MEGAdigital. Online-Angebot der historisch-kritischen Gesamtausgabe von Karl Marx und Friedrich Engels

24. March 1866. N. 1178.

Should the Bank of England allow interest on Deposits?

The Private Deposits of the B.o.E. nearly the same as 10 years ago: 1856: £12,107,000. 1866: £12,478,000. Dagegen immense growth der private deposits der London and Joint Stock Banks. Z.B. Deposits of London and Westminster Bank in 1856: £11,170,000. 1866: £19,224,000.

According to our system, the B.o.E. is the „Bankers Bank“; the holder of the sole unused store of money of the nation.

Credit means confidence in pecuniary payments. Yet, after the suspension of cashpayments, the B.o.E. for 20 years did not perform its pecuniary promises; and no one thought the worse of it. … The Bank holds a great many public funds, money of corporate and quasicorporate bodies which can hardly go anywhere else … The bankers deposits are between 2,500,000l. und 4,000,000, and probably are generally over 3,000,000. Those deposits are most plentiful when they are most required. Most deposits at a time of difficulty and disaster tend to ebb away; the influence of distrust and the influence of high profits combine to attract them. But the bankers’ deposits at the B.o.E. augments at a time of panic, they rose to over £6,000,000 in 1859, and in any little difficulty of credit their rise is as sure as the rise of the tide at London bridge.

Emile Pereire’s evidence. Continuatio.

E. Pereire. The B. o. England puts its discount at 7%, and we have it at 3. It is commonly said: „Since our discount is at 3, we will send all our money to England to supply it at 7.“ But it is not necessary in order to do that to send money at England. Bills of exchange on London can be taken and kept in portfolio: in that way the discount of 7% is secured without any displacing of money, for … gold cannot leave France unless the exchange on London accounts to 25f. 371/2c, in which case the banker who might have taken London paper to get 7%, would have had besides the profit coming from the rise in exchange. But in such circumstances a rise of exchange is not to be feared. The bills of exchange of all Europe are in great part centralised at Paris, and thence they go in different directions: consequently one can find at Paris as much paper on London as one wants, especially when France, for the balance of her own exchanges, is not the debtor of England. There is now (7 Nov. 1865) a difference of 2% between the discount rate of B.o.F. and of B.o.E. According to the prevailing prejudices speculators might profit by the difference of 2% to empty the till of the B.o.F. and fill that of the B.o.E. But that is not done. There goes not and cannot go a sovereign to England, because exchange is at 25f. 221/2c. It is impossible to send gold from here to London, and yet there is a difference of 2% in the rate of discount. Ask the first bill brokers at Paris, they will tell you that at this moment the sovereign sterling in short paper on London is bought at Paris at 25f. 221/2c., and in paper of 3 months at 25f. 271/2c., less the discount of 7%. A small profit is, therefore, made on this difference of discount paper is taken at a |37 higher price when it is long in order to obtain a higher discount. What is true for 2%, is true for 3 or 9, not for 10 or 20% … If 3% at B.o.F., 7% at B.o.E., there would be a difference of 4, could not be continued long. How would it be corrected? By gold leaving the B.o.F. or returning to the B.o.E.?

If, during a month or two that state of things were to exist … there would be such an advantage in taking at Paris paper on London, that none or much less would be presented to the B. o. England, which would permit that Bank to reconstitute its stock of notes, by the falling due of bills in its portfolio; and thus the equilibrium prescribed to it by the bill of 1844 would be promptly re-established, without the least of the world producing on the till of the B. o. France a drain … a level is re-established without displacing capital by the single fact of the temporary retention at Paris of the bills of exchange of the Continent.

M. d’Eichthal: What does Pereire tell us? That if the discount be 3% at Paris, and 7% at London, bankers will hasten at Paris, the great market of exchanges, to take bills on London: they will sell their securities, and receive in exchange paper on Paris with which they will buy paper on London. But suppose the contrary case. All the bills that I have on London I send to London, and I realise my capital to buy bills on Paris. The effect of the difference of the rate of interest, when it is higher at London than at Paris, is then to keep out of England, by the attraction of high interest, bills of exchange which but for that would go to be negociated negotiated at London by the Bank of England. What does the Bank of England do in raising its rate of discount? It compels all bills which would be presented to it to be discounted, to remain on the continent, and that renders the money less rare in England, and dearer in France. You are mutually dependent, and in that state of things the exchange necessarily rises. No, it is not necessary to send coin abroad: but when capital becomes rare and dear amongst our neighbours, if you do not detain it in France, they will come to take it; or in other terms, the debt which England has contracted remains in your hands, and it is your capital which pays the goods England has bought. You have no cotton to buy in Ejypt. Granted; but the debt of England comes into France, and you give credit to England.

