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Title: Heft „London 1868“. VII. The Economist 1867, September–Dezember, und Index
Description: Marx’ Exzerpte aus dem „Economist“ vom 31. August bis Dezember 1867 und sein Index zu den Economist-Exzerpten, 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.%20VII.%20The%20Economist%201867%2C%20September%E2%80%93Dezember%2C%20und%20Index
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*Nach der Handschrift, MEGAdigital (MEGA² IV/19).[^lic] [Traducción al español](https://marxismo.school/archivo/marx-engels/1868%20Cuaderno%20%C2%ABLondon%201868%C2%BB.%20VII.%20The%20Economist%20de%201867%2C%20septiembre-diciembre%2C%20e%20%C3%ADndice)*

### 31 August. 1867 N. 1253.

#### The Finances of Russia.

*Consul Michell’s Report of Russian finance friendly to Russia*; he *obtained his appointment partly through Russian influence*. It shows that that Gvt. never succeeds even temporarily *in avoiding a deficit*. *Before 1832*, each Russian department spent at its own discretion; deficiencies made up by the issue of inconvertible notes, sales of property, or by leaving debts unpaid. In *1832* a slightly better system introduced, but Treasury still unable to make expenditure and revenue meet, and compelled every year either to borrow money abroad, or to take money from the State Banks of Deposit, or issue inconvertible paper.

Between *1832* and *1861* thus obtained 216,000,000l., average deficit for *30 years of 7 Mill. l. a year*.

| Official admitted deficit of | 1862 | over l.1,500,000; |
|---|---|---|
|  | 1863 | 1,700,000; |
|  | 1864 | 6,300,000. |
|  | 1865. | 2,700,000 |
|  | 1866 | 5,700,000. |

*Michell* shows that this *is far within the truth*. The State helps itself from the National Bank as it pleases, giving only inconvertible paper in return; and so, in one way or other, the Russian Gvt., von 1861–1866 borrowed 75 Mill. l., or at the rate of 15 Mill. l. a year, *an average deficit of nearly double the old amount*. Much of all this debt met by notes which bear no interest, and the interest bearing debt bears no proportion to the real indebtedness of the State. No one knows how much paper is afloat, total enormous, but *public debt* = 286 Mill. l., mit annual charge of 11 Mill. l., or average of about 4½%. As the ordinary revenue in 1866 = 53 Mill. l. St., *Russia owes*, apart from her paper, nearly *6 years income*, and has mortgaged nearly ⅕ of her usual receipts, not a very formidable state of affairs when compared mit English, French, or Dutch accounts, but very formidable when compared mit dem true analogue, *India*, which owes barely 2 years income, and has mortgaged little more than a tithe of her revenue. India, moreover, has no inconvertible paper. Yet India can borrow at 5%. *Michell* says, as to the unknown quantity of inconvertible notes: „The accounts between the Treasury and the State Bank are so complicated as to defy any inquiry for the purpose of making a statement beyond dispute. *Practically, the State helps itself to whatever it wants from the Bank*, which is thereby compelled to issue more inconvertible notes to ‚strengthen the branches‘, and thus to suspend its own charter. The Treasury has broken the State Bank, for it has long been unable meet *its engagements to pay specie*. *Nor could it return to the public their deposits if demanded*, except by a corresponding new issue of inconvertible paper.“ „Irrespective of 45,000 men serving in the Imperial army, the 800,000 rank and file, supplied by a total population of about 55 millions, constitutes 1 4/10% of that portion of the population liable to conscription, while the numerical relation of the army to the population of the empire (70 mill.) exceeds that of France and Prussia by ⅓.“

„At the same time“, says Michell „the number of young men eligible in Russia for service is comparatively far smaller than in other countries of Europe, where about 1% of the population yearly reaches the age of 20 years, and of these 40[%] are fitted for military service. In Russia, owing to the mortality of the children, it takes 50 millions of the population to produce the number of young men of 20 years that France can command with a population of 38 mill. According to this calculation, the number of men of the class liable to military service, who reach the age of 20 years in Russia, about 400,000 p. an.; of these, perhaps not more than 160,000 are fitted for the army; but the actual number yearly taken is 100,000, and these only return to their families after 8 years’ service. Official Expenditure 33% of revenue; in der That immer viel mehr. Ausserdem charge to the country by the fact that the annual expense to the male taxable population of furnishing a contingent of 100,000 recruits cannot be less than 3½ mill. roubles, while their liability to transport and quarter troops is estimated at 15 Mill. roubles, constituting a tax of 60 to 70 copecks per male; while in order to possess irregular troops, 3 mill. of a population occupying the most fertile provinces of the empire are exempted from all taxes and contributions.“

* * *

### September 14, 1867. N. 1255.

#### The Common Schools of America.

*Rev. James Fraser* was sent out, to make the inquiry, by the *Schools Inquiry Commissioners*. His Report now printed. He begins by the *State of Massachusetts*. By its laws every township is bound to keep up common schools for the instruction of all the children of the township in the rudiments of education. Every *township containing 500 families* or householders is, in addition, to keep up a *high school of the second class*, in which general history, bookkeeping, surveying, geometry, natural philosophy, chemistry, botany, the civil polity of the State itself and of the U. States, and Latin are to be taught and every *township containing 4000 inhabitants* is further to provide instruction in Greek, French, astronomy, geology, rhetoric, logic, intellectual and moral science, and political economy. *These schools are supported almost entirely by local taxation.* There is a *State School Fund*, contributing towards their expenses, but this contribution is small, positively and relatively. *In 1864*, the average sum contributed by the *State School Fund* less than ¼$ for each child, while the average sum raised by local taxes almost *6½$ for each child*. *School fees are unknown in Massachusetts, Illinois, and Ohio*; in some other States they are permitted, but limited by law. Where they do not exist, each township is bound to raise such sums of money for the support of its schools as it judges necessary. If it refuses or neglects to raise the money, or to choose a school committee, it is liable to penalties, and receives no aid from the State School fund unless it raises 1½$ for each person between 5 and 15. These penalties difficult of infliction, and instances where they are evaded. The law says the common schools are to be kept for at least 6 months in the year. In 1864 more than ¼ of townships failed in this respect, 32 townships out of 68 (of more than 4000 inhabitants) did keep no First class school *(as by Law)*, in 1864. Nach dem Law der High Schools to be open 10 months in year. Of the 118 High Schools of Massachusetts, in 1864, only 88 fulfilled the requirement; 14 kept open for 8 months only, 16 for less than 8 months. These breaches insignificant. (dabei 1864 Kriegsjahr!) The public duty by no means neglected in the chief States. In *Boston*, **more than ⅛ of the** *whole amount of taxation*, about 2½% on the capital of the city, spent on education; in *New York* city ⅕ of its ordinary annual taxation, 5½% on its capital. „The cost“, says Fraser, „being defrayed by taxation, is *proportionate to the property of the parent*, *not to the number of the children he sends to school*.“ „It is nothing more than a sober conclusion, that an American farmer frequently gets an education for his family at a cost to the community of not more than 10sh. a year per head, ⅓ of the amount at which our own Committee of Council have been in the habit of rating the cost of the education of the children of an English mechanic or labouring man.“ The community, defraying the cost, has the right to insist on guarantees, that the education is effective. Each township elects a school committee, charged with the management and control of the scholars at large. The duties of the committee are to appoint, examine, and, if necessary, dismiss the teachers; to visit and inspect the schools, to provide books and apparatus, and maintain and keep in order a sufficient number of school houses. As to the *books to be used*, the school committee bound to take care that „no book calculated to favour the tenets of any particular sect of Christians be purchased or used, *and* (Holla!) *to require the daily reading of some portion of the Bible in the common English version*.“ There is a growing demand in the U. States for a central bureau of education, or a Ministry of Public Instruction. „The supreme control of schools absolutely in the hands of local administrators“ and want of „a properly authenticated and independent officer“ to see that legal requirements are not ignored or evaded. At present the law rests too much on the sentiment of the district.

*The Massachusetts Factory Act is almost if not quite inoperative.* Parents are bound to send their children to school under a penalty, but this seems to be seldom inflicted. But the *demand for compulsory attendance* is growing loud and vehement. „It is argued that if the State taxes me, who perhaps have no children, towards the support of schools for the security of the society, I have a right to claim from the State for the security of the same society, that the schools which I am taxed to maintain shall be attended by those for whose benefits they were designed.“ Others ask if the State has a right to put its subjects into prison, but no right to send them to school; a right to take away life, but no right to make life useful and bearable. Diess richtige Sprache für the descendants der early colonists, who „in *1642*, only 22 years after the landing of the pilgrim fathers from the Mayflower, enjoined upon the municipal authorities,“ (by a public Act passed in the General Court of the colony) „the duty of seeing that every child within their respective jurisdictions should be educated“. These Public schools supported by the people for the people, instruction offered freely to everyone, powers given by the law to render that instruction compulsory.

