August 25, 1866. N. 1200.

The Economist, 25. August 1866. S. 993/994.
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Overend, Gurney and Co. (limited.)

Nach dem Report der liquidators: even with the call (den sie noch nicht gemacht) they only propose 5 months after the failure of the Co. to pay its creditors a first dividend of 5s. in the £. Do not hint when the creditors are to have the remaining 15s. Die Liabilities of the estate theils those of creditors for money lent to the Co. und diese cannot be recovered from any 3d party; zweitens liabilities on acceptances and bills rediscounted by the Co.; davon part at least to be recovered from the parties to whom these acceptances were given, and from the parties whose names are on the bills. The account runs:

to be repaid to the Co. in part at least. £.
To Creditors on bills payable 200,000
in respect of bills rediscounted 1,050,000
Not to be repaid to the Co.
Unsecured creditors 3,728,000
Creditors whose securities are insufficient 250,000
Gesammtliabilities 5,228,000, mit interest
since 18. May.

Against this the liquidators will have on 1 October immediately applicable:

Cash 600,000£.
By call of 10l. a share 1,000,000
Deficit. 3,500,000 against immediate liabilities.

The Economist, 25. August 1866. S. 995/996.
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Is it better that the Banking reserve of a Country be kept in Single Bank or distributed between several banks.

In England and France, the banking reserve is kept by a single bank. Country Bankers as a rule, only keep the minimum of cash sufficient for their daily wants; their reserves, properly so called, i.e. their extraordinary fund for extraordinary occasions, is held in Consols, Exchequerbills, money at the bill brokers, and other like modes. London Bankers add to these a credit at the Banking department of [the Bank of] England. But these so-called reserves are not money. They are but means of getting cash. The only reserve of real cash against the banking liabilities of the country |96 is the reserve in the banking department of the B.o.E. Just so in France. Its reserve both against  The Economist: currency
liabilities and note liabilities is the Bullion the B. o. France holds.

In America the main reserve of the Banks is not specie, but greenbacks. The Bank Accounts of the 59 New York City Banks (Associated Banks) for the week ending with the commencement of business on June 23, 1866, were:

Loans and Discounts. Specie dollars. Circulation. (dollars) Net Deposit dollars. Legal tenders. dollars.
248,436,808 dollars. 8,504,096 26,585,934 201,969,288 80,840,518.

The banks themselves have a small circulation, but as it amounts to only 1/9 of the total liability, we can easily suppose it forfeited to the Gvt., and sufficient sum struck off both sides of the account. The entire reserve would then be, as almost all of it is now, kept against the banking liability. The general result of the 59 Banks:

Deposits 40,393,856l. St.

£45,710,934 liabilities
Circulation. 5,317,078l. St.

Specie 1,700,818l. St.
Gvt. legal tender paper 16,168,102l. St.
17,868,920l., das ist 17,868,920

or more than 35% of the liabilities; a very satisfactory account if compared mit der insignificant proportion which the reserve in the banking departments bears to the total liabilities not of the B.o.E. only, but of this country. The reserve is distributed about equally between all the banks; those who have the greatest liabilities have the largest reserve, and umgekehrt. Here is an example of many banks, each of which keeps its own reserve.

A single bank, overtopping and overpowering all others, feels that its credit is too good to be questioned. The B.o.E. and the B. o. France know that happen what may they are sure to be in good credit. But when a considerable number of banks keep the reserve of a country, each feels that its position depends on its own prudence. If it does not keep a reserve which will meet the demands upon it, when those demands arise, it will fail.

Again, a number of banks are much more likely to be independent of State control than a single bank. A single predominant bank is always the banker of the Gvt. It is connected with it by relations the most intimate. It receives its taxes, advances its loans, gets to be called the national bank. The credit of the nation and the stability of Gvt. come to be borne up with its reputation, and in a time of difficulty the State must come to the aid of the bank. It will suspend an Act of 1844 or make an Act of 1819; it will authorise a suspension of cash payments; authorise everything necessary to enable the bank to continue its operations and do the business of the Gvt. Ist nicht the case mit any ordinary bank. It is not the basis of national credit, and could not be treated as if it was so.

The Economist, 25. August 1866. S. 1001/1002.
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Indian News. (Money Market.)

Calcutta July 6. No fresh failures. Distrust continues very great. Discounts not obtained without difficulty. Business generally very restricted.

Madras. 13 July. The Bank of Madras rates for accommodation reduced 1%. Now 9% for advances on Gvt securities, 10% on 3 months private bills. No transactions reported. In fact business of all kinds suspended. Our principal exchange banks have decided upon reducing the currency of Indian document and other bills from 6 months’ to 4 months’ sight, from and after January 1, 1867.

The Economist, 25. August 1866. S. 1002–1004.
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Money Market Movement.

