most extreme and lamentable caricature of this folly.

The effect of the system has been to shift the burden of the largest part of the public works of the last few years from the savings in detail of the investing classes of the country and fasten it upon the merchants and others legitimately resorting to the money market for the discount of their ordinary trade bills, and for advances required for short periods to meet the nature of their business. The contractor making a railway in Wales, or Somersetshire, or elsewhere, has appeared in London, or Liverpool, or smaller places where banks are to be found, and has got his bill at 4 or 6 months discounted at twice or thrice the current rate of the time, fortifying it of course by a deposit of collateral security. When the due date arrived the bill could not be paid. It must be renewed, and renewed it has been, not once but several times. Now and then the lender has been lucky enough to get repaid out of his securities, or out of the pocket of some new party discovered and cajoled by the assiduous exertions of the well-paid and plausible emissaries of the people wanting the cash. The end of the process has been a lock-up of funds in advances which are really and truly mortgages on unfinished public works, or on public works struggling into profitable existence.

During the last month or two it is probable that there has been some clearance of finance paper. The borrowers on it have been, in one way or another, enabled to offer securities to bona fide at prices which had led to a real distribution among the public – or, what is the same thing, a class of real shareholders has been found, not before the line was made or the calls required, but after both these things have been accomplished at a sacrifice about which prudence and pity alike counsel silence.

The finance cos. were set up expressly to do this sort of intermediate work, but have not done it at all well. Sie konnten nur lend safely what they possessed safely, their own capital and the deposits lent to them for long periods expiring at various dates. They resorted to credit; they counted upon the facilities of the market; and when the market ceased to be facile, because contractors were found to miscalculate and to fail, then the finance cos. had to turn round on their shareholders and call up in a hurry and [in] the midst of panic the capital they had been foolish enough to lend to others before they had it in hands themselves. … A bill of exchange drawn against goods bona fide produced and sold is a security which the ordinary consumption of the country will carry off and pay for, and is therefore a safe and proper instrument for circulation among bankers or bill brokers. A bill of exchange drawn in reality against an unfinished public work is a pure speculation on the possibility of that public work yielding a dividend on its cost, and finding purchasers in detail for its bonds or shares.

Fraud or misrepresentation should be punished as a criminal offence; as, f.e., by rendering personally liable the directors and officers actually signing any bond or security, which on the face of it implies any material circumstance at variance with the real facts of the case … Wenn dieß finance paper cleared out of the market, the rate of discount will then resume its former and proper function of indicating the relation between floating capital expressible only in terms of money on the one hand, and floating capital represented by merchantable bills and securities on the other.

The East Indian Railway Scandal.

Handelt sich um the great line which serves the valley of the Ganges. The Gvt was forced to order an inquiry into certain great mischief, which the enormous and unexpected prosperity of the railway is inflicting upon commerce. Pressure already severe (auf den rolling stock) when the full weight of the cotton trade fell upon the railway, producing a scene, when its duration is taken into account, entirely without parallel. Every European house rayed out its agents into the NorthWest and Central Provinces in search of cotton. Every native firm began making advances and bribing the little holders, and from 50 districts as big as English counties cotton, the very existence of which was hardly suspected, came pouring towards the line. The stations were choked to the roof, and in a little while the idea of housing was given up and the cotton piled upon the plain. At Cawnpore, says Mr. Robert, official Chief Auditor of the Railway, there were after the greatest efforts had been made 20,000 bales of cotton lying piled in the station, 20,000 more on the plain round it, and 24,000,000 lbs were in the store-rooms of the native town, all waiting transport at once. This represents a property of 2¼ millions lying idle at one station. The railway officials could not carry it, had not, after they had strained their powers to the uttermost, sufficient engines or trucks or time, and by the by they found a reason for not hurrying. The owners wanted the cotton very much – Heißt z.B. in extract from the evidence of a partner in the House of Schoene, Kelburn et Co.: „I have to complain generally of the detention of cotton at Mirzapore and an unfair distribution of waggons. We had goods at Mirzapore ready for dispatch in December and January last, 2,545 bales of cotton, of which up to date we have only received 260 bales. Application to agent on 18. January, reply on the 19. The traffic manager was doing all in his power towards distributing the wagons fairly, and agent was very much surprised to find subsequently, that private instructions were issued to the traffick manager to give the preference to the Commercial Transport Association in the allotment of the wagons. … on our total quantity of cotton at this date there is a loss compared with the prices to be realised in January of 5rs. per mound, in round numbers 30,000rs, and, as the firm has paid for all this cotton, they lose monthly 2,500rs. interest.“

Thus pressed the great European firms used their social weight both with the Co. and its officials, and so obtained occasional preferences, but the natives went more directly to the point. They bribed the station-masters. Fabulous sums were offered to subordinates on 300l. a year, one man’s wife making by a sale of preferences above 1,400l. a month. Outcry. It was seen that the Commercial Transport Association was always served first. Besides being very great customers, they owed the railway a heavy debt … preference given them to pay this off. Committee of Inquiry proposed that the trains should be put up to auction. Whoever paid most, should have his cotton carried first … not met (this) the merchants’ approval … It would render the price of cotton at the part altogether uncertain, the bids being high one day and lower the next, would enable a lucky bidder to undersell his neighbour, and completely suspend all trade in goods unable to bear the heavy premiums. No final orders have, we believe, been issued, and whole the Board in England are straining every nerve to meet the demand, there the cotton lies heaped round the central and Northern stations .

