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Title: Heft „London 1868“. VI. The Economist 1867, Juni–August
Description: Marx’ Exzerpte aus dem „Economist“ vom 1. Juni bis 24. August 1867, 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.%20VI.%20The%20Economist%201867%2C%20Juni%E2%80%93August
---


*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.%20VI.%20The%20Economist%20de%201867%2C%20junio-agosto)*

### June 1. 1867. N. 1240.

#### Taxation in the U. States. (apart from Customs)

Nach dem *„Commercial Chronicle“* (New York) the assessment per head of the *New York State more than double the rate paid in* England, nämlich $9.95 *per head in Great Britain und Ireland* und $22.75 in *New York State*.

#### Emigration from Ireland. (State of Agriculture.)

Mr. *Robertson*, an agricultural expert, commissioned to report on the state of some Irish counties, states: „*There is a very large area of grassland*, which is in a very impoverished condition. The land is grazed year after year; young cattle are reared, and dairy produce sold; *but nothing is returned to the soil.* It will not be long before the Irish farmer experiences that this system will *end in the total exhaustion of the land* .“ Lord *Dufferin* himself, in his book, just published on Irish Emigration and the Tenure of Land in Ireland, says; in *reference to the conversion of tillage land into pasture*, p. 298: „It is attributable chiefly to the difficulty of getting labourers. The Irish tenant has to take his capital *out* of the farm in place of putting it *into* it.“ *Caird* in Brief an *Times (May 1867)* says: „What I feel is that the nation is being weakened by the withdrawal, year after year, of so many of the young, strong, and intelligent. It is no longer a question solely of landlord and tenant, for this constant drain is a *national loss*.“

* * *

### June 8. 1867. N. 1241.

#### The National Bank System of the United States.

This System has been in course of establishment und diffusion throughout the Union during the last 5 years.

Prior to the passing of the 1st National Bank Act early in 1863 (25. March), the Banking Institutions of the Union had been regulated in each State by the State Legislature; considerable variations between one State and the other. In all the States there were regulations, more or less stringent, regarding the *Deposit of State and Federal Bonds as a Guarantee for Note Circulation*, in Bezug auf *Publications of accounts* etc. In the more commercial States, *New York*, *New England* und *Philadelphia* the current of opinion for some time gegen die excessive and minute interference formerly considered indispensable. There was a period when the State Comptroller professed to satisfy himself, by a personal visit to each Bank on certain days, that it had in its own actual possession the prescribed amount of specie and public securities. But it was soon discovered that by ingenious arrangements, the *same* parcel of specie and securities was made to travel through a series of banks – being, of course, borrowed for the occasion, and paid for handsomely, under the appropriate title of *„shin plaster“*. For *some years prior to 1863*, the American public had found out that by far the best preservative against vicious banking is not excessive legislation, but rigid enforcement of the obligation of specie payment. There had, accordingly, been long established in *New England*, a system of almost daily *Note Exchanges* between all Banks carrying on business within a given circle. This plan was known as the *Suffolk Bank Redemption Plan*. In *New York*, a *Clearing House* on the London model was set up about *12 years ago*. Dadurch the irregularities of former periods practically impossible. A Bank endeavouring to force out more of its notes than the trade of the Neighbourhood required, had them, of course, immediately returned upon itself as *cash demands through the Clearing House*. Dadurch state der State Banks der Union sehr satisfactory for a considerable time before 1863. Diese *State Banks* private institutions, regulated by the State Legislatures.

The schemes during the last 40 years for establishing a single bank, or series of banks, specially selected und empowered by Congress, *for the transaction of Federal Financial Business* all utterly failed. The history of the *two socalled Banks of the U. States* a history of mistakes and disasters. Unter *Andrew Jackson* conviction prevailed that any powerful banking organisation, under control of the Federal Executive, would be a grave departure from the Constitution, and dangerous to Public Liberty. Daher regulation of Banks to be matter of purely State concern and policy. Even the Washington authorities required to provide themselves in New York and elsewhere, under the title of *Sub-Treasuries*, with separate offices of deposit for the collection and custody of the public revenue, until disbursed for Gvt. outgoings.

The exigencies of the Civil War compelled the banks generally to *suspend specie payments on 28 Dec. 1861*. In the *preceding April* (1861), an Act was passed by Congress – authorising a *suspension of the Independent Treasury Law* – that is, permitting the Secretary of the Treasury, at his discretion, to lodge the revenue collections not in the Sub-Treasuries, but in any banks considered eligible. Aber nicht much use made of this permission; and, as a matter of fact, the *New York Banks* were principally forced to suspend specie payment, in consequence of *their large subscriptions in coin to the loan* of 250 Mill. $ *opened in July, 1861*. The War extended in the course of *1862*. Chase überzeugt, daß to provide efficient financial support for the Federal Gvt, necessary to override all State Legislation on Banks, to suppress all the local issues of existing State Banks, to convert them into *National* banks, to require each National bank to invest considerable part of its paid-up Capital in Federal Securities, and to furnish strong inducements to the establishment dieser national banks, in small und remote places, hitherto not reached by, or unable to support, any private institutions of their own. Opposition in Congress und von den Banking interests of the larger States. Danach Chase ’s scheme became law on *25 March, 1863*, under the title: *„An Act to provide a National Currency secured by a pledge of United States Bonds, and to provide for the circulation and redemption thereof.“*

Dieser Act intricate und long (65 Sections.) Sein outline, mit subsequent amendments, ist:

1) An officer is established at Washington, called the *Comptroller of the Currency*. Under his charge all the machinery of the Act is placed.

2) Any number of persons, not less than 5, may constitute themselves into a Co. with *liability limited to twice the value of the shares held for the* purpose of forming a National Bank. The shares to be $100 (20l.) each.

3) In cities und places exceeding 50,000 persons, the capital of the National Bank to be not less than $200,000 (say 40,000l.), – in smaller towns not less than 100,000 (say 20,000l.) But *at the direction of the Secretary of the Treasury* , National Banks may be formed in places von nicht mehr als 6000 inhabitants mit Kapital of $50,000 (10,000l.) Half the capital to be paid up before commencing business, the other half by 5 monthly instalments.

4) Before commencing business, each National Bk. to transfer to the Comptroller registered Bonds of the U. States zu, at least, 30,000$, or in the case of the smaller banks, ⅓ of the paid up capital. In return for such transfer, the Comptroller shall deliver to the Bank, Circulating Notes of *one* dollar and upwards registered and countersigned on behalf of the Federal Gvt., but with blanks for the signatures of certain officers of each National Bank: the amount of the notes so furnished for issue not at any time to exceed 90% of the market value of the Bonds lodged as Security.

5) The Total Amount of the *National Banknotes* to be created under the Act not to exceed $300 Millions (60 Mill. l. St.) In the *original Act of March, 1863*, these 300 millions were apportioned among the several States, half according to representative population, half to banking capital, resources, and business. By *amended Act of June, 1864*, the distribution left to the discretion of the Secretary of Treasury; and *in March, 1865, other amendment* adopted, wodurch the *State Banks encouraged to convert themselves into National Banks, regardless of any precise ratio in the distribution of the National Bank Note Circulation*.

6) Each National Bk. to be *primarily liable* for the payment *of the Notes issued by it under its counter signature*, but failing such payment, the *Un. States Treasury will redeem the notes* and reimburse itself by the sale of the Bonds held by it, and by the *exercise of a prior lien over the general assets of the defaulting bank*.

7) National Banknotes to be received *at par* in all Revenue collections, *except for Custom Duties*, and to be paid by the Gvt. at par for salaries, wages, and debts, *but not for interest on public debt*, nor in *redemption of the „greenback“ currency*. The effect of this provision is to give the National Bank Notes a modified *compulsory* circulation between the Federal Gvt. and the Public, but *not to render them legal tenders as between individuals*.

8) In 17 places, viz. 1) *New York*, 2) *Philadelphia*, 3) *Boston*, 4) *Albany*, 5) *St. Louis*, 6) *New Orleans*, 7) *Louisville,* 8) *Chicago*, 9) *Detroit*, 10) *Milwaukee*, 11) *Cincinnati,* 12) *Cleveland*, 13) *Pittsburgh*, 14) *Baltimore*, 15) *Leavensworth*, 16) *San Francisco*, 17) *Washington*, each National Bk. to have constantly in hand, *a sum equal to at least 25% of the aggregate amount of its Circulation and Deposits, in lawful money of the U. St.* (i.e. *specie or greenbacks*.) National Bks. in other than these 17 cities, need have only *15% of similar cash reserve*, and of this 15%, ⅗ may be *balances due to the Bank from its Correspondents* in these 17 cities.

9) The Secretary of Treasury, at his discretion, may select National Bks. *to be depositories of public money except Customs duties)* and to be employed as financial agents of the Gvt.

10) The Federal Taxes to be paid by National Bks. shall be – one % p. annum on the average amount of their Circulation; ½% p. annum on the average amount of Deposits; and ½% p.a. on the amount of capital *not* invested in U. States Bonds.

11) The Federal Taxes to be paid by *State Banks* to be *10%* p. annum on the amount of their Circulation, and corresponding rates on their deposit and Capital.

12) Each National Bank to forward to the Comptroller *quarterly full returns of its condition and business*, and also *monthly returns* of a less elaborate character. The Comptroller may, at his discretion, order a personal verification of these returns.

13) *All laws relating to usury* which may prevail in the several States *to continue in full force*, and be applicable to all transactions of National Banks.

The principles of this arrangement come to this:

Ⅰ) Almost absolute control by the Federal Executive at Washington over all the National Banks. The Secretary of Treasury, at his *discretion*, can authorise the formation of Banks in all places of less than 6000 inhabitants; he can select National Bks. to be depositories of public money and Federal financial agents; he can constantly interfere in the affairs of each bank, by rigidly enforcing the condition that the Notes furnished shall only be 90% of the *market value* of the Bonds lodged; and, at his pleasure, tighten or relax the power of affecting the credit of any Bank, by directing the visit to it of a Special Inspector.

Ⅱ) The establishment of at least *300 mill. $ circulation of National Bk. Notes* , ultimately payable by the Federal Treasury out of the proceeds of Federal Securities, that is, of *300 millions of what may be called Greenbacks N. 2*. These National Bk. Notes to be forcibly substituted (for the 10% tax on the circulation of the State Banks is virtually prohibitory) for the notes of the Banks previously existing under laws and constitutions adopted by the several States. The 300 mill. of National Bank Notes to be apportioned over the country *virtually* at the discretion of the Secretary of the Treasury.

