24 February 1866. N. 1174.

The Economist, 24. Februar 1866. S. 217.
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Reduction in Bankrate from 8 to 7%.

Eastern demand for silver suspended, if not exhausted. Gold retained und foreign gold received.

The Economist, 24. Februar 1866. S. 229.
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Corresponding Week ended 24 February.

Die Bankdaten beziehn sich auf B. o. England.

1856. 1863 1864 1865 1865
£. £. £. £. £.
Circulation of Notes incl. Bank Post Bills 19,254,614 19,715,828 20,207,871 20,101,978 20,973,521
Public Deposits 4,141,551 7,901,658 8,153,601 6,665,364 5,048,777
Other Deposits. 14,762,364 13,367,153 12,406 673 14,140,885 12,591,493
Gvt. Securities. 11,946,006 11,043,079 11,174,584 11,023,211 9,915,483
Other Securities. 19,185,177 18,569,000 19,233,243 18,790,280 18,020,480
Reserves of notes and coin. 6,508,872 10,147,041 8,794,497 9,590,713 8,260,305
Coin and Bullion. 10,757,392 14,614,096 13,819,412 14,600,233 13,822,935
Bank rate of discount. 6 and 7% 4% 6% 5% 7%
Price of Consols 913/8 921/2 911/8 891/4 875/8
Average Price of wheat 69s. 2d. 46s. 6d. 41s. 1d. 38s. 4d. 45s. 9d.
Exchange of Paris (short.) 25. 25. 50 25 171/2 221/2 25 25 35 25 121/2 20 25 221/2 321/2
Amsterdam (ditto) 11 181/2 191/2 11 51/2 16 11 171/2 18 11 16 161/2 11 18 19
Hamburg (3 months) 13 111/2 113/4 13 71/4 71/2 13 8 81/2 13 73/4 81/4 13 101/4 103/4
The Economist, 24. Februar 1866. S. 223–225.
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James’ James Rothschild’s Examination continued.

J. Rothschild. „We are much less advanced than the English with respect to credit. Twenty years ago you could not have travelled in France with a banknote – no one would have received it, or change it. to time you must leave the task of developing credit.[“]

It has been said very truly that it is the great speculations made at Liverpool in cotton which are the cause of the present crisis, and that they made the B.o.E. raise its discount – to force holders of cotton to sell.

The Bank of England leads all the other banks of Europe. When money is seen to be rare in England, people open their eyes, not only at Paris, but at St. Petersburg and everywhere. The situation is quite different to ours; the measures taken by the B. o. France do not produce the same effect abroad as those taken by the B.o.E.

The President. In France the limit in the issue of notes is left to the appreciation of the Bank, to its prudence and experience.

The Economist, 24. Februar 1866. S. 222/223.
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Mr. Michell’s  Titel von Marx notiert in „Heft 3. 1868“ der „Hefte zur Agrikultur“ (MEGA² IV/18. S. 587.17), einem Exzerptheft 1878 (IISG, MEN, Sign. B 148) und im Notizbuch 1878/1879 (IISG, MEN, Sign. B 152).
Report on English Trade with Russia

The duty on Tea formed a principal item in the Russian revenue, and the trade was a strict monopoly at Kiachta. In 1861 the monopoly was abolished and legal importation has increased 42%.

We have ample evidence of a retrograde movement in Russian agriculture, and in essential national industries, such as linen, hemp, and leather, whilst the important tallowtrade has fallen to nearly half its former amount. Theils wegen cattle plague, but principally from the diversion of capital and labour |24 durch die high protective duties für künstliche Industrien, cotton etc.

Mr. Michell estimates the total importation of manufactured articles into Russia in 1864 at 2,930,000l. paying a duty of 645,333l., about 22% on the Russian valuation, but at least 50% ad valorem. This throws the greater part of the import trade into the hands of the smuggler; and the operations of the latter are on a proportionate scale. Differential duties in favour of importation by the land frontier also favour smuggling. Houses are established for the systematic smuggling of goods into Russia at a premium of 35%; and under this system British trade mit Russia, except as regards bulky articles, such as iron, machinery and coals, is rapidly dwindling into a contraband trade; whilst the trade over the frontier has facilitated the introduction of imitations of English goods with fraudulent trades marks. The interests of the Russian ports and Russian mercantile marine are also sacrificed by these differential duties, and the rate of freights for Russian exportations is materially increased.

As the result, Mr. Michell calculates that comparing 1859 with 1863, our trade with Russia has decreased 11%.

The Economist, 24. Februar 1866. S. 221/222.
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The New Finance and Discount Companies.