These Indian railways are in fact state railways. The state gives the land out of taxes, gives the interest out of taxes, and assumes a direct and most searching control of the administration. Muß also für das interest der natives so gut sorgen wie für das der Europeans, und das der community as well as that of the shareholders. This the sale by auction does not do. It is a direct prohibition to the grower of anything except cotton to use the state railway at all, and as regards cotton itself, gives the capitalist an unfair advantage over the small dealer.

The Report of the Commission of Inquiry into the Pollution of the Thames.

»Pollution of the river from the paper mills and sewage. In both cases valuable manure wasted and river poisoned. From one paper mill above a ton of dry fertility matter is thrown daily into the stream. Throughout the whole course of the Thames, from Cricklade downwards, the sewage of cities, towns, villages and single towns is suffered to pass into the river.« „There is no form of scavenging practiced for the surface water of the Thames, but carcases of animals float down the stream until wasted by corruption. The river water receives unchecked the whole of the pollution, solid and fluid, of the district, and this same water, after it has so been polluted, is abstracted, sand-filtered, and pumped into the metropolis for domestic uses.“

The example of London in removing its sewage from the river has not been followed. The water below Oxford is useless for the manufacture of white paper and unfit for drinking … It is true that the river is not so absolutely sewer-like as it was when the main drainage of London was turned into it.

The Commissioners inquire what can be done with the sewage, and whether the irrigation of land with sewage, as carried on at Croydon, Norwood, Worthing, Carlisle, and Edinburgh, has any bad effects on the health of those places. It has no perceptible effect, and they strongly urge its general adoption. Dr. Carpenter, of Croydon, said: no injury to the neighborhood had arisen from the irrigated fields, and there was but a very slight smell from them in hot weather, just before rain. According to Mr. Latham sewage is completely deodorised as it touches the earth. But great care is needed in the management of the sewer. They must be properly ventilated, and that outside the houses. The sewage water must be passed over a sufficient area of land, and not to near dwellings. But if these precautions be taken, the benefit of the sewage water to the land is invaluable. It goes off from the land bright, tasteless, and inodorous. Mr. Cousins, of South Norwood, who rents some of the irrigated land, has raised crops of grass of 50 tons of the acre. … Near Edinburgh, sewage irrigation has been used for two centuries, and though the conductors were suffered to get out of order, and to become reservoirs of stagnant sewage, no special class of disease has been generated through the sewage.

How to profit by the plague.

Take f.i. Cheshire and other localities where the plague has been virulent. Much of the disease which attacks the dairy cows due to the wretched accommodation, or rather the absolute want of accommodation in housing them, and to the poor system of feeding them during the winter months, well nigh universal in dairy farm districts.

„ In no case should undrained stiff clay lands be ploughed; the first crop may be tolerably satisfactory, but the expense of tillage afterwards, and the uncertainties of the seasons, will add so much to the cost of production, that there will be little left as profit. I would advocate the allotment of none but good land for arable cultivation, but no more of it than could be well managed; a little well done will be more profitable than double the extent only half farmed.“

A certain number of sheep and a certain quantity of ploughed land would be great improvements on Cheshire farms as helps and auxiliaries to dairy husbandry. Without ploughed land there can be no straw, absolutely necessary to the comfort and good management of cattle during the winter months.

The best fields on most farms (I speak of the average class of land in Cheshire, and not of the very light or sandy portion) are those which were boned many years ago, when never less than from 1 to 2 tons per acre were applied, most of which was in lumps of the size of a thump. These bones, it will be found on ploughing, have sunk 9 or 10 inches deep into the soil, and are lying there in a half-decomposited state; by ploughing you replace them near the surface where the action of the air and repeated tillage reduce them to powder, and lays them under a renewed contribution as fertilisers. There are hundreds of fields also whose grasses are run out, to use a common phrase, and which, by growing in a weak and spiral form and by matting together as they grow longer, ask to be ploughed; they can be returned to permanent pasture even in a better state than when first broken up. In expenses of ploughing, sowing, reaping, and harvesting good land are all less than they are in poor unsuitable soil, and less still in fields conveniently near the homestead , which will be better for the tenant.

Share Market.

In financial shares trifling business. There is, in the Stockexchange and its „entourage“ a considerable „bear“ account or speculation for the fall. On the other hand, the public are in many instances uneasy, and on the slightest unsatisfactory news, reliable or otherwise, send constant supplies of shares upon the market.

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5 May. 1866. N. 1189.

The Sudden Rise in the Rate of Interest.

Drain of bullion and diminution in the Bank Reserve. Heraufgesezt Bankrate zu 7%. Der Bullion drain nicht for the East wie lately. Es ist nicht an Oriental, but an European demand connected mit den operations of foreign Gvts now preparing for war, besonders der Italian Gvt. Continental capitalists are selling securities in this market, in order to supply the wants of the disturbing Gvts. The Bank return shows a large diminution in the reserve of notes.

15 Mill. der Bank of E. (statt 14) seit 1863, in Folge Eingehens von issue country banks. (15 Mill. paper not issued against Gold.)

Agricultural Labourers on Strike.

The farm labourers in the village of Peasemore, Newbury, Berks have struck for an advance of wages. Their present pay is 9s. per week, and many of the men have large families. Some farmers have written to the Times that some of their labourers have received from 9s. 9d. to 14s. p. week since Michaelmas – probably by occasional piece-work or the aid of their wives and children – but the general rate of wages for ordinary farm labourers in the parish is not disputed to be 9s. p. week. The advance asked by these Berkshire men is 1sh. p. week. Throughout the rural districts of England there has been at certain times and in several districts an actual scarcity of labour. We know not how the rural workmen can avail themselves of this to them favourable state of the labourmarket so readily as by some general and combined action, and to those who have known the farm labourers of the West of England 20 or 30 years ago, the fact of theirs thus combining for the assertion of their own right to make the best bargains for their labour the market will afford is a sign of hope and promise.