Ⅲ) The sudden and complete creation of a Federal Gvt. Banking Organisation of the most absolute character, differing only from the Bank of France in the circumstance that instead of creating, as in France, a large Central Bank, with a monopoly of Circulation and a monopoly of Branches, and a management largely nominated by the Minister, the procedure consists in scattering 1600 or 1700 separate institutions over the country, but placing them under the effective control of an office in Washington, compelling each of them to invest ⅓ of their capital in Federal Securities, and selecting from time to time from the most favoured Banks those which shall become depositories of public money and Gvt. financial agents. Folgendes ist der

Progress of the National Banks, subsequent to First Act, March 1863, und Amended Act, June, 1864.

|  | Date | Number of Banks. | Capital paid up $ | Circulation. $ |
|---|---|---|---|---|
| 1863. | October | 63 | 6,700,000 | No return |
| 1864 | Januar. | 137 | 14,500,000 | 〃 |
|  | April. | 309 | 42,000,000 | 〃 |
| 1865. | Jan. | 643 | 135,000,000 | 67,000,000 |
|  | July. | 1264 | 325,000,000 | 131,000,000 |
| 1866 | Januar. | 1626 | 403,000,000 | 213,000,000 |
|  | Oct. | 1659 | 415,000,000 | 280,000,000 |
| 1867. | Jan. | 1649 | 419,000,000 | 291,000,000 |
|  | April. | 1649 | 419,000,000 | 291,000,000 |

The progress became rapid *after Jan. 1865*, when pressure really put on the State Banks to conform to the new system. Prior to April, 1865, it is probable that most of the 6 or 700 National Banks opened were entirely new institutions. Z.B. out of 152 Banks established up to Feb., 1864, not less than 46 opened in small places where, up to this time, no bank had existed. It was, undoubtedly, a principal feature of Chase’s scheme to *promote the creation of New National Banks in the more remote und primitive parts of the country*.

#### Manufacturing Markets.

Demand for goods only moderate. Prices well supported. Iron steady. *Falling off in the transactions in coal.*

* * *

### June 15. 1867. N. 1242.

#### The National Bank System of the U. States.

Um das für den Krieg nöthige Geld beizubringen, Chase offered to capitalists and others the inducement of large immediate profits für die National Banks undertakers. Z.B. The *profit and loss outline* of the case stands at present thus for any 5 persons setting up a National Bk. on *the basis of subscribing $100,000 (20,000l.) in* lawful money. (Assume 5$ = 1£.):

1) 20,000l. deposited with the Comptroller in *Un. States Bonds, 6%, in coin*, equal at present price of gold to, say, *8½ in greenbacks*, will produce annually 1700£ (nämlich 20 000£ à 8½%). 2) The Comptroller will issue for this deposit 90% of National Bk. notes, say 18,000l.; against these 18,000£ in Notes the Bank must keep 15% of Legal Tenders, or 2,600£, leaving 15,400l. available for advances at, say, the same rate of 8½% in paper, producing per annum 1309£. (15,400 à 8½%) 3) The result is, therefore, to give *an immediate gross return of over 15%* p. annum, or 3,009l, on the 20,000£ put down.

The private bank, started purely on its own credit and connection, has gradually to get out and establish a circulation for its notes. Erst nach mehren Jahren it can command a circulation of such magnitude as to be of importance in the profits of the business. Die National Bank launches at once of the whole of the *(virtually)* *Gvt. Notes* received by it from the Comptroller, and for the simple reason that they possess almost all the qualities of a legal Tender note. Daher die rasche multiplication der National Banks, besonders in the more remote parts of the country. The *Sub-Treasuries* were mere offices or vaults for the safe storage of its revenue collection. Waren in no sense credit institutions. So lange as the Federal Gvt. had a surplus revenue and no public debt, they answered. Nicht so, when the crisis appeared, and Gvt. became borrower on large scale, and *by means of the issue of inconvertible paper*. *It* became, then, apparent that the Secretary of the Treasury was utterly destitute of the appropriate Organisation. (Had not at his hands a *Bank of England*, is it not?) There was no central and powerful Bank, and the Sub-Treasuries were warehouses, not places of financial business. Dieß new organisation has *all the faults and dangers*, *and scarcely one of the advantages and safeguards of a chief Federal Bank*.

In a table (C) below, we give from the official returns collected by each State, an abstract of the condition of the State Banks at the *end of 1862*, or rather *early in January 1863*, a year after the suspension of the cash payments, and just before the passing of the first National Bank Act at the end of Feb. 1863. The number of banks in each state was in no case unmanageable; in *New York State* f.i., it was 308; in *Pennsylvania* 94; in *Illinois* 25; and the local supervision was aided by general local knowledge.

In the *3 groups of states included in the table C, there were 1205 banks*, but *998* davon in the 11 commercial and leading States, forming the Eastern and Middle Regions of the Union. Their *PerCentage* of *Assets* und *Liabilities* were:

B) Summary of Condition of the 998 State Banks in the 11 Eastern and Middle States, 1st Jan. 1863.

| Liabilities. | P.Ct. |  | Assets. | P.Ct. |  |
|---|---|---|---|---|---|
| Circulation | 11.3 |  | Cash reserves | 12.1 |  |
| Due to other Banks | 10.7 |  | Gvt. Securities | 17.3 |  |
| Deposits | 40.0 |  |  | 29.4 |  |
| Other liabilities | 4.5 |  | Due by other Banks. | 12.6 |  |
|  | 66.5 |  | Loans and Discounts | 54.2 |  |
| Capital paid. | 33.5 |  | Other investments | 3.8 |  |
| Total: | 100.0 |  |  | 100.0 |  |

In the cash reserves, appearing here as equal to 12.1%, of the assets, were included, of course, legal tender notes of the Federal Gvt. In *actual specie* the Banks in the above category seem to have held about 7% of their assets. The Gvt. securities included *State Bonds* as well as *Federal Bonds*. In *Cash Reserves and Gvt. Securities*, the State Banks held very nearly 29.4% of their total assets. The large items on both sides of the account of sums *„Due to“* and *„Due by“* other Banks, arise from a practice early adopted in all American returns of distinguishing the balances between one set of banks and another, in order to ascertain in some degree with what exactness the system of exchanges was kept up. On the Liability side, the *Circulation* was only 11.3%, and the Capital paid up was 33.5%. At the end of 1862, the State Banks had so arrived at a condition of no little strength. We find from table *C*, that in the 5 Middle States, including *New York* and *Pennsylvania*, the *Circulation was only 5.7% of the liabilities*, *against 26% in the more remote and less commercial Eastern States*, and *32.5% in the still less populous* and less *wealthy North Western States*. Where the facilities and resources of capital and credit are largest, the *quantity of circulation is least*. The public have to pay for every Note they retain, and, daher, they retain exactly as many as it is worth paying for, and no more. In *table D* returns of *the 261 State Banks* existing *at the close of 1861 in the 10 Southern States*, just before the Civil War. Diese Figures less trustworthy than in *table C.*, from the more scattered nature of the Banks, and the incipient disorders which, in 1861, prevailed in the South. They give, however, forcible evidence of *the greater poverty of the South as compared mit dem North* in the *comperative largeness of the Circulation and Loans*, in the *Smallness of the Deposits, Reserves, and Gvt. Securities*.

Table C.) Un. States. Twenty Northern etc States. Official Return of State Banks therein, Jan. 1, 1863, prior to passing of Nt. Bk. Act. 25 Feb. 1863. 00,000’ are omitted. Thus, f.i., 65.5 = 65,650,000

| Liabilities |  |  |  |  |  |  |  |  | Assets |  |  |  |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|  | A.) Six Eastern States (507 Banks) |  | B.) Five Middle States (491 banks) |  | C) Nine Northwestern States. 207 Banks |  | D) Total 20 States. 1205 Banks. |  | A. | B. | C. | D. |
|  | $ | P.C. | $ | P.C. | $ | P.C. | $ | P.C. |  |  |  |  |
| Circulation. | 65.5 | 26.0 | 31.5 | 5.7 | 19.6 | 32.5 | 116.7 | 13.2 |  |  |  |  |
| Due to other Banks. | 20.5 | 7.1 | 68.4 | 12.4 | 1.3 | … | 90.3 | 10.2 |  |  |  |  |
| Deposits. | 66.7 | 3.0 | 267.7 | 48.6 | 21.2 | 34.1 | 355.7 | 40.2 |  |  |  |  |
| Other Liabilities. | 11.4 | 4.0 | 28.0 | 5.1 | 4.6 | 1.0 | 44.0 | 5.0 |  |  |  |  |
|  | 164.2 | 60.1 | 359.8 | 71.8 | 46.8 | 67.6 | 608.8 | 68.6 |  |  |  |  |
| Capital paid up. | 126.8 | 39.9 | 155.2 | 28.2 | 15.7 | 32.4 | 297.7 | 31.4 |  |  |  |  |
|  | 291.0 | 100.0 | 551.0 | 100.0 | 62.5 | 100.0 | 844.5 | 100.0 |  |  |  |  |
| Assets. |  |  |  |  |  |  |  |  |  |  |  |  |
|  | $ | P.C. | $ | P.C. | $ | P.C. | $ | P.C. |  |  |  |  |
| Cash Reserves |  |  |  |  |  |  |  |  |  |  |  |  |
| Specie | 12.8 | 4.5 | 51.2 | 8.3 | 7.4 | 12.0 | 71.4 | 7.5 |  |  |  |  |
| Cash items | 1.1 | … | 42.0$ | 7.0 | 1.1 | 1.7 | 44.2 | 4.5 |  |  |  |  |
| Other Banks. |  |  |  |  |  |  |  |  |  |  |  |  |
| Balances due | 25.2 | 10.1 | 46.3 | 7.7 | 9.2 | 14.8 | 81.8 | 9.5 |  |  |  |  |
| Notes in hand | 11.9 | 4.0 | 29.0 | 5.0 | 7.4 | 12.0 | 48.3 | 5.1 |  |  |  |  |
| Stocks | 8.0 | 2.9 | 146.1 | 24.3 | 8.5 | 13.7 | 162.6 | 17.2 |  |  |  |  |
| Loans | 216.3 | 76.0 | 265.8 | 44.2 | 24.5 | 39.2 | 506.6 | 53.0 |  |  |  |  |
| Real Estate | 4.5 | 1.7 | 13.0 | 2.0 | 1.6 | 2.6 | 19.1 | 2.0 |  |  |  |  |
| Other Investments. | 2.6 | 0.8 | 8.3 | 1.5 | 2.5 | 4.0 | 13.4 | 1.3 |  |  |  |  |
|  | 284.4 | 100.0 | 601.7 | 100.0 | 62.2 | 100.0 | 947.4 | 100 |  |  |  |  |

A) *Six Eastern States*: *Maine*, 69. *New Hampshire*, 52. *Vermont* 40; *Massachussets* 183. *Rhode Island* 88. *Connecticut* 75. *All:* 507.

B) *Five Middle States* : *New York:* 308. *New Jersey*, 52. *Pennsylvania*, 94. *Delaware* 5, *Maryland* 32. *Total:* 491.

C) *Nine North Western States*: *Illinois*, 25; *Indiana* 37; *Ohio* 55; *Michigan* 4; *Wisconsin* 64; *Iowa*, 14; *Minnesota* 7; *Kansas* 1; *Nebraska* 1. *Total:* 207.

