May 19, 1866. N. 1186.

The Economist, 19. Mai 1866. S. 581–583.
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The Panic.

This panic more than any other we remember – a Credit Panic. The promises we have given to pay gold on demand could not be performed by many thousand times as much gold as there is in the country. And when this is the case our whole mercantile system must always be easily injured by causes comparatively slight … Last Friday (11 May) no one knew who was sound and who was unsound … the lenders of money were suspected of misusing it. The panic of 1866 was a credit panic, not a capital nor a bullion panic.

Charter Act (1844) suspended. Just before the suspension of the Act no bank was – considering the nature of its liabilities – in so much danger as the B. o. England. It had a reserve of only 3,000,000l. in town and country, and from all parts of the country demands on that reserve were pouring in every hour. Country bankers felt they must either get more notes and more sovereigns, or give up their business; London bankers were pressed upon not only by their country customers, but by a kind of oscillating run which now went to this bank and now to that. The B. o. England could not have increased its reserve by letting its bills „run off“; for they would not have „run off“, but have accumulated unpaid in its bill case. … On Friday the London bankers deposits in the B.o.E. amounted to a larger sum than its reserve. These bankers would not – and some of them used plainly such language – allow the B.o.E. to go on while they failed. Nothing is so imitative as panic, and if 1 or 2 large bankers had drawn their balances, all the rest would have followed like sheep, and the banking department of the B.o.E. must have been left bare … In figures its (the banking department’s of the B.o.E.) reserve looks larger than that of its competitors, but only because it includes that of its competitors. It was at least as badly off as they, for it existed on their sufferance. … No considerable amounts of Consols can be sold at moments when the Bank is for such purposes the only lender, and when it refuses to lend. The jobbers in stock are men of means, but not masters of secret hoards of ready money. It is not a question of price but a question of cash. In ordinary times if stocks come forward in unusual quantities for sale, he can (the Jobber) with ease borrow on it, or dispose of other securities to purchase it. But in a panic these „other“ securities are probably unavailable, and if the B.o.E. hesitate to lend, the other resources of the market are very scanty. If the Bank were, in a panic, absolutely to refuse to lend on Consols, they would not be saleable for cash.

Except in particular branches of speculative trade – as cotton, or pig iron, or the ship-dealing and owning fostered by Barned’s – English commerce was hardly ever sounder Zusatz von Marx.

Brief des Russell und Gladstone 11 May (suspension der Bankacte). Danach interest heraufgesezt zu 10%.|


The Economist, 19. Mai 1866. S. 588/589.
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The Suspension of the Bankact. (Von Bonamy Price im Economist)

Die Banks und many mercantile firms drew only out notes to protect themselves. Aber wahrscheinlich, daß wie in 1847, not a single note in excess of the regulations laid down by the law will have been issued. … Der Effect des letter (der suspension) a real gain. The run was checked, the deposits were left alone; but it was achieved by a process of the imagination; not a single additional note was set to work … The Bank Act of 1844 neither made nor healed the crisis; it had nothing to do with the matter; but the application of a delusion respecting it did do good, and so far the mechanical has an advantage over the discretionary issue of banknotes. It makes it possible to use its abolition, and the substitution of the discretionary method in its place, as an instrument supposed to be capable of working miracles in a panic.

In the hour of panic no one thinks of the gold as necessary for the B.o.E. note. Before 1844, the banknote was accounted as safe, as solid, as it is now. Since 1819 no man has preferred a sovereign to a B.o.E. note on grounds of safety. In 1825, when the severest run was made against the Bank, banknotes were demanded, and the Bank, in its banking department, was saved from the stoppage solely by the accidental discovery, not of bullion, but of a million of unburnt banknotes.

The Economist, 19. Mai 1866. S. 591.
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In der French Correspondence des Economist.

Gladstone solle der B. o. England pay back the debt which the Gvt owes to it. By so doing it would relieve itself from the interest of 3% on that debt, which it pays the Bank; and that relief would be as effective as buying up Consols in the market. The Bank, on its part, would profit, by having the money as capital to work with. It has at present no capital, and that is a great anomaly in an establishment which directs the market and regulates the rate of commercial interest.

The Economist, 19. Mai 1866. S. 586.
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Figures relating to Panic of 1847, 1857 and 1866.

A. 1847. 1847

Week ending

Notes in Circulation. £. Public Deposits. Other Deposits £.

