John Leslie Foster: An Essay on the Principle of Commercial Exchanges, and More Particularly of the Exchange Between Great Britain and Ireland: with an Inquiry into the Practical Effects of the Bank Restrictions. London 1804.
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John Leslie Foster, (of Lincoln’s Inn): An Essay on the Principle of Commercial Exchanges. London. 1804.


Difference between the Currencies of England and Ireland: At the time of the great recoinage of William III, it was determined that the English shilling would pass for 13d. in Ireland, also = 1s. + 1d. Irish. Any sum of English money hence = the same sum of Irish money + 1/12. 12 English l. = 13 Irish; 100 English £. = 108l. 6s. 8d. Irish. At whatever rate the exchange is stated in the following chapters, 81/2% must always be deducted, in order to exhibit the amount in which it is favourable or unfavourable; f.i. when the exchange is said to be 19, it is 102/3% against Ireland.

Ch. I) General Nature and Effects of the  Foster: Balance of Debt
Balance of Trade

The balance of trade is generally understood to signify the excess of exports over imports. (3) Aber z.B. Ireland’s remittances for absentees, the interest of her debt paid in London, Great Britain’s remittances for her foreign expenditure, are all operations unconnected with commerce … which influence the wealth of the country, and the rates of their exchanges. (3)

Er nennt:

  •  Hervorhebung in der Quelle.
    balance of trade
    , the difference between commercial exports and imports;
  •  Hervorhebung in der Quelle.
    balance of debt
    , the difference of money to be paid, and money to be received. The balance of trade forms a part of the balance of debts. (4)

Exports  Hervorhebung in der Quelle.
exceed imports
… they have actually exceeded them to a great amount, during the whole of the last century in favour of England; yet … the balance of  Hervorhebung in der Quelle.
… cannot be permanently favourable or unfavourable to any country on the whole of its transactions. (4)

1) The balance of debt may continue permanently favourable or unfavourable to any country, between it and any other country, though not between it and the whole world.

2) The balance of debt may be for or against any one country with the whole world, for a limited time: great foreign expenditure, bad harvests, sudden emigrations of the proprietors etc.

3) As the commerce of the country increases, it may demand an additional quantity of precious metals for its circulation, and therefore a part of the surplus brought in by the balance of debt will be retained for that purpose.

In every commercial country there must be a circulating medium proportionate to its demand. (5)

 Marx exzerpierte Henry Thorntons „An Enquiry into the Nature and Effects of the Paper Credit of Great Britain“ (London 1802) 1851 in Londoner Heft VI (MEGA² IV/7. S. 506–527). Das aus Foster notierte Zitat exzerpierte Marx damals nicht.
(Thornton sagt in seinem Essay on Paper Credit, Note I, p. 178: „The quantity of money necessary for performing a certain number of exchanges in a given time, may be considered as nearly in the inverse ratio of its velocity of circulation.“)

The greater we suppose the entire amount of the circulating medium in any country, while the  Foster: velocity of circulation and the extent of its commerce
velocity of its commerce
continue the same, of the less value any given portion of it must obviously become. (6  Kommentar von Marx.
Hier der Humesche etc Unsinn
) (6) So wenn der Commerce eines Landes 10 Mill. £ fordert, und es wird 1 Mill. Gold zugefügt, so the 11,000,000 represent exactly the same value as the 10,000,000 did before; each million and each pound must have lost 1/10 of its value, that is, represent 1/10 less than it did before such increase took place. (7) Besteht aber das circulating medium aus den precious metals, so: »the precious metals, like every other commodity, seek a market where they are dear, and retire from one where they are cheap. The trade of the bullion-merchant for ever prevents their value becoming permanently less or greater in any one country than in the rest. (7) (Their intrinsic value is least in those countries which have the most direct communication with the mines; in all, it compounded of their value at the mines, and of the expense of their carriage.« (7 Note)[)] The only mode in which the (überschüssige) bullion can be exported, is in exchange for commodities. The exportation of the redundant bullion, and the importation of the commodities for which it is ultimately exchanged, are carried on by different hands and distinct capitals: the latter is however the necessary consequence of the former, as it is impossible  Zusatz von Marx.
for any country to part with bullion, or any other commodities, without receiving value of some kind in return. The operations of the bullion merchant therefore augment the quantity of imports in the year following, and thus restore that equality of the imports to the exports, which the tendency of the precious metals to preserve every where an equality of value must necessarily occasion, unless some other mode of their application is provided. (8)

Von 1700–1800 die respective balances of trade in favour of England zusammen über 348 Mill. £. St.; their real value much greater. ([8,] 9)

Die  Hervorhebung in der Quelle.
Foreign Expenditure
of Great Britain … accounts for the application of the bullion brought in by the balance of trade, and at the same time the cause which gave rise to that balance. (9) Had it not been for the foreign expenditure, the balance of trade could not have been in her favour during the century, to a greater amount than the demand of the country for plate and coin. (9) However great might have been the excess of exports during any limited time, proportionate must have been the subsequent increase of imports, which the trade of the bullion merchant would necessarily have occasioned. (10)

The trade of the bullion merchant for ever prevents the balance of debt being permanently  Hervorhebung in der Quelle.
in favor of a country
, by continually exporting in exchange for commodities the surplus quantity of the precious metals which a temporary balance of debt had introduced. (10)

Ferner: When an unfavourable balance of debt has been paid in the precious metals, the demand for the precious metals which will be universally felt, in consequence of the exportation of a part of what was necessary to circulation, immediately enhances the value of that portion which has been left; but the dearness of the precious metals, and the cheapness of the commodities are exactly the same: the want of the precious metals, which will be generally felt, must give birth to an increase of produce and manufactures, by which alone they can be obtained; and the cheapness of these commodities, which necessarily ensues on the demand for the precious metals, attracts the foreign market. (11) »The productions of that country, by their cheapness, compared to the precious metals, will be forced out to foreign countries; as, on the other hand, the dearness of the precious metals will invite them to flow into that country, in exchange for its commodities: – exports therefore increase, until the quantity of the precious metals required for the commerce of the country is restored. The trade of the bullion merchant in this instance, as in the former, regulates the amount of the precious metals within the country. When the balance of debt is in favour of any country, his operations increase its imports; when it is unfavourable, they augment its exports.« ([11,] 12)

The willingness of foreign nations to buy, is increased just as much as the necessity of those at home to  Foster: sell
. The first find their gold cheap, and the commodities to be bought with it dear; the second find specie dear, and their commodities cheap. (12, 13)|


Aber daher folgt nicht  Hervorhebung in der Quelle.
, daß „the greater is the scarcity of circulating medium, the more effectual is the stimulus applied to industry, to produce those commodities, by which alone that circulating medium can be obtained“. (13) Denn Herr Thornton hat gezeigt, bei Gelegenheit der Contraktion der Bank o. E.  Zusatz von Marx.
(worauf 1797 die Suspension)
that, where the demand arose from  Hervorhebung in der Quelle.
sudden alarm
, which, by impeding the velocity of circulation, rendered a greater amount of circulating medium temporarily necessary, to augment that alarm tenfold, and to bring circulation altogether to a stand, was obviously an aggravation, instead of a remedy for the evil (14).

[»]If the exports to all the world could be added to the amount of specie exported, they would be found equal to the amount of imports, and of foreign expenditure.« (16) Während der Kriege »der excess of her (Great Britain’s) exports above her imports was precisely that part of her produce for which she received no value in return[«]. (17) It was no loss to the merchants, but it was to the nation; for it was the nation that ultimately paid the merchants … not foreign nations. (17)

The operation appears to have been practically as follows: – a portion of British Capital was borrowed by the gvt. to defray the expenses of the nation, and taxes imposed for the payment of the interest; that part of the money lent, which was destined for foreign expenditure, was necessarily sent out either in specie or in bills of exchange, but, in each case,  Hervorhebung in der Quelle.
necessarily forced
the exportation of British produce to that amount
, to pay for these bills of exchange; for the specie which was sent out, was to be recovered by the export of manufactures, and the bills of exchange for the same reason could be answered only by exportation to their amount. The bills drawn on government by their agents abroad, and discounted in countries which were the theatre of expense, represented the expenditure in the first instance; but these bills furnished the foreign discounters at once with means, and with the temptation*), to become the purchasers of British manufactures, and laid Gt. Britain under the absolute necessity of increasing her exports to the amount of those bills. (* With the temptation, as they were necessarily discounted at an unfavourable exchange. In this instance, the unfavourable exchange was the cause of the balance of trade, and not the effect of it. 18 Note) The  Hervorhebung in der Quelle.
foreign expenditure may therefore be considered as having been paid for in exports, in the first instance
. (18)  Kommentar von Marx.
(Seine Meinung ist, daß specie exported must be bought back to fill the void caused in the circulating medium by the specie export. Dieß ist die echte Currency Scheisse!)

It is obvious that  Hervorhebung in der Quelle.
the capital of the British exporters was replaced not by the capitals of foreign consumers, but by the capital of the British nation;
and the only return the nation received, was the unproductive labour of her soldiers and sailors, and the still more unproductive labour of the princes whom she subsidised. … considered in a financial or commercial light, it operated no otherwise on the wealth of Gr. Britain, than if, at the expense of the nation, it had been purchased by the gvt., and thrown into the sea. (19)

For the 8 years of peace, ending 1793, the amount of the balance of trade in favour of Great Britain was in all 13,685,746l. official value. For the 8 years of war which succeeded, it was 46,905,169l. official value; or, if estimated 70% higher, to give its real value, 79,738,787l. (See: Mr. Irving’s Evidence before the Secret Committee of the Lords, appointed to investigate the Affairs of the Bank, 1797 ) Thus we find a prodigious increase of foreign expenditure, accompanied by a prodigious increase of balance of trade. In no other mode Kommentar von Marx.
jezt kommt der Blödsinn!
could the Quantity of specie requisite to Grt. Britain be kept in circulation than by exporting her produce to the amount of her foreign expenditure. (15, 16)

The amount of the foreign expenditure … during the first 4 years of the war … £33,510,779£ £33,510,779. (See Report of the Secret Committee of the House of Lords, 1797, p. 253 ). The exports were principally increased to those countries which were the theatre of our expenses. The exports to Germany were more than quadrupled. (Sieh eben citirten Report of the Secret Committee etc, 1797, p. 254). During Peace they were not above 1,900,000l. p. an.; but 1795 and 1796 they were above 8 Mill. £ St. each year. (16)

Lord King has accounted in another manner for the balance of trade being permanently in favour of England, in that commerce of which the tables of Exports and Imports take notice. According to King, the possession of the Indian commerce, which is carried on by the exchange of European silver for Indian commodities, „involves the necessity of maintaining a favourable balance with the continent of Europe“; by which alone that silver can be obtained. (19) Aber, sagt Foster: The official balance of trade in favour of Gt. Britain with all countries, except the East Indies, during the 18. century, amounted to 348 millions; the real value was possibly above 500 millions.  Kommentar von Marx.
⦗Der Esel glaubt daß diese 500 Mill. in precious metals importirt werden!⦘
Yet certainly Gt. Britain did not export 500 millions worth of silver to India during that period. (21)

 Kommentar von Marx.
Wie sich alle facts verdrehn, im Kopf der currency principle Besessnen, zeigt Foster’s Erklärung über den Commerce der East India Co. mit East India. Wenn seine Theorie richtig, so müßte das fortwährende Häufen von Silber in Indien dort das Geld (Silber) depreciirt und den Preis der indischen Waaren so furchtbar erhöht haben, so daß der Export indischer Waaren durch die Depreciation der Currency checked and Import of foreign commodities excited. Foster’s Bullion merchant in India must at once have „forced“ by the export of Silver to Europe the Import of European Commodities into India. Statt dessen:

»The motives for foreign nations to carry on such a commerce ⦗ Zusatz von Marx. Marx exzerpiert hier erneut einen Satz, den er schon oben auf S. 37 des vorliegenden Hefts notiert hat. Da er den Satz auf S. 37 mit einem kleinen Fehler (buy statt sell) abschreibt, ist der vorliegende Satz wahrscheinlich erneut aus dem Buch, und nicht aus dem früheren Exzerpt abgeschrieben.
nämlich grade vorher geht der Satz:
The willingness of foreign nations to buy, is increased just as much as the necessity of those at home to sell. The first find their gold cheap, and the commodities to be bought with it dear; the second find specie dear, and their commodities cheap. p. 12, 13⦘, will be similar to that which induce our East India Co. constantly to export specie to India, in exchange for its commodities, and not  Hervorhebung in der Quelle.
vice versa
, because that specie has a greater relative value to commodities in India, than in Europe.« (13)

 Kommentar von Marx.
Also obgleich beständig (constantly) silver poured into India from Europe for 100 years, the whole 18. century, trotz des beständigen Wachsens der Quantität von Silber in India, bleibt der relative Werth of silver verglichen mit Waaren – d.h. dem Preis der Waaren in Indien, [–] wohlfeiler als niedriger in Europa. Und dieß führt Foster dafür als |39 Beweis, daß mit der increase of the quantity of the precious metals their value must sink and that of commodities rise!