Table D.) Unit. St. Ten Southern States. Official Return of State Banks at Close of 1861, prior to the Civil War.

|  | D) Five Southern States. 147 Banks. |  | E) Five South Western 114 Banks. |  | F) Total Southern States. 261 Banks. |  |
|---|---|---|---|---|---|---|
| Liabilities. |  |  |  |  |  |  |
|  | $ | P.C. | $ | P.C. | $ | P.C. |
| Circulation | 39.6 | 32.0 | 31.5 | 27.3 | 71.1 | 30.1 |
| Due to other Banks. | 4.2 | 3.3 | 6.1 | 5.5 | 10.3 | 8.0 |
| Deposits. | 16.5 | 13.0 | 21.5 | 19.0 | 38.0 | 12.0 |
| Other Liabilities. | 4.1 | 3.3 | 5.6 | 5.0 | 9.7 | 4.1 |
|  | 64.4 | 51.6 | 64.7 | 56.8 | 129.1 | 54.1 |
| Capital paid up | 56.3 | 48.4 | 51.0 | 43.2 | 107.3 | 45.9 |
| Total. | 120.7 | 100.0 | 115.7 | 100.0 | 236.4 | 100.0 |
| Assets |  |  |  |  |  |  |
|  | $ | P.C. | $ | P.C. | $ | P.C. |
| Cash Reserves |  |  |  |  |  |  |
| Specie | 8.1 | 6.7 | 21.5 | 18.4 | 29.6 | 12.4 |
| Cash Items | 0.2 | … | 1.8 | 1.5 | 2.0 | 0.8 |
| Other Banks |  |  |  |  |  |  |
| Balances due | 5.1 | 4.1 | 11.0 | 9.3 | 16.1 | 7.0 |
| Notes in hand | 3.8 | 3.2 | 6.0 | 5.1 | 9.8 | 4.0 |
| Stocks | 10.0 | 8.3 | 8.0 | 6.8 | 18.0 | 7.2 |
| Loans | 79.3 | 65.8 | 61.7 | 52.7 | 141.0 | 60.0 |
| Real Estate | 10.6 | 8.4 | 2.2 | 1.7 | 12.8 | 5.0 |
| Other Investments | 3.5 | 3.5 | 5.1 | 4.5 | 8.6 | 3.5 |
| Total. | 120.6 | 100.0 | 117.3 | 100.0 | 237.9 | 100.0 |

Unter D) *Five Southern States*: *Virginia* (66) *North Carolina* (31) *South Carolina* (20) *Georgia* (28) *Florida* (2) *Total: 147* E) *5 South Western States*: *Alabama* (8) *Louisiana* (6) *Tennessee* (14) *Kentucky* (44) *Missouri* (42). *Total: 114.*

* * *

### 22 June 1867. N. 1243.

#### The National Bank System of the U. States.

*Table E* brings into distinct contrast by means of *Per Centage* Proportions the 1649 *National Bks., April 1867,* mit den *1205 State Banks*, in the Northern Portion of the Union, *Dec. 1862*.

*Table H* Abstract of *the official Returns of 1626 National* Banks, *Jan. 1866*, and of *1649 National Banks*, *April 1867* (Union, North und South)

*Table F.* *Results of Detailed Return (Table I) on New York State brought in Smaller Compass.*

*Table G* *Total U. States Circulation* in *1861*, *1862* und *1867*.

*Table I* *New York State.*

*Table K* *Distribution of 1466 State Banks, Dec. 1862, and of 1649 National Banks, Dec. 1866.*

Table E.) United States. Condition of 1205 State Banks, Jan. 1863, compared mit 1649 National Banks, April 1867. Per Centages of Liabilities and Assets.

| 1649 National Banks. April 1867. |  | A.) 6 Eastern St. 807 Banks. | B) 5 Middle St. 491 Banks. | C) 9 North Western St. 207 Banks. | D) Total 1,205 Banks |
|---|---|---|---|---|---|
|  | Liabilities |  |  |  |  |
| Per Cent. |  | Per Cent | Per Cent | Per Cent | Per Cent |
| 20.4 | Circulation | 26.0 | 5.7 | 32.5 | 13.2 |
| 7.7 | Due to other Banks | 7.1 | 12.4 | … | 10.2 |
| 37.0 | Deposits | 23.0 | 48.6 | 34.1 | 40.2 |
| … | Other Liabilities | 4.0 | 5.1 | 1.0 | 5.0 |
| 65.1 | Total | 60.1 | 71.8 | 67.6 | 68.6 |
| 34.9 | Capital paid up | 39.9 | 28.2 | 32.4 | 31.4 |
| 100.0 | Total | 100.0 | 100.0 | 100.0 | 100.0 |
|  | Assets. |  |  |  |  |
|  |  | P.C. | P.C. | P.C. | P.C. |
| 7.0 | Cash Reserves | 4.5 | 15.3 | 13.7 | 12.0 |
| 8.8 | Other Banks | 14.1 | 12.7 | 26.8 | 14.6 |
| 34.7 | Stocks | 2.9 | 24.3 | 13.7 | 17.2 |
| 48.2 | Loans | 76.0 | 44.2 | 39.2 | 53.0 |
| … | Real Estate | 1.7 | 2.0 | 2.6 | 2.0 |
| 1.3 | Other Investments | 0.8 | 4.5 | 4.0 | 1.3 |
| 100.0 | Total | 100.0 | 100.0 | 100.0 | 100.0 |

In group *A* circulation of the 507 Banks 26.0% of their total liabilities, the deposits to 23.0% and so forth.

A distinction must be made between the *State Banks* of the 5 large and leading *Middle States* and the Banks of the *East* and *NorthWest*. In the *National Banks* the *circulation* is 20.4%, but in the *Middle States* it was in Dec. 1862 only 5.7%. In the *National* Banks the *Cash Reserves* are 7%, but in the *Middle States* they were 15.3 p.c., and even the average of the 3 groups gives 12%. In the *National Banks* the *Cash Reserves* and *Gvt. Securities* together are 41.17% of the assets. In the *Middle States* they were 39.6%, or very nearly the same; and in the North West the proportion was 27.4%.

Da *diese Vergleichung* nicht die gewünschte „deterioration“ ergiebt, vielmehr *mehr securities unter dem National System*, so vergleicht die Werthe des Verhältniß in beiden Systemen im *Staat New York*.

Table F.) New York State. 308 State Bank, Dec. 1863, und 313 National Banks, April 1867 (Details in Table I.)

|  | National Banks. April 1867. | State Banks. Dec. 1862. |
|---|---|---|
|  | Per Cent. | Per Cent. |
| Liabilities. |  |  |
| Circulation. | 13.0 | 9.1 |
| Deposits | 45.0 | 47.0 |
| Due to other Banks. | 13.5 | 13.4 |
| Other Liabilities | 2.0 | 4.3 |
|  | 73.5 | 73.8 |
| Capital paid up | 26.5 | 26.2 |
|  | 100.0 | 100.0 |
| Assets. |  |  |
| Cash Reserves | 22.3 | 16.7 |
| Due by other Banks | 5.4 | 10.3 |
|  | 27.7 | 27.0 |
| Government Securities | 26.6 | 28.0 |
|  | 54.3 | 43.0 |
| Advances and Discounts | 43.2 | 43.0 |
| Other Assets | 2.5 | 2.0 |
|  | 100.0 | 100.0 |

The *State Banks* held 28% assets in Gvt. Securities, the *National Banks* hold a trifle less, 26.6%. *Cashreserves grösser* in den National Banks (er sagt about the same), *Discounts* grösser in den *National* Banks by  6/10% (er sagt about the same.) *Paidup Capital* grösser in den National Banks (er sagt (der *Economist* ) about the same) *Deposits* etwas grösser (by 2%) in den State Banks. Aber, und das soll das Fürchterliche sein, *Circulation* der *National Banks* 13%, der *State Banks 9%* (Unterschied von 4%) (in both instances secured by the deposit of public securities). (Ob mehr Deposits oder mehr Notes hängt von ganz bestimmten Zuständen ab. Wenn nicht, so könnte man nachweisen, daß, in different periods dieser Unterschied, bei der B. o. England, viel mehr als 4% fluctuirt.)

We have seen that in New York State, the National Banks are hardly more numerous than were the State Banks. But the case is very different in the less commercial parts of the Union. A statement (K) gives the distribution of the 2 kinds of banks in detail; and we find there an increase of 120 banks in *Pennsylvania* (which is not *un*commercial-State), 85 in Ohio, 31 in Iowa, 57 in Illinois, 34 in Indiana etc. Früher, obgleich das building derselben free, 207 State Banks had grown up in the *9 North Western States*, at the end of 1862. Jezt statt dieser 207 sind da 434 National Banks. The State Bank Circulation of these 9 Banks was 19½ mill. of dollars in Dec. 1862. The National Bank circulation pertaining to them in Dec. 1866, was 50½ millions, or 2½ times greater. Diese expansion der Note Circulation in the North West – the eminently agricultural and grazing region – sicher Schuld an increase in price of articles of food, and in the wages of ordinary manual labour which has occurred during the 2 last years. ⦗Aber mon Cher, warum nicht umgekehrt die *increase of prices* Ursache der increased circulation? Prices mußten increase 1) *weil die lawful currency (legal tenders) depreciated* und die Banknotes stellen nur diese depreciated currency dar; 2) In Folge der *taxation*; 3) *Mißerndte* und 4) Mangel an Händen während des Kriegs. Ist das nicht sufficient? In derselben Art hatte Overstone, damals *Lloyd Jones* den *englischen countrybanks* vorgeworfen, daß ihre Circulation 1836–8 (oder 9?) expanded, während die der B.o.E. contracted und, umgekehrt, nach der Panic 1866, Gladstone, daß die Circulation der country notes contracted, während die der B.o.E. expanded. Stets derselbe Kohl.⦘

In his *Report of December 1861*, Chase estimated amount of gold und silver coin in the whole Union at *275 Millions* $ (say *55 Mill.* £. St.) Danach können wir in approximate form beurtheilen die additions to the amount of Circulating medium, besonders in the Northern or Federal States. Dieß in der folgenden Tabelle G.

Table G. Estimates of Circulation in 1861, ’62 und 67 Jan. 1861.

|  | North. | South. | Total. |  |  |
|---|---|---|---|---|---|
|  | Mill. $ | Millions $ |  |  |  |
| State Banks Notes | 140 | 60 | 200 |  |  |
| Coin. Gold and Silver | 200 | 75 (?) | 275 |  |  |
| Total | 340 | 135 | 475 | 510 | 710 |

December 1862. Northern States only. Millions $

| Notes of State Banks | 180 |
|---|---|
| Greenbacks | 290 |
| Fractional United States Notes | 20 |
|  | 490 |
| Coin | 20? |
|  | 510, increase of 50% over 340 Mill. of Jan. 1861. |

April 1867. Whole Union. Millions $

| Notes of State Banks | 6 |
|---|---|
| Notes of National Banks | 290 |
| Greenbacks | 375 |
| Fractional Un. States Notes | 29 |
|  | 700 |
| Coin | 10? |
|  | 710 |

These 710 Increase of 40% over the 510 mill. of Dec. 1862 und 100% over the 340 mill. of Jan. 1861.

