# Jahrgang 1867.

## January 5, 1867. N. 1219.

### Proposals Made for sharing profits between Masters and Workmen

Notice issued by Fox, Head, et Co, of Newport Rolling Mills, Middlesborough-on-Tees (Oct. 1866), with a view to prevent further disputes with their workpeople. Diese works employ about 120 men, when in full activity. The principles:

1) To pay to all the men the full ordinary wages of the district for the several kinds of work, and for the number of hours usual in the district. 2) To prohibit any workman from belonging to any Trades Unions Union, and so long as he is employed at Newport. 3) the firm to have a first lien on the net profits of each year to the extent of 10% p.a. as compensation for interest and risk of capital. 4) The surplus of net profits (if any) beyond 10% per annum to be divided equally between the firm and the workmen – the payment to the workmen being calculated as an uniform percentage on the amount of actual earnings of each during the year, in order that the bonus to each man may be determined by his own skill etc. The bonus to be paid to workmen who may have worked for the firm even for part only of the year. 5) Arrangements to be made under the Amended Partnership Act of 1865 for enabling the men to invest their savings in the business at rates of interest depending on profits. 6) The full and absolute control of the business to remain with the firm; and the certificate of a public accountant to be final, and without appeal, as regards the profits and distributions of each year.

Many kinds of trade, and notably the iron trade, have cycles of good and bad years. For long periods a large concern has to be kept in motion at rates which just pay expenses and leave no profit at all. Then comes a spurt of demand, and large profits are made in a short time.

### Ownership of Landed Property in England.

The selling price of land is too light high to tempt the small capitalist, unless under special circumstances. In his view land does not pay. If he is to let it to a farmer, he cannot expect a return at the best of more than 3%, and if he is to cultivate it himself, he will have to furnish additional money, with great chance of getting no return at all. Under this persuasion he puts his savings in funds, railway shares, bonds, or mortgages etc[.] Daher is so little competition for moderate quantities of land, farms of 100 to 200 acres, only fit for cultivation. Wenn for building purposes etc, the small capitalist becomes an eager purchaser. Daher auch constant diminution of proprietors holding small quantities of land for purposes of cultivation. The price offered for them is too tempting to be declined. The free holder of 20 acres, who has supported himself and family in a state of great penury, by farming it himself, is offered for it 1000 to 1200l. which, if employed in trade, when added to what may be considered his salary, will double or triple his income. Again take the freeholder of a higher class, who, f.i., owns a farm of 100 acres, and has a capital besides of, say £1000 employed in its cultivation. His total income can hardly exceed 300l. p. annum, 150l. for rent, and 150l. for profit of capital. Bettered his position if he sells his farm for from 4,500 to 5000l., and withdraws the floating capital. He will then possess in money from 5,500 to 6000l., and, if experienced in agriculture, take a larger farm from a neighbouring estate, certainly double, and perhaps, his income. … The break between the labourer and the large farmer or his bailiff in where what are called improved districts, the South of Scotland f.i., is far too great.

## January 12, 1867. N. 1220.

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.|

### 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.

### 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 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.

## 19 January, 1867. N. 1221.

### The Danger of mixing up Acceptances and Deposits in the Banking Accounts.

Suppose the liabilities of a Bank, viz. deposits and acceptances together, have, at 31st Dec. 1866, fallen off, say 3,000,000l., as compared with June, 1866. The Bank may have shortened sail, and reduced its acceptances, or lost public confidence, so that public has reduced its deposits. While the accounts are put together no human being can tell which. The chairman of one bank has defended the combination of these distinct liabilities, upon the ground that it was not desirable, that the source of the bank’s profit should be revealed.

### „Government Notes“ by R. Slater.  Zusatz von Marx. Schließen (Mintnotes) (Bullion notes)

Hat gezeigt, in a pamphlet, December 1857, from actual commercial transactions reduced to the scale of one million, that gold entered only to about 3% of the whole, banknotes 8%, bills of exchanged exchange to 53%, cheques to 36% of the actual circulation. Let the Mint, or some public body, be the recipient of standard gold, and issue its certificates for its value at 3l. 17s. 101/2d. per oz. These certificates, or notes against bullion, will circulate over the whole of Europe, without the necessity of exporting bullion. But above all, that bullion will belong to the people in whom the capital of the country is really invested, will be distributed amongst them, and not be concentrated in the hands of the Bank.