Public Securities

Other Securities £ Bullion. £. Reserve of Notes. £. Minimum Rate of Discount
Oct. 2 19,577,278 9,329,057£. 7,961,767 11,661,340 21,259,929 8,565,307 3,409,300 51/2
9 19,503,372 9,414,713 7,713,896 11,126,340 21,437,443 8,408,750 3,321,700 dto
16 20,263,004 5,496,883 8,674,584 11,088,877 18,963,326 8,430,700 2,630,115 dto
23 21,265,188 4,766,394 8,580,509 10,899,707 19,467,128 8,312,691 1,547,270 8
30 21,764,085 4,696,032 8,911,442 10,613,607 20,409,897 8,438,874 1,176,740 dto
Nov. 6 21,318,118 4,991,313 8,804,395 10,598,607 19,919,915 8,729,551 2,030,085 dto
Nov. 13 20,931,680 5,991,765 8,312,171 10,583,607 19,560,468 9,258,520 2,797,710 dto
20 20,179,074 7,219,802 7,866,482 10,633,607 18,791,117 10,016,957 4,228,095 7
27 19,860,654 7,729,572 8,238,554 10,946,594 18,531,810 10,532,943 4,986,590 dto
Dec. 4 19,668,782 7,799,527 8,441,289 10,946,594 18,070,409 10,032,599 5,583,020 6
11 19,182,179 8,229,759 8,437,376 10,946,594 17,630,931 11,426,176 6,448,780 dto
18 18,615,039 8,763,497 8,606,976 10,998,214 17,198,338 11,991,376 7,551,140 dto
25 18,630,093 9,235,978 8,243,203 10,065,267 16,979,060 12,236,526 7,786,180 5


B. 1857.

Week ending

Notes in Circulation £ Public Deposits £ Other Deposits £

Public Securities £

Other Securities £ Bullion £ Reserve of Notes £ Minimum Rate of Disct. %
Oct. 3 20,824,714 8,243,214 10,002,282 10,593,607 21,835,843 10,662,692 4,606,040 51/2%
10 20,862,690 8,502,326 9,667,123 10,560,607 22,398,877 10,109,943 4,024,400 6
17 21,052,315 4,833,021 11,132,431 10,254,541 20,539,565 9,524,478 3,217,185 7
24 20,585,707 4,861,740 11,263,986 10,254,541 20,404,597 9,369,794 3,485,840 8
31 21,184,276 5,160,918 11,489,979 10,254,541 22,194,320 8,731,553 2,258,275 dto
Nov. 7 21,079,942 4,871,944 11,910,670 10,120,104 22,628,251 8,497,780 2,155,315 9
14 21,036,430 5,314,659 12,935,344 9,444,828 26,113,453 7,170,508 957,710 10
21 22,235,954 5,483,881 13,959,165 6,407,134 30,299,270 6,484,096 1,148,185 dto
28 22,156,143 5,788,998 14,951,516 5,807,494 31,350,717 7,263,672 1,918,840 dto
Dec. 5 21,943,691 6,072,267 14,436,186 5,441,647 31,191,386 7,356,467 2,268,340 dto
12 20,953,992 6,648,062 14,440,724 5,434,022 30,111,185 8,069,489 3,900,485 dto
19 20,537,314 6,944,352 15,077,428 5,446,131 29,264,940 9,450,855 5,757,175 dto
26 20,133,558 7,428,807 15,151,818 5,492,756 28,088,186 10,753,281 7,426,670 8
C. 1866
April 25 22,588,244 4,417,147 13,294,641 10,694,254 18,507,854 13,855,776 5,844,205 6
May 2 23,309,819 4,922,990 13,587,965 10,694,254 20,380,395 13,509,140 4,839,250 7
9 22,806,660 5,781,827 13,515,537 10,894,254 20,844,217 13,156,140 4,950,325 9
16 26,650,817 5,936,219 18,620,672 10,837,056 30,943,259 12,323,805 730,830 10
The Economist, 19. Mai 1866. S. 589/590.
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A Game Preserver’s Ukase.