    Bank o. E. 22 August.
  • Circulation: decrease of £436,301; ditto decrease of Priv. Securities 336,159.
  • Increase: Private Deposits 638,194, Bullion 621,264; Reserve 979,239.

Discount Market. notes and gold sent in from the provinces at a period when, almost invariably, owing to harvest operations, withdrawn to meet the additional circulation exacted by so many diffused payments of coin.

Railways: Much disappointment in the declaration of dividends experienced, hence considerable variations in prices, besonders speculators.

Failure: Younghusband and Co, Australian Trade.

July 13, 1867. N. 1246

The Economist, 13. Juli 1867. S. 781–783.
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Effect of Trades Unions upon Wages and Prices.

System of Trades Unions would in all probability raise wages. Supply is not the mere quantity of an article in the market for the moment. We must take into account the desires and needs of the suppliers. Great Western stock was, and, indeed, still is, above what figures show to be its fair value, because it was „well held“; that is, its proprietors had no need to sell at once, and could afford to take the chance of future improvement. Rice z.B. falls of off mit same supply und demand. In fact, some great holders of rice have large bills to meet, and so to clear his liabilities, he was forced to sell at a sacrifice. This mental element in „supply“ the most obvious fact about the moneymarket for months. Many good stocks und shares have been at an absurd discount, because the proprietors were very anxious to sell, either to pay off liabilities incurred, or because, having suffered much by bad shares, they wished to be „out of those things“ at any cost.

By accumulated funds and an organised concert, trades unions enable the working classes to remain unemployed if they choose; während der agricultural labourer, who has not a shilling beforehand, and who acts as an atom, cannot remain out of work or out of the poorhouse for a week. Abzuziehn the constant cost of the Trades’ Union und the occasional loss by strikes. But the expense of strikes is occasional, while the benefit of being a better seller is constant, and a very heavy cost in machinery and management will not seem too much to those who have watched in other markets how powerless weak sellers are, and how sure the price of the commodity is to go down when a large dealer has liabilities which he cannot meet unless he sells. The lock out by the masters is the plain and obvious reply to the strike by the men. The whole is a rough sort of bargaining, and the party which can hold out longest wins.

Labour has a law by which it is propagated; capital a law by which it is accumulated. Capitalists can by no combination force wages lower than the rate at which labourers choose to marry and have children. Labourers can by no combination force profits beyond a rate at which monied people think it worth while to go into business. But between these limits and at every particular instant, wages and profits are determined by a sort of wholesale „higgling of the market.“ As to wages, the chance is that a sudden and simultaneous introduction of a combination system among labourers in all trades would have a tendency to raise wages. As a rule, a new force favourable to one party to a bargain will help him to make a better bargain. Would such a general rise of wages raise, or tend to raise prices (of commodities)? Obviously not. A cause which operates generally upon, and equally upon, the cost of production of all articles, cannot affect the exchangeable value of money. A considerable disturbance might and would be caused. Articles into which the cost of hand labour entered largely would rise, and those into which the cost of such labour entered little, but the profit of fixed capital entered much, would fall in comparison. Aber dieß would altogether differ from a general augmentation of all prices. The average remains as it was.

Wenn aber Trades Union introduced into one single trade, and that only, und die profits of capital hier only upon a level mit other trades, der capitalist will withdraw capital as soon as he begins to get less. Mit fixed capital geht das nicht (buildings und machinery cannot be transferred from one trade to another.) Aber das floating capital can be transferred. The most profitable trades borrow most. Je mehr a trade becomes less profitable, less inclined to borrow money to carry it on. In dem particular trade daher, mit rise of wages, the price of the special article must be forced up, or capital will withdraw from the trade. Whether the price can be forced up or not, depends on the taste  Zusatz von Marx.
of the public. In an article of prime necessity probably it could. In luxury articles an addition to the price causes a diminution of the demand, and can only be obtained by a diminution of the supply; and if the supply is to fall off, labour as well as capital, must leave the trade, and labour will not leave any trade till it is driven hence by bad wages. Also: Wages rise, and force up prices; then the demand slackens, and prices fall; then, in consequence of the fall of prices, wages go down. The |151 effect of Trades Unions upon such a trade is to cause disastrous fluctuations. In the case of articles of subsistence, their price will not at once fall, because the buyers must have them; but the labourers being more highly remunerated than in other trades, labour will flock thither; an extra quantity will be produced, and so both prices and labour will fall again.  Kommentar von Marx.
⦗Ass! More capital will be attracted, wenn the prices rise; daher more labour can be employed. Die workmen verwahren mehr necessities. Und in den luxury branches capital und labour withdrawn. In other words: The distribution of production changes.⦘