Low wages produce a want of spirit and energy amongst the farm labourers, which often unfits or disinclines them for more active exertions than they have been accustomed to make even when offered better wages.

Share Market.

Generally very low quotations. Financial shares have mostly given way, quotations in every case show a decline, and in many cases the fall has been severe. Rumours of calls, and the vague feeling of alarm still prompts the public to part with share. Operations for the fall are also active. Banking shares are also lower.

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12 May. 1866. N. 1185.

The State of the City.

The failure of Overend, Gurney et Co (Limited) has given occasion to a panic more suitable to their historical than their recent reputation. Overend, Gurney unlimited, for the sake of high interest took bad securities. As to Overend, Gurney and Co. (Limited), they did the best they could, but could hardly help bringing over old business of very questionable nature from the old firm. … Lombardstreet has been thronged and almost stopped by curious wanderers in a way we never saw it stopped before, and on the whole we doubt (trotz seiner beständigen Prophezeiung des Gegentheils!) if there ever was a collapse of credit more diffused and more complete.

It has hardly been observed how new an element of danger limited cos introduce. The moment the operations of the Stock Exchange depress their prices, that instant a run begins. Many cos may go which did not deserve it merely from the depression of their shares.

Bk. act of 1844 must be suspended. Large sums have been withdrawn from the Banking department to-day, notes to a great amount have gone into the country, discounts and advances at the Bank have swelled to an extent almost unprecedented. If these demands have reduced the Bank reserve to such a state as 1847 and 1848 … it is not a matter of theory (die suspension des Bankacts von 1844) at all; it is plain insolvency and must be mended somehow … After a certain though very late period yesterday, the Bank did not make advances on Gvt. securities, wohl weil their reserve was in danger of exhaustion. If the B.o.E., the sole banker of the English Gvt., will not advance on the securities of that Gvt, there is no saying what may happen to any one. … As to the General state of the trade of the country, we have no doubt of its substantial soundness. Hurrah!

What a Panic is etc.

The provisions of Peel’s Act aggravate alarm. They cause panic where there would have been merely fear. In solchen Zeiten der credit der B.o.E. is augmented. In the ordinary working of banking in England, a mechanism of diffused credit economises the use of banknotes, of visible instruments of exchange, of money in the ordinary sense of the word. By the aid of the clearing house, of country bankers, of London bankers, of the B.o.E. all working together … the most important bargains are settled without the use of any banknotes or coin whatever. A cheque is given, and by the aid of the system of set-offs, this bit of paper pays for cotton or indigo as effectually as sovereigns, and pays for it in every part of the kingdom. Darin all wholesale transactions settled. Mit Ausnahme des North of England, where a rather barbarous mode of charging bank commissions restricts the use of cheques and banking, no one pays any large debts except by cheque. The wholesale currency of the country is a ledger currency – a currency of bankers’ deposits transferred by bankers’ cheques. Banknotes in general, and in their customary use, are but a retail currency. Small matters are settled by them; large matters are settled without them. In a panic this auxiliary and supplementary currency is at once in part annihilated. Its very foundation is taken away. That foundation is credit, and there is discredit. A person f.i. who has lent money on securities will not take his debtor’s cheque and give up these securities. He asks for banknotes. The general machinery by which bargains are settled and debts paid in this country is in times even of commencing panic disturbed and superseded. The Banknote is a most coarse form of credit as compared with the cheque currency. Taking a banknote (even when not a legal tender) only involves trusting the Bank; but taking a cheque presumes also a trust in the cheque giver. (Viel weniger als by bills of Exchange!) Weil in dem panic die cheque currency partly destroyed, we fall back on credit of the first sort, upon Banknotes. We require more Banknotes, just because the feeling, the confidence which made few Banknotes effectual has disappeared. The same cause operates in another way at the same moment. Die country bankers provide themselves mit notes etc. Wenn Scotch or Irish issuing Bank should fail, die other Scotch or Irish banks would issue notes upon bullion to fill the void, but obtain that gold by getting a credit balance at the Banking Department of the B.o.E., by drawing a cheque on that balance, by getting notes in payment of that cheque, and getting those notes paid in gold at the Issue Department. Those notes are then cancelled, but the effect is the same as if they had been taken to Ireland, or Scotland, and there issued. The panic has in both cases destroyed the local circulation, and taken notes out of the Banking Department of the Bank to replace them. In one case it has issued and in the other destroyed them; but that is immaterial: the demand on the Bank issue, the void in London is the same.

Also pressure on the Banking Department of the B.o.E. More notes are required, taken out of the reserve there. Dazu Bk.o.E. notes a legal tender. … Yesterday (11 Mai 1866) was perhaps the worst day ever known in a week of that sort.

The Irish Landbill.

Fortescue’s bill. Tells us that it is merely to render the Act of 1860 effective. Aber das Neue drin: a provision giving a tenant a claim on his landlord in consideration of outlay incurred, irrespective or even in defiance of the landlord’s wishes … The assertion in a general form of the subordination of the Landlord’s right in his property to the public welfare has not yet been made in distinct terms in an Act of Parliament. This would be entirely sound.