The 710 millions includes about *13 mill. of National Bk. Circulation* established in the Southern States.

In stating this part of the case, most American writers *confuse themselves* (Du Esel! Die greenbacks in the Banks, als cash reserve, circuliren nicht, solange die Noten für sie cirkuliren, und die Noten cirkuliren nicht, sobald sie gegen greenbacks ausgetauscht werden.) and *their readers* by making deductions for the quantities *of Coin*, *Greenbacks* etc held in the tills of Banks and the vaults of Sub-Treasuries. Such deductions are – fallacious and misleading! (Also, wenn 15 Mill. £ Gold in the B.o.E. und 22 Mill. £. St. in circulation und 8 Mill. l. als Reserve im Banking Department, so *circuliren* für 30 Mill. l. Gold!)

Upon this (false and stupidly arbitrary basis), there seems to be good reason for concluding that at the present time the Circulating medium in the U. St. is very *nearly double the amount before the Civil War*, *or in January 1861*; and that out of the present 710 millions of dollars (say 142 Mill. £ St.), it will be necessary (!) to redeem at least 220 to 250 Mill. dollars, (44 to 50 Mill. l. St.) before the volume of the currency will approach the level at which it stood when cashpayments were suspended.

H.) U. States. National Banks. Founded Febr. 1863. Official Return at dates as under. 00,000 omitted.

|  | April 1867. 1649 Banks. |  | Jan. 1866. 1626 Banks |  |  |
|---|---|---|---|---|---|
| Liabilities. |  |  |  |  |  |
|  | $ | P.C. | $ | P.C. |  |
| Circulation |  |  |  |  |  |
| National Banknotes | 291.9 | 20.0 | 213.2 | 15.2 |  |
| State Banknotes | 5.9 | 0.4 | 45.4 | 3.2 |  |
|  | 297.8 |  | 258.6 |  |  |
| Deposits |  |  |  |  |  |
| Government Deposits | 30.0 | 2.0 | 29.7 | 2.1 |  |
| Private Deposits | 510.6 | 35.0 | 513.6 | 37.0 |  |
|  | 540.6 |  | 543.3 |  |  |
| Due to other Banks |  |  |  |  |  |
| To National Banks | 91.1 | 6.2 | 96.7 | 7.0 |  |
| To other Banks | 23.1 | 1.5 | 23.8 | 1.7 |  |
|  | 114.2 |  | 120.5 |  |  |
|  | 952.6 | 65.1 | 922.4 |  |  |
| Capital |  |  |  |  |  |
| Paid up | 418.8 |  | 403.3 | 29.0 |  |
| Reserves | 60.2 |  | 43.0 | 3.0 |  |
| Profits | 31.1 |  | 29.0 | 2.0 |  |
|  | 510.1 | 34.9 | 474.3 |  |  |
|  | 1462.7 | 100.0 | 1396.7 | 100.0 |  |
| Assets. |  |  |  |  |  |
|  | $ | P.C. | $ | P.C. |  |
| Legal Tenders. | 92.6 | 6.3 | 90.0 | 6.3 |  |
| Specie | 10.4 | 0.7 | 16.0 | 1.1 |  |
|  | 103.0 |  | 106.0 |  |  |
| Due von Other Banks. |  |  |  |  |  |
| Balances Von Nat. Banks. | 94.0 | 7.0 | 93.2 | 6.6 |  |
| Other Banks | 10.7 | 0.8 | 14.6 | 0.7 |  |
| Notes | 13.7 | 1.0 | 20.4 | 1.4 |  |
|  | 118.4 |  | 182.2 |  |  |
| Government Securities: |  |  |  |  |  |
| U. S. Bonds for Circulation | 338.5 | 23.0 | 298.0 | 21.2 |  |
| for Deposits | 38.4 | 2.6 |  |  |  |
| in hand | 46.6 | 3.1 | 142.0 | 10.0 |  |
| Compound Interest Notes | 84.0 | 6.0 | 97.0 | 7.0 |  |
|  | 507.5 |  | 537.0 |  |  |
| Advances und Discounts: |  |  |  |  |  |
| Loans und Discounts | 597.1 | 40.0 | 498.8 | 36.2 |  |
| Stocks und Mortgages | 20.2 | 1.3 | 17.5 | 1.2 |  |
| Real Estate | 19.6 | 1.1 | 15.4 | 1.1 |  |
| Cash Items | 87.8 | 5.8 | 89.8 | 6.2 |  |
|  | 724.7 |  | 621.6 |  |  |
| Expenses | 14.0 | 1.3 | 5.5 | 1.9 |  |
| Total | 1467.6 | 100.0 | 1398.2 | 100.0 |  |

K.) Distribution of 1466 State Banks in Dec. 1862, and of 1649 „National Bank“ in Dec. 1866.

| Six Eastern States | St. Banks. | Nat. Banks. | Five Middle Sts. | St. Bk. | Nat. Banks. | Nine Northwest. States | State Banks. | Ntl. Banks. | Five Southern States | State Banks | Nat. Banks | Five South West. States | St. Banks | Nat. Banks |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Maine | 69 | 61 | New York | 308 | 313 | Illinois | 25 | 82 | Virginia | 66 | 35 | Alabama | 8 | 3 |
| New Hampshire | 52 | 39 | New Jersey | 52 | 54 | Indiana | 37 | 71 | Nth. Carolina | 31 | 5 | Louisiana | 6 | 3 |
| Vermont | 40 | 39 | Pennsylvania | 94 | 201 | Ohio | 55 | 135 | South Carolina | 20 | 2 | Tennessee | 14 | 10 |
| Massachusetts | 183 | 208 | Delaware | 5 | 11 | Michigan | 4 | 42 | Georgia | 28 | 9 | Kentucky | 44 | 15 |
| Rhode Island | 88 | 62 | Maryland | 32 | 32 | Wisconsin | 64 | 37 | Florida | 2 | − | Missouri | 42 | 15 |
| Connecticut | 75 | 83 |  | 491 | 611 | Iowa | 14 | 45 |  | 147 | 51 |  | 114 | 46 |
|  | 507 | 492 |  |  |  | Minnesota | 7 | 15 |  |  |  |  |  |  |
|  |  |  |  |  |  | Kansas | 1 | 4 |  |  |  |  |  |  |
|  |  |  |  |  |  | Nebraska | 1 | 3 |  |  |  |  |  |  |
|  | 507 | 492 |  | 491 | 611 |  | 207 | 434 |  | 147 | 51 |  | 114 | 46 |

#### The Pollution of the Lee. (Sewage Irrigation)

About a Year ago, *First Report of the Rivers Commission on the state of the Thames* . In Folge davon der *Thames Navigation Act of last session* (1866), in which many of the recommendations of the Commissioners were adopted, and many of the grossest abuses of the former management provided against or remedied. Jezt *Second Report* derselben Commission to *the River Lee*. The great prevalence of the cholera in the *East of London* (1866) last year was attributed to the *foul state of the water furnished by the company which draws its supply from the river Lee*. This river is one of the *northern tributaries of the lower Thames*. It rises in the county of Bedford, about 3 miles above the town of Luton, and with its tributaries drains a large area of Hertfordshire. It is a tidal river for about 5 miles in length, and is navigable for barges a distance of 28 miles. So old is this navigation of the river, that King Alfred availed himself of it to visit Ware, and that Parliament legislated for the river in the time of Queen Elizabeth. The weirs, locks, and other works are kept in good repair, nor has the river trade been injured by railway rivalry. In this respect the Lee presents an advantageous contrast to the Thames, but the comparative rates at which the 2 rivers are drained for the supply of London are out of proportion. While the Thames has a minimum dry weather flow of 350 millions gallons daily over Teddington lock, and supplies *48 mill. gallons daily to 5 London water companies*, the Lee, with a dry water flow of 40 mill. gall., is said to be mulcted of 38 mill. gallons *by two water companies*. This almost incredible statement rests on the authority of the engineer to the *East London Water Works Company* . The *New River Co.* provides for about *840,000* persons, and the *East London Waterworks Comp.* for some *675,000*. The first Co. furnishes about 24 gallons *per head* daily, the second co. 18 gallons. *Few of the houses are put on the constant system*; in most, the water is turned on for 35 minutes, and the *poorer houses have a Sunday supply*. The *New River Co.* lays pipes to the doors of houses, but does not hold itself responsible for anything further, and as the landlords very frequently provide the most scanty means of storing the water, there *is a continual water famine*. Of this, the engineer to the *New River Co* gives some examples. Die Company takes credit that it furnishes a Sunday supply to so many of the poorer class of houses, and the culpable indifference of the landlords has led to these *exceptional privileges* being granted to their helpless tenants. Whether *such* *privileges ought to be exceptional*, and whether it is certain that „in *few cases can it be truly said that the turncock’s services on Sunday are necessary*“, are questions on which the consumers and the co. would, probably, differ.

The systematic way in which the *sewage of the towns* on the banks of the Lee, and *the refuse of an agricultural and industrial district are poured into the* river, schlimmer als die pollution der Thames selbst. At *Luton*, indeed, where the Lee is yet „a slender stream“, the sewage is clarified by the *lime process* before passing into the river. This purification is the result of legal measures taken by a landed proprietor, and, though not a perfect remedy, is an improvement. As we drop down the river *much litigation* is found without any such result. „We learn“, say the Commissioners, „with something approaching to dismay, that one manufacturer alone employs from *1 to 2 tons of oxalic acid* in bleaching straw plaits, but are somewhat reassured upon consideration that the poisonous character of this substance is entirely destroyed by admixture with the carbonate and sulphate of lime contained in the water of the river.“ Then, the river is polluted by *sheep washing*, and, as the preparation for dipping sheep contains *arsenic*, another noxious ingredient is added to the new *witches’ cauldron*. But, besides these directly poisonous substances, the river receives the *sewage* of Hatfield, Hertford, Ware, Enfield, Barnet, and Tottenham. The foulness of the stream after passing by all these places, or their outlets, is such that the enormous volume of sewage, pumped in by West Ham, which has a population of more than 22,000, makes no visible alteration. Every town complains of the town next above it, and gives cause of complaint to the town next below. At Luton, a perpetual injunction has been obtained against the town authorities. At Hertford, the *New River Co.* is threatened by the authorities of Ware. Ware itself passes on both grievance and complaint. Bishop Stortford has been threatened by several parties. „Our neighbours at Sawbridgenorth have told us that we have been poisoning them. We have said that we are sorry for it, but we think that they contribute to the nuisance to some extent themselves, and we have, therefore, not heeded what they had to say.“ Indeed, Bishop Stortford prides itself of having discovered a plan for the utilisation of sewage, and having appeased the discontent of its own inhabitants at the expense of strangers. „The nuisance of which the inhabitants have complained from the smell of the river was during the summers of 1864 and 1865, but it was very much abated in consequence of our having wet seasons, and a plan was adopted that *succeeded remarkably well*, and that was this: During the summer when the water is very short, the filth will sometimes almost crop up to the mouth of the drains, and when there has been a flood in the winter, this accumulation has been stirred up by a large and a heavy rake behind, *so that we have passed it on to our neighbours to some extent*. We thought we had kept it long enough, and by the use of the flood water *relieved ourselves from a considerable quantity of stink by that means*.“ The Commissioners see no hope in the litigation opened by Edmonton against Enfield, by Tottenham against Hornsey, by the Lee Trustees against Tottenham. What the Commissioners propose is a *Conservancy Board*, acting for the entire watershed, and bound to provide for the cessation of the present supply of sewage to the river, as well as for its general maintenance and protection.

