July 14, 1866. N. 1194.

State of the Money Market. (Still 10%)

The Decrease in the active circulation very satisfactory at this time of the year, when the payments for the dividends are going out … As long as the „danger“ signal is kept up, unusual reserves by way of protection will be kept … In ordinary times, all sound country bankers will hold proportionate reserves in London against their liabilities, but not a sixpence more than is wanted in banknotes in the country … Still efflux of gold. We drive the money away by maintaining the rate of interest at a point which makes everybody believe that there is some great calamity about to supervene which the exceptional rate is to prevent.

The Crisis of 1866.

The circumstances of 1862–3 rendered that difficulty natural. Concession of limited liability. Bad cos. formed. There was a great set towards the establishment of new banks and discount cos. The great English Banks were then paying enormous dividends, and we wrote on 24. October 1863:

With discount companies the effect, though different, was even more pernicious. A great many new cos. were founded, and they came into competition with Overend, G. et Co. Overends, an old firm quite insolvent, and propping up its great reputation, by high rates of interest, could not let the money go, and the new Cos. wanted to make the money come. Between the two the rate of interest given by intermediate borrowers so to speak – by borrowers who insisted |84 to lend again – was forced up to an unreasonable amount, and yet the rate of profit on actual undertakings, the earning fund, the productive capacity of the country, remained where it was. The specific danger of the time was the accumulation of loanable capital in the hands of those who did not know how to use it because the profits of active capital were at the moment so small, and yet, partly from the competition of banks and partly from the foundation of discount and finance cos, the rate of interest given by these intermediate holders was beyond all precedent excessive and dangerous. Greater folly than has been committed by banks and discount cos during the two last years has never be been known before.

The True Mode in whic which a shareholder should watch its Co.

A shareholder only sees the half-year’s accounts – in too many cases carefully prepared to meet his eye, and concealing under delicate ambiguities and well-contrived words exactly what it most concerns him to know. Attendance at a halfyearly public meeting mostly useless. A public debate on a co’s matter has rarely, if ever, done it good; and a single shareholder can scarcely generate a debate at such a meeting if he desires it. The directors in office never wish it, and while the co. is prosperous, can always prevent it. After the Co. is ruined, of course there are discussions enough.

If the principal directors who start a Co. are leaving it as if in terror; if they who know its secrets are leaving its ranks; if they are selling their shares and diminishing their responsibility – there is something wrong. If the directors are selling their shares, other welljudging people sell theirs too. The whole Co. is weeded of its rich capitalists, and left to women, clerks, and vagrants.

Movement of the Money Market.

Bk.o.E.
• Decrease in Circulation £.598,413, Private securities 1,710,620 und Reserve (total of l.3,800,640) £.264,440.
• Increase in Private Deposits £.1,532,578 und Bullion: £.883,479.

June 1. 1867. N. 1240.

Taxation in the U. States. (apart from Customs)

Nach dem „Commercial Chronicle“ (New York) the assessment per head of the New York State more than double the rate paid in England, nämlich. $9.95 per head in Great Britain und Ireland. und$22.75 in New York State.

Emigration from Ireland.  Zusatz von Marx. Schließen (State of Agriculture.)

Mr. Robertson, an agricultural expert, commissioned to report on the state of some Irish counties[,] states: „There is a very large area of grassland, which is in a very impoverished condition. The land is grazed year after year; young cattle are reared, and dairy produce sold; but nothing is returned to the soil. It will not be long before the Irish farmer experiences that this system will end in the total exhaustion of the land.“ Lord Dufferin himself, in his book, just published on Irish Emigration and the Tenure of Land in Ireland, says; in reference to the conversion of tillage land into pasture, p. 298: „It is attributable chiefly to the difficulty of getting labourers. The Irish tenant has to take his capital out of the farm in place of putting it into it.“ in Brief an Times (May 1867) says: „What I feel is that the nation is being weakened by the withdrawal, year after year, of so many of the young, strong, and intelligent. It is no longer a question solely of landlord and tenant, for this constant drain is a national loss.“