E. Pereire. We lend to England. We give her credit for the amount of our productions, for those which we have exported; but we do not lend her money. There is consequently no danger for our metallic reserves.

d’Eichthal: rechtzeitige Herabsetzung des Zinsfusses nöthig, sonst nicht operations reduced at right time etc“ etc.

E. Pereire. You have too much experience of banking business to maintain that when English commerce is a debtor to foreign countries for very large sums, an elevation of the exchange on London is to be feared at Paris. The contrary takes place. If England owes a great deal for the cotton, wool, wheat and cattle she imports, that must augment the number of the bills of exchange drawn on her. Those bills arriving at Paris in larger quantities must bring down the exchange, and not make it rise. Now the fall of exchange prevents the sending away of gold.

M. Pastré: The exchange is not at all a determining element. In India the interest is 14 to 15%. The exchange indicates a very trifling profit; but as the discount is at 14 and 15%, masses not of gold, but of silver, are sent to India.

E. Pereire. It is not for the purpose of making investments that silver is sent to India, but principally for the balances in purchases of raw materials. When purchases of cotton have to be made in India or Ejypt, it is not a difference of 1 or 2% in the interest on a bill of exchange which will stop such an operation. When you buy cotton at Alexandria, the complete operation is effected in 3 months, – that time being necessary for sending, receiving, realising the affair. Difference of interest of 2% p.a. is 1/2% für 3 months, does not prevent the operation. You and all the other merchants of Marseilles undertake the operation only if you have a margin of from 12 to 15%. When you take the chance of losing or gaining 10, 15, 20%, no 1/2% of a temporary augmentation of interest will stop you. The warnings (durch raising der Bankrate) referred to, and which it is alleged must be given to prevent certain operations, warn no one: 1/2% cannot be an obstacle to an operation of this kind. But it embarrasses all other operations of commerce and industry.

Pastré: Nicht für die gewöhnlichen Operations, für France alone. It consumes only 30–35000 bales of cotton of Ejypt. Even if 30 000 or 35 000 other bales were taken for Switzerland, it would still matter little.

E. Pereire: The rate of interest does not indicate the abundance or rarity of money. England buys with her productions all the silver necessary für her commerce with India: she even manages to supply you with the coin you send to Ejypt: she is the great purveyor of the precious metals. She pays for her cotton from India and Ejypt with the silver drawn from the country in which that metal is produced, Mexico f.i., paying for it with her productions. At this moment, on all our coasts of the Channel and the Atlantic, she is buying up our grain because she wants it and we have too much: she is carrying off all the fresh vegetables, all the poultry, all the oxen that we can supply, so that England is our debtor. You cannot change that: the exchange cannot modify that situation. We are sellers to England.|

Pereire: The extraordinary investments (in bills on England, when high discount at London) rarely exceed 60 or 80 Mill. fcs. The resources employed are not all taken from the Bk. o. France, and besides, as regards England, France only exports gold there very exceptionally. The B.o.E. raises its discount, not because it has no coin, but because it is not permitted to issue enough notes. The void is made up by delays, by credit. It is filled up from Paris, Brussels, Lyons, everywhere, because there is always everywhere disposable capital. The contents of the till of the B.o.F. are not 1/100 of the disposable capital in the county. … The consequence of a different rate of interest between France and England is that on the Continent – at Paris, Amsterdam, Berlin, Antwerp, Brussels, and in Switzerland, bankers retain English bills of exchange which bring in 7%, and greatly prefer taking them to accepting paper on Paris at 4 or 5. But as the demand for bills on London at 7% augments the demands for bills at a long date, the price rises, and the difference disappears – the level is re-established. … The bills of exchange on London, which the elevation of interest keeps naturally on the continent, not being presented for discount at the B. o. England, the demand for rates declines, and the equilibrium is re-established.

The Apprehended mercantile convulsion in America

Kommentar von Marx.
Schließen (Der English clown, der diesen Artikel schreibt, heißt Bonamy Price. (Bon ami Price!)

»A commercial convulsion is apprehended in America. Kommentar von Marx.
Schließen (nicht in England, where it came to pass in a week’s time!) Whether it comes to pass, or whether it is averted, in either case alike it furnishes a striking illustration of the mischievousness of that form of tax which consists in levying money by means of an inconvertible paper currency.[«]

Professional and Amateur Farmers.

We all recollect that Mr. Mechi, when most loudly proclaiming the profitable character of his own farming, could never be induced, either by taunt or persuasion, to publish his balance sheet.