* * *

### 21 Sept. 1867. N. 1256.

#### Waste of Educational Revenues. (in England)

Oxford und Cambridge have almost fabulous income. They don’t know what to do with their money. Prof. Rogers hat vieles brought out. Mr. Forster tried to get at the facts (as member in the *Committee on Mr. Ewart’s University Bill*), but was outvoted. Nach Rogers die revenues of Oxford reported von 200,000 to 800,000£ St. Nach *Roundell’s* exact numbers für the different items, revenue of 500,000l. Dafür educated about 1,400 undergraduates, chiefly of the upper class, members of the Established Church. Und diese 1400 pay for their own education into the bargain, z.B. 20,000l. a year for tutors’ fees. The fixed charges of every college for tuition, chamber rent, food, and attendance, at least 60l. a year for each undergraduate. At *Cambridge*, average annual cost to a parent 300l., though some young men live on 150l. But the academical year consists of only 24 weeks. During the rest of the year, the young men have to be maintained at home etc. On what, then, are these endowments spent? On Prizes. The *University of Oxford* alone, independent of the colleges, is not more than 27,000 or 30,000l. Von den incomes der colleges (13,000 für Merton College, 30,000 St. John’s College, *Cambridge*) nur 200 or 300l. a year is directly spent on instruction. Das actual money für die Professors lecturing in den colleges fast nur von den fees paid by the undergraduates. The revenues go to the Fellows and the scholars. These fellowships may be retained for life if their holders do not want to marry, and have no objection to taking orders. Some who hold them for life do nothing in return for the income. A man gains a fellowship at 24 years, and vegetates then on his 300l. a year. He does not live in Oxford or Cambridge. Because he was first in a competitive examination, when young, he is maintained for the rest of his life at the expense of all future competitors.

* * *

### September 28, 1867. N. 1257.

#### Further Failures of the National Banks in New York State.

2, mit paid up Capital of about *100,000l.* , *Liability to depositors and customers about 450,000l. more*. *Farmers’ National Bank, of Brooklyn (New York)* und the *First National Bank*, of *Kingston* (New York.)

*„The Farmers’ Bank of Brooklyn“*, organised 1852, State Bank; with a nominal capital of $500,000, the capital stock being divided into 25,000 shares of $20 each. High place, under prudent management, in the public confidence; large profits; its dividends, paid semi-annually, about 8% of the capital stock. Its shares quoted 118 to 120, and were practically out of the market. It sustained the storm of 1857, when the Banks were tumbling by 100nds, and was thenceforward looked upon as perfectly sound. In 1865 transformed into *Ntl. Bank*. A settlement was made, its assets were divided, converted into the *„Farmers’ Nl. Bank“* , with a capital stock of $300,000, represented by 15,000 shares at $20 each. The shares appropriated by the stockholder of the old State Bank. Its affairs proceeded without interruption, its stocks being quoted in Wallstreet at 108 to 110. A Branch Bk. at Green Point, a suburb of Brooklyn, was established. People were induced to make the Brooklyn Bk. a *sort of Savings’ Bank*, and *two Savings’ Banks* – *the Germania* and *the Dime* – deposited large sums in its vaults. Nach official statement on *1st July 1867* its *deposits*: $1,156,135. These deposits made by the *Savings Banks* aforesaid, small tradesmen, farmers and market gardeners living in Long Island, by speculators, manufacturers, private gentlemen, and mechanics – the largest deposit by one individual probably not exceeding $15,000. The *President of the Bank* and *others connected with its management* used these individual deposits for the purpose of speculation.

The nature of these speculations shown by list of the offices filled by the President, who was treasurer of the Tionesta and Sugar Greek Oil Comp., treasurer of the Beaurehoff Run Oil Co., treasurer of the Challenge Gold and Silver Mining Co., director of the Trust River Navigation Co., president of a Company of Divers and Wreckers, and director of a Co. for making „whisky“ by a cheap „patent“ process. Upon all these *bubble cos.*, the manager of the Bk. wasted the funds of depositors, and the capital of the Bank. They squandered so much that on 1st July 1867 they were unable to show to the Gvt. Inspector the *Currency Reserve* (of 15% of deposits and circulation) required by law to be kept in hand by every Nl. Bank. They were duly warned by the Gvt. Officer. The prescribed 30 days granted to Nl. bankers as a time for complying with the requirements of law expired, and, the Currency reserve not being shown, the Comptroller of the Currency appointed a receiver, who entered upon his duty on Saturday. The *liabilities of the Bank* were: (on 1st July 1867): $1,851,307, but since that time, the amount has been swollen by speculation to at least *2 Mill. $*. *The available assets:* *Real estate*, valued at $26,000; *cheques on solvent Banks*, $49,524; *U. St. Bonds*, deposited as a basis of circulation $285,500; *U. States Bonds*, on hand, $3,300; *bonds and mortgages* $1,900; *city certificates* $800; *cash on hand in Circulating Notes of other Banks,* about $27,000; *legal tender notes*, *compound interest notes*, *fractional currency*, *specie*, *and cash in an Albany Bank*, to redeem the outstanding Circulation of the Old State Bank, about $100,000; or in all, something less than $500,000. Other assets mentioned, but not available or at least doubtful; probably ½ mill. $ is a liberal estimate of the assets; 25% on the Liabilities. This is equivalent to the ruin of 100nds of small tradesmen, poor depositors, farmers etc. The effect of the failure was seen in the mob that besieged the doors of the Bk. on Saturday – a weeping, cursing, howling, distracted mob of old men and young men, old women and young women, Yankees, Germans, Irishmen – representatives of the Cosmopolitan population of an American seaport city. The creditors of the Germania and Williamsburgh City Dime Savings’ Bank – whose failure probably involved in that of the *„Farmers’ Bk. “* – surrounded the latter’s doors with frantic demands for their „money“, the Directors of the Savings’ Bk. being unable to afford them any relief. It is unnecessary to dwell on these scenes – being the inevitable concomitants of all Bank failures in all lands.

The *Kingston Nl. Bank* failed durch *speculations on the part of its officers*. It was organised under the National System, capital $200,000. The cashier has sunk his own private capital of $130,000, and $70,000 to $80,000 of the money of the Bank; i.e. money of depositors, and the President has withdrawn not less than $90,000 from the Bk. of deposits or currency. The *Federal Gvt. is responsible only for the Circulation Notes of the Collapsed Banks*, welche secured sind by Federal bonds deposited in Washington. Aber die depositors must look to *the humbug mining and stock Cos.* for their money. Result: widespread ruin among small traders (shopkeepers) etc and farmers.

The Comptroller of the Currency has made „a black list“, in which appears the names of all Nl. Bks. suspected of unsoundness. It is not exposed to public inspection. Not less than 7 Nl. Bks. – 2 of them New York banks – are in this list described as „shaky“, as most fit to be watched.

#### Mulholland’s (Irish man of Business) Remarks On the Currency at the Belfast Social Congress.

Any person who contracts a debt comes under an obligation to pay money. … A bill or note may have the effect of postponing the payment of the debtor, while, at the same time, enabling the creditor to anticipate the effect of payment. But the creditor can only realise in the present by the possession of a bill or note the effect of a future payment, by finding some one who has loanable capital at command. When trade is in a natural condition, the supply of this floating uninvested capital is usually equal to the demand, and the interest for loans at its normal state. Aber when a period of speculation and excitement, with inflated prices, had led to a general extension of transactions, there is, necessarily, an increase in the amount of indebtedness. When this indebtedness has to be liquidated, it is found that there has been no corresponding increase in the supply of unemployed capital. In fact, the supply in such cases is generally smaller; for many who formerly preferred the small but sure return from interests to the risk of speculation may have been induced by the contagion of such excitement, and the example of large gains, to withdraw their capital from its accustomed employment, and to embark it in the ventures of the day. The demands for loans having increased, and the supply to meet it diminished, advance nothwendig in the rates of interest demanded by holders and offered by borrowers? Such an advance in the rate of interest is simply an indication that enterprise and speculation have exceeded the limits beyond which they cannot pass with safety. … At last the amount of debt so far exceeds the amount of available loanable capital that a money crisis or panic ensues.

Where trade is *„International“* as well as *domestic „money“ must have a real, an intrinsic, an international value*. It must not only be the *measure of the value* of other commodities, and the *medium of their payment*, *but absolutely their equivalent*. *Gold and Silver* alone combine all the necessary conditions.

*In the autumn of 1864* we had the first symptoms of the financial pressure that continued with but slight intermissions until its culmination on the 11. May, 1866.