 Kommentar von Marx.
Indien macht d. currency pri war von vornherein der Stein des Anstosses für die currency principle men. Aber während Foster einfach vergißt, daß er grade mit Indien das Gegentheil von dem zeigt, was er zeigen will, erklärt sich Vanderlind die Sache daraus, daß die Inder das Silber vergraben, und es daher nicht als currency wirkt. Er giebt also zu – was ebenfalls sein Princip aufhebt – daß Geld noch andre Functionen hat als die of currency.

Ireland: The foreign expenditure of Ireland besteht aus 2 articles, the remittances to absentees (2 Mill. £. St. p. an. stated in the Evidence, p. 2, before quoted, but probably far less) and the interest of her debt payable in London (1,275,000£. p.a., to which about 250,000l. will be added by the expenses of this year,  Zusatz von Marx.
viz. 1804
) (p. 22)

Supposing no loans to be raised in England, the first and immediate effect which their (the absentee’s) residence abroad produces is to force an excess of Irish exports above imports, to the same value as the remittances which are to be made to them. (23)

Suppose the case of a single absentee proprietor, who has an estate in Ireland of the value of 20,000£. p.a. His rents must be remitted to him either in gold, or in bills of exchange. If they are remitted in gold, an increase of Irish produce must be sent out to recover specie to an equal amount, as indespendable to the circulation of Ireland  Kommentar von Marx.
(Hier guckt der Eselsfuß wieder heraus.)
; and therefore may be considered as having been sent out, in the first instance, in discharge of that remittance. (23, 24)

But the fact is, that the remittances to the absentees seldom or never are made in specie. This was fully admitted in the evidence taken by the Select Committee. Even in the North of Ireland, were where the rents are paid in gold, the gold does not leave the country. The remittances are made in bills at a course of exchange not sufficiently high to tempt the gold out of the country  Kommentar von Marx.
(also wirkt der Herr Bulliontrader unter Botmässigkeit des Wechselkurs. Strömt Gold in ein Land ein, so der Wechselkurs für es, und, all circumstances remaining the same, der bullion trader can send out no gold)
. But when the remittances are made in bills of exchange … the bill of exchange is either drawn in Ireland upon London, and bought by the agent in Ireland to be remitted to the proprietor. Dann it has necessarily been drawn in consequence of a demand which the Irish exporting merchant has upon England. If, on the other hand, the bill be drawn by the absentee in London, on his agent or banker in Dublin, it cannot be sold on the Exchange in London, unless to some merchant who has imported, or is going to import, commodities from Ireland. Or if, for want of a purchaser in London, the bill is remitted to Ireland in the first instance for payment, and specie is in consequence exported, still that must occasion an exportation of produce to recover specie to an equal amount. (24, 25)

Had they (the absentees) continued in Ireland, they would have given birth to a quantity of produce equal in value to their rents, and  Hervorhebung in der Quelle.
consumed it in Ireland;
but living in England, they still give birth to an equal amount of Irish produce, but consume it  Foster: in England
in Ireland
 … The quantities produced and consumed in both cases the same in value … but different in the nature of the items of which they are composed. The Irish produce … consumed in Ireland … would have been such as his (the Proprietor’s) taste and pleasure should have dictated; but on his emigration they become such as the foreign market shall demand. The consumers also are different; for it is not to be supposed that the absentee spends his income in the purchase of Irish commodities; on the contrary, he spends his Irish rents in the encouragement of English industry; but then he is the cause that others become the consumers of Irish produce of another description, and to an equal amount. The Irish producers are also different. Had the proprietor remained at home, he would have called forth industry, probably on his own estate, and in its immediate neighbourhood; but when settled in England, the proprietor of an estate in Munster, may perhaps, to a much greater degree, encourage the industry of Ulster. lt is he, indeed, that gives birth to the quantity of produce; but the quality must be decided by the demand of the foreign market. (25, 26)

Of the few who have been aware that the effect of the absentees was to force an increase of exports to the amount of their remittances, some have fallen into an extraordinary error, and concluded, that the absentees  Hervorhebung und Ausrufezeichen in der Quelle.
were therefore so far beneficial!
But the supporters of so strange a paradox might have observed a distinction between the exports that are exchanged for imports, and those which are to discharge the foreign expenditure of the country – a  Hervorhebung in der Quelle.
distinction no less important than that the former are paid for, but the latter not
. The exporting merchants, indeed, are paid alike for all that they export; but it is Ireland, and not another nation, that pays for that portion which is sent in discharge of her foreign expenditure. The capital of the Irish merchant, who exports the produce which is to answer for the remittances to absentees, has his capital replaced, not by British capital, but by the rents of the absentees. It is Ireland paid by Ireland to work for England. It is the part of England to enjoy, and of Ireland to labour. The only value that Ireland receives in return, is the permission to keep at home her circulating medium.  Kommentar von Marx.
… If a tradesman found that of what he sold 2/3 were regularly paid for, but the remaining third never, he would certainly consider  Hervorhebung in der Quelle.
his balance of trade
as the only part of it that did not enrich him. The case of the nation is the same as that of the individual. (26, 27)

 Bemerkung von Marx.
Notabene: Hier zeigt sich wieder die bonne foi des Herrn McCullochs! Er kopirt von Foster den incitement of industry durch die absentees, aber vergißt Foster’s ausdrückliche Bemerkungen über die Schädlichkeit dieses excitement für Irland zu kopiren! Lumpenhund!

In den Irish pamphlets und speeches des 18. Jh. immer die Angst, daß Irland in Folge seiner remittances  Foster: that their gold was about to leave them
des Baaren entblößt werden würde
. Prophezeiung nie erfüllt „leave poor Ireland without money“. »A prediction annually made, never fulfilled, yet still repeated.[«] (28) Selbst Swift schrieb in diesem Sinn. (l.c.) In einem Pamphlet (anonymous) von 1729 heißt es: (Es ist a treatise „on the state of Ireland“): „It appears plainly from this list of absentees, and the estimate of the quantity of species they may be supposed to draw out of the kingdom, that no other country labours under so wastful a drain of its treasure as Ireland does at present by an annual remittance of above 600,000l. to our gentlemen abroad. lt is believed by many who understand our money affairs, that there is less species now in the kingdom than there was at any one time since the Revolution, if not since the Restoration. The most sanguine do not reckon that we have £400,000 now remaining; if so, ’tis impossible to subsist much longer under such a train drain … and a constant course of exchange against us, … it evidently follows, that all our remaining species will in a little time be carried off. … It is to be feared this misfortune will fall upon us much sooner than could be thought of, since we are credibly informed that Miss Edwards’s estate in this kingdom, said to be worth 150,000l. is immediately to be sold, and the purchase money sent away; that a noble lord of the greatest fortune here is to have 80,000l. remitted, and that several others are selling or mortgaging their lands for large sums.  Hervorhebungen in der Quelle.
If all these designs should take place, they will be sufficient to carry off all the circulating cash of |40 kingdom in a very short time
.“ (29, 30)

After the revolution of near 80 years, we may now observe, that notwithstanding Ireland possessed only 400,000l. in specie, and had an annual subtraction of 600,000l. according to the author from that sum; notwithstanding the constant course of exchange complained of; and notwithstanding the sale of Miss Edwards’s estate; Ireland never was exhausted of its specie until the measure of the restriction rendered it superfluous; on the contrary, though the absentees have greatly increased since 1729, and though estates, greatly superior to Miss Edwards’s, have since been disposed of, Ireland has increased her stock of specie from 400,000£., in 1729, to 5 millons, at which it was estimated in 1797. (31) (Evidence Committee p. 97 und 129)

Ireland, compelled to export the value of above 3,000,000l. … the effect of such a balance of debt not being to cause an exportation of specie, but an exportation of produce without return, was zwingt Ireland to labour severely, and to little purpose, to save a great portion of her annual produce, not for the purpose of accumulating a capital for herself, but of sending it to increase both the revenue and the capital of another country. (31, 32)

 Zusammenfassung von Marx. Foster: It certainly is possible that an artificial system may counteract the operation of the balance [...]
Dieser Prozeß kann aber durch falsche Maßregeln gestört werden
. Dazu rechnet er »the expedient of raising the loans in England for the service of Ireland« (p. 32)

1) It enables Ireland to discharge the balance of debt in another manner than by the exportation of her own produce and manufactures. (p. 33)

 Kommentar von Marx.
Das was nun folgt ist eine der schönsten Exemplificationen der currency principle delusions of International Commerce, die man sich denken kann:

»By the unnatural supply of circulating medium which it occasions in Ireland, it entirely counteracts that demand for circulating medium which the balance of debt would otherwise occasion, and the scarcity of which wouldgive existence to such an increase of produce. Preventing the scarcity of circulating medium, it necessarily prevents the existence of all that increased produce which the scarcity of circulating medium would otherwise have occasioned.  Kommentar von Marx.
(Warum, in dieser Lausetheorie, sollte die scarcity of the circulating medium, statt an increase, not rather cause a decrease of production? The produce being decreased to a certain point, the relative scarcity of the circulating medium would be converted into sufficiency or even abundance.)
At the moment when it is most for the interest of Ireland that the circulating medium should be as dear as possible, it renders it cheap.« (33) [»]As far as the balance of debt goes, the loan discharges it, and immediately returns to England in payment of that amount; which balance, had it not been for the remittance of the loan to Ireland, would have been paid for in produce, which  Hervorhebung in der Quelle.
would have
existed.« (33)  Kommentar von Marx, zum Großteil wieder von ihm gestrichen.
⦗dear, dear! Gesetzt erstens, die Irländer haben die Sauenglische Regierung in Irland aus eigner Tasche zu zahlen (ohne loan dafür in London) (der loan auch in London ist natürlich auf die Steuern in Irland berechnet, und ist nur advance, sort of Exchequer Bill upon Irish Taxes, wofür Irland die Zinsen zu zahlen hat) u. ausserdem Geld nach England zu remittiren für die absentees.