The proper object of a measure for tenant-compensation is, to secure to the tenant full property in the thing he has himself created, or, in lieu of this, its value from the man who under the law may appropriate it. It is, however, an inevitable circumstance that the value which the tenant adds by his improvements to his farm becomes, when the outlay has once taken place, inextricably blended with the general value of the land: it is thus a preliminary condition to the practical solution of the problem that a separation should, with at least approximate accuracy, be effected between the elements of value added to the land by the tenant’s outlay and those due to the general circumstances of the country. Moreover, in all progressive communities the value of land – as a consequence of the longer demands made upon it for subsistence by an increasing population – and wholly irrespective of agricultural improvement tends to rise, wozu jezt noch kömmt die immensely increased production of gold and silver. 100l. means not now what before the Australia et California discoveries. This affects wie den price aller Dinge the price of land. … A railway runs through a district, and the value of land in the district rises …

There may, or may not, be good reasons for retaining the land of a country in the hands of the State. The benefit of its augmenting value may thus be reserved for the community at large.

Confiscation is not for us the word of horror which it is for most of our countrymen. We can well believe that a well-devised scheme of confiscation might easily be made productive of solid benefits to Ireland; nor should we shrink from this expedient were it necessary for the regeneration of the country. But our objection to Mr. Fortescue’s measure is that while paying the cost of confiscation, it secures none of its gains.

In dem Act steht: „The Gvt. do not propose to interfere with perfect liberty of contract.“ And the Act is only to come into operation „wherever there is no written contract to the contrary“. The measure is thus rendered absolutely innocuous, but also … perfectly idle. Do the Gvt. really suppose, that Irish landlords will incur the risk of indefinite claims being run up against them by their tenants if they have it in their power to prevent this by the simple expedient of an additional clause introduced a common form into every lease?

Money Market.

The business of the old firm Overend and Co in July last (1865) transferred; its suspension followed by that of the English Joint Stock Bank , a still more recently created establishment. Some pressure during the day at a few of the banking houses, but all claims have been satisfactorily met in that direction. At the B. o. England the demand has been heavy; in other quarters the transactions reported are extremely few.

Rapid rise in the discount rate, to day advanced to 9%, seems to have checked demand and the export of bullion.

Chief failures transpired to-day those of 2 or 3 contractors unable to obtain the advances upon which they had been accustomed to rely. Also reported stoppage of a Liverpool House in the iron trade.

In all securities the depreciation has been sudden and beyond precedent within last 20 years.

Foreign Stocks. The rapid decline on the French Bourse and the pressures of sales on the extremely limited market in London occasioned a further excessive decline in prices.

Railway Shares: considerable decline in prices compared with those of last week. The chief depreciation may be attributed to the realisations of those who, to meet losses, have been compelled to sell any high investments at command. There is very little doubt that operations for the fall have had much to do with the further reductions noted in the list.

On Financial shares the panic has acted with unprecedented violence. Concentrated in its form on account of the limited space upon which it has been only able to act, the present panic in financial shares exceeds all that has been previously witnessed, although the depreciation of the past few weeks had been severe and extensive. At this moment the difference between the par value of shares on the „Miscellaneous“ list, and the quotations of this evening amounts to somewhere about 15,000,000l. St. Today the dealers have mostly refused to deal, except to close account; and the consequence of a resolution of this kind following upon a crisis like the present is the closing of a vast number of accounts, and the extinction in many cases of whole fortunes involved on too large a scale in shares on which the dividend depended entirely on the realisation of assets now rendered impossible. In many cases the profits declared have had no existence except on paper, and subject to the safe conclusion of the operations in which the societies had engaged.

Banking shares have suffered afresh; the degree is only inferior to that of the Financial Co. shares, but the results so far have been less disastrous.

Failures: Gibbs, Brothers Ironworks, liabilities 25,000l.; the English Joint Stock Bank limited, today followed Overend; W. Shrimpton , of Westminster, suspension; Bills of Sir Morton Peto returned last evening, and, we fear he will not be able to resume payment.

Cotton market. Liverpool.

Much depression. Quotations for Americans and East India are reduced all round 1d. per lb since Friday last. To-day there has been quite a panic in the market; sales about 3,000 bales, at prices quite nominal.

Manchester. May 10.

Iron has given way considerably.

Prices have continued their downward course day by day. Both yarns and goods quoted 1 to 2d. per lb down since last week.

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May 19, 1866. N. 1186.

The Panic.

This panic more than any other we remember – a Credit Panic. The promises we have given to pay gold on demand could not be performed by many thousand times as much gold as there is in the country. And when this is the case our whole mercantile system must always be easily injured by causes comparatively slight … Last Friday (11 May) no one knew who was sound and who was unsound … the lenders of money were suspected of misusing it. The panic of 1866 was a credit panic, not a capital nor a bullion panic.

Charter Act (1844) suspended. Just before the suspension of the Act no bank was – considering the nature of its liabilities – in so much danger as the B. o. England. It had a reserve of only 3,000,000l. in town and country, and from all parts of the country demands on that reserve were pouring in every hour. Country bankers felt they must either get more notes and more sovereigns, or give up their business; London bankers were pressed upon not only by their country customers, but by a kind of oscillating run which now went to this bank and now to that. The B. o. England could not have increased its reserve by letting its bills „run off“; for they would not have „run off“, but have accumulated unpaid in its bill case. … On Friday the London bankers deposits in the B.o.E. amounted to a larger sum than its reserve. These bankers would not – and some of them used plainly such language – allow the B.o.E. to go on while they failed. Nothing is so imitative as panic, and if 1 or 2 large bankers had drawn their balances, all the rest would have followed like sheep, and the banking department of the B.o.E. must have been left bare … In figures its (the banking department’s of the B.o.E.) reserve looks larger than that of its competitors, but only because it includes that of its competitors. It was at least as badly off as they, for it existed on their sufferance. … No considerable amounts of Consols can be sold at moments when the Bank is for such purposes the only lender, and when it refuses to lend. The jobbers in stock are men of means, but not masters of secret hoards of ready money. It is not a question of price but a question of cash. In ordinary times if stocks come forward in unusual quantities for sale, he can (the Jobber) with ease borrow on it, or dispose of other securities to purchase it. But in a panic these „other“ securities are probably unavailable, and if the B.o.E. hesitate to lend, the other resources of the market are very scanty. If the Bank were, in a panic, absolutely to refuse to lend on Consols, they would not be saleable for cash.