The high rates given for deposits have proved so attractive, that the amount deposited at call, or short notice, in the London Joint Stock Banks alone, now amounts to about 100 millions. Für diese immense liability they keep a small reserve of money in the B. o. England. Diese Bank proceeds to do with them what the bankers who lodged them felt could not be done with safety – it uses them for the discount of mercantile paper, or it includes them with its own reserve. Now, the same money cannot be a reserve for the joint stock Banks and a reserve for the B.o.E. also. It is, in fact, no reserve for the Bk. of England at all, and it ought not to appear as such in their weekly statements, but be noted as *„cash held on account of bankers“*. In May, 1866, the total reserve shown in those statements seemed at first sight not to be unsatisfactory, but it was in reality less than the balance held on account of other bankers, so that at *that time the B.o.E. had no reserve of its own whatever*.

We see in the recent history and present position of the commerce of the U. St. a striking example of the effects of an inconvertible currency. Deprived of the healthy check of convertibility, it was certain to become redundant. There had been in that country all the symptoms of a fictitious prosperity – the feeling of an universal increase of wealth. This apparent increase in the value of all property from the inflation of prices was so deceptive, that it misled a leading statesman so far as to make him declare publicly that the war had not only enriched the nation, but added to the wealth of every individual in it. … An artificial level of prices stimulated importations, but it destroyed their export trade, and a heavy balance, due to foreign countries, accumulated against them. To pay this, the money by which they had measured values (Nonsense!) was found useless, and fell to a heavy discount. A complete collapse must have occurred before this time had not their *Government bonds been received* in Europe instead of gold.

#### Correspondent. Paris. 26 Sept. 1867.

##### Pereires.

Abtritt der Per eire vom Credit Mobilier. Vermögen von 4 to 6 Mill. £ St. gemacht. »In success the Pereires were worshipped.« Jezt fällt alles über sie her. Sie haben railways in Frankreich established, a service of no small magnitude, considering the lack of enterprise in this revolution-tossed country. They have, too, had no inconsiderable part in promoting the remarkable extension of material prosperity in France after the *Coup d’état*.

#### Mortality in England in 1865.

490,909 persons died (1865) in England. Davon 199,843 oder 40%, *under 5 years of age*. 70 in a 1000 of children under 5 years died in the course of the year. The deaths between 5 and 10 years only 19,733, less than  1/10 of the deaths of the first 5 years, and about ⅛ in 1000 living. The third quinquennial period, 10 to 15, is the least mortal of all our lifetime; 10,420, less than 5 in 1000 of the living boys and girls of that age. In an equal number of children under 5 and of children between 10 and 15, 14 of the former die when only 1 of the latter [dies]. From the age of 15 upwards the ratio of mortality never ceases to increase. Von 15 to 20 were 13,484; von 20–65, the working time of life, 155,051, the ratio increasing from less than ⅛ per thousand of that age living in the first decennial to more than 32 in the last. After 65, the ratio increases very rapidly.

* * *

### October 5, 1867. N. 1258.

#### Suggestion Introduction (by Mr. Hutton, at Belfast Social Congress) of Prussian Rentbanks into Ireland. (Interest Bearing Currency)

The Prussian Rent Banks seem to us a rudimentary and infantine financial device … Stein had to buy out, on behalf of the peasant cultivators, the manorial Lord. The Rentbanks – no banks at all – were simply a Gvt. department charged with this peculiar financial arrangement. The Govt. valued the interest of the „lord“ at such and at such a sum, and issued to him bonds with 4% interest – bonds in every sort of sum from 30s. to 150l. – payable at the option of the Gvt., but *not* at the holder’s option. The landlord was compelled to take them, and the idea of issuing them in various sums was that he might keep them or pay them away – in every mode that he thought fit. These bonds were secured on the estate, and the tenant was obliged to pay a certain rent-charge annually for their liquidation. There was an annual „drawing“ (Ziehn wie bei Losen), according to the continental fashion, and the bonds „then drawn“ were discharged out of the sums so paid by the peasants. If the peasants did not pay their annual *quota*, the State took and used very ample powers of entry and confiscation. Der Lord forced to *take* these bonds. It is plainly a severe act of despotic finance. … In fact, *no interest-bearing security* is really suitable to *currency purposes*, because its value changes from day to day. The interest accrues *de die in diem*. It is one thing on the 1st Oct. and a greater on the 2nd Oct. A *sum*, therefore, has to be done whenever the bond changes hands, and no population has ever borne, or will ever bear, a kind of currency requiring so much labour … Prussia may have much to teach us in other departments; *but, surely money is our own subject*; *we understand that if we understand anything*. *And so it is.* (Herr Jesus!)

* * *

### October 12, 1867. N. 1259.

#### The Money Market here and in France. (Credit Mobilier etc) (Cotton, Wheat etc)

The *Credit Mobilier Co.* (in France) was raised up to be a *kind of Providence* in the moneymarket, and its stoppage, therefore, troubles people. It was raised up, according to its original programme, to *„regenerate industry“*, and it was known to have the Gvt. aid in so doing. Its original statutes are full of the most patriotic aims … L. Bonaparte patronised the Crédit Mobilier, and we see the result. A pretty full list of the *shares it holds* has been given, and greater rubbish could not have been collected, worse even than those of our Finance Cos. They, at least, have had no political aspect, but the Crédit Mobilier has. It is the representative of the *„Imperial Initiative“*, and when it fails, the Empire is damaged.

The *state of the Cotton Trade*, of Liverpool especially, is gloomy. *Cotton has been falling in price rapidly.* In Indian cotton, it is probable that many have been obliged to sell to meet bills drawn upon them, and it is not yet at all clear that the price has gone down to the point at which the manufacturers will begin to work. *Before the cotton famine* we had *„Three years’ clothes in advance for the human race“*. Beforehand, this great supply was called overproduction; but it had the best effect. It enabled us to get through the cotton famine with ease otherwise impossible. But until the *whole world* is satisfied that cotton has reached its final fall, no similar stock will again be accumulated. *The fall in the raw material is ruining many,* but no corres*ponding augmentation of our manufacture occupies our surplus capital or employs our population*.

*Wheat crop bad* (barley und oats good.) Our foreign purchases will have to be large. The largest augmentation (in wheat import) is from Russia; and *the Russian exchange almost never rises to the point at which gold goes*. *Large orders, too, are gone to California.*

*Slack Employment:* The bad state of credit has, undoubtedly, made the employment of the people worse than it has been for a long time. In some departments, f.i. iron trade, the prospects are improving. Still, compared mit late years, employment will be bad, and consumption too. This *evil is of a self-intensifying kind*. The worse any trade is, the less those engaged in it can spend on other things, and the worse, therefore, the trade in such other things will be also.

#### L. Bonaparte’s Cost.

Der Economist sagt in einer früheren Nummer, daß L. B. Europa, on average, *40 Mill. £. St.* gekostet hat in Rüstungen, Armies, Krieg etc.

#### Our Wheat Crop. (Lawes’ Experimental fields)

Mr. *Lawes’ experimental fields in Hertfordshire* consist of land of fair quality on a chalk subsoil, which has also been artificially drained, and for 24 years wheat has been grown, year after year, on one portion of the land *without any manure*; on another portion, with a yearly dressing of *farm yard manure*; and on several other portions, with *dressings of artificial manures*, varying on each portion, but the dressing on each constituting in fact high farming. In other respects, each portion is treated like every other. „As the preparation of the land“ (dieß alles aus *J. B. Lawes, of Rothamsted, Herts, Letter to Times*) „the quantity of seed sown, the time of sowing, and every other operation is each year the same for all the plots, the *difference of result* between plot and plot in the same year is due to *the difference in manuring*; and as the operations are also conducted, as far as possible, in the same way from year to year, the *variation* in *the produce of one year compared with another* should represent the *variation of the climatic conditions or season*.“ Lawes notices that von 1860 to 1863, there was a progressively increasing yield from year to year; the *great crop of 1863 having been the largest grown during the whole series of 24 years*, *while the subsequent 5 crops show a progressively declining yield*. There is little doubt that *these cycles of advancing and declining crops are due to* season, and that the same results will be found to have occurred in the ordinary farm crops during the same seasons.

On the plot *unmanured* crop of 1866 bushels 12⅛ of dressed corn per acre, in 1867 only 8⅞ bushels, decline of nearly ⅓. Average produce of the *unmanured* land for 15 years, *1852–1866* was 15¼ bushels per acre; that of *1863*, the largest, was 17¼ bushels. On the plot *manured with 14 tons of farm yard manure* to the acre, produce in *1866* was 32⅝ bush., in *1867* bush. 27½. On the plot dressed with *artificial manure*, the highest farmed and most productive, *1866* 32½, in *1867* 29⅛ bush. p. acre – the average crops for 15 years on the 2 last plots being 35⅝ und 36⅛ per acre respectively – falling off in this year, compared mit last year, but the *proportion of deficiency* is nothing like so great on the „unmanured“, i.e., ill-farmed land. The produce of *1867* is not only less than that of any of the 4 preceding years, but also „very inferior to the average of the preceding 15 years“. The produce without manure is unusually low, „indicating that the season was specially unfavourable for the crop on lands out of condition“. The *quality of the grain*, as shown by the weight, per bushel, is *above the average* in every case, except where there was no manure employed. On the unmanured land, the wheat this year was 56-1 lbs per bushel, against an average for 15 years 75-5 lbs p. bush. Here again, we *see the greatest loss from season falls on the poor farmer*. Lawes estimated the crop of 1866 at 10% below the average, fears the present will be 20% less than the average.