With the increased numbers of money lenders created by the new joint stock banks, discount houses, and finance cos, the number of money borrowers has in some degree corresponded to the supply.

While premiums were in the ascendant, and were the leading consideration with the subscribers to these new constitutions created specially for the purpose of lending money, the subsequent struggle for place and dividends were little cared for by promoters and allottees.

Zwei ganz verschiedne sorts of business undertaken by the new cos. The discounter of bills of exchange requires a knowledge of men and their means; the finance manager, of securities and their value. The discounter has to look to the return of his principal at a specified moment; the finance manager to the intrinsic worth of the securities he holds, their market value in fact or in prospect, and their consequent negotiability. The discounter may take money on deposit for short periods with safety; the finance Co. can only borrow for long periods with any degree of safety.

Aus dem Report der Joint Stock Discount Co. folgt, daß ihre embarrassments und call of 5l. p. share, weil der manager Wilkinson took to financing. Railway contractors making railways, as is now commonly the case, for payment in shares or „Lloyds bonds“, offered these securities to Mr. Wilkinson for loans, no doubt at very tempting rates of interest; and the money borrowed at comparatively low rates, and for short intervals, thus became „locked up“ in securities for which there is no market and cannot be converted. The lenders on deposit must be paid. Hence call for the shareholders. The Joint Stock Discount Co. had taken on deposit on 31 Dec. last, nearly 31/2 millions, against which were held securities to the amount of 41/2 millions; but a large portion of the latter is locked up on securities by railway contractors.

Railway contractors’ securities of the class they now take in payment for their work,  Marx’ Worte. The Economist: cannot be accepted by any money lender with anything approaching common prudence
sind in der That keine securities
. Hence the London Financial Association compelled to admit recently some degree of embarrassment on account of advances of this nature.|


Session after session we have seen bills passed for millions upon millions of outlay upon railways, and we have seen, too, the railways themselves started into existence without shares or any market shape. Now we begin to see that the new money lenders have been their chief support, and that the high terms bid by railway contractors have not only induced the new Discount and Finance Cos to incur injudicious risks, but have contributed to no small extent to the high value of money in this country, for the last 2 years.

A far as the official figures go, there is nothing very alarming in the position of our new Discount and Finance Cos.

December 31, 1865.
Limited Cos.



Paid up.


Net Profits.


Last dividend rate % per annum.
International Financial 3,000,000 750,000 91,014, for the year 10%
Joint Stock Discount 2,000,000 (call of 5£ p. share now made.) 8,000,000 19,595 für the 1/2 year nil
General Credit 5,000,000 1,000,000 202,632 for the year 15%
Consolidated Discount 1,000,000 200,000 1,384 for the 1/2 year nil
London Financial 2,000,000 600,000 40,422 for the 1/2 yr. 10%
Imperial Mercantile Credit. 5,000,000 500,000 91,862 für the 1/2 year 20%.
Average Dividend. Surplus Profits after last Dividend. £.
1863 1864 1865
International Financial. 15% 10% 10% 59,473
Joint Stock Discount. 5 7 3 56,169
General Credit 10 15 15 20,072
Consolidates Consolidated Discount 0 0 0 594
London Financial 15 171/2 121/2 160,108
Imperial Merc. Credit ... 141/4 20 94,169.
December 31. 1865
Liability to the Public. (Deposits etc) Assets
£. In Hand (as valued)
Calls in Reserve
Internat. Financial 682,833 1,549,445 2,250,000
Joint Stock Discount 3,461,290 4,349,407 1,200,000
General Credit 1,117,372 2,473,015 4,000,000
Consolidated Discount 1,862,797 1,941,685 800,000
London Financial 795,088 1,593,062 1,400,000
Imper. Merc. Credit 4,707,655 5,392,042 4,500,000
12,627,035 14,150,000 17,298,656
Total of Assets = 31,448,656.

The one point upon which these official figures convey no comparative information is the all important mode of valuation of the assets in hand. The International Financial and General Credit Cos. took the market prices of their securities as their rule for valuing their assets on 31 Dec. last; but the Joint Stock Discount Co. apparently valued their assets at the amount of money advanced on their security. Und da darunter viele securities of railway contractors, the official figures really afford no insight whatever into their real position.|


The Economist, 24. Februar 1866. S. 217–219.
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The Sound State of American Banking at Present.

»It is very generally believed, or feared, that there will be a sudden crisis – some collapse of credit in America.«  Kommentar von Marx.
Dieser englische Aberglauben sehr schön! Die Krise war unter ihren Füssen, zu London – sie sahen sie aber nur jenseits des Atlantic. Und der friendly „Economist“ sucht sie zu beschwichtigen durch Darstellung der Solidität des jetzigen amerikanischen Bankwesens!