Money Market.

Discountmarket tending to lower rates. The reduction of the rate in Paris to 31/2% is also indicative of growing ease.

Heavy decline in the value of the shares of financial cos this week has carried alarm amongst holders. Commencing in a speculative movement, it was accelerated by rumours carelessly or maliciously repeated, and ended in a condition of the markets rarely seen save in times of panic. Happily, the state of the money market is such that a run upon any of the institutions alluded to is improbable etc.

Railways and other shares.

Banking shares have, in common with the shares of the financial and discount cos., suffered somewhat, though in a much smaller degree. Indian guaranteed stocks have to some extent, participated in the general decline, and are lower. Financial shares have been rudely shaken by a rapid succession of sales, for which those most interested and best informed are totally unable to account. The shares of the International Financial Society declined rapidly from 1/4 prem. to 3/4 discount on rumours, completely unfounded, of an impending call. Ditto decline in the shares of the General Credit Co. It is remarkable that the shares of these 2 cos. should have been singled out for bear operations, as it would be difficult to injure their position or to succeed in any object affecting them, except so far as the loss to individual shareholders sacrificing their shares in the general alarm might be concerned. The shares of both cos. are 20£, and the deposits in the hands of the two are hardly worth naming. On the shares of the International Financial 5l. is paid, on those of the General Credit 4£, Hudson’s Bay shares, fully paid up, have also shared the general depreciation, and in several other cos. the decline in value very considerable.

Closing quotations this evening (24 March): International Financial Society 4/16 to 7/16 discount. General Credit, par to 1/8 premium. Credit Mobilier and Financier Foncier 11/4 to 11/2 premium, show a fall of 1l. in the day. Overend, Gurney et Co at 13/4 prem., are also lower. Imperial Mercantile, at 3/4 to 1/2 discount, also lower. Some few orders from shareholders at a distance have tended to the further decline of most of these shares, but Zusatz von Marx.
Schließen ! the state of public opinion and feelings in town appears to be more satisfactory.|

9 February, 1867. N. 1224.

Emigration from Ireland. (Communicated by T. E. Cliffe Leslie)

Von Marx bereits zitiert in „Draft of a Speech on the ‚Fenian Question‘ for the Meeting of the General Council of the International Working Men’s Association, November 26, 1867“ (MEGA² I/21. S. 19.9–11).
Schließen After a loss of 2/5 of its population in 21 years, throughout most of the island the rate of wages is now only 1s. a day; a shilling does not go farther than 6d. did 21 years ago, and the man who earns it might earn 4 or 5sh. or more in America.

What is there in the diminution of the supply of labour to increase the demand? What is there in the loss of labour by employers in Ireland, and its gains gain by employers in America, to equalise the means of payment of both? Irish farmers, f.e. are not enriched by the increasing difficulty of getting hired labour at the very time that their children are leaving them; and the wages fund has been actually diminished in many localities by the disappearance of employers accordingly. The entire organisation of rural districts has been broken up, country towns have lost their customers, the shopkeeper has been driven to follow the farmer and the labourer, and the demand for labour in both country and town has been lessened, not increased, in many cases, by emigration.

That The the rise of wages produced by emigration ⦗so far as this has been done⦘ is no proof of prosperity, appears in the fact that it is in the poorest, and not in the most prosperous, parts of the island, that some kinds of skilled labour are now dearest, while other kinds are not forthcoming at all. The wages of masons and carpenters are higher in the West than in Antrim or Down, though the workmen are worse, and their services little in demand; building is dearer in Mayo, though stone and lime are abundant, than in parts of England where those materials are scarce. It is dearer, not because there is a great deal of building, but because there is very little; because there is a very limited demand for builders, and, therefore, a very limited supply of them; because few can pay the price of skilled labour; and it is, therefore, seldom employed, and hardly to be had. It is only by emptying the labour market, and depriving all but a few rich people of the assistance of labour, that emigration can raise wages considerably, or put a stop to itself, so long as people to emigrate remain. Farmers are not made wealthier or more enterprising by it; it does not create manufactures; on the contrary, it at once increases the difficulty of production, and diminishes the home demand for all articles produced.

The Duke of Rutland’s Estates Estate

gives, wie sein Steward unterrichtet, nur 54,000£ jährliche Rente.

The Manufacturing Districts.

Wolverhampton. The leading houses are receiving a few more orders from large home buyers, and there are also orders coming, but not to a large extent, from the East Indies, Brazil, and the Un. States, though far short of sufficient to keep the works fully employed. The hardware trades are considerably depressed.