But … the loan remitted to England may perhaps exceed the amount of the balance of debt due by Ireland.  Kommentar von Marx.
(Und warum soll Irland den Engländern mehr zahlen als es ihnen schuldet?)
 … No country can retain a greater quantity of specie than it can employ as the representative of its commerce  Zusatz von Marx.
(er meint als currency)
, at the same value as specie is employed by the adjoining nations. Now in whatever manner the loan is remitted to Ireland, the medium in which it is remitted must be a representative of value also in England; and not finding in Ireland any value to represent  Zusatz von Marx.
, it can no more continue in Ireland, than if it were so much specie: it therefore instantly leaves Ireland and returns to England; but after having discharged the demand of England against Ireland, it can return to England only in exchange for commodities. (34)  Kommentar von Marx. Alternative Entzifferung: müßte.
(Selbst innerhalb der bornirten Vorstellungen des Kerls mu(?)ßte er für seine Zeit something wissen von placing capital at interest in foreign countries).

 Hervorhebung in der Quelle.
[»]The English loan therefore diminishes the exports of Ireland by the amount of the balance of debt, and increases the imports of Ireland by the excess of loan above the balance of debt.«
(34)  Kommentar von Marx.
⦗Die Angst des Kerls ist sehr überflüssig. So weit the English loan to Ireland = balance of debt due for remittances to Irish absentees in England, so wird nichts on this account von Irland nach England an Produce, nor of money from England to Ireland geschickt. In diesem Fall hielte also Irland sein Surplusproduce, statt es in Zahlung von Rent umsonst nach England zu schicken. Die Creation dieses surplusproduce ist erzwungen durch die Existenz der Rente, due to the landlords. Sie ist nicht erzwungen, kein Geschöpf des absenteeism dieser landlords. Das produce will exist, ganz unabhängig von der balance of indebtedness zwischen England und Irland. Der farmer muß nach wie vor a surplus produce = rent produciren. Entweder ist es nun möglich dieß surplusproduce im Inland zu verkaufen. Tant mieux. Oder es wird nach England geschickt, aber jezt nicht umsonst, sondern gegen Equivalent. Irish linnen etc, welches statt Korn etc nach England gehn mag, findet Absatz in England nicht weil es die Form ist, worin die Rente, national betrachtet, bezahlt, sondern weil es in England demanded wird. Andrerseits, wenn der English loan to Ireland > balance of debt due for remittances to Irish absentees in England, so braucht nach dem Princip des Kerls selbst nicht nach England zurückzukehrn(?). Da nämlich Theil des surplusproduce wenigstens in Irland bleibt unter den vorausgesetzten Umständen, so ist more value to represent und daher more Geld als currency absorbirbar, nach dem Princip des Kerls selbst.⦘ ⦗Im angegebnen Fall zahlt England die Rente aus. Andrerseits wird Irland Schuldner für die Zinsen des loan.⦘

[»]The operation is practically this: When the loan is to be remitted, the Treasury in Dublin draws bills on their agent in London, and sell them to persons wanting to remit in Dublin: but the purchaser of their bills in Dublin has but two possible modes of applying them, either in liquidation of a demand against him in England, or, as is probably more frequently the case, in purchase of commodities in England to be sold at a profit in Ireland. If he applies the note for the first purpose, it obviously discharges the same office which exports to the amount must otherwise have performed; but if applied for the second … it is so positive an increase of imports etc. In the first case the Treasury draught allows the holder to spare the circulating medium of Ireland  Kommentar von Marx.
, and thereby prevents the exports that must either have gone in its place, or to recover it, if actually sent. In the second instance, the Treasury draught allows the holder to have a demand upon London, which the quantity of the circulating medium in Ireland could not otherwise have permitted.« (34, 35)

 Kommentar von Marx.
⦗If the English loan to Ireland = the Irish Debt to England, Ireland and England are placed upon the foot of countries between which there exists a par of exchange. Voilà tout. The surplusproduce = rent due to the Irish absentees will be eaten up by the English officials and debtholders in Ireland etc. Or the English loan to Ireland It is then the same thing as if the Irish absentees consumed it themselves in Ireland. Or if the English loan to Ireland > than Irish debt to England, let this overplus of loan over debt be = x£. Those x£ are a simple loan by England to Ireland, not in discharge of any former debt incurred by Ireland to England, but a loan pur et simple. That loan may be transmitted to Ireland in bullion or in commodities, or in both. But for our purpose it suffices to suppose the two extreme cases, bullion only or commodities only. If the latter, the commodities may be either of a description which makes them enter into dangerous overwhelming competition with certain branches of Irish industry. So far production may be checked by their import, viz. this form of the English loan. Or the import may take the shape of commodities to be productively consumed in Ireland. Then this form of the English loan will develop Irish production. Both cases are true for all foreign loans (we do not consider here the question of interest, and of loans for unproductive expenditure. Even in the latter case better for Ireland if England pays the capital of her own government expenditure in Ireland and Ireland the interest only than if Ireland had to invest her capital in that unproductive expenditure.) They have nothing at all to do with the state of the circulating medium, its expansion or contraction. On the other hand, if England discharges her loan in the shape of bullion, this is nothing less or more than the general case; not anything particular to Ireland, of a nation borrowing from another capital in the shape of bullion. If |41 it be said, that, the circulating medium being full, the occasion of that bullion must depreciate it to the same amount, this is then true for every nation that contracts a foreign loan, to be remitted in bullion. And this ought to be the doctrine of the currency school. But, then, they ought to go farther, and assert that no new demand springing up – no new effective demand = monied demand, [–] can increase production, hence capital, but can only depreciate the existing currency. And this ought to be the doctrine of the consistent currency men. But Foster’s nonsense consists prima facie in this that he treats this not from this general point of view, but as something peculiar to the relations of England and Ireland.⦘

Thus instead of increasing the capital of Ireland … the loan increases nothing but her expenditure. By swelling her list of imports, it … compels her to consume foreign articles, which she could not otherwise have purchased; at the same time by diminishing her list of exports, it prevents the existence of those articles, the productions of her industry, which, were it not for the loan, the balance of debt would have occasioned. (35, 36) Hence … those  Hervorhebung in der Quelle.
daily lists
of imports and exports of the port of Dublin, whose formidable balance of imports excites at once the astonishment and despair of Irish merchants. (37)  Kommentar von Marx.
(Der Esel vergißt, daß durch die Union die Engländer sich den irischen Markt geöffnet hatten und ihn unter allen Umständen, loan oder nicht, überschwemmt haben werden.)

[»]Even on the supposition that these loans are so much addition to the capital of Ireland, still the amount of money, in which they are sent over, could not continue in the country, since the quantity of circulating medium, which any capital demands, is probably not 1/100 part of that capital. The capital of Grt. Britain has been estimated at 4000 Millions: the circulating medium of Gt. Britain is probably not 1/100 of that sum; therefore, if a loan of 2 mill. is remitted to Ireland, supposing that circulating medium bears the same ratio to capital in Ireland as in England, they who imagine it possible for the money to continue in Ireland, must contend that it has operated an increase, not of 2 mill., but of 200 mill. of capital.« (36 Note)

 Kommentar von Marx.
Der Kerl sagt in einer andern Note, die seinen ganzen Dreck über den Haufen wirft:

»As there is reason to presume that the balance of trade, notwithstanding the loan, was last year in favour of Ireland, it may appear inconsistent to talk of the excess of imports; but it is the commerce of Dublin that is under consideration. The  Foster: excess of exports
at Cork and Belfast
may more than counterbalance; and it appears a confirmation of this theory  Zusatz von Marx.
, when we observe that the same part of Ireland which receives the loan is the place where the imports so much predominate.[«] (38 Note)

Sir John Sinclair , in his History of the Revenue of Great Britain, has collected 21 passages from respectable writers, all men of authority in their day, tending to prove that England was actually undone in 1680, and has been in a progressive state of deterioration ever since. (40, Note).

On year ending 5. Jan. 1803 current value of imports into Ireland: £7,654,113, of Exports £8,571,412, leaving a balance of 917,299£ in favour of Ireland. (41)

On year ending 5 Jan. 1803 Exports + loans etc = 10,031,002l.; Imports + Remittances for absentees = 9,654,113; leaving 376,889 in favour of Ireland. (43)

The interest paid by Ireland for that debt payable in London … is retained in London out of the loan made for Ireland. (43 Note)

 Zusatz von Marx.
Der Esel glaubt, daß es für seine Theorie spreche:
1) daß previous to the practice of Ireland borrowing from England, her exports exceeded her imports, nearly to the amount of her remittances to absentees; 2) that when the practice of borrowing commenced, the excess of her exports were reduced; 3) that as the loans increased, the reduction of that excess of exports … still greater; or perhaps, that it was entirely destroyed, and a balance of imports substituted in its place. (44, 45)  Kommentar von Marx.
All this has nothing to do with his „theory“, but proves only that an excess of exports, merely paid as a tribute without any immediate equivalent or prospective return, will disappear in the same degree that this tribute disappears, whether from one cause or the other.

 Kommentar von Marx.
One of it its ways of disappearing is of course a continuous loan, by the nation which receives the tribute, to that which pays it. (the interest, however, being always paid for the tribute, remitted or cancelled by the loan)

 Kommentar von Marx.
Also alle facts des Kerls haben nichts mit seiner Theorie zu thun.

On average of 5 years, ending March 25, 1794,  Hervorhebung in der Quelle.
before the practice of raising the loans in England had commenced
, the exports exceeded the imports 1,195,810l. 5s. 9d. p. annum, official value. (45) On an average of the 5 succeeding years, ending March 25, 1799,  Hervorhebung in der Quelle.
after the practice of making the loans in England had commenced
, the excess of exports over imports no longer 1,195,810l., but only 466,466l. 12.s. 12s. (45) On an average of the 5 succeeding years, ending Jan. 5, 1804,  Hervorhebung in der Quelle.
when the loan had become much greater
, the excess of exports over imports was not only annihilated, but the imports came to exceed the exports by 1,071,428l. p.a. Dieses leztre statement aber nur according to official value; for, if stated according to the real, there is reason to believe, that the balance of trade would, even during the latter 5 years, appear in favour of Ireland, … aber der official value must suffice for the comparison of one year with another. (45, 46)

The Bank Restriction, ferner, has allowed, if not compelled, a considerable proportion of the specie of the country to be applied to the liquidation of the demands against her. (47)

The foreign expenditure of Gt. Britain forced a balance of trade in her favour, to the amount of that foreign expenditure,  Hervorhebung in der Quelle.
the quantity of specie which was exported, and which the country was able to dispense with. The greater the quantity of specie that could be dispensed with, the less therefore was the balance of trade in favour of Gt. Britain; that is, the less the productions of British industry. The Bank restriction, by enabling the nation to dispense with a very great proportion of the specie, diminished therefore the balance of trade to that amount. ([47, ]48)

Every system of banking displaces a certain proportion of the precious metals as  Hervorhebung in der Quelle.
and the Bank restriction tends to displace them entirely. (51)

Hume dachte Banknotes addition to the circulating medium of the country; and on this is founded his attack on the banking system. A. Smith zeigte daß banknotes sind not addition, but »substitution« für the precious metals.  Zusatz von Marx.
Darauf bemerkt Foster klugscheissend:
Even supposing the banking system acts only by substituting, and not by adding, still it is attended with a loss to a certain degree; f.i., if … the banking system in England has displaced 20 Mill. of gold, still these 20 mill. must be applied, in some manner, in other countries; but as, wherever it is applied, it must depreciate in value, and as the value of the precious metals becomes finally equal in neighbouring countries, the gold that has remained in England will also be depreciated: yet Gt. Britain is a gainer by the operation; for the loss has been divided with all the world, but the gain has been exclusively to her. But if … all countries should adopt the banking system in proportion to their commerce, they none of them would have substituted the cheap in place of the expensive medium, but have made a mere addition to their circulating media, and depreciated them nearly in the same proportion. (51 Note)|


The amount of specie exported from Ireland since the restriction has been  Thomas Thorpe Frank berichtete über den Goldexport 1804: „3,000,000 guineas have been sent out of Ireland.“ (Siehe Report from the Committee 1804. In: House of Lords. The Sessional Papers 1801–1833. Vol. 10. 1803–1804). S. 128–132.)
estimated by Mr. Franks so low as 3 Millions
. (53 52)

Plain linen, staple manufacture of Ireland. In the years ending 25 March

1791 Exported 39,718,706 yds
1796 46,705,313
1797 year of the restriction 36,559,746
1804 37,432,365.

Doch »that diminution may be attributed to other causes«. (p. 54 Note)

That mischievous operation would have … caused to be exported a much greater quantity of specie, had it not been counteracted in the North of Ireland by the steady resolution of the linenmanufactures and merchants to refuse Banknotes, and make all their payments in gold, followed by the practice of several absentee landlords, who required payment of their rents in specie. A considerable quantity of specie has thus been retained in the North of Ireland as its medium of circulation, which, had it not been for this custom, would infallibly have been exported by the Bank restriction. (55)

A nation which confined itself to domestic commerce, might adopt for its circulating medium any substance and form, which it found most convenient; but if it is to support commercial relations with the rest of the world, it must have recourse for a certain extent to the precious metals, as affording the only circulating medium common to them all. (56 6)

Ch. II. Operation of the Balance of Debt upon Exchanges.