#### Money and Trades Unions.

If the Trades’ Unions can, as they say, *„raise the price of all things“*, where do they get the money to pay that augmented price? Under a metallic circulation, as a rule, higher prices require more of the precious metals. The operations of the Trades’ Union have no tendency to improve Banking. The *„consumer“*, as he existed before the rise of prices, cannot find the money. He is very commonly a person mit fixed income. If he buys less of one thing, he must buy more of another. The new money must be found, either by making the miner work harder and so bring fresh gold into the world, or by changing the distribution of gold, and diverting to the country affected by the Trades’ Unions a part of the gold which used to go elsewhere. Beides unmöglich. Wenn the Trades Unions can cause a *general rise of price*, how will they get *more gold for the same things*? (Der Esel hätte sagen sollen: How they get more things for more gold.)

#### The State and the Currency. (Communicated)

Mr. *Patterson* in *Fortnightly [Review] (July, 1867)* proposes: „That the State should secure the substantial value of the note circulation, by requiring that every bank of issue shall deposit with a Gvt. office an amount of Consols fully equal to its note issue, at the same time allowing each bank to secure the convertibility of its own notes, by keeping in hand so much gold as experience shows in each case to be requisite.“

What we (the *State Currency men gegen* Patterson) propose is, that *all banknotes above a certain amount to be fixed by the H.o.C.* should be issued by Gvt. in exchange for properly assayed gold, 22 carats fine, at the rate of 77s. 10½d. p. ounce, exactly as sovereigns are now issued by the Mint in exchange for the same kind of gold at the same rate. Giving banknotes in exchange for bullion at the exact value of this last per standard ounce, and which is to lie idle in a vault as long as the amount of banknotes which represents it is in circulation, is a very different thing from being a dealer in bullion, nor does it involve any transactions in either home or foreign securities. The *H.o.C. must determine* what *amount of banknotes may be issued against securities other than gold coin or bullion* (Blödsinn!), and this amount banknotes should be unalterable without their consent. The duty of the Gvt. would be simply to take care that any one who wanted banknotes for bullion or gold coin should be able to get them, or *vice versa*. This could be arranged by 3 issuing establishments at London, Edinburgh, and Dublin, where stores of bullion, gold coin, and banknotes should be kept for the purpose of being exchanged one for the other according to the wants of the public. The State banknotes *legal tender* everywhere but at the issuing establishments; here they would be simple certificates on gold. They should go as low as one sovereign; dadurch holders of banknotes kept away from the issuing establishments until they required gold for exportation, and the tedious process of changing 5£ St notes into sovereigns, and back again into 5£ notes, would be thereby avoided. Any one who lived in Scotland or Ireland, will admit the 1l. notes’ convenience of carriage and superiority to sovereigns, often light, and to be weighed. *The legitimate business of a banker to lend and borrow money already in existence.* To each of the 3 issuing departments, there should be a *Gvt Clearing House Department*, open to all bankers on payment of an annual fee; they should be permitted to settle with each other by *drafts on the reserves they have previously lodged at the Clearing House Department*, such drafts to be *payable to Clearing bankers* only.

* * *

### October 19, 1867. N. 1260.

#### The Low Price of Bank Shares and its Dangers.

Low price of Bank Shares now and high prices derselben 2 years ago. As a rule people do not keep at the bankers, without interest, more than the sum of money which they want *for current expenditure*, and this they must keep somewhere. If a man distrusts the old banker, he selects a new banker, and the aggregate result – the sum total of the money – on the running accounts of all banks is not diminished. Auch die interest bearing deposits, trotz low rate of interest, probably, as great or nearly as great as ever. Even at this low rate, people do not know what better to do with their money. They do not like *to go into the funds at a high price*. *Four causes of the fall in the Prices of the Bankshares:* 1) *Banking* far *less profitable trade* than it once was. Zwar nicht so fluctuating as the public quotations of the value of money would indicate. A great deal of money is employed at 5% by country bankers in the discount of local bills, which *they know* to be good, which are not known, and by their nature cannot be known in the London market. In respect to the great London joint stock banks (and in a minor degree, to almost all other banks, too), they charge far less, they also give far less; lose therefore not out of their profits the whole difference of the discount. Trotzdem on the whole banking far less profitable.

2) *Many banks*, besonders those conspicuous banks whose shares are most watched, *have greatly increased their capital*. *A banker, it is true, wants no capital in his own proper business*; as *Ricardo* justly said, *a banker does not begin his true business till he begins to deal with the capital of others* . Aber die public demands rightly, that a banker should have a visible guarantee fund to meet the possible losses he may make *with their money*, and that this fund should be approximately [proportionate] to that money.

3) *Leeman’s bill* has put a stop to the speculative (dealing in) sale of bankshares. A low price of bankshares is the greatest of all temptations to joint stock bankers. The only *mode of raising the value of the shares is to augment the dividends* und, in order to augment that dividend quickly, managers take statt securities *in*securities. This season of cheap money is the season for warning. It is in that sort of time that the beginnings of panics are laid; and may be laid the sooner if from any accidental cause, like this low value of their shares, bankers or other money lenders, should be unduly anxious to employ their money, and unduly regardless of the quality of the securities upon which it should be employed.

* * *

### October 26, 1867. N. 1261.

#### Liverpool Bank Scandal (In Money Market Review zu sehn).

#### The Finance of Trade Unions.

The most remarkable point elicited by the London Commissioners, that *they are all insolvent*, even the *Amalgamated Carpenters* und *Amalgamated Engineers*. The Unions join together the most dissimilar things in the world – the *cost of supporting men in sickness and old age*, and the *cost, or alleged cost*, of *getting them good wages*; *benefit societies* – and *strike societies*, strikes are an incalculable element; no one can tell how often they may happen, how long they may last, and what their cost may be. You might as well endeavour to settle *a priori* the cost of a continental war. This matter was referred to an Actuary by the Commissioners. The rules of the Amalgamated Carpenters Society provide that in consideration of a contribution of 1sh. weekly, each member shall be entitled to 12s. a week when sick, to from 5 to 8s. a week when old, according to the duration of his membership, and to a funeral benefit of 12l. These die objects of ordinary friendly societies, but, in addition to these, the society gives help to members „out of work from causes other than sickness“, i.e. in the disputes with masters, and aids in emigration, as well as upon the loss of trade tools. Mr. Tucker, the Actuary, stated he could form no estimate of the liabilities from such sources; as they depend upon human passions. When a Trades’ Union will quarrel with an employer, or pay members to leave the district, cannot be determined by statistics. If a merchant were asked to pay his life insurance premiums, *either* to defray the costs of *„lock-outs“*, *or* to provide for his family after his death, he would think the proposer mad … It may be said a member of a Trades’ Union might make himself tolerably safe by paying a considerable weekly payment *in addition* to that required by benefit societies, by paying *a large strike premium* over and above his common benefit premium. But he does precisely the reverse. The actuary who reported upon the 2 model societies (Engineers und Carpenters) reported that, *even as benefit societies*, and not including the wages-augmenting element, *they were completely insolvent*. The subscriptions utterly inadequate even for an ordinary benefit society. „If“, says Tucker, the actuary, „the society continues to be conducted upon its present footing, although a continued influx of new members may defer the period, the Amalgamated Carpenters und Joiners Society must ultimately become bankrupt.“ A society which has such future liabilities as a superannuation, may easily have large funds in hand, and yet be wholly unsound; more especially when it has been very many years in existence, and only admits young members. In the first years of a superannuation office, as in the first years of a life insurance, *the incomings are present, but the outgoings are postponed*. Members are attracted by the „strike element“ to join bad benefit societies. The Central Committee of the Union are sure to have immense funds in hand from the „benefit payments“. Out of the monies subscribed for sickness and old age they can, if they like, fight the employers. If they had to deal with a strike fund alone, they would have in comparison but an empty treasury. The constant hopes and the continual payments of a benefit society keep the strike society together; but if the strike society cannot hold together of itself, it ought to fall. One of the first and most necessary reforms is the separation of the 2 elements of the provident fund from the „contentious fund“.