By the agency of a common cause operating upon all employments, wages may rise by a reduction of profits, and yet prices be unaltered. Aber Union etc may occur at a time when the trade is exceptionally profitable, and the capitalist gets more than the common profit. The tendency to the equalisation of profits is a very powerful tendency in all business, perhaps the strongest single tendency. But still it is only a tendency. Water tends to find its level, but still much water is always higher than other water, and on that account is in motion to descend to the usual level. Just so the profit in particular trades may, even for considerable periods, be higher than in other trades, though a perpetually acting cause tends to bring about an average and common equality. If a Trade Union should be introduced into a trade at a period of unusually elevated profits, it might raise wages without raising profits. Profits being higher than usual, capital would  Zusatz von Marx.
(auch ohne Unions)
come in and compete for that sort of labour  Zusatz von Marx.
, and so its price would have risen. Rise will not be permanent, except the labourer was before earning less than the common rate of wages. If the Trades Union makes him earn more, other labour will come into the trade, und the rate of wages go down to the common level. Nevertheless, in such a case, the operation of Trades’ Union, even in a single trade, may be (and often has been) to raise wages without raising prices.

The Economist, 13. Juli 1867. S. 784/785.
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The  Diesen und andere Parlamentsberichte zur Hungersnot von 1866 im indischen Orissa exzerpierte Marx ungefähr im Sommer 1868 in „Heft 3. 1868“ der „Hefte zur Agrikultur“ (MEGA² IV/18. S. 670–676).
blue book on the Orissa Famine

Orissa, a British Province, not 3 days’ steam from Bengal, and not 6 from Arracan, population of 3 mill. mit plenty of money, lost 1/4 of its numbers from sheer starvation. County isolated. Its resources in grain sufficient for ordinary years, but its isolation, preventing exports, prevented also the accumulation of stores. It was useless to grow more than a neighbourhood could eat in a year, for if an extra quantity was grown the money value of the new harvest proportionately declined. This money value of extreme value to the farmer, as he had to pay his rent in cash, which he gets only by the sale of his grain within a very limited area. Each farmer, therefore, grew what he and his dependents needed, plus a very small surplus value to non[-]agricultural persons, and plus a store adequate to his own support for a few months. At the same time, the labouring class of Orissa – the class without any land – was for India unusually large, probably 1/4 or 1/3 of the whole population. They were prosperous, the Ooreyahs, as they are called, occupying in Bengal just the position of Auvergnats in France, emigrating readily, and finding in the cities preferential employ as servants of almost all descriptions. Thrifty up to the Auvergnat point, 3 × more than Scotch cottiers, but, living on monthly wages, they of course store up nothing except cash. Harvest of 1864 bad, of 1865 totally failed. They had plenty of money but nothing to eat. To the last, the peasant proprietors managed to exist, each man hoarding some little store, and refusing to part with it at any price whatever.

The remedy for these dangers to increase irrigation, so as to prevent drought, the great Indian evil, which we have intensified by incessant felling of the forests, and to develop communication. Until roads are made the people will never store their grain to any great extent, for if they do they can never hope to sell it. Each township grows enough for itself, and a man with a 1000 bags of rice which he cannot move is just as poor as the man with only one – indeed poorer, for he has spent |152 labour on unprofitable works. This has repeatedly occurred in parts of India, notably in the Punjab, where the people, after an enormous harvest, have been unable to pay their rent. Nobody in the neighbourhood wanted their grain, and carriage to a distance was impossible, till it was in one instance at least officially reported that the wheat in the Punjab would feed the people for 3 years, and that there was consequently very much distress. Irrigation, railways, und besonders auch canals wanted.

The Economist 13. Juli 1867. S. 785/786.
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Workhouse Reports.  Zusatz von Marx.
(Communal (self) Government.)

 Kommentar von Marx.
Diese Scheisse wichtig, weil sie wieder zeigt, wie impossible local Gvt. in our state of things.

Two thick Blue Books (1867) containing a history of the official inspection of the last 10 years. Every workhouse in London visited yearly or oftener during that period. The inspectors have noted down in the visitors’ books their exact impressions of every workhouse.  Zusammenfassung von Marx.
Und doch existirt die größte Scheisse ruhig fort.
At the very time when „the Amateur Casual“ of the Pall Mall Gazette visited the Lambeth workhouse, Mr. Farnall certified that the wards provided there for the homeless poor were „good and sufficient“. Unangenehmer Posten der des Poor Law Inspector. If he finds too much fault, he sets the guardians against him, and exposes himself to the reproach of caring more for the poor than the ratepayers. To show the time required for the introduction of any scheme case of an idiot in Bermondsey workhouse: January 1861, his name is mentioned, and an amelioration of his treatment suggested. Met by a sneer in the answer of the medical officer of the workhouse. In Dec., 1862, the idiot again under discussion, recommended he should be removed into some proper institution. This recommendation brought before the guardians in a letter from the Poor Law Board; guardians reply that there is no reason for such a thing. Dec. 1864, same recommendation repeated by the Lunacy Commissioner, and again brought to notice of guardians. Febr. 1865, the medical officer of the workhouse reports that the idiot is better, where he is, but that, in deference to the Poor Law Board, his case shall be considered. In March 1865 same report (der Inspectors), the same suggestion, the same reply. Then, after 3 years’ delay, and 4 unsuccessful attempts on the part of the Poor Law Board, idiot removed to an asylum in November 1865.