»The Un. States Government stands in America in the same monetary position (vis-à-vis den banks) in which the B.o.E. stood here.[«] (vis-à-vis den country banks während der suspension of cash payments.) It has issued inconvertible paper, 90 Mill. l. St. in round numbers, for the present much depreciated as compared with gold. They are »legal tender«. If an American bank has enough of these notes, it will pay its way.

Before the civil war no national system. Each state had its own banking law. Annoyance of a currency so multifarious in a country where locomotion so constant and so distant. A Chicago note was at a discount at Washington, and a Delaware note was difficult to pass at Chicago. „Exchange“ dealings between the different states of the Union complex by the difference of currency. Chase provided a national uniform currency to replace the various States currencies.

The Act of Congress, to this purpose, interferes not only with the issue of currency, but with the trade of banking (d.h. securities for the deposits, not only for the notes). The Act permits no bank to be organised „with a less capital than 150,000 dollars, nor in a city whose population exceeds 50,000 persons with a less capital than 200,000 dollars“; though with the permission of the Secretary of the Treasury, a bank with a capital of no less than 50,000 dollars may be „organised in any place of which the population does not exceed 6,000 inhabitants.“ In the principal cities of the Union each bank must keep in lawful money 25% of its circulation and deposits, and banks in less important places 15%; and every bank is bound to carry 1/10 of its profits to the reserve fund before declaring a dividend, till that fund amounts to 20% of its capital stock etc. The aggregate circulation is limited to 60 Mill. l. St., and is divided amongst the banks according to the following singular clause: „The amount of such circulating notes to be furnished to each association shall be in proportion to its paid-up capital, as follows, and no more: To each association whose capital shall not exceed 500,000 dollars, 90% of such capital; to each association whose capital exceeds 500,000 dollars, but does not exceed 1 mill. dollars, 80% of such capital; to each association whose capital exceeds 1,000,000 dollars, but does not exceed 3 mill. dollars, 75% of such capital; to each association whose capital exceeds 3 millions dollars, 60% of such capital. And that 150,000,000 dollars of the entire amount of circulating notes authorised to be issued shall be apportioned to associations in the States, in the district of Columbia, and in the Territories, according to representative population, and the remainder shall be apportioned by the Secretary of the Treasury among associations formed in the several States, in the district of Columbia, and in the Territory, having due regard to the existing banking capital, resource, and business of such State, district, and territory.“ The whole |27 circulation is secured by the deposit of U. St. bonds with 10% margin. This deposit of U. St. bonds was of course, for the Finance minister, the primary point of the Act. Mr. Chase was sorely in want of money. The existing bank circulation was secured by state bonds; and it was of the first importance to him to replace it by a currency secured by Federal bonds. He thus got a loan for the national Exchequer out of funds before used by the State exchequers. At any other time such a proposal would have excited the old controversy of State right versus Federal right, and would most likely have been lost. In the civil war – Mr. Chase passed his Act.

Such an interference of Gvt. with country banking, or half such an interference, would have been impossible in England, but in a democratic country the inhabitants do not look on the Gvt. as something apart from themselves as we do, and do not feel humiliated by its interference; it is only themselves in another form enforcing what they think right, and so they do not mind it.

Chase coaxed the existing banks. He offered them tempting terms to become, instead of State banks under the old system, national banks under the new system. And all but an insignificant fraction have become so. „In about 21/2 years“, boasts Mr. McCulloch (finance minister under Johnson), „from the organisation of the first national bank, the whole system of banking under State laws has been superseded, and the people of the Un. St. have been provided with a circulation bearing upon it the seal of the Treasury department as a guaranty of its solvency.“

With the bold completeness which is its characteristic, the American gvt compels the publication of the most elaborate accounts by every bank in the Union, and the Comptroller of the currency publishes annually a report giving those accounts in detail for each banks, and a summary of them all. The following letzte Publication:

(dollar taken at 4sh.) £.
Capital Stock paid in 78,631,441
Surplus Fund 7,742,676
Notes in Circulation 34,264,380
Individual Deposits 99,195,962
United States Deposits 9,634,076
Dividends unpaid 986,211
Due to national banks 18,008,967
Due to other banks 4,877,236
Profits 6,470,145
Old Circulation outstanding issued by National banks while still State Banks: 11,953,795
Other items 188,810
Total 271,953,614
Loans and Discounts 97,062,805
Overdrafts 371,221
Real estate, furniture, and fixtures 2,940,656
Expense Account 907,905
Premiums paid 517,100
Remittances and other cash items 14,461,970
Due from national banks 17,995,796
Due from other banks 3,478,646
Un. States bonds deposited to secure circulation 54,526,840
Other U. St. bonds and securities 31,019,420
Bills of other banks 3,249,448
Specie 2,993,228
Other lawful money 38,618,872
Other items 3,809,702
Total 271,953,614 |

No banks in the world such amazing solidity.