* * *

### November 2. 1867. N. 1262.

#### Trades Unions’ Finance.

The societies are as yet financially young; their superannuation fund does not begin to tell for years, because they only take young members. Therefore, their great apparent prosperity quite consistent with real insolvency, even so far as the risks of old age and sickness are themselves concerned. But if you added to these liabilities the strike liabilities, the insolvency is indisputable.

#### Bank of England. (Separate Reserves for Bankers’ Accounts)

If the Banks all issued notes, and at the same time instituted an *efficient system of note exchanges* by means of *which they returned to one another the notes of their respective issues*, as in Scotland, the return by the Banks of the notes in circulation made up immediately after a general exchange of notes would represent *the notes in the hands of the general public as distinguished from the banks*. As a matter of fact, such a return is made weekly by the banks in Scotland, and shown, in round figures, that the 1l. *notes in circulation* 2,500,000l. und die notes of 5l. and upwards, 1,500,000l. These returns show with great accuracy the amount of the *natural circulation* of the country. Aber in England there is a *national circulation* und an *artificial* or *factitious circulation*. The national circulation is the *notes in transitu*, or circulation outside the banks. The *artificial* consists mostly of the B. o. England notes held in reserve by the *non-issuing banks*. The amount so held varies, not according to the *actual requirements* of the public, but the *anticipated* requirements, and in times of mistrust the *apprehensions* of the non-issuing banks. Daher die increase in the apparent circulation on 9. und 16 May 1866. The *increase in that one week was nearly 4 millions*. This operated on the B.o.E. reserves precisely as if much bullion shipped out of the country. Wären die *Bankers accounts* getrennt gewesen von der übrigen Reserve, so on *16. May*, *1866*, supposing they held 10 Mill. £ belonging to other banks, all the specie they had *of their own* was 2,323,805l. against 41,207,708l. of liabilities, for 11,120,995l. of which they were under statutory obligation to provide a separate reserve of gold.

* * *

### 9 November 1867. N. 1263.

#### State of Trade.

Aggregate Exports for the 9 months ending 30 Sept.

| 1866. | 1867. |
|---|---|
| £.141,936,898. | £.137,202,497. |

Die Imports much less than last year. 1866: £.155,812,883 und 1867: £141,448,055 für die 8 months ended 31st August. Aber die 2 capital items have curiously changed

| Cotton. |  | Corn. |  |
|---|---|---|---|
| 1866: £58,204,544. | 1867. £39,752,424. | 1866: £:8,192,693. | 1867: 14,680,483 |

Corn. Wheat.

| From: | 1866. (in £) | 1867. (in £) |
|---|---|---|
| Russia | £.2,263,829 | £.5,334,125 |
| Denmark | 182,637 | 233,112 |
| Prussia | 1,755,805 | 3,437,432 |
| Schleswig Holstein et Lauenburg | 72,284 | 63,093 |
| Mecklenburg | 326,064 | 427,081 |
| Hanse Towns | 337,494 | 341,815 |
| France | 1,676,745 | 361,220 |
| Turkey, Wallachia, Moldavia | 150,432 | 1,030,200 |
| Ejypt | 5,565 | 254,344 |
| U. States | 180,658 | 1,285,863 |
| British North America | 4,156 | 2,273 |
| Other Countries | 1,237,024 | 1,909,880 |
| Total | 8,192,693 | 14,680,438. |

Die imports of other sorts of corn, and of wheat, meal, and flour, not in the aggregate very different from last year.

Import of Cotton. Raw.

| From | 1866. | 1867. |
|---|---|---|
| Unit. States | £.29,349,669 | 22,606,517 |
| Bahamas und Bermudas | 46,816 | 56,437 |
| Mexico | 28,591 | 121 |
| Brazil | 3,973,456 | 2,716,300 |
| Turkey | 515,714 | 273,333 |
| Ejypt | 6,626,740 | 6,674,842 |
| Brit. India | 16,139,879 | 6,942,842 |
| China | 78,000 | 20,965 |
| Other Countries | 1,445,679 | 1,061,067 |
| Total. | 58,204,544 | 39,752,424 |

Prussia and Russia the largest creditors on the Continent; take as a rule not much bullion; great *falling off of* the *Indian debt* for cotton, which has of late absorbed so much für bullion.

#### Trades Unions and Friendly Societies.

Mr. Pitt, in 1793, passed the first law relating to *Friendly Societies* , followed by a whole crowd of successors. Ihr aim: to exempt from the general prohibition of combination certain particular associations so as to encourage and protect „by voluntary subscriptions of the member thereof, separate funds for the mutual relief and maintenance of the members in sickness, age, infirmity“. Viele *„friendly societies“* solvent, many insolvent. Und insolvency often very gross, selbst in sehr respectable societies. Thus „The Preston Branch of the Manchester Union“ had a deficiency of 23,880. The *favours given to the Friendly Societies*:

1) The right of suing, and being sued at law, especially, what was vital, the right of suing their own members for arrears, and their own officers for defalcation. The right was, indeed, given in an absurd way. In the case of *Joint Stock banks*, those constituted under the original Act, cannot *sue for themselves*, a *public officer must sue for them*. Friendly societies are under the same disability; they cannot sue on their own account as a Railway Co. does; *a trustee* has to sue for them.

2) *Exemption of the transfer of interests in them from certain stamp duties,* though only to a certain amount.

Wegen dieser privileges der Friendly Societies, *all other associations of workmen* tried to be *Friendly Societies* whatever else they were, and so to gain the right of suing their defaulting members and officers. Und dieß um so easier als, by a series of enactments, it had become very difficult to say what a Friendly Society was or was not. No blame can be attached to the founders of the Trades Unions for coupling together 2 antagonistic aims, for the law encouraged them in it, and gave them no chance of gaining that for which they most cared, unless they attempted the other also. The attempt was, however, vain. Aber Judges decided that *Strike Societies* were *illegal as in restraint of trade*; and, therefore, that although they were benefit societies also, they could not sue for payments in arrears by members, or for sums in the custody of defaulting and resisting officers. So die Trades Unions are now wholly unable either to sue or be sued. No legal defect can be more absurd or fatal. We cannot understand those who wish that these societies should be half legal and half illegal. That they be permitted to combine, but not allowed to provide the funds which alone make that combination effectual. Abolish all notion of wages-combinations being in restraint of trade; we professed to legalise these combinations years ago, and now it would be impossible to destroy them by a sidewind, and pernicious to attempt it.

#### Occupation of land in England.

The *tenant farmer* would make a great sacrifice in purchasing land; he would be employing his money at 3%, instead of 15. In fact, he borrows the largest amount of the capital at a rate which does not exceed 3%.

Upon similar grounds the *yeoman* sells his freehold. He will not hold a property which yields him 3%, when he can get for the money which he obtains for it, perhaps 5% on a perfectly secure mortgage, 7% by building or buying cottages, or 10 to 15% in some industrial enterprise. *Land*, hier, at the market price, of 30 years’ purchase, lower than in France, Holland, Belgium. Some of the *largest properties in Europe* are to be *found in Belgium* .

* * *

### November 16, 1867. N. 1264.

#### The Economic Side of the Workhouse Inquiry.

Quite clear from the evidence already received by the Commission of Enquiry that the report des *Lancet* upon the *Farnham Workhouse* was undertoned. It is rare to meet, even in fiction, with anything quite so horrible as the little story of the sick pauper woman, roasted to death from sheer supine neglect. … wretched race of *„masters“* selected to keep down masterful beggars.

The main source and reason of all the barbarities now exciting so much just indignation has been the *desire to save expense*, *to keep the rates as far as possible „down“*. Das management der workhouses is *mean*, aber zugleich viel *waste*, *peculation* etc. Local boards are not good managers of money, as we all know from the experience of vestries and municipalities, and local boards *working through contracts* are peculiarly liable to imposition and jobbery. Witnesses seem to doubt *whether* (in dem Farnham case) *supplies paid for* ever arrived. At all events it is quite clear the workhouse did not get the full benefit of its position as a great wholesale buyer.

#### The Bank of England (Communicated)

A *banknote* is *a promise* to pay, a *cheque* is *an order* to pay, no analogy between them. A banknote is a *transferable* promise on the part of a bank to pay to bearer, on demand, a certain amount of coined gold; it circulates side by side with gold in endless succession; it liquidates debts like coin; and men in business are practically bound to accept it when in circulation. A cheque is an order to a banker to pay over a specified sum of money; it requires endorsement on being paid, nor is any one practically bound to accept it when offered to him in payment of a debt etc. An order to pay Notes is not the Notes themselves.

#### Railways’ Cos’ Act of 1867 (Auditors)

Durch seine clause 30 haben die shareholders control through the auditors und leztre responsibility they had not before. It is a striking fact that the auditors have never discovered, or at any rate disclosed, any one of the numerous cases of forgery of stock, false returns to the Board of Trade, payment of unearned dividends, charging of revenue expenses to capital, or any other of the various forms of „cooking“ accounts by which shareholders have been lured to ruin by their directors.