A few fresh details in diesem Second Report on manner wie *sewage to be applied to land* und success of *grassfarming under the system of irrigation*. Crops of Italian ryegrass, grown under sewage irrigation at *Worthing*, are cut at the rate of from 5 to 8 tons to the acre, whilst *adjoining pasture lands are almost bare*. „A small dairy has been established, the cows being stall-fed on the cut grass; the milk produced, from its richness and superior quality, commanding a preference in the town.“ Irrigation was tried at Tottenham under the direction of the *surveyor to the local board*, and his report was, that *the system had to contend against much prejudice*, but was, in itself, successful. There was, however, a difficulty in procuring land for the experiment *where every acre was so valuable for building purposes*, and *those who had land in cultivation were the most reluctant* to run the risk of their crops being injured. Of course, *so long as all the refuse of town and country can be turned into the rivers, people will refuse to look beyond the present need*. *But when the rivers are closed to them, they will admit that the disposal of sewage becomes a practical question.*

* * *

### June 29. 1867. N. 1244.

#### Austria. Iron, Coal and Railway facility. (Working of means of transport)

The ore of the *iron mines of Styria and Carinthia* abundant, produces steely-iron, renowned all over the world. Difficulty to work them because of the *absence of fuel*. *Lignite* was for a time employed, but there was not enough of it to be got; then *turf* used, but the supply not sufficient. Recourse must therefore be had to *coal*. This found in large quantities, and easy of extraction at *Fünfkirchen*, within some 40 miles of the river *Drave*, one of the tributaries of the Danube. The *valley of the Drave* extends to Styria and Carinthia, and is in communication by means of the South of Austria railways with *Trieste on the one hand and Vienna* on the other; also with *Pesth*. A railway from *Bares on the Drave* (not far from the railway) *to Fünfkirchen* would enable the coal of the latter place to be carried to the rich ore deposits of the 2 provinces. The Austrian Gvt. has taken active measures to execute it as quickly as possible. Part of the line will be opened on *1st July 1868*, and the other part a year later. The iron of Styria and Carinthia of great hardness and solidity, and at the same time is light. It is pre-eminently suitable for *Bessemerising*, and *for making steel*. Wird daher market find in all the parts der world. *All that was needed to turn it to full account was the construction of a short railway to pits.* Not only will the coal pits of Fünfkirchen obtain by means of the railway a profitable market in the iron works, but [they will] be able to send coal to Vienna, where it is very dear; also to Trieste, and through Trieste it is believed to all parts of the Adriatic and the Mediterranean. The coal is very good, and *the deeper it gets the better it becomes*. It is *specially suitable for making coke*. At the pit mouth it only costs about 6d. p. cwt, so that the use of it will not affect the cost price of iron. The pits are of considerable extent. In 1866, the extraction was about 225,000 tons.

* * *

### July 6. 1867. N. 1245.

#### The National Bank System of the United States.

The notes of the State Banks were purely a *local* issue, and were, therefore, constantly and rigidly controlled in quantity by the frequent exchanges and clearings. Notes issued by a small National Bank in Maine may, and do, float away 1000ds of miles from their point of starting. ⦗Dieß könnte einfach geheilt werden durch ein Gesetz wöchentlicher Interchanges, Clearings, zwischen allen Branchen⦘ It is hence a common occurrence for National Banks to have to provide for the redemption of a very small fraction indeed of the Notes they have originally paid away. The wide action of the Notes of National Banks has already reduced a large part of them to a discount; and to *remedy this discredit*, the Comptroller urges that all National Banks shall be compelled to redeem their Notes at par at New York, by means of funds maintained there in the hands of correspondents – that is, of some one or more of the New York National Banks. Aber, says the Comptroller: „If all the provincial National Banks are to redeem their Notes in New York, they must constantly maintain there large funds – the New York Banks will compete for the custody of these funds, and the more adventurous of them will bid for accounts by offering high rates of interest on country deposits. But if the New York Banks give high rates of interest for money left with them, they can only make a profit by advances more or less hazardous, and subject, therefore, to onerous terms. In order, then, to avert the catastrophe of a Banking collapse, Congress must pass a *stringent law prohibiting Banks from allowing interest on any sort of deposits*.“ Such legislation would be futile and mischievous. The Comptroller proposes other checks for the supervision of the 1600 banks. Z.B. Prevent Persons from setting up National Bks. who find the means of borrowing the largest part of the available means, and applying them to most objectionable speculations. Also clauses for monthly instead of quarterly Bank Returns: the quarterly Returns enable Banks „to prepare for a good exhibit on these particular days“. *(Weekly public Reports!)* Schon cry in different parts of the Union about the *dangers and abuses arising from the patronage des Secretary of the Treasury* in regard *to the selection of National Banks to be depositories of public money* and *financial agents of the Federal Gvt*. It is a paramount object with a National Bk. to obtain the custody of the Gvt. money. Selection for such a trust is used as an advertisement to attract private deposits and private business, and largely succeed. The *First National Bank at New Orleans*, holding Gvt. Deposits, has just failed, under disgraceful circumstance – about 300,000l. has been made away with in a clandestine manner, and a leading authority in New York writes: „The machinery of the National Bks. has proclivities to weakness et danger which cause wellfounded apprehension. Disclosures at New Orleans, and disgraceful previous failures of Natl. Banks in various parts of the country, leave no room for further doubt. The best way for a shrewd manager of a Nl. Bk. to obtain *private* deposits, is to get up an appointment for his institution as a depository of Gvt. fund.“ Sagt ferner: the increasing number of Banks which even on the face of their quarterly returns do *not* hold the amount of cash reserve required by law. The returns of *October 1866* showed that 55 Banks then held reserves considerably below the prescribed limit. It is now complained in New York, „that the Comptroller has not announced publicly how *many of the Banks are defaulters in their reserves since Oct. 1866*, nor what measures have been taken to correct this serious defect“.

Up to March, 1865, or just at the close of the War, the circulation of the Nl. Bks. no more than about 25 mill. l. St. The expansion to the present limit of 50 millions l. is the work of the 2 last years. Their paid up capital only 30 mill. l. in March 1865, has risen to 84 mill. l. since that time. The advantage and strength of *the State Banks* arose from 1) Rigid enforcement of cash payments; und 2) perfect freetrade, subject to a few reasonable preliminaries, in banking business. The danger and weakness of the *National Banks* arises: 1) They have been called into existence, and been distributed over the country by the arbitrary discretion of a public officer, acting in most cases in perfect ignorance or misapprehension of circumstances, exceedingly prone to be influenced by motives of party patronage, and chiefly intent not on supplying the fittest banking institutions to the several parts of the Union, but on finding active and wealthy sympathisers with the Republican party, who, through the medium of the Nl. Banks, would support, first, Northern measures, and next, the views of the majority of Congress. 2) Under conditions like these, Nl. Banks have been set up by persons having no adequate knowledge of the business. They have started a Bank either chiefly as a party measure, or as a convenient mode of getting nearly double rates of interest for their money, or with a view of attracting deposits and employing them in private speculation of their own, or with the object of commanding a deposit of public money, and becoming Gvt. financial agents. 3) As the Circulation of the National Banks is essentially general and not local, the check of *constant liability to its return through the exchanges does not operate*. 4) The supervision of the Comptroller at Washington over 1600 Banks, of necessity, almost worthless for any purposes of practical control, ausserdem nicht desirable that all the Banking institutions of a country subject to the regulations of a party political officer.

The *imperfections of the Nl. Bk. System* became already practically manifest: 1) in the *admitted imperfection of the returns made by the Banks*; 2) admitted abuses prevailing in the administration of many of them; 3) admitted exercise of unjustifiable patronage in the selection of particular banks to be depositories of public money, and to be financial agents; 4) admitted necessity of further stringent legislation (f.i. the prohibition of interest on deposits)

If no modifications speedily introduced: The large number of incompetent, inexperienced, careless, scheming and speculating people, who have forced themselves or been attracted into the control of the Nl. Banks, will grossly mismanage the business; dissipate the deposits in foolish or disreputable advances, and the Banks will fail. Under the law of prior lien, the Gvt. will, out of any available assets, as far as possible, pay itself first, and in full, and the ordinary creditors, as in the recent case of New Orleans, will be left without a farthing. The *Notes of the failed Bank* will be at least to some extent covered by the lodgement of Federal Gvt. securities, but there will be a wide field for ingenious financing in the realisation, sudden or gradual, of these securities, and in the cancelling, sudden or gradual, of the particular Nl. Bk. tainted by default. A *series of failures* of Nl. Bks. may create a panic and bring down a large part of the organisation at once, or the distrust and dissatisfaction may operate more gradually. During the last 2 years, the Nl. Banks have had all in their favour. They have run up their Circulation from 25 to 60 Mill. St., and prices have all been rising. They have now reached the limit of their Note Issue. Process of reaction has set in which, by the by, will render cash payments again possible. This kind of reaction wird Masse dieser hastily set up concern ruiniren.

* * *

### July 13, 1867. N. 1246

#### Effect of Trades Unions upon Wages and Prices.

System of Trades Unions would in all probability *raise wages*. *Supply* is not the mere quantity of an article in the market for the moment. We must take into account the desires and needs of the *suppliers*. Great Western stock was, and, indeed, still is, above what figures show to be its fair value, because it was *„well held“*; that is, its proprietors had *no need to sell at once*, and could afford to take *the chance of future improvement*. Rice z.B. falls off mit *same supply* und *demand*. In fact, some great holders of rice have *large bills to meet*, and so to clear his liabilities, he was forced to sell at a sacrifice. This mental element in „supply“ the most obvious fact about the moneymarket for months. Many good stocks und shares have been at an absurd discount, because the proprietors were very anxious to sell, either to *pay off liabilities incurred*, or because, having suffered much by bad shares, they wished to be „out of those things“ at any cost.

By accumulated funds and an organised concert, trades unions enable the working classes to remain unemployed if they choose; während der agricultural labourer, who *has not a shilling beforehand*, and who *acts as an atom*, cannot remain out of work or out of the poorhouse for a week. Abzuziehn the *constant cost of the Trades’ Union und the occasional loss by strikes*. But the expense of strikes is occasional, while the benefit of being a better seller is constant, and a very heavy cost in machinery and management will not seem too much to those who have watched in other markets how powerless weak sellers are, and how sure the price of the commodity is to go down when a large dealer has liabilities which he cannot meet unless he sells. The *lock out by the masters* is the *plain and obvious reply to the strike by the men*. The whole is a rough sort of bargaining, and the party which can hold out longest wins.