## January 26, 1867. N. 1222.

### The State of the Money Market.

The natural position of this country is that of an exporter of bullion. We are the entrepôt between the mining countries and the monetary countries. The gold of Australia and California, in the main, comes first here, and hence is diffused over Europe and the world. Mere export of bullion daher not to be confounded with a foreign drain of the necessary bullion we require. A certain sum of the precious metals – more or less – is needful for the business of England, and when that sum is trenched upon, we must raise the rate of interest at once and quickly.|

118

Trade is very slack – slacker, perhaps, than ever, for people must go on for a long interval after a crisis to clear off existing obligations, ; it is not until the ante-crisis liabilities are effaced, that we can truly estimate the effects of such a year as the last. Now we have reached that stage. The demand for capital is falling still more short of the supply than before.

### Striking etc.

The men should consent to receive payment part in wages and part in profits – part as an advance in anticipation of profits, and part when the profits were actually realised; and that the wages or anticipated portion should be calculated at such a rate as to leave a balance in the hands of the employers to meet the workmen’s share of losses in case losses were incurred. In other words that the men, instead of receiving the whole of their share of the profits in advance, should receive only a large instalment of that share. The only difficulty – the workmen could scarcely ever be persuaded to submit to that preliminary reduction in their fixed wages. If they desire to have larger profits at the year’s end, they must be content with smaller advances on the faith of those profits during the course of the year.

### The Farming of Leicestershire. Grass Land.

Leicestershire is the land of the Grazier; its grass land is the great source of its profit. Some of this grass land is, as says Mr. Moscrop, the author of the Prize Essay of the Royal Agricultural Society, of surpassing fertility, and a large part of its 2nd and 3d class pasture land is very valuable for the dairy and the rearing of store stock. Land produced produces but little compared with its capacity for production. About 1/2 the area of the country, containing 522,240 acres, is under permanent grass. Was von den grass lands of Leicestershire, and their management, gilt von den great grass districts of the Midland counties, already the source of so much of our meat supply.

The climate being mild and equable, the rainfall moderate though usually sufficient, and there being no bogs or mountains, the Leicestershire farmer occupies a position more favourable than the average of the English counties. The Eastern division contains the greater portion of the rich grazing land – consisting mainly of clay loams – varying from stiff to friable. Many of the farms in this division have no arable land, others having from 1/6 to 1/3 in arable. Dairying is pursued chiefly on the small farms in the northern portion, while the great bulk of this division is used for fattening cattle and sheep. It is to the natural richness of the pastures „rather than to any extraordinary pains bestowed on their improvement that Leicestershire is indebted for her surpassing fertility“. The rents received by the landowners are the highest of any county in the kingdom. Though within the last 20 years – since Repeal of the Cornlaws – much draining has been done, much land yet requires that first and preliminary improvement.

Farms range from 50 to 80 acres, the more general sizes being from 100 to 300. There are, however, many small holdings ranging from 20 to 70 acres. The smaller farms are usually occupied by dairy farmers, as their chief product is the wellknown Stilton Cheese. Trees und hedge rows bilden a serious incumbrance of the land. The grazing farms are nearly devoid of farm-buildings. Yet these farms let at 3l. and upwards per acre. Such land will „fatten a bullock, weighing when fat from 50 to 60 imperial stones, and one sheep over 20 lbs per quarter, during the summer months, and in winter will keep from 1 to 11/2 sheep per acre. Freedom from the care and complexity of arable cultivation, cultivation renders these purely grazing farms attractive. Yet they require much attention to render them profitable. Care must be taken to prevent the grass getting too long, and yet the pasture must never be bare, or rapid fattening becomes impossible. Consequently cattle in certain seasons must be bought at whatever cost; and, again, when grass falls short, some of them must be sold even at a disadvantage, or the grass must be supplemented by a liberal use of cake. Once a year the pasture must be grazed bare, or the rough places mown with the scythe. The more general practice to „crop them off during the winter months with Scotch or Welsh runts, termed ‚gnawers‘ [“]. All this requires watchful attention to keep the pastures sweet and level, and yet have the cattle, including the gnawers, in an improving state. The droppings of the cattle are also collected before they have time to rot the grass and ultimately to produce rough herbage which nothing will eat. Meadows, from which hay is taken, are grazed and mown alternately. Here there is great room for improvement, as very little dressing beyond ditch scourings and the clots collected, collected are afforded. The manure made is most wastefully consumed for want of farm-buildings.[“]

Mr. Moscrop says: „The scarcity and consequent high price of store stock, together with the many risks of importing disease where all are bought, are tending to a revolution, from mere grazing, so that farms with a certain proportion of friable arable soil are regarded much more favourably than formerly, especially |119 if the buildings are suitable, which, however, is rarely the case. [“]

In the Northern part of the Eastern division of the country: „About Burrow, and from thence north, some of the pastures are in a much neglected and unimproved state, some fields being covered with ant-hills, to the entire exclusion of all good and nutritious herbage. Drainage is much wanted. Thistles and other noxious weeds abound, and the care and attention bestowed on the grass land in the south of the division is on many farms here totally wanting.“