Liabilities of the National American Banks to the Public.
Notes in Circulation (old and new) 46,218,175
Private Deposits 99,195,962
Public Deposits 9,634,076
Due to other banks 4,877,236
Against this they have in actual cash: £
Specie 2,993,228
Lawful money 38,618,872

Also über 25% ihrer liabilities. B.o.Fr. und B. o. England keep larger amount; am 15 Febr. (1866) B. o. France über 37% ihrer total liabilities, die B. o. England (am 14 Feb.) 343/4%. Aber diese reserves, besonders in England, are the banking reserves of the whole country. The amount of specie held in the tills of the London and provincial banks of this country is a trifle in proportion to the liabilities; it is not regulated by these liabilities; it is simply the ready money of the day. Um die reserve (metallic) der B.o.E. mit der der American Banks zu vergleichen, muß man sie im Verhältnis zu den total liabilities der English Banks betrachten. We do not know those liabilities. Aber 3 banks alone, London und Westminster, Union und London Joint Stock Bank haben 56 Mill. £. liabilities, während die der Bank of England nur 42 Mill. £. The American banks hold in mere cash 25% of their liabilities when thrown together; if the English banks were thrown together, we doubt if they would hold 5%.

Ferner, die securities der American banks:

Cash 41,612,100
Government security 85,546,260
Remittances and other cash items 14,461,970
Total 141,620,330
Liabilities but just over 160,000,000l.

That a bank should have 14/16 oder 7/8 of its liabilities either in Gvt. security or cash is to an Englishman perfectly astounding. An English Bank which holds 2/5 considers itself an example of caution, and many of the best banks in the country hold a proportion very much smaller.

The American banks are able to hold so large a reserve, and yet advance a large sum to their public because their capital is so enormous. An English bank does not consider it begins it its proper business till it begins to deal with the property of others; but an American bank lends mainly its own money, and so can keep almost all its customer’s money in hand and tangible. In round numbers the American national banks:

Advances: 97,500,000l. gegen A Capital of 78,631,441l. und Reservefund of 7,742,678l., Zusammen 86,374,119l.

No English bank lends only 14% of its own money.

 Zusammenfassender Kommentar von Marx.
Der wiseacre schließt aus diesem state der American Banks daß kein credit collapse in U. St., möglich, wie 1837 oder 1857, wenn the State Banks of America kept very small reserves and failed by wholesale.

If banking credit, sagt er, stands firm, no general failure of other credit is likely. Individual failures may happen there as here, but no wholesale bankruptcy of ordinary traders.|

January 12, 1867. N. 1220.

The Economist, 12. Januar 1867. S. 31/32.
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Foreign Trade.

The East India Company , the Russian Company , and the Turkey Company , in old times, divided much of our foreign trade between them. According to the then received doctrines, the scattered ships of unconnected traders had no business in distant foreign seas.|


The Economist, 12. Januar 1867. S. 33–35.
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Master and Servant.

A poor man who is accused of an offence cannot employ the same counsel, cannot have the same facilities of collecting evidence, cannot have his case put before the court as a rich man could. For these very reasons the law ought to favour the poor rather than the rich. It ought not to presume on the necessary disadvantages of a man’s position to impose fresh burdens upon him. It has done this in the case of master and servant. It has widened the gulf between capital and labour by attempting to give capital the command over labour. It has viewed the relation between employer and employed as if the first entered into a light civil contract, while the second bound himself by a penal bond. It has given the first a summary mode of redress, while it has thrown the second on his own resources. Summary punishments are the most effectual. Penalties which must be levied by civil process are comparatively seldom exacted, introduce doubt, delay, technical objections, increase costs and obstructs obstruct justice.