Labour has a law by which it is propagated; capital a law by which it is accumulated. Capitalists can by no combination force wages lower than the rate at which labourers choose to marry and have children. Labourers can by no combination force profits beyond a rate at which monied people think it worth while to go into business. But *between these limits* and at every particular instant, wages and profits are determined by a sort of wholesale „higgling of the market.“ As to wages, the chance is that a sudden and simultaneous introduction of a combination system among labourers in all trades would have a tendency to raise wages. As a rule, a new force favourable to one party to a bargain will help him to make a better bargain. Would such a *general rise of wages* raise, or tend to raise *prices (of commodities*)? Obviously not. A cause which operates generally upon, and equally upon, the cost of production of all articles, cannot affect the exchangeable value of money. A considerable disturbance might and would be caused. Articles into which the cost of hand labour entered largely would rise, and those into which the cost of such labour entered little, but the profit of fixed capital entered much, would fall in comparison. Aber dieß would altogether differ from a general augmentation of all prices. The average remains as it was.

Wenn aber Trades Union introduced into one *single trade*, and *that only*, und die *profits of capital* hier only *upon a level mit other trades*, der capitalist will *withdraw capital* as soon as he begins to get less. Mit fixed capital geht das nicht (buildings und machinery cannot be transferred from one trade to another.) Aber das floating capital *can* be transferred. The most profitable trades borrow most. Je mehr a trade becomes less profitable, less inclined to borrow money to carry it on. In dem particular trade daher, mit rise of wages, the *price of the special article* must be forced up, or capital will withdraw from the trade. Whether the price can be forced up or not, depends on the *taste* (!) of the public. In an article of prime necessity probably it could. In luxury articles an addition to the price causes a diminution of the demand, and can only be obtained by a diminution of the supply; and if the supply is to fall off, labour as well as capital, must leave the trade, and labour will not leave any trade till it is driven hence by bad wages. Also: Wages rise, and force up prices; then the demand slackens, and prices fall; then, in consequence of the fall of prices, wages go down. The effect of Trades Unions upon such a trade is to cause disastrous fluctuations. In the case of *articles of subsistence*, their price will not at once fall, because the buyers must have them; but the labourers being more highly remunerated than in other trades, labour will flock thither; an extra quantity will be produced, and so both prices and labour will fall again. ⦗Ass! More capital will be *attracted*, wenn the prices rise; daher more labour *can* be employed. Die workmen verwahren mehr necessities. Und in den luxury branches capital und labour withdrawn. In other words: The distribution of production changes.⦘

By the agency of a common cause operating upon all employments, *wages may rise by a reduction of profits*, and yet prices be unaltered. Aber Union etc may occur at a time when the trade is exceptionally profitable, and the capitalist gets more than the common profit. The tendency to the equalisation of profits is a very powerful tendency in all business, perhaps the strongest single tendency. But still it is only a tendency. Water tends to find its level, but still much water is always higher than other water, and on that account is in motion to descend to the usual level. Just so the profit in particular trades may, even for considerable periods, be higher than in other trades, though a perpetually acting cause tends to bring about an average and common equality. If a Trade Union should be introduced into a trade at a period of unusually elevated profits, it might raise wages without raising profits. Profits being higher than usual, capital would (auch ohne Unions) come in *and compete for that sort of labour* (!), and so its price would have risen. Rise will not be permanent, *except the labourer was before earning less than the common rate of wages*. If the Trades Union makes him earn more, other labour will come into the trade, und the rate of wages go down to the common level. Nevertheless, *in such a case*, the operation of Trades’ Union, *even in a single trade*, may be *(and often has been)* *to raise wages without raising prices*.

#### The blue book on the Orissa Famine .

Orissa, a British Province, not 3 days’ steam from Bengal, and not 6 from Arracan, population of 3 mill. mit plenty of money, lost ¼ of its numbers from sheer starvation. County isolated. Its resources in grain sufficient for ordinary years, but its isolation, preventing exports, prevented also the accumulation of stores. It was useless to grow more than a neighbourhood could eat in a year, for if an extra quantity was grown the money value of the new harvest proportionately declined. This money value of extreme value to the farmer, as he *had to pay his rent in cash*, which he gets only by the sale of his grain within a very limited area. Each farmer, therefore, grew what he and his dependents needed, plus a very small surplus value to non-agricultural persons, and plus a store adequate to his own support for a few months. At the same time, the labouring class of Orissa – the *class without any land* – was for India unusually large, probably ¼ or ⅓ of the whole population. They were prosperous, the Ooreyahs, as they are called, occupying in Bengal just the position of Auvergnats in France, emigrating readily, and finding in the cities preferential employ as servants of almost all descriptions. Thrifty up to the Auvergnat point, 3 × more than Scotch cottiers, but, living on monthly wages, they of course store up nothing *except cash*. Harvest of 1864 bad, of 1865 totally failed. *They had plenty of money but nothing to eat.* To the last, the *peasant proprietors* managed to exist, each man hoarding some little store, and refusing to part with it at any price whatever.

The remedy for these dangers to increase *irrigation*, so as to prevent drought, the great Indian evil, *which we have intensified by incessant felling of the forests*, and to *develop* communication. Until roads are made the people will never store their grain to any great extent, for if they do they can never hope to sell it. Each township grows enough for itself, and a man with a 1000 bags of rice which he cannot move is just as poor as the man with only one – indeed poorer, for he has spent labour on unprofitable works. This has repeatedly occurred in *parts of India, notably in the Punjab*, where the people, after an enormous harvest, have been unable to pay their rent. Nobody in the neighbourhood wanted their grain, and carriage to a distance was impossible, till it was in one instance at least *officially reported that the wheat in the Punjab would feed the people for 3 years, and that there was consequently very much distress*. Irrigation, railways, und besonders auch canals wanted.

#### Workhouse Reports. (Communal (self) Government.)

Diese Scheisse wichtig, weil sie wieder zeigt, wie impossible local Gvt. in our state of things.

Two *thick Blue Books* (1867) containing a history of the official inspection of the last 10 years. Every workhouse in London visited yearly or oftener during that period. The inspectors have noted down in the visitors’ books their exact impressions of every workhouse. Und doch existirt die größte Scheisse ruhig fort. At the very time when *„the Amateur Casual“* of the *Pall Mall Gazette* visited the Lambeth workhouse, Mr. Farnall certified that the wards provided there for the homeless poor were *„good and sufficient“*. Unangenehmer Posten der des *Poor Law Inspector*. If he finds too much fault, he sets the guardians against him, and exposes himself to the reproach of caring more for the poor than the ratepayers. To show the time required for the introduction of any scheme *case of an idiot in Bermondsey workhouse*: *January 1861*, his name is mentioned, and an amelioration of his treatment suggested. Met by a sneer in the answer of the medical officer of the workhouse. In *Dec., 1862*, the idiot again under discussion, recommended he should be removed into some proper institution. This recommendation brought before the guardians in a letter from the Poor Law Board; guardians reply that there is no reason for such a thing. *Dec. 1864*, same recommendation repeated by the *Lunacy Commissioner*, and again brought to notice of guardians. *Febr. 1865*, the medical officer of the workhouse reports that the idiot is better, where he is, but that, in deference to the Poor Law Board, his case shall be considered. In *March 1865* same report (der Inspectors), the same suggestion, the same reply. Then, after 3 years’ delay, and 4 unsuccessful attempts on the part of the Poor Law Board, idiot removed to an asylum in *November 1865*.

*Corresponding mit Stepney guardians* wegen Bau of new workhouse. Letter from the *Poor Law Board* in *September 1857*. No answer. Second letter in *December*. Answer: Aber sie machen neue difficulty. Letter des *Poor Law Board May 1858*, repeated *August*. Answer: they are still considering the subject. Some more letters from the *Poor Law Board*; they send endlich their minutes about building a new workhouse. *20 October 1859*, member gave notice that he would move for a committee to take the matter into consideration. *27 October* motion was adjourned to *3d November*. *3d Nov.* no proceeding taken. *9 Febr.* another motion substituted. *16 Febr.* resolved to postpone the matter till election of the new board of guardians. *23 Feb.* a motion put to take immediate action, and having thus been deliberated upon for 4 months, was *lost*. Mr. Farnall writes that *defects of the Rotherhithe workhouse* pointed out again and again „the guardians have *for many years* been earnestly solicited to build a new workhouse, but wholly without effect; still I hope, almost against hope, that they will see the real necessity which positively exists for such a step.“ *Marylebone Workhouse* – disgrace to such a wealthy parish. In *Bloomsbury*, the inspector found one of the classes in school, being instructed by a *monitor without breeches*. In the same workhouse, the privies were so covered with filth, *Febr. 1858*, that Mr. Farnall could not go in to visit them: „the pavement, for at least 3 feet, was thus obstructed. One of the directors accompanied me, and will report this fact to the directors. I never remember seeing a more filthy display.“ Yet, in *Dec. 1858*, „the water closet which, at my last visit, was in a most filthy state, was equally dirty today“. In the *Hackney workhouse*, the bedrooms teem with bugs, and the damp and stench from the water-closets was most offensive. In two other workhouses, *St. James’s, Westminster*, and St. *Martin-in-the-Fields*, the want of basins for washing led to the use of chamber utensils for that purpose. In *Lambeth* „the drains are frequently in a defective state; the deadhouse is immediately under the flooring of a sickward for females, and the medical officer says: „The smell is sometimes terribly offensive; it is most atrocious.“ The dispenser says: „It is impossible for me to do the duties which involve upon me.“ *Sample of the complaints made by inmates*, and calling upon themselves the elaborate attention from the Poor Law Board, *verbatim from the Blue Book*: „Sain Margret and Sain John Workhouse Kensentone. Sur i humbeley big yore parding but i think upon outer no that we poor sols bees *in danger of our lifes* the luntik keeo (Keogh) been an cutt poor Metcafs throt (throat) the too doctors sowd him up an the poor feler ant ded yet i hope he wont be lett stop hear. i bees told that won of the womann lunatiks bees very denjors to. i bees your humbel servant. *P. Hennks*.“ Throughout the blue books (jedes 450 pages) too much deference is shown to the sovereign guardians, slight examples of good management are praised almost too fervently, while graver errors are passed by with a word of implied censure. These guardians think themselves important and indispensable, are conscious of their authority, and only neglect their duty; remember that they have *powers when threatened with interference*, and forget why they were charged with those powers when there is need for their exercise.

