10 February 1866. N. 1172.

Money Market.

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

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

There have during the week been several failures of contractors and others are still rumoured

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

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

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

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

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

15

Cattle Plague.

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

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

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

American Protectionism.

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

Coal Supply.

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

Sir W. Armstrong, in his Newcastle address, assuming 2 3 4 as the average annual increase in the 8 years previous to 1861, exhausted the available supply in 212 years.

Mr. Jevons estimated the average annual increase between 1854 and 1863 at 3 1 2 %, u. exhausted in 100 years at that rate of increase.

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

1861 85,635,214 tons
1862 83,638,338
1863 88,292,515
1864 92,787,873.
1863 exceeded 1862 by 4,654,177 tons
1864 1863 by 4,495,358.

So ultimate catastrophe still more proximate.

16

Our Number of collieries: 1863 2,397
1864 3,268.

British exports of coal.

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

France.

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

Imports of Coal into France.

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

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

17

Value of French Import of Coals

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

Belgium.

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

Germany.

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

Prussian Production.

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

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

Austria.

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

Russia.

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

U. States.

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

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

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

18

The Banking Question.

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

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

Game and Bankruptcy.

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

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

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

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

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

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

  • 1866 „The Economist“ (Jahrgang 1866) vol. XXIV.
  • The „Money Market Review“. Jahrgang 1866.