Except in particular branches of speculative trade – as cotton, or pig iron, or the ship-dealing and owning fostered by Barned’s – English commerce was hardly ever sounder!

Brief des Russell und Gladstone 11 May (suspension der Bankacte). Danach interest heraufgesezt zu 10%.

The Suspension of the Bankact. (Von Bonamy Price im Economist)

Die Banks und many mercantile firms drew only out notes to protect themselves. Aber wahrscheinlich, daß wie in 1847, not a single note in excess of the regulations laid down by the law will have been issued. … Der Effect des letter (der suspension) a real gain. The run was checked, the deposits were left alone; but it was achieved by a process of the imagination; not a single additional note was set to work … The Bank Act of 1844 neither made nor healed the crisis; it had nothing to do with the matter; but the application of a delusion respecting it did do good, and so far the mechanical has an advantage over the discretionary issue of banknotes. It makes it possible to use its abolition, and the substitution of the discretionary method in its place, as an instrument supposed to be capable of working miracles in a panic.

In the hour of panic no one thinks of the gold as necessary for the B.o.E. note. Before 1844, the banknote was accounted as safe, as solid, as it is now. Since 1819 no man has preferred a sovereign to a B.o.E. note on grounds of safety. In 1825, when the severest run was made against the Bank, banknotes were demanded, and the Bank, in its banking department, was saved from the stoppage solely by the accidental discovery, not of bullion, but of a million of unburnt banknotes.

In der French Correspondence des Economist.

Gladstone solle der B. o. England pay back the debt which the Gvt owes to it. By so doing it would relieve itself from the interest of 3% on that debt, which it pays the Bank; and that relief would be as effective as buying up Consols in the market. The Bank, on its part, would profit, by having the money as capital to work with. It has at present no capital, and that is a great anomaly in an establishment which directs the market and regulates the rate of commercial interest.

Figures relating to Panic of 1847, 1857 and 1866.

A. 1847.

(verte)

B. 1857.

A Game Preserver’s Ukase.

The following curious notice to his tenants has been issued by Lord Denbigh to his tenants: „As complaints have been made to me of the damage done by rabbits in the cultivated parts of my property, and I am anxious to meet the wishes of my tenants as far as possible, I have arranged with my keeper to destroy the rabbits as far as he can on the arable land; and in order to insure this being attended to satisfactorily, I have given orders that 2 appointed rabbit-catchers shall be at the disposition of the tenants from Febr. 15 till the beginning of the breeding season on the following terms: The tenants shall have full leave to ferret all the hedgerows adjoining arable land on their farms (excepting covert hedges) as often as they like during that period, using neither dog nor gun, but only purse nets over the burrows. All the rabbits so caught by each tenant shall be kept by him, he paying the wages of the rabbit catcher so long as he employs him. No tenant is to ferret without being accompanied by the rabbit-catcher. In consideration of this concession I expect my tenants will preserve strictly for me all other game. As frequent complaints have been made of self-hunting dogs being seen on the property, I have given orders to my keepers to destroy all such found hunting etc. Denbigh. Newnham Paddocks, April, 1866.“

That which most vitally affects the farmer, the question of whether he is himself to consume the crops he had paid for to Lord Denbigh, or whether Lord Denbigh is to consume those crops by means of his game and rabbits, is to be arranged, not with the tenant, but behind his back with his lordship’s keeper! It is proverbially said, you cannot have your cake and eat it, but Lord Denbigh and his fellow game-preservers have found out the way of doing so. They first take rent for the use of their land, and then they consume for their own profit and amusement the crops raised on the land by means of their tenant’s capital.

At the Aberdeenshire election now pending says Mr. Fordyce, the farmer’s candidate: „From 1820 the Game Laws have gone on increasing until their number was now almost legion.“

Money Market.

Comparative view.

Discount market. Notwithstanding the remarkable pressure upon its resources, the Bank has not yet infringed the limit of the Bank Act … There are inquiries on account of foreign investors in first class 6 months paper of unexceptionable character of 8¾ to 8½%.

Railway shares. Slight recovery in the prices, but business is of a very limited character.

Financial shares: The depression continued during the early part of the week, and reached extreme limits. Unreasoning haste on the part of the holders of shares contributed no less than the numerous sales of speculators for the fall to the fearful sacrifice of property that ensued. It was no longer necessary to pay for shares. Holders became so anxious to be quit of their liability that they offered various, and, in some cases, large amounts to those who would consent to assume their places on the sharelists of the co. in which they were, or fancied themselves involved. The shares of Overend, Gurney etc Co with 15l. paid, were offered at 18l. discount, or a bonus of 3l. for taking the shares. Imperial Mercantile at 10% discount, with 10l. paid. Credit Mobilier and Foncier at 5 disc., with 5l. paid. London Financial, with 20l. paid, at 15 and 16l. discount. General Credit and Finance shares, on which a call of 2l. had most unexpectedly been announced, were offered at 5s. per share, as if the whole capital, or nearly the whole capital, of the co. had been entirely lost. The settlement on the 15. inst., by causing the closing of numerous accounts, served to put an end to many of these wholesale sacrifices of property. Within the past 2 days there is less despondency, and less disposition to sell so freely as previously, a considerable improvement is hence to be noted in very many cases. Credit Mobilier and Foncier have recovered to 2⅝ disc.; General Credit to 2½ disc.; London Financial to 13 disc. The shares of Overend, Gurney and Co. are still dull at 18 to 16 disc. The shares of the International Financial Society have held firm in consequence of the exceptional position taken by the co. in offering to discount its own acceptances at Bank rate.