#### Paris 10 July. Bankruptcy of Pollet, the banker of Roubaix.

Liabilities 16,000,000 fcs, assets: 20,000,000f. Just condemned by the Court of Lille to *5 years imprisonment* (!) and 3000 fcs. (!) for swindling. His House enjoyed the highest reputation, so that an eminent banker declared: „any person inquiring about its credit would have been as much laughed at as if asked if the Rothschilds were solvent.“ Yet for 30 years in a most embarrassed position, and for a great many of them only existed by putting into circulation *bills of exchange drawn by clerks*, servants, women etc. Amongst the victims: *Bank of France* for 1,080,000 fcs, *Lecuver et Co*, bankers, for 1,650,000f. *Fould et Co*, for 1,650,000 fcs. *Mallet et Co*, for 300,000f. and several other bankers for sums of 420,000f., 350,000f. 240,000f. and so on.

*Failure* of *W. Brunner et Co, New York, Manchester, et Bradford*. Liabilities about 200,000l. *Fairchild and Fanshawe* , merchants in the American trade, have made composition with their creditors of 10s. in the pound.

* * *

### 20 July 1867. N. 1247.

#### Finance of the American States. (Von George Walker, Springfield Massachusetts gegen den Standard Correspondent ) (Loanable Capital of the West.)

In the *New York Financial* (nicht Commercial) *Chronicle of April 27, 1867* carefully prepared table on the indebtedness of the 36 States composing the Union, in 1860 and 1866. The figures are derived from the latest State reports, and are official. *Total of these debts* in *1866* = 352,194,290$, but in *1860*: $255,839,769; increase only during the 6 years within which the war occurred of $96,354,521. In the 3 largest States of the West – *Ohio*, *Indiana*, and *Illinois*, the aggregate debt was *reduced* in that period from 37 to 31 millions, and in *Pennsylvania*, after New York, the most populous state of the Union, reduced 2 millions. The largest increase was in the rich States of *Massachusetts* (18 millions), *Connecticut* (10 mill.), *New York* (17½ mill.) Hier und the other North Eastern States the greatest stimulus given by the war to manufactures, and other productive industry, and in them, consequently, the largest bounties paid to volunteers, and most monetary relief furnished to the families of the absent soldiers. In the *West*, no considerable bounties were paid, and no debts, on account of them, could therefore be created.

The *State of New York* has just published a return on its indebtedness, embracing the State debts, and the debts of counties, cities, towns and villages within it. State Debt now $*51,753,082*, but of this 34,182,975$ existed before the war and more than 18 mill. of it represents the *costs of the Erie canal*, a gigantic work of internal improvement, nearly 400 miles in length, which has existed for 40 years, and has contributed many times its cost to the wealth of the State. *Interest on it* defrayed by the tolls of the canal, paid by the whole inland commerce between the West and East. The county, city, town, and village debts *$85,675,645*; of this $41,927,998 created for bounties and other war purposes; residue grown out of internal improvements, roads, bridges, waterworks, railways, schoolhouses, almshouses, prisons, asylums for the infirm, hospitals, all built by the help of the municipalities; debts temporarily created for them. Greater part of them only municipal guarantees; no burden whatever, on account of them, falling on the people. Total Debt of New York, alles zusammen, less than $ 140 mill. Population of New York nearly 4 mill. that of the late loyal states about 24 Mill. Southern states had never great local debts, weil no improvements. If the State and local debt of the whole loyal North on so large a scale as those of New York = 850 $ mill. Aber die population of Ohio, Indiana, Illinois 5½ mill., their aggregate state debt: 31 mill. The population of New York is 3,880,000 und its State debt 51 mill., more than twice as large as that of these Western States per capita. The *disparity of local indebtedness* noch grösser, weil in den new agricultural states not so many municipal bodies capable of creating debts as in the older and richer states in the East, and very few of them have an established credit. *Their wealth is chiefly inland*, and of this much is unimproved. *No loan fund in the West to make the advances necessary to create debts.* *Little banking capital (proportionally), no savings’ banks*, few *insurance or trust companies* ; and private capitalists can do better than lend their money on county or city bonds. To a very large degree, *the ordinary hand to mouth business of that section is done on Eastern capital*; and there is certainly *no local capital* which can have been *immobilised* in the manner supposed. Their absolute inability to borrow must, therefore, have kept the Western local bodies from contracting considerable debts. The *total bank capital of the Union is 420 millions*; and all of this is invested in *Federal Bonds*, and, therefore, the *loanable capital which they control must come from the people in the form of deposits*, and *from their circulation of 300 millions*. Of this bank capital, *New York has 116 millions*, the *6 New England States* 145 millions, and *Pennsylvania* and *New Jersey* 60 millions; while the *12 Western and Border States* – *Ohio*, *Illinois*, *Michigan*, *Wisconsin*, *Iowa*, *Minnesota*, *Kansas*, *Missouri*, *Tennessee*, *Kentucky*, *Nebraska*, *Colorado*, with a population of nearly 12 mill., have *only 68 mill. of banking capital*. The *savings’ banks of the* *East* also hold a very large fund, much of which available for local loans. The *savings’ bank of New York* $ 141 mill., of *Massachusetts* 67 mill. $, the other North Eastern States, including Pennsylvania and New Jersey, hold proportionate amounts. Mit exceptions, here and there, z.B. 8 or 9 mill. $ in California, savings’ banks are unknown in the U. St. The *savings banks* of the West are her broad acres of cultivated land; and the *only deposits of its people* the seed, the growing crops, the horses, the meat cattle, the hogs, and the farming implements, with which the land was stocked.

*Nearly the whole loanable capital of the Union is held in the Eastern und middle States*, und *no appreciable part of their capital is invested in the local debts of the West*. Daher kann die indebtedness (*State* und *Local*) der *U. St. not exceed $ 650* mill. Added to *Federal Debt*, as shown by the June statement, of 2515 mill. $, the total public debt of the American people would be 3165 mill. $, a sum which does not much exceed the anticipated amount of the Federal Debt alone when the war was ended. Dagegen schreibt der *Standard Kerl* von 4000, und probably nearer 5000 millions.

* * *

### July 27. 1867. N. 1248.

#### Effect of Trades Unions on Prices and Wages.

Trades Unions are introduced into all trades, but more or less into all *trades of skilled labour*, not at all or very little into *agriculture* or *other departments of unskilled labour*. Dieß would nicht raise *manufacturing produce*, weil in the *barter of gold* (quel imbecile!) *for skillmade articles an equal force would be operating to raise sowohl den value of gold* (mining being also a skilled labour) and *the articles*. Daher reduced the *price of agricultural produce*. (as gegen Gold) *If* labour migrated from agriculture to mining and manufactures easily and quickly, this process would be arrested, but in matter of fact it does nothing of the sort. Der agricultural labourer is like the capital sunk in the plant of a particular trade; it cannot be got out (Nonsense! dieser Vergleich) for any gains or by any means. Much labour is *cooped* up in agriculture, which for its own gains and earnings had better gone to manufacturers. Aber andrerseits: Any fall in home-grown corn, or other agricultural produce very slight. It cannot be effected except by an *increase of quantity* (Rindvieh! Als ob ein Artikel mit the same quantity nicht in price fallen könnte *relativ*, weil ein andrer in price steigt!) und dann nöthig resort to inferior soils and greater difficulties of production. The fall in the price of these articles already checked by the economy of nature. Also, upon the whole: *the prices of all articles would continue unaltered*. If in manufactures the rise in wages reduced profits 1 or 2%, capital would flow into agriculture as long as it could obtain a greater rate of profit. Aber even the augmenting difficulties of further production would reduce that profit. So kein Anlaß to go to agriculture. Also result: a *general reduction of profits*, in trades of skilled labour, because wages forced up by it, and prices remain the same; in *agriculture*, because of resort to inferior soils. Hier supposed that *money (gold etc) was produced within the country*.

#### How to retain farm labourers?

Allgemeines Gekohl auf den *Agricultural Meetings* über *scarcity of labourers*. Sir Stafford Northcote (President of the Board of Trade) attempted to make out, on agricultural meeting in *Devonshire*, daß derselbe Mangel in the mercantile navy, the works and employments of the large towns und manufacturing districts. Darauf Remonstrances: *The Rev. E. Girdlestone* (Canon of Bristol and Vicar of Halberton, in *Devon*) in a letter to a newspaper, stated that there are about 60 farms in his parish, and that, with very few exceptions, the pay of the ablebodied agricultural labourers is there 8s. a week; in some cases only 7. And that a like scale of wages prevails throughout a large part of Devonshire. He added: „In many instances, deduction is made, not only for rent, but for grist at the farmers’ price, so that the labourer sometimes does not carry home more than 3s. 6d. in coin. I know 2 strong lads in one family, aged resp. 16 and 14, who receive from the farmer who employs them, the one 3s. 9d., the other 2s. 6d. a week; and the farmer, reckoning these miserable earnings of the 2 lads together with the father’s wages, stated in a public paper *that he gave his labourer 14s. a week*.“ Another Vicar in *Hampshire* says: „The wages received by an able-bodied labourer when engaged in ordinary work is 9s. a week. Out of this they have to pay one s. a week for houserent. … There is no ale, cider, or any other emolument given.“ Well, does any one wonder that rural labourers get away from Devonshire and Hampshire the first available opportunity? … How are the farm wages of such districts to be increased? To some extent *by the depletion of the market*. But this process, especially in backward regions of the West of England, must be a slow one. … If most of the estates in England were judiciously managed, some of the present tenants must, perhaps, either give up their farms, or give up some portion of their land.

#### Strike of Agricultural Labourers.

Strike in *Buckinghamshire*; village of *Gawcott*, near *Buckingham*; demanded advance of 2s., namely from 10 to 12s., with an additional sh. for Sundaywork, which would be necessarily the case with shepherds, horsekeepers, cowmen, and the like. Appeals have been made to the public und subscriptions have, indeed, aided them. Some of the Gawcott farmers have yielded. The same demand is being raised in other parishes in the neighbourhood. Rural labour has been scarce for several years past, while at this particular time the prices of all kinds of provisions, besonders bread and potatoes, very much higher than for some years. Discomfort of insufficient cottages, long distances between the places of work and the abodes of many of them. *The agricultural labourer has no other mode of righting himself than by combining with his fellows to demand better wages.* Farmers are not to be expected to give more than they are compelled to do by the rates current in the labour market; and meeting, as they do, at their vestries, and in fairs and markets, *they can and do practically combine together to keep wages down to the lowest possible point*. Until very recently, that point was very little beyond the merest maintenance for a human family.

The movement of the labourers in some of the worst paid of our agricultural districts for an advance of wages must be regarded as a part of the great movement in English agriculture which is imminent.

* * *

### 3 August 1867. N. 1249.

#### Paris. 1 August. Failures in Building Speculation.

Building Cos. in Paris seem not destined to prosper, notwithstanding the vast number of new houses which the immense demolitions of Prefect Hausmann necessitates. The difficulties of the *Great Immobilière Co.* are well known. The directors of another Co., the *Immobilière de la Rive Gauche*, were obliged to avow in a recent meeting of shareholders that its *debts* were 15,607,428f., and the assets, consisting of houses and building ground, only 10,563,266f. So deficit of 5,044,152. A third *building Co*, that of the *Boulevard du Temple*, failed some time back. The great speculators in housebuilding are also said not to be prosperous.