The following curious notice to his tenants has been issued by Lord Denbigh to his tenants: „As complaints have been made to me of the damage done by rabbits in the cultivated parts of my property, and I am anxious to meet the wishes of my tenants as far as possible, I have arranged with my keeper to destroy the rabbits as far as he can on the arable land; and in order to insure this being attended to satisfactorily, I have given orders that 2 appointed rabbit-catchers shall be at the disposition of the tenants from Febr. 15 till the beginning of the breeding season on the following terms: The tenants shall have full leave to ferret all the hedgerows adjoining arable land on their farms (excepting covert hedges) as often as they like during that period, using neither dog nor gun, but only purse nets over the burrows. All the rabbits so caught by each tenant shall be kept by him, he paying the wages of the rabbit catcher so long as he employs him. No tenant is to ferret without being accompanied by the rabbit-catcher. In consideration of this concession I expect my tenants will preserve strictly for me all other game. As frequent complaints have been made of self-hunting dogs being seen on the property, I have given orders to my keepers to destroy all such found hunting etc.“ etc. Denbigh. Newnham Paddocks, April, 1866.

That which most vitally affects the farmer, the question of whether he is himself to consume the crops he had paid for to Lord Denbigh, or whether Lord Denbigh is to consume those crops by |59 means of his game and rabbits, is to be arranged, not with the tenant, but behind his back with his lordship’s keeper! It is proverbially said, you cannot have your cake and eat it, but Lord Denbigh and his fellow game-preservers have found out the way of doing so. They first take rent for the use of their land, and then they consume for their own profit and amusement the crops raised on the land by means of their tenant’s capital.

At the Aberdeenshire election now pending says Mr. Fordyce, the farmer’s candidate: „From 1820 the Game Laws have gone on increasing until their number was now almost legion.“

The Economist, 19. Mai 1866. S. 592–595.
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Money Market.

Comparative view.
At corresponding dates with week ended May 19. 1856 1863 1864 1865 1866
Circulation, includirte bank post bills 20,324,077£ 21,268,315l. 21,313,352l. 21,769,022l. 26,650,817l.
Public Deposits 2,991,956 7,610,278 7,566,661 7,566,661 5,936,219
Other Deposits 12,351,097 13,983,654 12,962,402 13,489,291 18,620,672
Gvt securities 12,479,416 11,151,395 10,785,267 10,984,441 10,837,056
Other securities 16,710,812 20,236,420 20,973,429 20,027,201 30,943,259
Reserve of notes and coin 4,739,925 8,496,341 7,097,911 8,366,913 1,202,810
Coin and bullion 9,801,865 14,529,451 13,267,446 15,023,913 12,323,805
Bankrate of discount 6 und 7% 4% 8% 41/2 % 10%
Price of Consols 915/8 921/4 911/2 903/8 871/2
Average price of Wheat 68s. 9d. 46s. 9d. 39s. 3d 40s. 11d. 45s. 9d.
Exchange on Paris. short. 25 35 421/2 25 20 271/2 25 30 40 25 171/2 25 25 0 121/2
Amsterdam (ditto) 11 181/2 19 11 151/2 16 11 171/2 18 11 171/2 181/2 11 13 15
Hamburg (3 months) 13 103/4 111/4 13 71/2 8 13 91/4 93/4 13 91/2 10 13 10 101/2

Discount market. Notwithstanding the remarkable pressure upon its resources, the Bank has not yet infringed the limit of the Bank Act … There are inquiries on account of foreign investors in first class 6 months paper of unexceptionable character of 83/4 to 81/2%.

Railway shares. Slight recovery in the prices, but business is of a very limited character.

Financial shares: The depression continued during the early part of the week, and reached extreme limits. Unreasoning haste on the part of the holders of shares contributed no less than the numerous sales of speculators for the fall to the fearful sacrifice |60 of property that ensued. It was no longer necessary to pay for shares. Holders became so anxious to be quit of their liability that they offered various, and, in some cases, large amounts to those who would consent to assume their places on the sharelists of the co. in which they were, or fancied themselves involved. The shares of Overend, Gurney etc Co with 15l. paid, were offered at 18l. discount, or a bonus of 3l. for taking the shares. Imperial Mercantile at 10% discount, with 10l. paid. Credit Mobilier and Foncier at 5 disc., with 5l. paid. London Financial, with 20l. paid, at 15 and 16l. discount. General Credit and Finance shares, on which a call of 2l. had most unexpectedly been announced, were offered at 5s. per share, as if the whole capital, or nearly the whole capital, of the co. had been entirely lost. The settlement on the 15. inst., by causing the closing of numerous accounts, served to put an end to many of these wholesale sacrifices of property. Within the past 2 days there is less despondency, and less disposition to sell so freely as previously, a considerable improvement is hence to be noted in very many cases. Credit Mobilier and Foncier have recovered to 25/8 disc.; General Credit to 21/2 disc.; London Financial to 13 disc. The shares of Overend, Gurney and Co. are still dull at 18 to 16 disc. The shares of the International Financial Society have held firm in consequence of the exceptional position taken by the co. in offering to discount its own acceptances at Bank rate.