Bankshares: extremely sensitive. Considerable fluctuation in Agra and Masterman’s Bank , Bank of London , and Alliance Bank .

• Messrs Penny et Co, Liverpool, East India Merchants. Liabilities 104,000l. Assets: 20,000l.
• Drafts of the Oriental Commercial Bank (Limit.) were returned unpaid on 17 inst. Liab. 350,000l.
• Draft of the New Zealand Banking Corporation have been returned. Co. formed in 1863, paid-up capital 60,000l. the last dividend declared 10% p.a.
• Fernie Brothers and Co., Liverpool, merchants and shipowners, have arranged for liquidation.
• Bank of Turkey, 17 inst., resolved to wind up.
• Shrimpton , contractor, 15 inst. meeting of creditors. Liab. 220,656l. Assets at their nominal value: 387,070l.
• British and Foreign Mining Financial Co (Lim.) winding up; ditto „London and Provincial Starch Co.“ Limit.
• Failure of Hallett, Ommanney et Co, Private bankers and navy agents, Westminster announced on 15. inst. Liabilities von 250 to 300,000£.
• Imperial Mercantile Credit Association (limited) stopped payment on 12 inst.
• Failure of Mr. Charles Bedell, wine merchant, Markline, liab. about 100,000l.
• Northfield Iron and Steel Co. (lim.) winding up; ditto „Hop and Malt Exchange and Warehouse Co“ (lim).
• Commercial Bank Corporation of India and the East, suspension of payments.

Liverpool. May 17. Cotton Market.

The cotton market, which had previously declined to a comparatively low point, has not been so much affected by the monetary crisis as might have been expected.

Manchester. 17 May. The market opened with greater steadiness this week after the recent panic. A small hand-to-mouth business in yarns for manufacturers, who hold only their bare requirements. In cloths, for current general trade, the demand has almost ceased.

Leeds: A collapse of orders and sales of goods for Germany.

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26 May 1866. N. 1187.

The Substantial Grounds for increased confidence.

Our discount rate 10% against 4% at Paris.

Besser if the Act had been nicht nur legally, but really broken. It would have been so, if the London bankers had not, to prevent it, sent in a larger amount of small notes than usual. Considering how much must be in the country branches, 800,000l. of notes is childish as a reserve. In fact, the Act was broken the moment the Bank began to act on the letter of this day fortnight; a course of policy then began inconsistent with every clause of it. If the directors were acting under no indemnity they would in the present state of the reserve deserve impeachment.

We are not frightened by the operations of the so-called „bear“ at the Stock Exchange. Some most unjustifiable ruses have indeed been resorted to by inferior persons which amount to aggravated plunder.

The operators, z.B. im case der London und Westminster Bank, could not get the shares which they sell without paying as high or a higher price than that at which they sell. They are indeed able to gain great profits and inflict frightful injury in two cases – first, where as in the case of the Bank of London there has been bad business, and the extensive credit of the Bank is thereby weakened. Then as soon as sales are pressed the price falls, and the operator is able to buy the shares he sold to-day at a far less price to-morrow. The profits so made where shares fall so quickly as those of the Bank o. London are very great, and the consequent ruin of the bank very quick. The same result also happens where, though no bad business had been done by the Bank, its shares are in the hands of poor people, who can bear no loss and pay no calls. Such people rush to sell the moment the price falls; and the „bears“ thrive on their ruin … A fearful penalty is visited on incidental errors, and concerns which might have crippled on and got right, are by the depreciation of their shares crushed and swept down. But half of human justice works by decimation in this way.

The Practical effect of the Act of 1844.

The main use of the law is that it compels the Bank to act at an early stage during a foreign drain of bullion … Aber, der Esel sagt selbst: the Banking department was bare in 1857 and 1847, before they had aroused themselves to act as they ought, und damals existirte ja Act of 1844!

Evils of the Act: A panic is necessarily aggravated. As the auxiliary credit currency having been impaired and injured, more notes, more primary credit currency is wanted to supply its place. On what is called „Overend’s Friday“, the want of such currency was palpable, and it was given. The Act of 1844 is responsible not for the present want of credit but, but for the difference between the acute agony which preceded the relief from the Treasury and the slow suffering which we still feel. Certainly, Peel’s Act is a legal ligament which inflames panic into frenzy.

The Act of 1844 makes the quarterly payments of the dividends and salaries very serious matters, whereas otherwise they would scarcely be felt. The banking reserve being isolated, any considerable amount of notes withdrawn from it, even for internal purposes, makes a marked change, and … the rate of interest is raised unnecessarily. Whether a few more notes go out to the public is immaterial, if we make up the account in the „old form“, or as the accounts of the B.o.F. are made up; but the loss of those notes, at critical instants, is made most important by the Act of 1844.