In the Western Division of the County there is a good deal of friable and some heavy arable land. „Seit den letzten 20 Jahren hier progress in the management of the arable land. Dennoch antiquated und obsolete practices yet linger on, but chiefly on the small farms; as a rule, the best management is seen on farms of fair size.“ In summing up the account of the grass land, Mr. Moscrop says: „There yet remains much land that loudly calls for drainage. There are 1000 of acres of secondrate quality which liberal and judicious manuring would convert into pastures of fair fattening quality. There are 100ds of acres so covered with ant-hills as to be almost worthless. On some farms, hassocks, thistles etc are allowed to run riot. Much is taken from all the meadow land mown, only a little being returned by few, and nothing by many, the inevitable result of which must be deterioration. [“]

### Manufacturing districts.

Manchester Jan. 24. Again Gloomy market for all kinds of yarns and goods. Prices are still against producers. Though short time has been resorted to of late in some districts, stocks must be accumulating rapidly, as the buying has been on the most limited scale. Notwithstanding the limited buying for some time past for the India and China markets, the exports hence continue on a large scale, which shows that many producers are tempted to consign rather than accept the unremunerative prices offering in this market.

Birmingham. In the foreign department the symptoms of reaction are slight, the merchants are keeping back orders, and will continue to do so to a certain extent until much of the indebtness indebtedness of long-standing by various foreign markets is renewed.

Wolverhampton: So far the reduction of prices has given but slight stimulus to the demand for iron.

## 2 February 1867. N. 1223.

### A Curious Effect of the Paper Currency in America. (From the New York Chronicle, financial paper.)

Failures.
Numbers. Liabilities in all the States. Dollars. Failures in Northern States only[.] Numbers. Dollars. Liabilities in Northern states only.

### Tenant Right in Ireland. (Communicated)

It is maintained that the tenant’s claim should in all cases be liable to a deduction proportionate to the time which has elapsed since his outlay; otherwise, he would be paid twice over; once from the profits derived from the improvements during his occupancy, and a second time on quitting. If no such deduction were allowed, it would be the interest of the landlord to eject the tenant as soon as the improvements were completed, for he might have to pay as much compensation at the end of a long period of years, without any corresponding benefit.|

### Progress of India (Bluebook just issued. (April 1867) (First) „Statistical Abstract“ of India.)

Area. (□ miles) Population. (estimated)
British India 955,238 144,674,615
Native States. 596,790 47,909,199
States under French Gvt. 188 203,887
States under Portuguese Gvt. 1,066 313,262
Total 1,553,282 193,000,963
 Calcutta (population nach Census von January 1866): 377,924. Bombay (dto Census von Febr. 1864): 816,562 Madras (administrative report von 1863): 427,741.

1864–5: 2,747 miles of railway were opened in India, and conveyed 12,826,518 passengers. There were 1421 postoffices; 17,117 schools maintained or aided by Gvt. Average attendance of pupils: 435,898 und Gvt. expenditure upon them 391,277l. 4,473,263l. expended in the year upon public works. 11,736 miles of Gvt. telegraph lines were opened.

#### Commerce in British India.

 Jahr 1840–41: 8,415,940l. 1860–61: £23,493,716. 1864–65: 28,150,923l. in addition to 21,363,352l. treasure 1848–49: Cotton goods imported for 2,222,089l. 1864–5 for 11,035,885l.
 1840–41: l.13,455,584. 1860–61: l.32,970,605. 1864–65: l.68,027,016. This last increase due chiefly dem effect des American war (cotton) 1859–60: Export of raw cotton from British India l.5,637,624. 1864–5: l.37,573,637. The other chief exports in 1864–5: Opium, 9,911,804l. Rice: 5,573,537l. Seeds: 1,912,433l. Indigo: 1,860,141l. Jute: 1,307,844l. The U. Kingdom took 7,054,388l. exports in 1840–41 und 46,873,208l. in 1864–65. Exports of 10,874,652l. in 1864–5 went to China and Japan, and 2,902,596l. to France.

Public debt: 34,484,997l. in 1839–40 und 98,477,555l. in 1864–5. The troops employed in British India 35,604 Europeans und 199,839 natives in 1839–40, dagegen in 1864–5 … 71,880 Europeans und 118,315 natives.

## May 4, 1867. N. 1236.

### State of the Money Market.  Zusatz von Marx. Schließen (The Savings and Trade)

Exports for the 3 months ending 31 March: 1866: £46,991,165. 1867: 42,381,621l. Diminution: £.4,609,544

Imports for the 2 months ending 28. February: 1866: £.26,457,723. 1867: 24,281,048. Diminution 2,176,675.

