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)


  • 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