#### Iron Production in Sweden. (1860–1866)

|  | Production Tons. | Export to England. | Export to other countries. | Total Export. |
|---|---|---|---|---|
| 1860 | 134,700 tons. | 51,000 | 44,600 | 95,700 |
| 1861 | 142,600 | 32,200 | 37,100 | 69,300 |
| 1862 | 126,200 | 42,700 | 44,800 | 87,500 |
| 1863 | 123,000 | 45,600 | 45,100 | 90,700 |
| 1864 | 135,000 | 45,000 | 48,300 | 93,300 |
| 1865 | 146,100 | 43,400 | 44,500 | 87,900 |
| 1866 | 164,200 | 56,000 | 57,300 | 113,300 |

### Nov. 23. 1867. N. 1265.

#### Necessities from Improved Statistics of the Supply, Consumption und Stocks of Cotton in this Country.

leztens falsche Angaben der *Cotton Brokers’ Association at Liverpool*, haben a close monopoly over trade, and maintain it by the usual expedients. Of late years oft *excess* of the *actual* over the *estimated* quantities in bond. Ausserdem cotton trade has outgrown even the progress of Liverpool. London is rapidly becoming a considerable port in the cotton trade – especially as regards arrivals and stocks.

* * *

### 30 November, 1867. N. 1266.

#### Financing. The Details of an Actual Example. (London, Chatham, and Dover Railway und Peto)

Vor *May 1866* system in vogue to raise money in the discount markets for *„financing“* purposes by the *creation of fictitious bills purporting to be drawn on the Continent, America, and elsewhere*; *Accommodation bills* of the very worst character – of persons trading under false pretences and Credit.

Early, in *1866*, *the London, Chatham and Dover Railway* was in *extremis*, violent effort made to avert the crash. By a certain elaborate machinery of trusts, the Railway Co. purported to contract to sell to Peto certain lands at Blackfriars said to be *surplus land*, aber nach evidence der parties now before the Courts, not surplus or available land at all. Upon the security of these alleged available lands, Peto arranged on 21 Febr. 1866, for an advance of 135,000l. from the then *Imperial Mercantile Credit Association* , which failed in June, 1866, and for 190,000l. (in all 325,000l.) from the *General Credit and Finance Company* . These 2 Cos. were not to advance any actual money at all. They were to give their acceptance to *Bills to be drawn from time to time during a twelvemonth* by *„firms or individuals resident on the Continent of Europe, and in that behalf approved by the Credit Cos.“*; and the bills so drawn and accepted were to be handed to the *Borrowers „for Discount“*. The Credit cos. were to be paid a commission of 5% for the twelvemonth; i.e. 6,750l. as commission on the 135,000l. und 9,500l. as commission on the 190,000l.; and in the untoward event of the Finance Cos. being at any time under actual cash advance, the rate of interest to be charged by them was to be 4% p. annum *above* the minimum Bankrate; such rate never to be computed for this purpose at less than 8% p.a.; so that for the use of actual cash, the Borrowers had to pay 12% interest and 5% commission.

The following are the *actual clauses* of the *Deed* of 21 Feb. 1866:

3) „The *Credit Co.* *(Mercantile Credit Association)* will advance to the said Sir M. Peto the sum of 135,000l., and such advance shall be made *by Bills of Exchange to be from time to time drawn by firms or individuals resident on the Continent of Europe* and on that behalf approved by the Credit Co, who shall accept the same accordingly, and deliver the same to the said trustees *for discount*.“

4) „The said advance and credit shall continue for the space of 12 Calendar Months from the 21 Febr. 1866, and during that period all Bills *to be accepted by the Credit Co. as aforesaid*, *shall be satisfied out of the proceeds from fresh Bills to be drawn on* and accepted by the Credit Company as aforesaid, so that the Credit Co. shall never be called on to pay the said Bills or any of them.“

6) „The said Sir M. Peto shall pay all stamps in respect of the said Bills, and all costs and charges and expenses of, or in anywise incident to, the said loan or transaction.“

7) „The said Sir M. Peto shall, as and when the Bills for the said sum of 135,000l. be presented for acceptance, *as the consideration for such acceptance*, pay to the Credit Co a *commission of 5l. p.c. on the amount thereof* for the whole period of 12 months.“

8) In case the Credit Co. shall pay any of the Bills so drawn as foresaid, the said Sir M. Peto will forthwith repay to them the amount paid by them, *with interest thereon at the rate of 4l. p.c. above the current rate of discount at the time being*, at the Bank of England, from the time of such payment to the time of such repayment as aforesaid, such Bankrates never to be computed *at less than 8%*.

The 325,000l. in money was to be taken from the Discount Market, at any rates which might be necessary, and applied to the purchase of materials for partly finishing a London Railway. But the *transaction was to be disguised* by procuring Bills to be drawn from abroad in amounts, appearance, and dates, as nearly like ordinary mercantile Bills as possible, and the process was to go on by means of renewals for at least a year. The Finance Co. came forward as the intermediate party, and carried off 5% commission for the use of his name.

We see, in this case, the exact details of the kind of transactions by means of which the Rate of Discount was carried to and maintained at the exorbitant figures which prevailed so long before the final collapse of May 1866. So long as *Overend and Co.* (und andre!) could keep their credit, there was a place in London where Bills of the kind in question were not too severely criticised.

The Finance Co. fared badly by this transaction. Of course the „firms or individuals resident on the Continent *of Europe*“ being mostly boys in offices signing Bills at a few shillings a quire were quite unprepared to provide 325,000l. Peto was still less prepared – and the London, Chatham, and Dover Railway even still less than Peto. The Finance Cos., therefore, were left to find the money as well as they could, claim now against Peto and the Railway, for the principal, interests, and Commission. It was alleged last Session before the Parliamentary Committee on the London, Chatham, and Dover Bill, that the *Borrowers*, so far, were more acute than the Lenders; that not only was the alleged surplus land not really available, but that the same *pieces or plot of land were positively made to do duty as security on the same day to the 2 lending Cos.*, that is to say, the land was pledged twice over.

#### Landlord and Yearly Tenants.

Wm. Walton, (farmer) of Clawton, near Alton, Hants, writes to the papers: „It is neither the want of capital, industry, nor judgement that keeps the farmer poor and the land half cultivated, but it [is] the *want of security for the extra capital employed upon the land*. All landlords who do not give sufficient security for capital laid out upon their farms, particularly cold clays, are the whole and sole cause of the land not being properly cultivated. ⅓ or ½ more corn, beef, mutton, pork, and all other food for men, could be produced in old England by this little word *security*.“

* * *

### 7 December 1867. N. 1267.

#### Money Market.

England is a large importer of *vegetable* produce, and, therefore, her *paying account is largely dependent on the season of the year*. All tropical produce on the one hand, and all the produce of iceclosed northern countries on the other, *are paid for in the autumn*, and, perhaps, the greater part in the later autumn, and, therefore, *the value of money* always, other causes being taken out of the account, *tends to rise from October onwards*. … An *augmenting trade is necessary to employ our gradually accumulating capital*. If even for a year trade does not increase, a certain amount of saving clogs the market which it is difficult to employ. Now both Imports and Exports less than last year.

|  | 1866 | 1867 |
|---|---|---|
| Imports (9 months) | 174,168,898£. | 161,963,750l. |
| Exports (10 months) | 158,832,792l. | 153,051,639l. |

But if trade should revive, there is not yet any great accumulation of capital to keep down the rate of interest. Much bullion in the Bank of England und Bank of France, aber their liabilities have also much amended. The private deposits of the *Bank of England* were: *1864*: £12,666,764, *1867*: £,18,507,007. In the *Bank of France* no *increase of deposits*, *but of note* circulation. *1864 nämlich* £.28,891,656 und *1867*: £45,693,632.

#### Paris 5 December. Credit Mobilier.

Meeting of Shareholders *Saturday* last. Danach *Verlust durch decline in the values of securities held* f.51,192,260. *Presumed Loss on different accounts* (bills, advances to Cos., doubtful Credits) 3,160,886. *Zusammen* 54,353,146; Nach Abrechnung von Profits: f.47,542,000 (= *1,901,688 £ St*) Dieß loss. *Liabilities:* f.68,152,000. *Assets:* 143,402,000f. Bleibt balance of 72,250,000f. Aber capital actually paid up f.122,792,000 out of 124,000,000 due. Bleibt der obige loss of 1,901,688l. St. Die shareholders wanted to have a detail of the securities held by the Mobilier; verweigert, because such a document would encourage adverse speculation. Aber aus dem Report des Censors ergiebt sich, that part of the securities consist of *debentures* of the *North of Spain Railway*, and *the Immobilière Co.*, the *Transatlantic Steam Navigation Co.* to 28,675,000f., and *shares of* the *Magasins Généraux*, *North of Spain Railw.*, *Immobilière Co*, *Spanish Credit Mobilier* for 22,500,000f.