Balance of debt … against a country … often takes place for a limited time, and to a great amount. (58) In such circumstances, the money to be drawn from it exceeds the money to be transmitted to it; the bills drawn on the debtor country therefore exceed the bills drawn on the creditor country. The merchants on ’Change in the debtor country, wanting to remit, are more numerous than those who want to draw; while those on ’Change in the creditor country, who want to draw, are more numerous than those who want to remit. In each case the supply of bills is inversely as the demand … the bills drawn on the debtor country, being more than are demanded, must be sold cheap, and the bills drawn on the creditor country, being fewer than are demanded, must be sold dear. (58)

Z.B. wenn Irland mehr in England zu zahlen als von England zu fordern hat, dann: On ’Change in Dublin there are fewer bills on London than are required, the holders therefore demand for them a greater sum of Irish money than they sell for when at par; and the buyers are obliged to give it, in order to procure them: in this instance, the exchange is said to be unfavourable to Ireland, because any given sum of Irish money will exchange for a less sum of English money than it is really worth. (59, 60)

100£ British should contain as much silver as 108l. 6s. 8d. Irish; 81/3 is therefore said to be the par with Ireland. (59 [Note]) On the other hand, in London, the persons who want to draw from Dublin, are more numerous than those who want to remit: there are more bills on Dublin to be sold, than are demanded; and the sellers therefore must give them for less than they would demand, if the buyers and sellers were equally numerous: here again the exchange is unfavourable to Ireland for the same reason. … If there were no mode of making the remittances, except in bills of exchange, the price of these bills must proportion itself exactly to the supply, and … if Dublin had to remit 2 × as much as it was to receive, the exchange must be 50% against Dublin. (60) Unter dieser Voraussetzung »it would follow as a necessary consequence, that  Hervorhebung in der Quelle.
there must be a constant proportion between the balance of debt and the rates of exchange
… but, in fact, no such connexion. (60, 61) When the balance of debt has raised the exchange to a certain limit, it ceases to operate on the exchange … This limit … is the  Hervorhebung in der Quelle.
expense of transmitting the precious metals from the debtor to the creditor country
(cost of carriage, price of insurance, and in some cases, a compensation for the risk incurred in violating the laws of the country, which prohibit its exportation; ausserdem, in most foreign exchanges, reasonable profits für the bullion merchants. (61)

Seit dem establishment der mail coaches, price of carriage und insurance zwischen Dublin und London von 1 to 11/2%. Nach dem Evidence (des Committee, früher citirt) (p. 3):

The Expense of transmitting money from England to Ireland:
Carriage and insurance to Holyhead, per cent 7s. 6d.
Freight to Dublin 2
9. 6.
with a commission of 5s. p. cent on Bank and Gvt. Accounts, but of 10 on smaller ones. If insured in the packet, it is an extra expense of 5 or 7sh. more. (62 note)

So lange daher Goldcirculation Niemand would give much more than 109 or 110£ Irish for a bill on London for 100£ British. ([62,] 63) For 4 years previous to the restriction, 109l. 5s. Irish was the greatest price paid in Dublin for 100l. British ⦗many persons zahlten lieber dieße few shillings more rather than be at the trouble of demanding gold at the Bank, and packing it for its journey.⦘ Seit 1728 (mit Ausnahme von 1753 worüber später) exchanges zwischen Dublin und London never rose beyond the expense of sending gold from one country to the other. (63)

The same limit which the power of procuring gold imposed upon the rates of exchange in Dublin, equally confined the exchange in London. 100£ English for an Irish Bill of 109l., with one % additional for the interest of his money, because, by sending that bill to his correspondent in Dublin, and having the amount remitted to him in gold, he might receive a sum in London equivalent to 100£ British. ([63,] 64) The exchange of London in Dublin, previous to the restriction, was generally 1% higher than Dublin on London; but 1% of this was interest, and not exchange. (64, 65 Note)

If the expense of transmitting gold from Dublin to London was increased, whenever a balance of debt was due by Dublin, the exchange might rise to the amount of that expense. (65)

In the time of Sir W. Pettythe exchange was 15% (this was all a real exchange against Ireland; for there was then no difference in the currency. The Irish. Irish £ St. contained as much silver as the English one.)

Aber diese 15% due to a system of  Hervorhebung in der Quelle.
, which provided that the remittances from Dublin to London should pass through Barbadoes. Petty sagt:

„That to remit so many great sums out of Ireland into England, when all trade is prohibited between the said two kingdoms, must be very chargeable; for now the goods which go out of Ireland, in order to furnish the said sums in England, must, for example, go into the Barbadoes, and there be sold for sugars which, brought into England, are sold for money to pay there what Ireland owes: |43 which way being so long, tedious, and hazardous, must necessarily so raise the exchange of money, as we have seen 15 P.Ct. frequently given annis 1671 and 1672; although, in truth, exchange can never be naturally more than the land and water carriage of money between the two kingdoms, and the increase of the same upon the way, if the money be alike in both places. But men that have not had the faculty of making these transmissions with dexterity have chose rather to give 15 p.ct. exchange as aforesaid than to put themselves upon the hazard of such undertakings, and the mischief of being disappointed.“ (65, 66)

[»]It may be imagined, that in time an unfavourable balance of debt might exhaust a country of its gold, and that then the rates of exchange would be regulated exactly in proportion to the balance of debt: yet … an unfavourable balance of debt has no such effect; its operation is  Hervorhebung in der Quelle.
to force exports, and diminish imports; but neither to raise the exchange indefinitly, nor yet exhaust the country of its
 Hervorhebung in der Quelle. Foster: circulating medium
.« (66, 67)

 Zusatz von Marx.
Dieß erklärt sich Foster as currency man natürlich daraus, daß, wo z.B.
»Gold the necessary medium of circulation, it must, from the nature of things, receive an artificial value in the country exactly proportionate to the balance of debt, and sufficient, in every instance, to retain it within the country.[«] (68) Thus it is, that every balance of debt carries with it the powerful and certain principle of its own destruction, not in the unfavourable exchange which it produces (whose feeble operation must be as confined as the limit by which it is restrained), but by the value which it gives to the precious metals; – a value seen only in the cheapness of commodities that ensues, and the quantity of them that is thereby forced into existence for exports; –  Hervorhebung in der Quelle.
a quantity and a cheapness both proportionate to the balance of debt, though bearing no proportion whatever to the rates of exchange
, which continue fixed at the expense of transmitting gold, and which gold confines within that limit, not by actually going in the place of bills, but by its constant readiness to go. (68)

 Kommentar von Marx.
Hier hat der Mann wenigstens eine Konsequenz, welche die modernen currency men nicht zu ziehn wagten:

»Under such circumstances gold would have a positive tendency to flow into the debtor country, and not to leave it; the same increase of value which it has received from the demand to retain it, will attract it from abroad, as gold, like every other commodity, will seek the best market.[«] (69)

It may be said, that though such might be the effect, if no national Bank were established, yet that so long as there is a Bank obliged to furnish gold, gold will be expected until the Bank is ruined: but the Bank, in undertaking this obligation, has not left itself without remedy. The Directors well know, that their conduct, under such circumstances, would be to reduce the amount of their notes in circulation until the drain on them was discontinued; that is,  Hervorhebung in der Quelle.
until the circulating medium had from its scarcity attained such a value
, that exports were called into circulation sufficient to discharge the balance. Thus the Directors formerly used to adopt the same remedy which, had there been no Bank, the balance of debt would itself have produced. Since the restriction has been imposed, they seem to have changed their principles as much as they have changed their practice; for their evidence (See the Evidence 101, 102, 99) seems now to infer, that it is proper that an unfavourable balance should not render money scarce, and that  Hervorhebung in der Quelle.
act as friends of the country in supplying it with a quantity of circulating medium in proportion to its scarcity. (69, 70)

 Kommentar von Marx.
Hier haben wir also verbotenus die Anwendung des currency principle auf Banknote issues, wie Overstone etc sie predigt. Er führt diese Theorie weiter aus in folgendem:

It is evident that an unfavourable exchange, proceeding from a balance of debt, must operate as a bounty on the exports, and duty on the imports of the debtor country. When a sum of foreign money can purchase more English money than usual, it is a temptation to the foreigner to purchase commodities in England, because he purchases them just so much cheaper, as his money has increased in value, compared to that of England. The unfavourable exchange thus contains within it a tendency to redress itself, by encouraging exports to discharge the balance; but  Hervorhebung in der Quelle.
this tendency never can be greater than the encouragement it offers to exports; and this is confined to the price of sending gold or silver from the debtor to the creditor country
. Between England and the Continent this may amount to 5 or 8%; between England and Ireland it cannot much exceed 1%. Their vicinity to each other, and the ease of communication between them, have happily confined the expense of carriage within such narrow limits. So far then as 1 or 2% the balance of debt against Ireland may be considered as tending to redress itself through the medium of exchange; but beyond that, disregarding the efforts of so inefficient an agent, it exerts its own more powerful energy, an energy always commensurate to the difficulty to be removed. The balance of debt is not redressed by the puny operations of exchange, but by the scarcity of money which ensues on the extensive demand for it, by the artificial value which money obtains within the debtor country consequent to such demand, and which is not marked in its foreign exchanges, but by the cheapness of all commodities which follows on the increased value of money; and by the exertions of industry within the country to produce these commodities, as the only means of obtaining it. Such a situation occasions the increased value of the precious metals as compared with commodities, more than the increased or diminished value of the circulating medium of one country as compared with another. (70–72)

Der Exchange hat, in time, continued in Ireland. Und in limit of amount, ditto, denn der real Exchange cannot be much above 1% against Ireland; aber it has been near 12%. In September 1803, the exchange of London on Dublin was 20; that is, 111/3% against Ireland. (72) This has for years continued progressively to increase. (73)

It may well be doubted that as this country sends annually into Ireland a loan of 2 mill. to 2,500,000l., whether so great a payment is not a least equivalent to the annual balance of debt due from Ireland. (73, 74)

Umgekehrt: the balance of payment is actually, and has been all along in favour of Ireland. Wie gezeigt durch Mr. Marshall, the Inspector General of Exports and Imports in that country. (74)|


Das Committee of Inquiry ist zu demselben Schluß gekommen, daß England the debtor country. Nach ihrer Rechnung:

Creditor. Debtor.
By Balance of Trade in favour of Ireland, stated according to the  Hervorhebung in der Quelle.
£917,299 To remittances to absentees: £2,000,000
Amount of sums transmitted to Ireland on account of loans, lotteries and public services: 1,459,590 Balance in Favour of Ireland: £376,889
£.2,376,889 (75, 76)
Nach Marshall’s Rechnung die balance in favour of Ireland near 1 Million greater als das Committee rechnet. (76)

Die Personen, wonach die Balance unfavourable to Ireland … rested their assumption solely on the fact of the unfavourable exchange. (77) An unfavourable exchange, according to them, was an infallible criterion of the state of the balance of the debt … complete begging of the question. (77, 78)

Ch. III) Causes unconnected with the Balance of Debt Regulating the Nominal Rates of Exchanges.