Corresponding mit Stepney guardians wegen Bau of new workhouse. Letter from the Poor Law Board in September 1857. No answer. Second letter in December. Answer: Aber sie machen neue difficulty. Letter des Poor Law Board May 1858, repeated August. Answer: they are still considering the subject. Some more letters from the Poor Law Board; they send endlich their minutes about building a new workhouse. 20 October 1859, member gave notice that he would move for a committee to take the matter into consideration. 27 October motion was adjourned to 3d November. 3d Nov. no proceeding taken. 9 Febr. another motion substituted. 16 Febr. resolved to postpone the matter till election of the new board of guardians. 23 Feb. a motion put to take immediate action, and having thus been deliberated upon for 4 months, was lost. Mr. Farnall writes that defects of the Rotherhithe workhouse pointed out again and again „the guardians have for many years been earnestly solicited to build a new workhouse, but wholly without effect; still I hope, almost against hope, that they will see the real necessity which positively exists for such a step.“ Marylebone Workhouse – disgrace to such a wealthy parish. |153 In Bloomsbury, the inspector found one of the classes in school, being instructed by a monitor without breeches. In the same workhouse, the privies were so covered with filth, Febr. 1858, that Mr. Farnall could not go in to visit them[:] „the pavement, for at least 3 feet, was thus obstructed. One of the directors accompanied me, and will report this fact to the directors. I never remember seeing a more filthy display.“ Yet, in Dec. 1858, „the water closet which, at my last visit, was in a most filthy state, was equally dirty today“. In the Hackney workhouse, the bedrooms teem with bugs, and the damp and stench from the water-closets was most offensive. In two other workhouse workhouses, St. James’s, Westminster, and St. Martin-in-the-Fields, the want of basins for washing led to the use of chamber utensils for that purpose. In Lambeth „the drains are frequently in a defective state; the deadhouse is immediately under the flooring of a sickward for females, and the medical officer says: „The smell is sometimes terribly offensive; it is most atrocious.“ The dispenser says: „It is impossible for me to do the duties which involve upon me.“ Sample of the complaints made by inmates, and calling upon themselves the elaborate attention from the Poor Law Board, verbatim from the Blue Book: „Sain Margret and Sain John Workhouse Kensentone. Sur i humbeley big yore parding but i think upon outer no that we poor sols bees in danger of our lifes the luntik keeo (Keogh) been an cutt poor Metcafs throt (throat) the too doctors sowd him up an the poor feler ant ded yet i hope he wont be lett stop hear. i bees told that won of the womann lunatiks bees very denjors to. i bees your humbel servant. P. Hennks.“ Throughout the blue books (jedes 450 pages) too much deference is shown to the sovereign guardians, slight examples of good management are praised almost too fervently, while graver errors are passed by with a word of implied censure. These guardians think themselves important and indispensable, are conscious of their authority, and only neglect their duty; remember that they have powers when threatened with interference, and forget why they were charged with those powers when there is need for their exercise.

The Economist, 13. Juli 1867. S. 788.
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Paris 10 July. Bankruptcy of Pollet, the banker of  The Economist: Roubain

Liabilities 16,000,000 fcs, assets: 20,000,000f. Just condemned by the Court of Lille to 5 years imprisonment  Zusatz von Marx.
and 5000 3000 fcs.  Zusatz von Marx.
for swindling. His House enjoyed the highest reputation, so that an eminent banker declared: „any person inquiring about its credit would have been as much laughed at as if asked if the Rothschilds were solvent.“ Yet for 30 years in a most embarrassed position, and for a great many of them only existed by putting into circulation bills of exchange drawn by clerks, servants, women etc. Amongst the victims: Bank of France for 1,080,000 fcs, Lecuver et Co, bankers, for 1,650,000f. Fould et Co, for 1,650,000 fcs. Mallet et Co, for 300f. 300,000f. and several other bankers for sums of 420,000f., 350,000f. 240,000f. and so on.

Failure of W. Brunner et Co, New York, Manchester, et Bradford. Liabilities about 200,000l. Fairchild and Fanshaw Fanshawe , merchants in the American trade, have made composition with their creditors of 10s. in the pound.


  • 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