Bankshares: extremely sensitive. Considerable fluctuation in Agra and Masterman’s Bank, Bank of London, and Alliance Bank .

  • Messrs Penny et Co, Liverpool, East India Merchants. Liabilities 104,000l. Assets: 20,000l.
  • Drafts of the Oriental Commercial Bank (Limit.) were returned unpaid on 17 inst. Liab. 350,000l.
  • Draft of the New Zealand Banking Corporation have been returned. Co[.] formed in 1863, paid-up capital 60,000l. the last dividend declared 10% p.a.
  • Fernie Brothers and Co., Liverpool, merchants and shipowners, have arranged for liquidation.
  • Bank of Turkey, 17 inst., resolved to wind up.
  • Shrimpton, contractor, 15 inst. meeting of creditors. Liab. 220,656l. Assets at their nominal value: 387,070l.
  • British and Foreign Mining Financial Co (Lim.) winding up; ditto „London and Provincial Starch Co.[“] Limit.
  • Failure of Hallett, Ommaney Ommanney et Co, Private bankers and navy agents, Westminster announced on 15. inst. Liabilities von 250 to 300,000£.
  • Imperial Mercantile Credit Association (limited) stopped payment on 12 inst.|
  • 61
  • Failure of Mr. Charles Bedell, wine merchant, Markline, liab. about 100,000l.
  • Northfield Iron and Steel Co. (lim.) winding up; ditto „Hop and Malt Exchange and Warehouse Co[“] (lim).
  • Commercial Bank Corporation of India and the East, suspension of payments.
The Economist, 19. Mai 1866. S. 600/601.
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Liverpool. May 17. Cotton Market.

The cotton market, which had previously declined to a comparatively low point, has not been so much affected by the monetary crisis as might have been expected.

Manchester. 17 May. The market opened with greater steadiness this week after the recent panic. A small hand-to-mouth business in yarns for manufacturers, who hold only their bare requirements. In cloths, for current general trade, the demand has almost ceased.

Leeds: A collapse of orders and sales of goods for Germany.

April 6. 1867. N. 1232.

The Economist, 6. April 1867. S. 387.
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Parliamentary Return in Ireland.

Purely agricultural holdings: 608,864. Davon 174,989 valued at £4 or under, 190,877 over 4l. and under 10l., 123,784 at 10l. and under 20l., 83,259 at 20l. and under 50l., 35,595 at 50l. or upwards. Tenements in the 798 towns of Ireland: 392 towns (nach Census von 1861) mit population under 500, 280 mit population von 500 to 2000, 82 mit 2000 to 5000, 26 mit 5000 to 10,000, 18 towns mit more than 10,000 inhabitants. The number of town tenements is 272,381, viz. 156,973 valued at 4l. or under, 85,189 at over 4l., und under 20l., 30,219 at 20l. und upwards.

The Economist, 6. April 1867. S. 394/395.
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Manufacturing Towns. Iron und Coals less active.

Manchester. 4 April: Stagnant market, prices continue to droop. The larger imports of cotton have caused prices to recede, and buyers in this market, fearing still lower rates in consequence, keep aloof. Stocks, therefore, continue to increase, placing producers in a worse position than before. With many it is a necessity to realise, at very unremunerative rates. Further failures amongst manufacturers are reported. We cannot see well how makers, with limited or no means, can go on much longer at the losing rates now current.|


  • London. 1868.
  • 1866 „The Economist“ (Jahrgang 1866) vol. XXIV.
  • The Social Economist, 1. Oktober 1868
  • „The Economist“ (Jahrgang 1866) (Fortsetzung)
  • Jahrgang 1867.
  • Register der obigen Auszüge aus dem Economist für 1866 und 1867.
  • The „Money Market Review“. Jahrgang 1866.
  • The Money Market Review. Jahrgang 1867.
  • Register Money Market Review Jahrgänge 1866 und 1867