There is a danger from Peel’s Act we now experience for the first time; its suspension is liable to cause foreign discredit. This defect is most serious. Dieß bewiesen durch Clarendon’s Brief vom 12 Mai an die British Embassies and Legations throughout Europe, um klar zu machen, daß there is no suspension of cash payments or Bankerutt der B.o.E.

The Supply of Animal Food.

During the last 20 years provisions of all other kinds have become lower and more stable in price, while meat had advanced in value far more than other food has diminished, so that even mit better wages our working men find themselves no more able to furnish their families with a fair amount of meat than in the old days before Repeal of the Cornlaws. The importations of foreign live stock do, to a small extent, supplement and increase our own supplies. Probably preserved meat will by and by be derived from those pastoral countries where hides and wool have hitherto been deemed the sole produce of herds and flocks.

There is not the slightest doubt that if the land of this country were properly used and managed, a far grater population than that now living in these islands might be fairly supplied with meat at a reasonable price. It is not by the diminution of our grain that we shall increase our meat. In modern husbandry more cattle and sheep on a farm imply and furnish the means of growing more grain, while the increase of grain – with its accompaniment straw – is the origin of more stock and stock provender.

„Practically“, says R. Smith, in a lecture at the London farmer’s club, „it depends first (increased supply of animal food) on the investment of capital to increase the fertility of the soil; secondly, on the subsequent improved rotation of crops, so as to secure a larger percentage of cattle food produce with increased economy and decreased waste in its consumption; thirdly, on improved animals, with precocious habits, as fattening stock, whether cattle, sheep, or pigs … For such a purpose the strong lands, which hitherto have done but little in the way of increasing the supplies of animal food, should be used during the summer months for growing green crops. This ought to be to the occupier of clay soils what the winter feeding is to the occupier of light soils. Cabbages, early turnips (sown on a stale furrow) mangolds, and kohlrabi may be grown on clays, the two former in time to be eaten upon the land by the end of September, and the two latter to be drawn off, stored, pulped, and used with wheat straw chaff. In this way all the straw not absolutely wanted for litter, may be advantageously eaten, and, with the aid of oil cake and crushed corn, a good deal of mutton and some beef (the former pays best) may be made from the produce of those soils, the occupiers of which have hitherto relied upon wheat and beans only. This change of system would require autumn cultivation for all the green crops, and so raise the question of efficient drainage and steam cultivation.“ In dieser question einbegriffen the whole array of questions and difficulties which beset, trammel, and impede British husbandry. Efficient drainage, with its necessary concomitant, sufficient building accommodation for stock must be the work of the landlord, an outlay of capital to be compensated by interest in the shape of increased rent, – to be followed by outlays by the tenant in improved cultivation and stock management which any farmer must be absolutely insane to make unless protected by a long and rational lease. Then steam cultivation can only follow as a result from these other and preliminary improvements. And to render steam cultivation possible there must be a grubbing up of hedgerows and the removal of hedgerow timber, which must be done by the landowner as a capitalist, and completely, too. It is if no use to grub the hedges and leave the timber standing (as we so frequently see) in the midst of an arable field, greatly impeding ploughs with horses, and presenting an absolute bar to steam cultivation. Yet when landlords have consented to the grubbing of hedge-rows, even at the tenant’s expense, they object to the removals of the trees, leaving them as evidences of prejudices at once childish and unintelligible. Yet these prejudices are the serious obstacle to the progress of English agriculture.

Ferner obstacle: The feudal notions which infect all that concerns the ownership of land in England. It is tenacity with owners of land to retain the ownership – very often only the nominal ownership – of much more land than they have the means of managing. Hence we have, in a modified form, many of the evils which affect the Irish tenantry – farmers occupying farms in which many of the most necessary improvements – necessary according to the actual state of English agriculture – must either be made by the tenants or left undone. The result is, especially on the strong soils referred to by Mr. Smith as those on which more live stock ought to be kept, that the improvements are not made. In fact, the strong lands of England are less productive of meat than they were a century ago, and mainly because they cannot be well farmed without considerable preliminary outlay on the part of the landlord.

Ferner poultry much neglected. Smith says: „The late Mr. Pusey told us, 1838, that while England Wales contained about 37 millions acres, and Scotland and Ireland about 20 mill. each, there were in the U. Kingd. 20 millions of acres laying waste, one half of which might be improved.“ Ferner Smith adverts to the want of economy which results from the yearly-tenant system, which is the curse of English husbandry.

„Economy in Agriculture“, he says, „is a most important means by which an increased supply of animal food may be attained, the greatest of all being the increased fertility of the soil resulting from a liberal investment of capital under security of tenure, the fixed payments of a farm, such as rent, rates, and taxes, being the same; while, on the other hand, nothing can be well worse than the waste of capital where tenants are ‚farming in and farming out‘. There is economy in a good education; for, while a proper knowledge of the natural sciences is essential to profitable farming, it is equally important to understand the principles by which nature’s laws are governed. There is a marked economy even in well formed animals, as improved machinery at the farm factory, where the animal heat and the proportions of the boiler have alike to be consulted.“

Amongst other improvements he strongly recommended covered yards for stock. There, he says, „the cows having done growing would be placed in stalls to economise place, the fattening animals in warm boxes, the young growing stock would run loose in the centre yards, and the juniors would be placed in suitably arranged calf-pens; in the immediate vicinity of which are well-arranged root, chaff, meal, and mixing houses, which by their concentrated position afford an economy of labour, food, and supervision. Again, as the economy of warmth is a well known equivalent for food, so do covered yards economise feeding stuffs, while the even temperature of the building promotes both health and happiness. Covered yards are the things to save food; the cattle and food are all close together: what one won’t eat another will; nothing is wasted; and it is a capital thing pulping the roots and mixing them with the chaff. The best of all is, they don’t get washed by the storms. Their coats are so alike … They lie about like cattle on grass in the summer time, and don’t take near so much litter as the open yards.“

Mr. Cousmaker said: „too much importance could not be attached to the system of breeding … they ought to combine the breeding of stocks with its fattening. “ „He had himself escaped the cattle plague, although violently raging in his neighbourhood. In August and September they had lost in his parish 270 head of cattle. One of the causes of this escape was that he had not for years bought stock. He bred at one end and fattened on the other, and he never bought or sold, except to the butcher, beyond buying about once every 2 years a yearling bull, for the sake of change of breed.“

Paris Correspondent. 25 May.