The Exchange, or rather the nominal Rates of it, affected by any fluctuation in the value of the medium in which the payments are made. (83)

In der Evidence vor dem Committee ganz übersehn in what manner the balance was discharged; in paper or in gold; in paper of unexceptionable security, or in paper of no security at all; in pure gold, or in adulterated gold; in coin entire as when issued from the mint, or in a clipped and mutilated currency, in a mint currency, or in a currency of tokens, that is, of silver pieces, professing to represent a greater weight of silver than they contain. (84)

The Spanish dollars issued by the Bank, at 5sh., contain no more pure silver than 4s. 6d. English ought to contain; they are therefore  Zusatz von Marx.
(by Foster)
called not 5sh., but  Hervorhebung in der Quelle.
for 5s … A promissory note should either have intrinsic value itself, or else be merely representative of it: if it is issued as the value itself, it can be no more valuable than the silver it contains; if issued merely as the representative of value, why go to the expense of having it of such precious materials? (84, Note)

The present pars of exchange were originally computed with a reference to the quantity of the precious metals  Foster: contained in the currencies of the different countries
contained in the different countries
. If the currency of any country has since been altered in its value, the original par of exchange can be no longer the real par, and, if still adhered to in computation, it is merely nominal. (84, 85) If English foot reduced to 11/12 of its present length, 14 French feet would no longer be equal to 15 English feet, as at present, but to 16 English feet and 4 inches. (85)

Par of exchange with Hamburgh z.B. 33 shill. 8 grotes Banko of Hamburgh represent nearly same quantity of precious metals as 1£. in England. If £ St. in England, that is, since the restriction, a pound note of the B.o.E. become becomes purchasable for 4 Spanish dollars f.i., instead of for 4 Spanish dollars + 2 English shillings … the Hamburgh merchants will no longer give as many of their shillings for it, when it can only purchase 4 Spanish dollars … If, under such circumstances, the poundnote should at any one time obtain the same quantity at Hamburgh as formerly, that is, if it should obtain a greater quantity of silver abroad, than it could at home, the only conclusion to be drawn is, that the exchange really is in our favour, though nominally at par; and that if the pound note could procure in exchange the same quantity of silver at home as formerly, it would procure a still greater quantity abroad. (86–88)

If the currency of any country becomes less valuable than formerly, it becomes exchangeable for a less quantity of the currency of any other country, which continues as valuable as formerly. (88)

The Banknote  Hervorhebung in der Quelle.
does not profess to represent any certain value, but a certain weight
of silver
; and therefore if silver had risen 100% if the Banknote did not rise 100% along with it, it would be depreciated. (87 Note)

Die currency of a country kann suffer a change in its value, and a consequent change in its ability to procure a certain quantity of any foreign currency, from different causes. (88, 89)

1)  Hervorhebung in der Quelle.
on coinage
, coin becomes of greater value = value of the precious metals, + the amount of the seignorage. Provided the seignorage does not exceed the expense of coinage; the value of the coin will then be like that of every other article of manufacture, the price of the material together with the price of the labour employed in producing it. Such the decided opinion of A. Smith. Thornton dagegen. (89 Note) This accounts (Sieh J. Stewart Political Economy book IV. ch. II [)] for the exchange formerly appearing to be constantly in favour of France, and against this country. (90, 91)

2) The Worn and degraded coin of any country in which the bills of exchange drawn on it are to be paid … Exchange becomes unfavourable to the extent that its coin has lost in its value … Instance davon. A. Smith sagt: „that before the reformation of the silver coin in King’s King William’s time, exchange between England and Holland, computed according to the standards of their respective mints, was 25 P.Ct. against England; but the value of the current coin of England, as we learn from Mr. Lowndes, was at that time 25% below its standard value.[“] (91, 92)

The debased silver currency of England and Ireland can never affect their exchanges, so long as the £ Sterling contains the same quantity of gold as formerly; because the silver bullion to be remitted in payment of the balance of debt against England, is purchased by the gold coin, and not by the silver. (91, Note)

3) Adulterated coin … the rates of exchange must be against the country, in proportion of to the depreciation of its currency. (92) Sultans z.B. adulterated their coins. 3 great such adulterations in 1770, 1787 and 1796. Before the frauds were resorted to, Turkish Piastre = 2s. 6d. English (contained about the same quantity of silver). In 1767, course of exchange shows, that 8 piastres were given for 1£ St, i.e. 800 for a bill of exchange on London for 100£. In Folge der 3 adulterations, amount of silver in piastre reduced to less than 1/2 of the quantity contained in 1767. Jezt 16 Turkish Piastres (at the present course of exchange) = 1£ St.; i.e. 1600 are paid by a Banker at Constantinople, for a bill of exchange of 100£ on London. (92, 93) Dennoch, in Folge der nature des Levant Commerce, der real exchange stets in favour of Turkey, England the debtor country. (94, 95)

The general character of the trade with Turkey is a barter of a small quantity of English manufactures for a large quantity of Levant produce: difference sent out by England in bullion. (95.  Kommentar von Marx.
Warum wird hiedurch nicht enforced sending out of more commodities, by enhancement in the value of gold, nach Fosters fancy?


 Nummerierung von Marx.
A paper circulating medium may be depreciated either through discredit or excess. (97)

whatever causes shall make  Zusatz von Marx.
(in Irland z.B.)
the possessor of cattle, linen, corn, bullion, guineas, or any other object of intrinsic value, to consider the Irish Banknote as equivalent to 1/2 of its nominal value, in exchange for them, will produce the same effect in the possessor of an English Banknote, or of a bill of exchange on London.  Kommentar von Marx.
Hence zeigt sich im Wechselkurs.

When depreciation does at least ensue (von addition to circulating medium), hat es nicht an exact proportion to the amount of the addition made, because the increased industry which it had produced demanded an increase of circulating medium. (100)

There is a happy mean between very small and an immoderate increase  Zusatz von Marx.
(of Gold)
, which, while it encourages industry, does not give rise to depreciation … it was always the interest, both of the bankers and the merchants, to increase the circulating medium as much as possible; but as often as depreciation through excess ensued, it became the interest of the merchants to force the bankers, by a run on them for gold, to diminish the circulating medium until that depreciation ceased. (102)

the banking system … seems to have a necessary tendency to increase the quantity of circulating medium; but … so long as it is well regulated  Zusatz von Marx.
(Note convertible)
it never can increase it beyond the amount demanded by the increased industry, which it likewise will have occasioned. ([102, ]103)

 Zusammenfassung von Marx in eigenen Worten.
Fall des Wechselkurses in Frankreich in Folge der Assignaten
. Febr. 1789 Exchange not quite 8% against Paris; it fell gradually until March 1793, als zu 100% dagegen. (106) (The Exchange with Paris is computed in the French crown of 3 livres, estimated at 291/4d. English money, which is the par between the 2 countries. l.c. note.)

A paper convertible into the precious metals at the will of the holder … can no more become abundant than the precious metals themselves; for all that is superfluous of it will immediately be converted into the precious metals, and go abroad. This appears to be the principal use of gold and silver in the circulating medium of a great commercial country; – merely to keep steady the „measure of value“. (108)

Jezt, seit restriction: The notes once issued now, vestigia nulla retrorsum; they remain in circulation; and their amount being thus increased, the value of any given portion then becomes diminished. (109)

The Bank of England, exempted from the obligation of paying in cash, has the power of becoming to this country a New Peru, possessing mines of inexhaustible fertility, which enable it at its pleasure to augment in amount, and reduce in value, the circulating medium of this country in any conceivable  Hervorhebung in der Quelle.
; and this it may effect without ever issuing its paper, except upon the most perfect security. (111)

Another ground of the opinion which has been advanced, that the Bank issues  Hervorhebung in der Quelle.
be excessive according to the present mode in which they are made, is, that the  Hervorhebung in der Quelle.
supply follows
, and does not  Hervorhebung in der Quelle.
the demand. (111) Aber: 1) the discounting of merchants’ bills is not the only mode in which the notes of the B.o.E. come into circulation. (112) 2) If the supply of the circulating medium falling short of the demand for it, could prevent its depreciation, silver would not have lost its value in consequence of the discovery of Peru, since, abundant as the supply was, it certainly fell short of the demand of the Spaniards. (112) So hier a demand for a quantity of Bank notes similar to that which the Spaniards felt for silver. (l.c.)

U.a: By law the Bank are obliged to discount at 5%; but during war it is almost always possible to make more than 5% of money. If a merchant, under such circumstances, could obtain discounts to the amount of the security he could give, the issues of notes would soon amount to all the security that could be given, i.e. the value of all the fee-simple of all the lands in the kingdom, the purchase of all the personal property, including the amount of the national debt etc (113)

Die Bank kann jezt nur noch judge ob ihr paper is really excessive: 1) durch den average market price of gold, und 2) the average rate of foreign exchanges. (114) 3l. 17s. 101/2d. of Bank paper professes to represent an ounce of gold: yet 4l. 1sh. of bank paper must be given for it. No seignorage in England paid for the coinage. Also the difference between 4l. 1s. und 3l. 17s. 101/2d. seems to be the measure of the depreciation of English bank paper, as compared mit gold; that is, not quite 3l. per cent. (115)

Chapter IV. Causes and Effects of the Exchange between Grt. Britain and Ireland.

In Irland die  Foster: excessive issue of paper
depreciation der Banknoten
grösser als in England.

Die depreciation-symptoms des Papers:

1) [»]A high and permanent excess of the market price, above the mint price of bullion.« (119)

No regular bullion market [in] Ireland. Aber proved durch the rate at which the bank are forced to issue their new dollars in order to keep them in circulation. (120) Excess of the market price over the mint price operates as a bounty on the melting of the coin. Daher die coin inevitably disappears, unless protected by a seignorage, degradation, adulteration, or by being issued at a nominal value, greatly above its mint price. (120, 121) The new dollars are to be issued in Ireland at a nominal value of 6 Irish shillings, but their value at the mint price, is only 4s. 81/2d. Irish; they are issued therefore at a rate of 27% above their mintprice. The paper may not be depreciated to that extent. The B. o. Ireland may issue at a rate higher than sufficient for their present protection. Aber it proves that bullion is far more valuable in Ireland, than the price at which it is issued in coin by the mint – that is, the price at which the Bank directors promise to pay their notes. (121)

2) An open discount upon paper, as compared with coin. (119) Das Premium for Guineas (nach dem Appendix to the Evidence, p. 44) has progressively advanced (along with the increase of Irish Banknotes) from 3/4 to 10%, since the beginning of 1799. (121)|


3) Exchange unfavourable to the country when computed in Banknotes, yet possibly favourable when computed in specie; unfavourable to those parts of the country, where the circulating medium is paper; yet favourable, or at least much less unfavourable, to other parts, whose circulating medium is specie. (119) Sieh Evidence, Appendix, A 1 und A 2, p. 44–47 . As the paper circulating medium of Dublin has progressively increased, the exchange has gradually risen to 10% against it; though, during the same time, it has never been above 2% against Belfast, where the circulating medium was gold. On the contrary, it has generally been in its favour. In Newry, where both paper and gold circulate (the paper at a current discount), there are two rates of exchange, one when the bills are to be purchased or paid in paper, and the other where they are to be purchased or paid in gold[:] the difference of the rates is of course equal to the discount of the paper. (122, 123)

 Bei Foster das fünfte Symptom.
The entire disappearance of the smaller coin, which had been in circulation along with specie, but which cannot continue in  Foster: circulation along with
circulation with
any other circulating medium of less value.