*Manufacturing Towns:* *Iron trade* has continued very inactive.

* * *

### 10 August, 1867. N. 1250.

#### Foreign Trades Unions.

*Blue Book:* *Reports from ministers et Consuls on industrial Questions and Trades Unions:*

* * *

### 17 August, 1867. N. 1251.

#### What Bankers should at Present do with their money.

Much of every country banker’s business deposits are employed in his own district at *comparatively unvarying rates*, and he can now get upon these 4, 4½, or even 5%. For such *old* money, so to speak, he can afford to give 2%, or even a trifle more. But nicht upon new money, which he has to send to London to employ. London Bankers only give 1%, and even this rate – miserable as it is to the depositor – is not very satisfactory to the banker. In most parts of England, vestiges of the old „fixed price“ of money. 5% gilt noch als natural rate (in Folge der früheren usury laws.) Die country bankers können daher sich so leicht raise money to 10 or 12%, in times of difficulty, wie at London. Andrerseits brauchen sie nicht so zu reduciren. Aber auch, verglichen mit „London bills“ und the larger bills of all great cities sind „country bills“ the bills of less known people. Der country banker knows them, and charges them more.

#### Failures of Three National Banks in the U. States.

2 in *State of New York*, 1 in *Massachusetts*, Liabilities 230,000l., including the paid up capital of 82,000l. The causes: advances imprudently made on bad securities, and speculations in land. … Most *prolific grain harvest* secured, South, North, und West. Guter cotton crop steht before.

*Standard Correspondent* schreibt *New York, 30 July*: »Within the past 5 days 3 National Banks have failed: *Unadilla National Bank* (Unadilla, New York); *Newton National Bank* (Newton, Massachusetts), *Weedsport Nat. Bank* (Weedsport, New York). The liabilities of the first at least $750,000 (mit Capital: $,100,000), the liabilities of the 2nd $210,000, of the 3d $200,000; the capital of each of the two last named: $150,000. Ausserdem, the *Pegnonnock Nl. Bank* *(Hartford, Connecticut)* has just lost $50,000 by the peculations of an officer. Cause der disasters: reckless speculation, und equally reckless extravagance in living, induced thereby on the part of Bk. officers. In every instance numerous poor depositors ruined.«

The *Unadilla Bank* organised some 12 years since as *State Bank*, had profitable business. Nach institution des National Bank scheme, its managers deposited $110,000 in Federal bonds und received a charter as a Nat. Bank and $100,000 in Nat. Bank currency. As it had long enjoyed the confidence of the community, it became a sort of savings Bank for the surrounding country; und enabled to carry on a fair business in advancing money, or paper, to the farmers and shopkeepers of the neighbourhood, obtaining the full state rate of 7% upon its loans. Received so not less than 13% upon its capital stock (nämlich ausser den 7% mindestens 6% upon the bonds deposited mit der Gvt.) They (its managers) invested a large sum in the *purchase of petroleum lands in Pennsylvania*, another in *real estate in various towns*, und another in a scheme *for making cheap paper upon a „patent“* process. Endlich its notes protested. Run. Usual closing of doors. Struggling farmers, widows, orphans, small shopkeepers, dealers in produce have become paupers. One man committed suicide; two persons have become insane. … Trade is at a standstill in the east. The losses of some of our New York dealers in dry goods are to be counted by millions. *Stewart, Lord, and Taylor, Arnold and Constable, Lake and M’Creary*, and other heavy dealers in dry goods, are offering their goods at less than their original cost in Europe, and yet their stores are deserted. The paper money system makes an „easy“ money market just at this time … The advocates of the Nat. Bk. system assert that at all events the *notes of Banks*, being secured by the bonds deposited with Gvt. bonds in excess of the amount of circulation, will always be redeemable at Par. Dieß only partially true in the cases of isolated failures; for the only value of the currency lies in the public confidence, and if the public refuse to accept at par the notes of broken Nat. Banks the holders must suffer, and the holders are the mechanics und labourers. Wenn aber viele National Banks auf einmal caput gehn, then the value of the notes nur »what the bonds, held as „collateral“ security, will sell for in time of general financial disaster and distress«. But the *depreciation in the value of the notes* is *the slightest* disaster of people in connection with Nl. Bank failures. The ruin of 1000nds upon 1000nds of *depositors* whose money has been used up in foolish speculations by bankers, is a calamity of vastly greater magnitude.

* * *

### August 24, 1867. N. 1252.

#### The Credit Foncier of England.

Rechnungsablage oder „Interior“ dieser (relatively guten) Finance Co.

Die direct liabilities only £127,922 (darunter 43,605l. für *deposits*). Contingent liabilities of 368,757l. Singular smallness of their debts. Ihr „written up“ Capital = 1,800,000l. Diese Co. neu, formed out of the ruins of the *„Credit Foncier and Mobilier of England“*. In the *assets of the old Co* taken over by the new one figurirt: Fully paid shares and stocks, 1,159,000l. *valued at* £*305,466* und in their Report the directors say that „the difference between the sums at which the securities were valued in the Co’s books and their par value is no less than £.1,146,717“. Now the whole funds of the Co., whether belonging to themselves or others, only £1,997,000, and when there are losses of this magnitude from *the fluctuation in the value of securities*, who can be sure of anything about it? The directors tell us they used to value their securities at the price of the day, but now for property like this there is „practically no market“, i.e. the property cannot be sold at all or for anything; and, therefore, the directors are obliged to value it themselves. Of course, we do not know what the Co. gave for these shares; some of them may have been bought in cheap market, others allotted under par by special arrangement. Dennoch the value of the property has *fluctuated* to that amount, and to somebody’s loss, and the doubt remains whether *Cos. which deal in articles of so unstable a value*, can be relied on to secure a sure income.

The directors say that they have at stake in the following Cos., or in properties connected with them, the following sums:

| City of Milan’s Improvement Co. | £.243,615 |
|---|---|
| Varna and Rutschuk Railway | 196,467 |
| Belgian Public Work Co. | 107,279 |
| Irrigation Co of France | 282,740 |
| Imperial Land Co. of Marseilles | 325,666 |
| Millwalls Docks Co. | 145,526 |
|  | 1,301,293 |

besides a large stake both in the *London, Chatham, and Dover Railway* und *Paris Streets Improvements Co*. Added die leztern, probably all these investments = Capital of the Co. Profit on some of those investments may make up for loss in others. And as respects the *income* to be derived from these securities, such is of course the case. A person who bought all these things to hold would have some income from some of them; there is no common cause why they should all cease to earn. *But a finance Co. buys to sell*; *the great profit such Cos. hope to make*, and once apparently did make, *did not arise from the earnings of a railway Co. or a dock Co., but from the changes in the share market*. And the fatal fact, that securities of this kind *all high in good*, *all low at once in bad times*. This does not indicate a secure source of profit on which investors might rely for an increase, but rather *a system of sharedealing*, which will yield great sums in very sanguine times, at the cost of being left with a property for „which there is no market“ in depressed times.

#### Subways. (Gas Cos. etc)

Nämlich for Gas und Waterworks (Repairs) (statt daß sie jezt beständig die Strasse aufbrechen.) In 5 years there were 5,332 openings of the street in *Gray’s inn Road* and *Holborn*. Although the gas and water Cos. were informed whenever paying was to be done, they invariably waited till afterwards, in order to get over the ground again. The result: permanent *deterioration of the roadways*. Nach Mr. *Bazalgette* ganz verdorben die new street of Southwark, „one of the most perfect pieces of paving“, by the Cos. cutting their trenches, breaking up the concrete, disturbing the arch of stone paving. All this would be obviated by the use of *subways*. The Gas Cos. say that as Parliament has once allowed them to do as they like, it has no right to make them consult the convenience of the public! The safety of the subway system is merely a question of ventilation, and a downcast and an upcast shaft for every 3 miles would be sufficient. (Nämlich die gas pipes to be laid in subways). (One *explosion* in *such a Paris subway*, aber *15 explosions* in *the Paris sewers* from leakage through the earth.)

#### United States. Finances. (Official Report of McCulloch 7 August 1867)

*Total debt 1 August, 1867:* $2,686,685,896. *Increase* since 7 months of January by $11,623,391. Since *January* decrease of about 11 Mill. $ *greenbacks* afloat, their issue on 1 August being $369,164,844.

*1867* imported at New York $53,431,860 worth of Foreign Dry Goods, während 7 *months*, *1866* während same period $80,442,325. *Decrease* of $ 27 Mill., about ⅓ of import of 1866.

| (7 months) During the *7 months* *of 1867*, |  | the total Customs receipts at *New York* | $71,260,915 |
|---|---|---|---|
| decrease over 10 Mill. $ *of 1866* |  |  | 81,309,466. |

| Vom *Jan. 1 to Aug. 3 1867*, | *the New York Specie export* | $38,427,856. |
|---|---|---|
| *Same 7 months of 1866* |  | 51,824,771. |

Nearly all the export of 1867 made in the last 3 months, wahrscheinlich for maturing of bills drawn by American pleasure travellers in Europe *(Paris Exposition)*.

*Specie Production in 1867*, von *California und Nevada mines*, *Increase* gegen 1866, besonders in den Nevada mines. Bulk of the bullion from those mines seeks outlet through *San Francisco*.

| During first *½ of 1867* | amount sent to that city | $22,193,291, |
|---|---|---|
| *same time of 1866* |  | $21,137,763. |

The following table shows (Average *Rate of Taxation* almost tripled everywhere, since 1860) the ratio for *each inhabitant* of the total taxation in 1860 and 1866, and also for 1866 the proportion levied by *the City*, *the State*, and the *Federal* (U. St.) Tax.

| Cities. | 1860 | 1866 |  |  |  |
|---|---|---|---|---|---|
|  | Total Tax. $. c. | City Tax $. c. | State Tax $. c. | Federal Tax. $. c. | Total Tax. $. c. |
| New York | 12. 12 | 17. 34 | 1. 84 | 13. 95 | 33. 13 |
| Philadelphia | 6. 68 | 8. 17 | 1. 27 | 13. 95 | 23. 39 |
| Boston | 15. 32 | 21. 98 | 2. 49 | 13. 95 | 38. 42 |
| Cincinnati | 11. 25 | 10. 39 | 1. 50 | 13. 95 | 25. 84 |
| Chicago | 6. 18 | 8. 57. | 1. 17 | 13. 95 | 23. 69 |
| San Francisco | 18. 71 | 18. 71 | 4. 96 | 13. 95 | 37. 62. |

#### Improvement of Land. (Les nouveaux propriétaires)

Nothing is more common than to see a man, who has made a large fortune in trade or manufactures by most intelligent activity, when he becomes a landed proprietor, to be *remarkable chiefly for his exaggerations of the semi-feudal abuses in the management of his estate*. He becomes, as it were, assimilated to the territorial class. His preservation of game is more monstrous than that of the old aristocracy; and his restrictive control of his tenants is not less stringent and mischievous than theirs.

* * *

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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.