* * *

### December 21, 1867. N. 1269.

#### Why Money is dearer in the Autumn than in the Spring.

Our imports are smallest in the beginning of the year, and augment continually as the year goes on. Accordingly, we have more to pay in the autumn, and money is dearer; and less in the spring, and money is cheaper.

Allerdings andrerseits *our exports grow too as the year goes on*, wie die folgende Table zeigt:

|  | Monthly Imports. |  | Import. | Exports. | Monthly Exports. |  |
|---|---|---|---|---|---|---|
|  | 1865. | 1866. | 1867. | 1865. | 1866. | 1867. |
| Jan. | 6,348,256l. | 9,847,564l. | 9,452,759l. | 10,489,339l. | 14,354,748l. | 12,786,842l. |
| Febr. | 12,855,353 | 16,610,192 | 14,828,289 | 11,376,214 | 16,116,063 | 14,446,072 |
| March | 13,010,659 | 19,891,687 | 17,183,770 | 13,770,154 | 17,520,354 | 15,148,707 |
| April | 13,079,816 | 22,455,968 | 18,701,332 | 12,071,111 | 15,366,414 | 13,804,908 |
| May | 14,595,979 | 23,225,301 | 23,275,243 | 13,194,758 | 15,870,131 | 15,936,864 |
| June | 15,409,877 | 23,243,939 | 20,054,958 | 13,227,062 | 14,630,120 | 15,490,091 |
| July | 18,964,728 | 19,597,929 | 18,166,789 | 14,113,410 | 14,957,834 | 15,562,430 |
| August | 21,000,023 | 20,940,303 | 19,784,915 | 14,158,648 | 17,450,156 | 17,880,999 |
| Sept. | 21,633,447 | 18,356,015 | 20,515,950 | 17,316,681 | 16,671,078 | 16,145,584 |
|  |  |  |  | 15,547,225 | 16,895,894 | 15,849,142. |

Die augmentation der Exports aber nicht so great as die der imports.

But an increase of export trade, combined with an increase of import trade, would of itself raise the value of loanable capital; it would bring more bills and more warrants to Lombard street, even though no gold was exported. But there is a tendency to export gold; da wir mehr Credit für unsre exports geben als wir commonly take for our imports; and, therefore, what we have to pay comes to be paid sooner than what we receive comes to be received – thus making the balance against us.

#### The Panic in the Railways.

There has been so much painful experience, so many boards of directors have circulated so much which misled, that all which boards now say is searched between the lines; is suspected of ambiguity even when plain; is taken in a sense unfavourable to the railway whenever doubtful; is believed when against the board, and disbelieved when for the Board. Staat soll official Accounts machen.

#### American finance. McCulloch’s Report (1st Nov. 1867)

Dollar = 3s., die *Revenues der U. St.* now *73,595,098l.* (waren zwischen *12 und 13 Mill. vor dem Krieg*.) (Darunter von Customs 26,452,671 und von Internal Revenue: £39,904,130.

*Expenditure* for the year ending *June 30, 1867* war: 52,009,367l. *McCulloch* proposes to reduce the taxation to the level of expenditure, or nearly so. Sein Estimate for *30 June 1868* ist: *Revenue:* £62,574,288 und Expenditure: 58,990,381l.

Paper dollar now about 70 cents to the coin dollar, nearly 3s. instead of 4s. 2d.

*McCulloch hat greatly reduced the currency.* Nach dem *Chronicle* (New York):

| Currency on 1st Nov. 1865: | $929,767,080 | vis. 454,218,038$ | Greenbacks and fractional currency, |
|---|---|---|---|
|  |  | 270,000,000$ | National and State Bank notes |
|  |  | 205,549,042$ | Interest bearing notes. |
| Currency on 1st Nov. 1867: | $772,040,669 | vis. 387,871,277$ | Greenbacks und fractional Currency |
|  |  | 297,980,095$ | Nl. and State bank notes |
|  |  | 71,875,040$ | Interest Bearing Notes |

*Reduction in 2 years* of $172,040,669 oder nearly *26 mill £ St*. Much discussion has arisen why this great diminution has not brought the value of paper nearer to the value of gold. But the greater part of the reduction, say 19 Mill. l. on the *Interest bearing Notes* which, like Exchequer bills, do not pass easily from hand to hand. Ausserdem Geschäft contracted seit war, so daß ohne McCulloch’s interference, paper would have gone down much lower.

| On the *31st August 1865* | Federal debt on highest point: | $2,757,689,571. |
|---|---|---|
| On *1st November 1867* |  | $2,491,594,450. |

In der Debt included alles legal paper (Issued by the Federal Gvt.)

* * *

### December 28, 1867. N. 1270.

#### Conciliation versus Strike.

*Mundella* , eminent employer of labour in the Midland counties.

Of any particular trade, it is usual to say that the price of labour ought to be the same as in any other trade, but this, if true, only shifts the difficulty, for what then settles the price of labour in all trades. And, in accurate science, it is not true, for *a rise or fall in wages*, when legitimate, must begin somewhere, and the trade which takes the lead ought not to be proscribed because it is the first.

Some say: „Trades’ Unions are not wanted; the men need not be disappointed at not getting an increase of wages now. Capital will flow into the trade, if wages there are lower than in other trades, and the incoming of that capital will at once raise wages.“ Aber, thus it may be said, when masters propose a reduction: „You, too, need not be so anxious about it; if you do not get the reduction now, you will get it soon,“ – that is if you ought to get it. Supposing wages are higher in that trade than in other trades, capital will flow out of the trade, and that which remains will be rewarded better. Of course both these augments are arguments of pure theory; no capitalist ever voluntarily submitted to pay more wages than he could help, because, even if he did so, wages would be gradually reduced by an inevitable diminution of competition; nor will labourers ever, to the end of the world, give up a claim to an augmentation of wages, because *their successors*, or even themselves in later life, will have an increase by the gradual augmentation of employment. Both capitalist and operative always look to the present, and not to the future market.

*Mundella* sucht zu settle by friendly bargain. Since 1860, he and others have worked at Nottingham a joint council of operatives and capitalists, who after due argument settle what shall be paid. These he calls courts of conciliation. *As to their structure we own we are rather sceptical.* We fear the *critical question will be*: *„Is the casting vote to be given to the master or to the workmen?“* As to the decision of any tribunal, we have great doubts. Aber jedenfalls „Before a strike has occurred, it is far easier to reason calmly than after a strike.“

*Mundella says:* „When difficulties mit den workmen – they had the actual samples of the native and foreign manufacture on the table before them, with the prices: they went into the whole question of competition, and showed the delegate (of the workmen) that with the increase demanded, it was impossible to compete with the foreign trade. Experience of 7 years“ zufrieden stellend.

We doubt, *says Economist* , about the composition of the Nottingham board, but as to the desirability of some such board, and some such discussion, at all places, we have no doubt whatever.

#### Farmers and Farm leases.

*John B. Brandram* *,* of Chapmore End, near Ware, Herts, known in the district as an enterprising farmer, writes:

„Die farmers verlangen meist keine leases, weil the dislike of the great majority of our landowners to grant leases is so well-known, that most applicants for farms would think it a mere farce and waste of words to ask for one. *The competition for farms is so great*, owing, in a great measure, to *the increase of the population*, and *the decrease of the number of farms*, that when there is a farm to let, there is nearly always a great number of applications for it, and thus the *owner can dictate his own terms*, which *generally are a yearly tenancy, with 6 months’ notice to quit* … *Rents have risen so much during the last few years*, that many farmers are afraid to incur the responsibility of paying the present rent for a term of wages … Besides, a prudent man may well hesitate to bind himself to the payment of a fixed rental for a 14 years’ lease in the face of a probable heavy increase in his labour account.“ Another *Tenantfarmer* writes: „Suppose the farm to be fairly drained, it must be manured. A good dressing of London dung costs *4l. per acre*; and to feed bullocks and make the manure in the yards at the present prices of feedingstuffs, straw, and meat, will cost nearly as much. *This manure will directly improve the land through* *the whole course of the rotation of crops 5 or 6 years*, and indirectly, by the increase of green crops for many more years … I maintain that as soon as a yearly tenant goes beyond the old crop and fallow system his investment is *not commercially sound* … *Why is it that so little of the abundant surplus capital of the country is invested in the cultivation of the soil?* Simply because there is no security.“