Nach dem Bericht des Committee  Hervorhebung in der Quelle.
»it does not appear that there is a single mint shilling or halfpenny circulating in any part of Ireland«
, except in that district of the North where gold still the medium of circulation. (124)

 Bei Foster das vierte Symptom.
An Exchange between the different parts of the same country whose circulating media are different. (119)

Z.B. zwischen Belfast und Dublin, the Dublin rates so unfavourable that they nearly (their rates) correspond with the premium for guineas paid in Dublin. (123)

6) Near agreement of these different tests of depreciation, so daß the discount upon the paper, and the unfavourable notes of foreign exchanges, and the rates of the exchanges between the different parts of the same country, and the excess of the market above the mint price of bullion, should all be equal, or very nearly so, to each other. (119, 120)

Appendix to the Evidence shows, that though there has occasionally been a slight difference, it has never been of long duration, and that it may be affirmed generally that they rise and fall together. (124)

Die slight difference differences zeigen, daß das English bank paper auch depreciated. (124) If the B.o.E. notes depreciated, and the real exchange is at par, the premium paid for Guineas in Dublin must equal the unfavourableness of the nominal exchange + the depreciation of English paper. Da der exchange against Dublin is not of Irish paper against gold, but of Irish paper against English paper. (125)

If the Bk. of E. notes depreciated, and the real exchange  Hervorhebung in der Quelle.
in favour
of Ireland, the premium paid for guineas in Dublin must equal the depreciation of English paper + the unfavourableness of the nominal exchange ÷ the real exchange in favour of Ireland. Hence, if we add the premium to the real exchange, and substract the nominal exchange from their amount, the remainder must be the depreciation of the English paper. (125)

Premium = depreciation of English paper + nominal exchange - real exchange

∴ Premium + real exchange = depreciation of English paper + nominal exchange

∴ Premium + real exchange - nominal exchange = depreciation of English paper. (125 Note)

Aus dem Appendix zur Evidence folgende Tafel:

Date. Premium paid for gold in Dublin, P.Ct. Nominal Exchange, i.e. of Irish Banknotes against Engl. Banknotes; i.e. Dublin on London against Ireland P.Ct. Exchange of Engl. Banknotes against Irish Gold, i.e. Exchange of Belfast on London.
1803. In favour of Belfast. In favour of London.
January 3 35/12 7/12
February 3 32/3 5/6
March 33/4 41/6 7/12
April 41/4 42/3 7/12
May 41/2 51/6 1/2
June 43/4 411/12 5/12
July 6 65/12 5/12
August 8 85/12 27/12
September 8 61/6 25/6
October 71/2 61/6 21/3
November 9 75/12 25/6
December 9 711/12 31/12
January 91/2 72/3 21/3
February 10 819/24 7/12
March 9 62/3 27/12. (p. 126)
Zeigt (Monat August seems sudden fluctuation) daß seit September the depreciation of the English Banknote produced a sensible effect upon the exchange, for 8 + 1 - 61/6 = 25/6 = Depreciation of the English paper. Und dieß result nicht – nicht nur in that single month, sondern permanent since that time. (127)|


By this mode of calculation, the depreciation of English paper has been:

1803. Premium for Gold. Real Exchange. Nominal Exchange. Depreciation of English Paper.
September 8 + 1 ÷ 61/6 = 25/6
October 71/2 + 1 ÷ 61/6 = 21/3
November 9 + 1 ÷ 75/12 = 27/12
December 9 + 1 ÷ 711/12 = 21/12
January 91/2 + 1 ÷ 72/3 = 25/6
February 9 + 1 ÷ 811/12 = 25/24
March 9 + 1 ÷ 62/3 = 31/3. (p. 127)

This result agrees with  Hervorhebung in der Quelle.
the fact
mentioned by Mr. Burrowes (p. 14 Evidence, that 21/2 p.ct. is now paid to procure gold in London. It agrees also with the excess of the market above the mint price of gold, which gives a depreciation of somewhat less than 3 P.Ct. (127, 128)

Daher auch exchange so much in favour of Belfast, sometimes even 3 P.Ct.; for this was an exchange of gold against B. o. Engl. paper. (128)

Amount of notes issued by Bk. o. Ireland now nearly 5 × as great as when the restriction was imposed; die der Bk.o.E. not quite doubled in the same time. (130) In Irland [»]an issue of small notes was rendered necessary to fill the void left by the gold …« Probably »the entire loss of gold in Ireland, in consequence of the restriction, was 3,000,000l., but that part which was withdrawn from circulation in the country was of course supplied by the notes of country bankers.[«] (130) In Dublin small note in circulation … about 1,200,000. (l.c.) The alarm which prevails in Ireland from political causes, by rendering circulation slower, renders a greater amount of circulation necessary. (130, 131) Something … may be allowed for the increase of commerce and expenditure in Ireland. (131)

The Bank of Ireland does not possess the same control over the country banks as is possessed by the Bk.o.E. in this country: even in Dublin the private bankers are by many supposed equally to divide the market with it. … Zwar: every private banker must pay in Bank of Ireland notes,  Hervorhebung in der Quelle.
if called on;
but unfortunately the holders at present have little inducement to wish to change the note of a respectable private banker for a note of the Bk. of Ireland. (133)

Every bill which is discounted has a two-fold operation; it increases not merely the capital of the merchant who draws it, but also the amount of circulating medium of the country. (135)

Whatever exertions the private bankers in Dublin may have made, the private bankers in the country have far outstripped them in the race. As the measure of restriction had driven gold out of circulation, so the depreciation of the Irish paper expelled silver; and as the banishment of the gold had operated such a prodigious increase of profit, and opened such new opportunities in the banking system, so the annihilation of silver gave birth to a new race of bankers, with new principles and with new gains. Degraded as the silver currency of England is, such counters as pass for shillings here could not afford to circulate in Ireland; if sent into Ireland they must instantly return; they obtain a better price when exchanged for the pounds of England than for the depreciated pounds of Ireland: like every other commodity, therefore, they seek the best market; they leave Ireland, and return to England. (135)

I speak of those shillings which are to be exchanged for Irish paper; for in the North of Ireland, where gold continues in circulation, the silver is at least as good as in England. (136) Paper shillings were at length resorted to  Zusatz von Marx.
(in Ireland)
, perhaps as a substance cheaper than base metal. (136)

In Dublin, where, from the extent of the retail business, paper shillings were inadmissible, the base metal continued as the medium of circulation until its currency was annihilated by an hasty order of the Irish treasury. Dublin then presented the phenomenon of a great city literally deprived of all circulating medium of less denomination than one pound, and the distress that has ensued may be more easily conceived than described. (137)

In the country it was deemed more eligible to substitute paper shillings than to continue to receive the base metal: it accordingly disappeared, and promissory notes for all sums, so low as sixpence, took place. Banking on a small scale soon became not only one of the most lucrative, but one of the most common trades. When once it was discovered that coining was no longer illegal, provided it was executed on paper, many … applied themselves to so profitable a business. The towns and villages of Ireland swarmed with bankers, issuing their promissory notes for crowns, half-crowns, shillings, and sixpences, promising to pay the same in B. o. Ireland notes whenever a sufficient sum should be tendered. (137)

Z.B. a village habe 10 bankers, 1000 inhabitants. Besizt jeder inhabitants inhabitant 19s. von jedem der Banker  Zusatz von Marx.
(also jeder 190sh. in den verschiednen Notes)
, so zusammen 95,000l. sent into circulation. Dannach unmöglich to call on any one banker for payment.  Zusatz von Marx.
(da das geringste £ of Ireland Bank Note = 1£ = 21sh.)
… besides, these bankers are sufficiently ingenious to issue notes of such amounts that it is very difficult to combine them into pounds: and finally, if pressed for payment, notwithstanding all these defences, the resource of bankruptcy is still left to them; and it is melancholy to hear how many have resorted to it. ([137,] 138) According to the system pursued in Ireland, the number of banks issuing notes … in every place inversely as the extent of its commerce. London is supplied by one, Dublin by four; 12 … insufficient for Skibbereen; 23 … in Yonghal, a town … which it may be doubted whether there are 23 persons who follow any other trade … Auch female bankers … not uncommon. (138, 139)

All persons deriving their subsistance from a fixed income, are reduced in circumstances, in the ratio of the depreciation of the Irish paper, that is, about 8 or 10%. All persons engaged in foreign trade, in order to ensure themselves from the immense losses which they might incur, in consequence of the frequent fluctuations of exchange, must charge an extra profit on their transactions, falling on the consumer, in the import trade, and tending to exclude Ireland from the foreign market in the export. (140) All retail dealers, manufacturers, labourers, and all the lower classes, are reduced to difficulties … impossible to describe, by the depreciation and uncertain value of silver-notes in most parts of Ireland, or by the absolute annihilation of all circulating medium less than one pound. (140, 141)

All persons forced to pay in gold, and to receive payment in paper, a grievance too common in North Ireland, are sufferers. (141)

Dann die holders der vielen forged notes, which arise from the universal system of banking pursued in Ireland; all holders of the silver notes of the petty bankers in the villages of Ireland, lose when the issuers become bankrupt. (141)

All persons who had in their possession the base coin, which passed current in Dublin etc losers when that coin was cried down. Some master manufacturers who possessed great quantities (often so much as 500£ worth), incurred a loss from 50 to 80 P.Ct. on that account. (141)

Wer gewinnt durch das System? 1) The absentees. For the rents paid in paper to their agents in Ireland, purchase bills in Dublin, which, when remitted to London, produce a quantity of gold greater than what they would have exchanged for in Ireland. This arises from the real exchange; i.e., the exchange calculated in gold being favourable to Ireland. (142)|


 Nummerierung von Marx.
The proprietors of the Bank of Ireland stock. The Directors have increased their dividend von 61/2 to 71/2%, und bonus of 5% last year, zusammen 121/2%.

 Nummerierung von Marx.
The merchants who obtain such extensive discount … extended to an amount which the Directors themselves confess could not exist were the restriction taken off. (143)

 Nummerierung von Marx.
The Government, durch die advances, die ihnen ohne die restriction nicht gemacht werden könnten. (143)

 Nummerierung von Marx.
The private bankers in Dublin. (144)

 Nummerierung von Marx.
The silver note bankers in the South of Ireland. They are mere coiners … denen sogar ihr Material costs nothing, not even the expense of stamps, of which they have hitherto defrauded the revenue. (144)

 Nummerierung von Marx.
All agents in the North of Ireland, possessing sufficient influence to force the tenants of the absentee proprietor to pay in gold, and who pays them the next day in paper, gain 8 or 10% at the expense of the tenants; and if those agents remit the rents, paid in gold, through Dublin and not through Belfast, they then become gainers of 8 or 10% at the expense of the landlords. (144)

 Nummerierung von Marx.
The dealers in Exchange.