Many instances of the injustice, caused by this inequal legislation, may be found in a recent blue book bearing the same title as the article. Firstly, the servant who refuses to work is taken, mostly in handcuffs, before the magistrate. By the English system of criminal procedure, he cannot be heard in his own defence. The magistrate who tries him is generally a master. The law gives, besides, the magistrate no option. If the master presses for a conviction he is entitled to have it, and we read of a case in Scotland where a master refused to take a man back but insisted on his being imprisoned. The man pretended that the master had virtually broken the contract by putting him to work which he was not legally bound to do. This case does not stand alone. In the blue book … an instance of men being refused their wages on the usual pay-day, and yet being compelled to work by criminal proceedings. We have a peculiar case of men being discharged for refusing to work night and day, being then apprehended under a warrant, and, on an acquittal, being unable to recover damages either for their discharge or their false imprisonment. In some trades the master may discharge on a month’s notice, but the servant who leaves on a month’s notice, notice may be sent to prison. At certain steel works, „when a man is engaged, he is supplied with a code of rules, the notice to leave being 7 or 14 days’ notice.“ But the manager, instead of giving this notice to the men, „posts a notice on the wall to say that all those who belong to Unions are to leave at a certain date. The men want the same notice as he would require.“ In the Wolverhampton district it is the custom to enter into contract for a year, and the contract stipulates that the master may discharge his workmen at a month’s notice, but that the workmen must give 6 months’ notice. „A workman binds himself for 12 months to his employer“, says a witness from the Potteries, „and the employer undertakes to find him work for that period; but when the workmen sought to force from the employer the full amount of work, he never could obtain it, and the master could force from the workmen his 12 months’ employment.“ When the men know that there are some 10 000 prosecutors annually under the Master and the Servant Act, when they think that the magistrates before whom those cases are tried are mostly employers, when they see the justice of peace and the employer conferring in an ale house together before the trial, and returning to the ale house together after the trial, they may be excused for combining against their masters and the law which supports their masters.

The committee recommends that all cases should be publicly tried before two or more magistrates, or a stipendiary magistrate, the procedure to be by summons instead of warrant, the punishment fine instead of imprisonment.

The Economist, 12. Januar 1867. S. 35.
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A territorial Magnate.

Aus recently published number of the Royal Agricultural Society’s Journal, nämlich Prize Essay on the „Farming of Leicestershire“. Der essayist says: „That to the native excellence rather than to any pains bestowed on their (the pastures) improvement, is Leicestershire indebted for her surpassing fertility, and for the high rental – probably the highest of any county in the kingdom – received by her landowners.“ The Duke of Rutland’s estates extends to 1/16 of the whole county. The estate comprises 39,000 acres, of which about 1/2 is strong loam and clay (the pastures of surpassing natural fertility), of which the Vale of Belvoir, on the lias, forms the chief part, about 5000 acres beyond Leicester being composed of strong marl and gravel. The remaining half being about equally between white and red „creach“ (soil) upon the colite and marlstone formations. The farms vary from 50 to 750 acres; the more general size is from 200 to 400, the portions in grass and arable being about equal. All the ducal tenantry hold their farms from year to year. They have no formal agreement, but a sort of a ukase or „memorandum is printed on the backs of the rental receipts given when rent payments are made.“ This memorandum commences as follows: „Take notice – that the following are the conditions upon which you rent or hold the land in your occupation under His Grace the Duke of Rutland.“ Unter diesen provisions: „5) no trees growing on the premises will be permitted to be lopped or |117 in any wise injured. 6) On your quitting the premises all the manure will be considered as belonging thereto, and will not be suffered to be removed therefrom or allowed for. 7) the game and right of sporting on such lands is (common English would be ‚are‘) reserved to His Grace.“ It is also said the tenants „are further! protected by a liberal schedule of allowances, as tenant-right for purchased manure“, though how such a schedule can co-exist with the 6th condition, would puzzle the acumen of legal interpreters of the contract should any litigation arise thereupon. Kömmt hinzu the political influence such a territorial magnate can wield, by the agency of a subservient tenantry.

The Economist, 12. Januar 1867. S. 37.
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The National Debt.

Returns of the Revenue for year ending Sept. 30, 1866 was 68,460,142l., wovon 41,876,000£., almost 2/3 of the entire revenue, raised by Customs and Excise, fallen fast ganz auf beer, chicory, cocoa, coffee, corn, malt, sago, spirits, sugar, tapioca, tea, tobacco and wines. Those taxes act as a property tax of 15 to 20% on all that a poor workman has; 9,356,000l. stamps, affect especially all traders, from small shopkeeper to the merchant who draws bills, also bankrupts and litigants; 3,422,000l Assessed Taxes, not 1/12 of customs and excise, fall besonders auf die wealthy classes; 5,595,000l Property tax. The land pays hiervon ridiculously little; 4,365,000l. Postoffice; und 3,846,142l. von den Crownlands.


  • 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