* * *

## Register der obigen Auszüge aus dem Economist für 1866 und 1867.

### 1) Money Market. (1866)

- p. 11, 13, 19, 32, 33, 34, 38, 40, 41, 43, 44, 46, 47. *Sharemarket* (52) *Rise in the Rate of Interest (5 May)* (52) *Sharemarket* (53) *State of the City*, *Panic* (53, 54) *Money Market* 55, 56. *Comparative view of Money Market 1856–66* (59, 60) *Bankshares* (60) Money Market 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 77, 84, 85, 86, 87, 89, 90, 91. *Reduction of Discount Rate* 92. *Money Market* (96, 97, 99, 101, 104, 106, 110) (*Bank o. England* 110, 111) 117, 118. *Rates of Discount on Continent* (31)
- *Money Market (1866) Before Crisis* (1 (Eight P.C)), *Prospective Value of Money in 1866*, p. 1, 3, *Investments in 1865* (5), *Bubble Cos*, 5, 11, 12. *Effects of 8%* (5) *Market Prices of Investments in 1865* (5, 6.) *Recent Dividends of Joint Stock Banks* (9, 10) *Reduction of Discount Rate* to 7% (23) to 6% (34)
- *B.o.E. Interest on Deposits* (36)

* * *

### 2) Crisis of 1866.

- *Figures on it* (57, 58) *Grounds for Confidence* (61, 62)
- *Crisis of 1866* p. 73, 74, 82–84, 98.
- *Ten P.C.* p. 73, 75, 76, 78, 82, 81, 88. *(Profit et Interest)*
- *Agra and Masterman’s Bank Failure* (69, 70) *Its Reaction on India* (89)
- *Overend et Gurney* (71, 72, 95, 100, 108, 109.)
- *Protection for Bankshares* (70) *Dealing in them (Bears)* (76) *Bulling and Bearing* (81, 82) *Bill for regulation sale in them* (123) *Low prices of Bankshares* (171, 172)
- *Northcote and Gladstone on the Panic* (90, 91)
- *Circulation of Banknotes since Panic* (98)
- *Credit Mobilier and Finance Cos.* (11, 12, 13, 14) (24, 25)
- *Finance Paper and Rate of Discount* (48, 49)
- *First Interior of a Finance Co* (107) *Financing Details* (177, 178)
- *Credit Foncier of England* (158, 159)
- *Account of Joint Stock Banks* (92–93) *How a shareholder should watch its Co.* (84)
- *Liquidation of Bank of London* (113)
- *What to buy?* *(G – Gʹ Sich selbst verwerthender Werth)* (112)
- *Failures* (1866) 60, 61, 82, 107, 108. *1867* (p. 153)

### 3) Banking and Currency.

- *Suspension of the Bankact* (57) *French Opinion on it* (l.c.) *Its practical effect* (62) *New facts relating to it* (84). *Guthrie etc on Bankact* (68) *Proposed Inquiry* (87)
- *Bank of E. and its Bankers Accounts* (173, 174, 176) *Its Reserve* (95, 96) *Acceptances and Deposits* (117)
- *Clearing House* (122, 131, 132, 133)
- *Billbrokers* (1857), *Bankers* (1866.) [(100)]
- *Rediscounting* (131)
- *Memorial of Liverpool Merchants (Anfang 1866)* (p. 7, 8)
- *Banking Question* (18) *Gvt. Notes* (117) *Mulholland* (167, 168.) *State and Currency* (170, 171)

### 4) ~~India.~~ ~~English Railways.~~Money Market (1867)

- *Savings and Trade* (130) *Causes of Depression* (131, 132, 133, 140) *What Bankers should do with their money* (157, 169 *(Trade)*, 174, 178, 179) *Why money dearer in Autumn than Spring* (179, 180)

### 5) Railways.

- *English Railways* (33) *Making Minor Railways* (39, 40) *Non Paying Railways* (98) *London, Chatham, Dover* (99) *Its history* (102, 103) *Peto* (104) *Baxter* (110) *North British Railway* (106–7) *Brighton Railway* (131) *Railways’ Act 1867* (176) *Panic in Railways (1867)* (p. 180)

### 6) Ireland.

- *Land bill* (54, 55) *Law Court*s (74) *Railways* (85) *News* (96)
- *Emigration* (121, 124, 127, 137)
- *Holdings (Parliamentary Return) (1867)* [(125)]
- *Tenant Report* (129) *Prussian Rentbanks proposed by Hutton für Ireland* (168, 169)

### 7) Land in England and Agriculture

- *Crops and Harvest for 1866* (99, 100) *Wheatcrop (1867) (Lawes)* (169, 170) *Corn Duty* (41)
- *Cattle Plague. Gvt. Relief* (8, 15, 51, 52)
- *Cattle feeding* (85–86) *Supply of Animal Food* (62–64)
- *Ownership of Land* (88, 113, 114, 115, 175) *Entails* (80, 81)
- *English Farmers* (12, 13) *Tenant Right or Leases (Improbements)* (108) *Farming of Leicestershire. Grass Land* (118, 119) *A Territorial Magnate* (116, 117, 121) *Yearly Tenants* (178, 181, 182) *Chambers of Agriculture* (95)
- *Game Laws* (18) *Ukase* (58, 59) *Farmers Protest* (76) *Police and Game* (122)
- *Deerfarmers* (42, 43, 67, 68) *Deer versus sheep* (76, 85)
- *Agricultural Labourers:* *Strikes* (12, 40, 52, 156) *Wages* (155, 156)
- *Sewage* (111) *Pollution of Thames* (51) *Of Lee* (146–147)

### 8) India.

- *Indian Bills* (72, 76, 77, 80) *East Indian Railway Scandal* (50) *Railways* (87, 88) *Money Market* (100) *Deranged Exchange, action upon English Market* (100) *Progress* (130) *Orissa Famine* (151–152)

### 9) Miscellaneous

- *(Law of Demand and Supply)* (105, 110)
- *Coal Supply* (1–3, 15–17) *London Gas* (93. 94. 130) *Gas (Subways)* (159)
- *Saving Banks* (70) *National Debt* (117) *Frauds of Shopkeepers* (110)
- *Mortality in England (1865)* (168.)
- *Trade Returns* (29, 30, 33) für 1867 (123, 125) *Foreign Trade* (115)

### 10) Cotton.

- *During the Civil War* (45, 46) *Cotton Market Liverpool May ’66* (56, 61, 66) *Cotton.* (101) *Improved official Statistics wanted* (176)

### 11) Manufacturing Markets

- (1866) (p. 77) und 1867 119, 121. 123. 124. 125. 126. 127.

### 12) Labour, Poor, Conflicts.

- *Houses for Poor* (21, 22) *Torrens Bill* (125)
- *Workhouse Hospitals* (32, 33) *Workhouse Reports* (152–153) (176)
- *Master and Servant* (116)
- *Industrial Partnership (Fawcett)* (103, 104, 115)
- *Courts of Arbitration (Mundella)* (180, 181)
- *Strikes. Iron Workers* (112, 113) *(„Labour mere commodity“* 113.) 118.
- *Trades Unions:* *Commission* (120, 125) *Effect on Wages* (150–1) (155) *Money and Trades Unions* (170) *Finance of Trades’ Unions* (172, 173)

### 13) United States.

- *Trade with America* (4) *French Commerce with U. States* (7) *Protectionism* (15)
- *Finance:* 41, 42, 113. *Revenue* (19–21) *Taxation* (137, 154–55, 159–160, 180.)
- *Banking:* *Evidences of Pressure (1867)* (128, 129, 133–136) *Shipbuilding* (126, 127) *American inconvertible Currency* (45) *Antidote against Commercial failures* (119, 120) *Sound state of American Banking* (1866) (26–28) *Apprehended commercial convulsion* (38) *Why no Panic in America* (1866) (78–80) *National Banks* (137–140) (140–146) (148–149) *Failures of Nl. Banks (1867)* (157, 158, 165, 166)
- *American Public Schools* (162–3) *Waste of Educational Resources (in Engld.*) (163–4)

### 14) Russia.

- *Finance (Michell)* (23, 24) (160–161)

### 15) France.

- *Bank Inquiry* (22, 23, 30, 31, 34, 35, 36, 37, 38, 45, 114, 124, 127.) *Bk.o.F.* (68)
- *Effect of Overend’s Failure* (64)
- *Pereires* (168)
- *Bankruptcy of Pollet, Roubaix Banker* (153)
- *Failures in Building Speculation* (156)
- *Fraud in Cognac* (68)
- *Tableau Général du Commerce* (120. 122)
- *Agriculture* (34) *Beet root sugar* (120)
- *Aneline* (120)
- *Bonaparte’s Cost to Europe* (169)

### 16) Austria:

- *Iron, Coal, Means of Transport and their effect.* (148)

### 17) Sweden:

- *Production of Iron (1860–1866)* (176)

* * *

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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.