They who conceive that the profits of such dealers arise from remitting capital at a high exchange, in order to draw it back again when low, have formed a very inadequate idea of the subject. Such a speculation would be mere gambling, and might be productive of loss, as probably as of gain; but the commerce in exchange is founded not on the probable variation of exchanges at different times, but on its actual variation at the same time in different places. (145)

When the rates of exchange are low, both in London and Dublin, the difference between them would afford rather a greater profit to the dealer, than he could obtain from the same difference existing between higher rates. … Aber er findet from experience, that the difference of exchange is generally greater, when the rates are high than when they are low; and therefore, although he would prefer a difference of 21/2 or 3% on a low rate of exchange, yet as such a difference does not occur, except when the exchange is high, he prefers the high rate; the gain resulting from the greatness of the difference being infinitely more important than the loss occasioned by the hight height of the rate. The following calculations founded on the supposition of high rates, and of course states the gains of the dealers as still less than they would have appeared on the supposition of the rates being low. (145, 146)

First suppose the exchange in London is 117, and in Dublin 115. Difference = 2%, which very frequently occurs. (146)

The dealer in London invests 1000£ British in the purchase of a bill on Dublin, at 21 days date, of the amount of 1170l. Irish. He makes this purchase on Monday morning, and sends the bill to Dublin for payment in that night’s mail; it arrives there on Thursday morning, and is discounted on that day.

There will then be to be deducted from: £1170. (Irish)
Discount at 5% 21 days, 3 days grace £3, 16. 111/4
Expense of Postage 0. 2  2
Total: 3. 19. 11/4
He receives therefore on Thursday Morning: 1166. 0. 103/4 Irish.
With this he purchases the next day, Friday, a bill on London of 21 days date, which, at an exchange of 15% produces (British) 1013l. 18s. 4d.

This bill leaves Dublin on Saturday, and may arrive in London on Tuesday morning. Mit ungünstigem Wind say on Thursday morning, also on the 10th day after the 1000l. had left London in the shape of a bill on Ireland. (147[, 148])

( Zusatz von Marx.
It ought to be remembered:
No brokerage is charged in Dublin, nor any commission in a transaction of this nature, which is between correspondents having a joint account. 147 Note)

The dealer offers it on the same day (Thursday) to be discounted:

To be deducted from (British) £1013. 18. 4.
Discount at 5% 21 days date grace £3. 6. 8.
Brokerage at 1s. 10d.% 1. 0. 3
Postage 0. 2. 0
Total deducted: 4. 8. 11.
Rests: 1009. 9. 5.
This 9l. 9s. 5d. all profit, which this 1000l. has cleared by its journey to Dublin; it is 18s. 111/3d. P.Ct. for 10 days. Diese transaction dann fortwährend wiederholt mit den £1000. Wenn es returns 36 times to the owner in the course of a year, 341l. Profit = 34l. 2s. PCt. p. annum. Wenn die 1000£ nur einmal in 14 Tagen returniren, Profit 23l. 13s. 61/2d. p.a. (148, 149)

 Zusatz von Marx.
Dieser enorme Profit von
1000£, without having once served as the medium of exchange for any other commodity than paper during the whole of that time. (149)

It has hitherto been supposed that the bills in which the 1000l. have been invested, have been drawn by merchants and bankers; but if they are drawn by persons not in trade, f.i., by the absentee proprietors, the profits become much greater. Suppose all the 36 bills drawn in London, have been drawn by absentees. When exchange in London is 17, and in Dublin 15, the person not in trade, for 100£ English, paid to him by his banker, gives his bill on Dublin, at 21 days sight, for 118l., that is, one % more than the current rate. (150)

1000l. British, at exchange 118, produces a bill on Dublin for (Irish) £.1180. 0. 0
Discount 24 days £3. 17. 71/4
Postage 0. 2. 2.
Total to be deducted 3. 19. 91/4
Total received in Dublin 1176. 0. 21/4
1176£ Irish at exchange 115 purchases a bill on London for (British) 1022. 12. 2
Discount 24 days £3. 6. 2.
Brokerage 1. 0. 6.
Postage 0. 2. 0.
Total to be deducted 4. 8. 8
Total to be received in London £.1018. 3. 6.
The 1000£ British have cleared 18l. 3s. 6d. by its journey; at 25 returns in the year = 45l. 8s. 5d., at 36 returns: 64l. 16s. (151)|


The average difference for 3 months together was, 1£. 13s. 8d.; von 2 Oct. 1803 till 10t Difference = 3%, 10th – 22d = 21/2, it then fell to 11/2%; 14 Nov. – 22d = 2%, 13 – 31 Dec. = 21/4 und 2. (154 Note)

Two prices exist in the North of Ireland, for all commodities, the gold price and the silver price. (120 Note)

V Chapter. General Remedy for unfavourable Exchanges.

It has been said, that as 100l. British can now exchange for 118l. Irish instead of 108l. as formerly, it is a temptation of 10% to the British merchant to become a purchaser in Ireland; but if 118l. Irish can now purchase no more commodities in Ireland than 108l. formerly, what becomes of this temptation? It is the cheapness of  Hervorhebung in der Quelle.
Irish commodities
alone which could tempt the British merchant; but in this instance he finds nothing cheap except the  Hervorhebung in der Quelle.
Irish Banknotes
. (158)

Suppose 108l. 6s. 8d. Irish = 1200 yards of Irish linen, and that exchange is at par. 100l. English will then purchase 1200 yards Irish linen. Now if the Irish medium loses 1/10 of its value, 100l. English will exchange for 118l. Irish; but it will still exchange for 1200 Yds Irish linen, because the linen will be then no longer purchasable for 108l. 6s. 8d. Irish, nor for less than 118l. Irish. (159)

The fallacy originates from assuming that the Irish medium has retained its value, as compared with every commodity, except gold, silver, copper, and  Foster: English Bank Paper
Irish banknotes
; whereas it is  Hervorhebung in der Quelle.
it has lost its value, as compared with every other commodity, that it also loses its value, as compared with these. (159, 160)

If the exchange makes Irish commodities 10% cheaper to the English consumer, the depreciation of the Irish medium has first made them 10% dearer … the price remains what it was. (160)

Der unfavourable exchange operates as a bounty on exports when it is real … no such effect from a nominal exchange. (160)

 Zusammenfassung von Marx in eigenen Worten.
Das beste Mittel wäre natürlich convertibility der Note herzustellen.

Vor der restriction the Directors considered the run on them for gold as the criterion of the proper quantity of paper which they should keep in circulation; … when the demand on them for gold was great, they considered it as a proof that the quantity of their notes in circulation ought to be reduced; and they never failed immediately to contract their issues, and consequently to diminish the amount of the circulating medium of the country. (162)

This demand on them for gold they attributed to various causes, generally aber to the unfavourable state of foreign exchanges; and so much attention did they pay to this last cause of demand, that in all cases of unfavourable exchange, conceiving that the gold must be flowing out of the country, they lessened their issues as a measure of precaution. That such  Hervorhebung in der Quelle.
the practice of the Banks … continually avowed in the examinations of the English Directors before the Secret Committees of the Lords and Commons in 1797, and still more distinctly by Mr. Colville, an Irish Bank Director, in his recent examination. It is further assumed in the Report of the Select Committee Report p. 4 , wo es heißt:

„Such has been the natural practice of banks previous to the restriction. Mr. Colville states it in very clear and forcible terms as to the Bk. o. Ireland. Prior to 1797 they limited the amount of their issues as exchange rose. If prudence has not dictated such a course, necessity would have compelled a diminution of their issues, by diminishing the stock of specie, which could only be replaced at a loss proportionate to the existing rate of exchange; and your Committee observe, that, in fact as well as in theory, the effect of such practice always was and must be the redress of the unfavourable exchange.“ (163, 164)

Daher sehen die Directors,  Hervorhebung in der Quelle.
that in every commercial country the limitation of the circulating medium is the efficient remedy for redressing its unfavourable exchanges
. (164)

As the first effect of an unfavourable exchange, arising from a balance of debt, is to create a demand for circulating medium in the debtor country, and in many instances actually to export it … it tended to  Hervorhebung in der Quelle.
limit the amount
of the circulating medium, by creating a demand for that medium which could not be supplied. … were there no bank, the principle by which the balance of debt, and consequent unfavourable exchange, are removed, is by the limitation of the circulating medium which they occasion. (164, 165)

A bank may entirely counteract this tendency  Hervorhebung in der Quelle.
by increasing the circulating medium of the country in proportion as it is demanded
. Unmöglich vor der Restriction. Um nicht ihr Geld zu verliren, waren sie gezwungen, in case of unfavourable exchange, to diminish their issues, and create a scarcity or limitation of circulating medium much greater than the balance of debt, or unfavourable exchange, could otherwise have occasioned. (165) Ihre issues werden doppelt vermindert. (Report of the Select Committee 1797, p. 100 und 101). »First, to the amount of the gold paid; and, secondly, to an equal amount by the diminution of their loans or discounts which their prudence suggested to them to make.[«] (167) Durch die erste Ursache werden cancelled the notes brought in for cash, which was demanded and exported; durch die 2te weniger notes issued. (l.c.)

In dem Report of the Select Committee  Zusatz von Marx.
heißt es p. 8: „When exchange is so unfavourable to a country as to draw gold out of it, it is obvious, that for every guinea drawn out of the bank an equal amount of paper must be drawn out of circulation to be paid for the guineas. The re-issue of paper to that amount must be prevented by the decrease of the stock of specie: the same cause will most probably induce the Directors to diminish their discounts;  Hervorhebung in der Quelle.
so that the quantity of paper becomes diminished in a still greater amount
than the gold drawn out of the Bank in consequence of unfavourable exchanges.“ (167, Note)

Jezt handeln die Directors of the Bk. o. Ireland umgekehrt. Erstens fact: issues 5 × mit Exchange of 10% against Ireland. Zweitens vertheidigen sie dieß theoretisch.

Einer sagt: „as far as the guineas so drawn out went to pay the balance against the country, so far they operated to the reduction of the exchange against the country, by paying off so much of its debt, and  Hervorhebung in der Quelle.
so far only
“.  Zusatz von Marx.
Aber sagt Foster feierlich:
It appears then that they entirely exclude from consideration  Hervorhebung in der Quelle.
the value which such reduction added to the circulating medium which remained
.  Kommentar von Marx.
 (168, 169)

Ferner sagen dieselben Directors: „As far as the circulation of paper has supplied the circulating medium,  Hervorhebung in der Quelle.
it enabled the gold, which before stood in its place, to be exported out of the country, and, as far as it went in weight and measure, so far
it was a clear and decided cause of preventing the exchange from getting to a higher pitch than it has hitherto attained; and  Hervorhebung in der Quelle.
so far
as the Bank extends its notes,  Hervorhebung in der Quelle.
it further enables a greater drain of specie to take place
, and consequently to strengthen the cause which keeps down the rate of exchange.[“] (169)

Exchange = the comparison of value between two circulating media … when the circumstances attending a balance of debt, had added a superiority of relative value to the circulating medium of the creditor country, the limitation of the circulating medium of the debtor country, making it also more valuable in proportion as it made it more scarce, removed its relative depreciation. Or, to put it in another |50 light, when the superior demand for bills on the creditor country has added to its circulating medium an artificial value, the limitation of the circulating medium of the debtor country, by increasing the demand for it as well as for the other, operates a similar artificial increase of its value, until it finally becomes as valuable as the other; that is, until exchange is reduced to par. (171, 172)

 Kommentar von Marx.
Die Beispiele die Foster immer giebt, wie reduction of currency by enhancing the cost of it (thereby sinking the price of commodities, and enforcing exports) zeigen nichts als wie vorgefaßte Theorie den Kopf umnebelt und die Thatsachen verdunkelt.