Contrary to what might have been feared, the failure of Overend, G. et Co , and the panic at London, have not brought down any banks here, though several have suffered, one or two greatly. Nor has the stoppage of the European Bank , though it had a branch in this city, done much harm. But the difficulties created by the impending war are beginning to tell on commercial firms. Two commission houses of some importance have stopped; others are reported to be in jeopardy; and in all the great branches of trade the existing perturbation appears likely to produce serious consequences, in Paris and the large commercial towns. News this day arrived of the failure of a firm in the cotton trade at Rouen with liabilities of 4,000,000f.

The Money Market.

Discount Market: Recovery from the panic very gradual, few symptoms only of returning ease. The public show small disposition to relax their hold on the sums withdrawn from deposit; and, as the bankers do not yet esteem themselves secure from further withdrawals, they are unwilling to make any advances, but hold their resources in turn, in reserve. In mercantile circles distrust prevails. Credit is subject to unusual tests, and paper, which in ordinary homes would be considered unexceptionable, is subject to fluctuations as to the rate at which it can be discounted … The demand for money under these circumstances sustained, on good securities, at Bank rate; on other than good securities it is difficult to secure advances; and, in many cases, claims have been held over in London and Liverpool owing to the impossibility of obtaining adequate accommodation. Nevertheless, orders from abroad are still received for English paper of the best houses. As a very limited amount only, compared with the demand, moderate as it is for this class of bills, is to be had, the rate undergoes a proportionate reduction, and takers bid from 8½ to 8% for 6 months’ unexceptionable paper.

Gold appears to accumulate in the coffers of the B. o. France more rapidly than it is carried away from this country, and we may hence look for supplies of money from abroad on an extended scale so soon as the present partial distrust shall have been expelled.

With regard to the distrust at home – seeing that it is mainly owing to the unavailable nature of the securities in which the deposits lodged at the discount houses and banks have been employed, questionable whether legislative interference should not control the amount of deposits and limit their employment to securities, such as short bills on the one hand, or readily available securities on the other. The danger of the stoppage of banks in the present instance mainly arises from the possible enormous calls on them for the repayment of deposits at a moment when it is nearly impossible to convert their securities into available assets.

Foreign Stocks. Without exception heavy, prices subjected to very considerable decline. Danubian have fallen to near 50. Turkish stocks have also fallen.

Railway shares: Considerable decline from prices current last Friday. The unfavourable movement in the Bank market (Decrease of bullion of £466,019), and realisations with some speculation sales, account for the change. Indian railway stocks also lower.

Financial shares: Very limited dealings. (fast nur in 3 Cos.) Bargains in Overend, G. et Co shares, Imperial Mercantile Association and others, difficult; it being a matter of negotiation now that open market operations are no longer possible. International Financial Co’s shares moderately firm. General Credit improved slightly. Credit Mobilier et Foncier shares have fluctuated considerably, owing to large and sudden purchases, after which the price has mostly relapsed.

Bankshares: Great fluctuation. Previous to the transfer of the business of the Bank of London, unfavourable rumours afloat. Sales took place, followed by sales of shares in other banks, with a heavy decline. This evening prices firmer.

• European Bank (limit.) stopped 19 May. New Zealand Co (limited) not been able to meet their acceptances. Reese River Mining Co (lim.) winding up.
• Suspension of Messrs. Robinson, Coryton, and Co. Private bankers at Manchester.
• Kynaston, Sutherland and Co, colonial brokers failed. Liabilities about 100,000l.
• Commercial Bank Corporation of India and the East to be wound up.
• Owing to recent failures at Bombay, S. P. Framjee and Co, of Gresham house, stopped payments. Liab. about 300,000l.
• Sea and River Marine Insurance Co resolved to wind up voluntarily.
• Petition for winding up: Glamorgan Iron and Coal Co. (limited)
• Gellatly, Hankey, and Sewell, extensive mercantile and shipping house, resolved to liquidate under inspection
• Sithney and Carnmeal Mining Co. ordered to be wound up by the Stannaries Court.
• Luckie Brothers, merchants, stopped payment. Liab. about 70,000l.
• Bank of London transfers deposit and current account to the Consolidated Bank limited. Owing to the pressure of a continued withdrawal of deposits.
• McCulloch, John and Co, Liverpool, East India merchants, chiefly in the Bombay trade, stopped payment 24. inst.; liabilities nearly ¾ million.
• Klenan, of Angel Court, is in course of compounding with his creditors. Liab. 2,100,747l.

Cotton Trade. Liverpool. 24 May.

Business limited. Prices show a further decline generally.

Manchester. 24 May. This week (ausserdem Whitsunday holidays) almost a nonentity in business. Where any changes can be made in prices rather against the sellers. The amount of contracts also still in the hands of manufacturers has been such as to cause general surprise, though, here and there, as an exception, stocks begin to be found.

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