Erstes Beispiel. Schottland. Mr. Mansfield, banker of Edingburgh, sagt in seiner Evidence, that soon after the peace of Versailles, und bis 1770, der exchange between London und Edingburgh was 5 or 6% against Edingburgh.

At this time „the currency of Scotland was principally paper, and that to a greater extent than the natural trade of the country  Hervorhebung in der Quelle.
. The chartered banks of Scotland finding that they had given imprudent credit to bankers and their agents, who issued notes, they  Hervorhebung in der Quelle.
them very much
; the overissue of paper was prior  Hervorhebung in der Quelle.
the unfavourable state of the exchange
, and it was the cause of the system being altered; and he certainly thinks,  Hervorhebung in der Quelle.
that the overissue of paper was the cause of the high exchange
“. (172, 173)

 Kommentar von Marx.
Bis hierhin sagt der Mann Mansfield nur, daß die chartered Banks had given „imprudent credits“ to bankers, die dann natürlich ihrerseits wieder „imprudent credits“ ihren Kunden geben, welche imprudent credits zu imprudent imports von England führen und the exchanges gegen Schottland turn konnten. In welcher Form dieser Credit gegeben wurde und to bankers who issued notes or not hat absolut nichts mit der Sache zu thun. Was sie thaten, daß sie curtailed that credit. Dieß war schon ein modus to turn the unfavourable exchanges, wenn sie aus dem imprudent credit entsprangen. Daß aber die quantity des circulating mediums irgendetwas mit der Sache zu thun hat, beweist Mansfield 1) durch die Annahme, that their there existed an overissue of paper, was er beweisen soll. 2) durch den fact daß der von ihm imaginirte overissue of paper dem unfavourable state of the exchange vorherging. Wenn (was von der Art der Ausgabe abhing) ein overissue of paper existirte, also depreciirtes paper, wäre der nominelle Wechselkurs dadurch influirt worden. Aber der blose fact, daß, was Mansfield auch nicht beweist, mehr paper cirkulirte vor als nach einem turn of exchanges, beweist in keiner Weise, daß der unfavourable exchange Folge von overissue of paper, so wenig als daß spätre Reduction des paper Folge des günstigen Exchange. 3) he „thinks“ „that the overissue of paper was the cause of the high exchange“. Also die Einbildungen des Mansfield sind ein Beweis! Ebenso gut könnte Foster „think“ ohne die Autorität des Mansfield!

 Zusatz von Marx.
Aber die Sache wird noch besser.
The chartered banks, finding the high exchange proceeded from artificial means, determined to put an end to it, for this reason, „they began to think of collecting  Hervorhebung in der Quelle.
as much funds
as they could bring to London of their own; those funds they lodged partly with the Bk. o. England, and partly with their own bankers“; [»]and the banks then began to reduce the rate of exchange, by giving bills on London at a rate of 1/2% or 1% under that of the day: that in the course of years they reduced it to 1/2% against Edingburgh, at which rate it has continued invariably ever since; (the custom is to give bills on London, at 40 days date, or sight, which is about 1/2%); and that it never fluctuated even in the convulsion which credit experienced in 1793, nor at the time of the restriction in 1797: Hervorhebung in der Quelle.
that the demand for bills on London, though great at first, gradually decreased as the exchange was reduced;
that this change of system was adopted in consequence of there being more paper in circulation than the situation of the country required, and that it had the  Hervorhebung in der Quelle.
effect of diminishing the quantity of paper circulation
.« (172–174)

 Kommentar von Marx.
Also zunächst schicken die Kerls funds nach London, vermindern pro tanto die debt an England und vermehren pro tanto Zufuhr von bills auf England. Der Wechselkurs fällt daher, ohne irgend eine Operation auf die circulating bank notes. Gradually fällt er auf 1/2% gegen Schottland, da sie zugleich ihr system of imprudent credits curtailed haben. Die demand on bills on England ist groß, aber sie nimmt ab „as the exchange was reduced“. Sollte heissen: the exchange was reduced, as the demand on bills on England declined, aber quid pro quo in Mansfield’s Kopf. Schließlich dann die Versichrung, that this [„]had the effect of diminishing the quantity of paper circulation“. Dieß ist eine Behauptung Mansfield’s. Er beweist nicht und sucht nicht einmal zu beweisen the fact that „the quantity of paper circulation“ was diminished. Gesezt es sei der Fall gewesen, so bleibt zu beweisen, was bewiesen werden soll. Er sollte dabei beweisen, daß der ungünstige Wechselkurs Effect des overissue. Jezt will er beweis, daß die contraction of issue effect des günstigen Wechselkurses! He proves neither the one nor the other.

 Zusatz und Kommentar von Marx.
Zweites (von Foster im Sinn des currency Principle interpretirtes Beispiel):

Mr. Colville, an Irish Bank Director, giebt Evidence;

he remembers perfectly well „that, in 1753,  Hervorhebung in der Quelle.
the circulation of paper in Dublin from the private bankers was so general and extensive
, that in receiving 1000l. there was not 10l. in gold at that time …  Hervorhebung in der Quelle.
Exchange was near 3% above par;
the consequence was, that the bankers of Dublin, of whom there were as many as at present, if not more, were in competition with one another to send their specie over to London, and to get back bills at 4% above par, bringing in a clear profit to that extent. The consequence of this shewed itself in the succeeding year: all the banks failed except Messrs. Latouche’s house, and Sir W. Newcomen’s, and these 2 banks paid off their entire paper.  Hervorhebung in der Quelle.
There followed a total annihilation of Bank paper in Ireland at that time
 … the consequences were,  Hervorhebung in der Quelle.
that exchange fell 2 or 3% under par, and the whole circulation of Ireland was turned into gold;
but the result was, that multitudes of people were ruined: the convulsion was exceedingly severe; many tenants threw up their lands, and there was no person connected with the 3 Southern provinces of Ireland that did not suffer severely.“ (174, 175)

 Kommentar von Marx.
Der Wechselkurs ist gegen Ireland um 3%. Die Bankers, die auf geringer Goldunterlage viele Notes ausgegeben, schicken ihr Ge(?)ld nach England, to deal in exchanges. Doch wahrscheinlich run on the Banks, die ihre Noten nicht in Gold zahlen konnten. Bankrott derselben. Papercirculation durch diese |51 Creditkrise weggefegt. Unterdeß exchange turned, 2% in favour of Ireland. Turned, theils in Folge der remittance of funds nach England, theils in Folge der Krise, indem die Bankers etc durch ihren Bankrutt wipe off their debt to England. Natürlich, da die Papercirkulation discreditirt, wird sie durch Goldcirculation ersetzt. Der günstige Wechselkurs mochte einiges Gold von England herüber bringen; die Masse desselben kam jedenfalls aus hoards, die während der Papiercirkulation „unsichtbar“ wurden.

 Kommentar von Marx.
Aber Herr Foster schließt daraus, daß die contraction des circulating medium den Exchange turned! Und sehr schön die annihilation der paper currency eine contraction des circulating medium zu nennen!

 Hervorhebung in der Quelle.
the limitation of the circulating medium
,  Zusatz von Marx.
ruft er triumphierend,
 Hervorhebung in der Quelle.
is the specific remedy for an unfavourable exchange
. (177)

VI Chapter. Application of the Remedy in Ireland.

Das Select Committee, Report, p. 15, sagt:

„Your committee do, in express terms, declare their clear opinion, that it is incumbent on the Directors of the B. o. Ireland, and their indispensable duty, to limit their paper, at all times of an unfavourable exchange, during the continuance of the restriction, exactly on the same principle as they would and must have done in case the restriction did not exist, and that all the evils of an high and fluctuating exchange must be imputable to them if they fail to do so.“ (180)

The Bank of Ireland does not possess a control over the circulating medium of the country. (182)

Schlägt vor that the Bank of Ireland were to pay their notes in B.o.E. notes, or, which is the same thing, in bills on England at par, when the exchange is 18. (183) Lord King proposed dieß in the H. o. Lords, that the B. o. Ireland obliged to pay their paper in notes of the B.o.E. Dieß adopted in principle by the select Committee. (184)

The demand for discounts is not the criterion for which they should regulate their issues. (190)

Appendix. N. VII. p. 208.

A Calculation to show why the Exchange should be about 1% higher in London than in Dublin, and why the Exchange in Dublin should be considered as the true Exchange.

A) pays Exchange 114£ Irish for bill in Dublin on London for £100 British . (Exchange here paid = £14 p.c. Irish) Es sind hier 114£ Irish = 100£ English.

Die gekaufte bill runs 21 days sight, or 30 date, which are deemed equivalent. A pays ready money for the bill, and does not receive payment for it for a month, making a loss of interest of about 10s. for A. When the bill becomes due, B. the agent of A purchases a bill in London at 115£ and remits it to A who does not receive the money for another month, by which he loses a month’s interest = 10s. Ausser den 14l. Exchange, zahlt er also 1£ an verlornem Interest. Er zahlt also in fact für die bill £115 (Irish) für 100£ English. B in London pays 100£ English for a bill in Dublin of 115£ Irish. He pays die 100£ English down; the bill has 30 days to run, he loses a month’s interest = 10sh. His agent in Dublin buys a bill on London, and remits it to him in return, at the Exchange of 14; ready money is paid for the bill, paid after month, loses one month’s interest = 10s. Er hat 115£ Irish gezahlt für 100£ St. Aber 1£ in Zins, welcher abgeht. The real value of the bill in Dublin in Irish money = £114 p. 100£ (English)

Charles Lyell: Principles of Geology; or, the Modern Changes of the Earth and Its Inhabitants Considered as Illustrative of Geology. 7. Ed., Entirely Rev. London 1847.
Icon dass Zitate symbolisiert

Ch. Lyell. Principles of Geology. 7th ed. London 1847.

Würde z.B. ein Bewohner des County von Sussex von seinem Lokalstandpunkt raisonniren: Es ist der Entwicklungsgang des Menschen von in der See gelegnem Land immer mehr sich nach dem Flachland\Fest[land] zu retiriren (z.B. Brighton lag früher in der See, es liegt jezt weiter rückwärts auf dem festen Land), (p. 303, 304), so könnt er zum Beweis hierfür nicht nur eine Masse data an der Ostküste (etc) Englands finden sondern die Reise über den Globus machen, um dasselbe fact (z.B. an der Küste von Bretagne (France), adriatischem Meer etc[)]  Marx schrieb erst „nachzuweisen“ und ersetzte es durch „constatiren“. Er strich dabei nur den Wortteil „weisen“ , ließ aber den Wortteil „nach“ stehen.
nachzuweisen zu
constatiren. (Die Thatsache: entweder, wie bei Brighton, Land in See verwandelt und dann derselbe Ort neu erbaut weiter ab ins Land hinein, oder frühre See in Land verwandelt, und daher die Stadt (wie häufig am Podelta) etc tiefer ins Land hineingeschoben, d.h. weiter entfernt von ihrer ursprünglichen Lage an der See[)].|


  • Inhaltsverzeichnis von Friedrich Engels
  • Heft II. 1869
  • The Daily News, 20. Mai 1869
    • Notiz
      • Kaufmannsrechnung. (Continuatio)
      • John Leslie Foster, (of Lincoln’s Inn): An Essay on the Principle of Commercial Exchanges. London. 1804.
      • Ch. Lyell. Principles of Geology. 7th ed. London 1847.
      • Otto Hausner: Vergleichende Statistik von Europa (Lemberg. 1865) II. Band.
      • Michael Thomas Sadler. M.P.: Ireland; its Evils and their Remedies. 2nd ed. London. 1829