These diminutions are small, but a long experience shows that an augmenting trade is necessary to a stable money market, and that whenever trade goes down, even ever so little, the value of money is sure to be low. The reason is that the savings of the country accumulate day by day, and unlet unless some new outlet is found for them, an accumulation of loanable capital and a reduction in the rate of interest is inevitable. Ferner: now-a[-]days bills are scrutinised with extreme accuracy, with more nervous caution than almost ever before, and consequently the „effectual demand“ is less than usual.

### The Metropolitan Gas Bill

Every monopoly must, as such, be under public regulation, or it may hurt the public. Incomparably the best system in such a case where it can be applied, is that the State should be itself the producer. This system has been applied in Manchester and other towns to the supply of gas. The municipality manufactures, and if it manufactures ill its members can be unseated, and others who will do better put in. But at present, in Manchester, it manufactures very well.

## March May 11; 1867. N. 1237.

### Brighton Railway.

In case of 3 lines (Surrey and Sussex, Chichester and Midhurst, und West Sussex Junction Railway Co.), of which the directors of the London and Brighton or their nominees were themselves directors, they have incurred, on behalf of the Co., liabilities never explained to the proprietors, and which, if explained, would have been repudiated. Ferner: False Accounts, speciell Verheimlichung von temporary liabilities.

### Letter of Sir John Lubbock. d.d. May 9, 1867. Clearing House.

Er giebt, to be continued weekly, the Returns of the Clearing House, each day in the week. These returns will be published the same day as those of the H.o.C. B.o.E.

 1839 Exports were £53,233,580 und The average clearing of 1839: £18,400,000. 1866 £188,827,785 und The Clearing for Week commencing Thursday 2 May und ending Wednesday, 8 May: 57,024,000.

The amount of clearing for 1 May, 1866 was 8,006,000l. The largest amount which passed through the Clearing House in any one day in 1839 was 6,209,900l. und the smallest was 1,529,700l.

## May 18. 1867. N. 1238.

### Rediscounting.

Many banks, in the great centres of industry, besonders im North, rediscount their bills in London. The amount of such discounts should be stated. Z.B. bei der Leeds Bank (diesem swindle) von £.2,650,300 liabilities, at the time when it failed, waren liabilities on endorsements (rediscount) of bills = £1,919,991 about 2/3 of the entire liability of the Bank to the public. Davon estimated 1,000,000 not to be paid at maturity.

An agricultural country cannot safely employ its own money. A good class of borrowers does not exist there in sufficient numbers to carry off the yearly savings of the district. On the other hand, there are single streets in some large towns where the whole deposits can be lent instantly and safely. No unemployed saving class lives there. Rediscounts best mode of bringing the money to the investment. A West country Bank sends its spare money to London, and leaves it with a billbroker; a Lancashire banker sends his bills to London and asks for money on them. That money when he gets it he takes down to Lancashire and discounts again. In this way trade and industry get the supplies they want, and quiet people are able to employ the money they save.

### Causes of the Existing Depression.

First: At the present time, and for the last 9 months: Limitation of demand in almost every direction, and, consequently, falling prices, declining wages, accumulating stocks, debts difficult of collection, pressure on bankers for advances and accommodation, great diminution of the amount of bills in circulation, and exceeding discrimination on the part of dealers in money as regards the class of bills to be admitted by them at all.

Second: Enormous collapse on all sides of enterprises, which, during the Extension Mania of 1863–5, were in the highest vogue. In this list, Railways occupy the most prominent place.

Up to May, 1866, the nation had been running a career of desperate extravagance, i.e. for 3 or 4 years, it had been forestalling its savings in hundreds of ways.|

132

Dissipation of Capital, während der Extension Mania, almost as complete as a war expenditure. The Great Eastern, the London, Chatham and Dover, the North British, the Great Western and the Brighton did, during 1861–6, raise by debentures, preference shares, ordinary stocks, short loans in the open market, advances from bankers and others, scores of millions st., to be invested in extensions which, for the time, and, perhaps, for some year years to come, will not yield any net revenue. The money  has been sunk in earthworks, bridges, stations, locomotives, rails, sleepers, carriages, trucks, and land, and the people who found the money have now to go without any income from it.

Ebenso a large part of the investments made during 1861–6 in joint stock cos. of all sorts – banking, finance, docks, ships, mines, buildings, trading, manufacturing, and the almost endless catalogue of miscellaneous purpose. The state of the Share List and the Liquidations proceeding in Chancery, are sufficient evidence that 9/10 of these cos have failed to make any profit, and, too, incurred losses so great as to extinguish most of the capital.

The prices of Stock Exchange securities, and the range of dealings in them, were kept up by the appearance of continual fresh bodies of purchasers, who brought into that market capital taken and to be taken from other employments, present and future. Demand of all kind was stimulated for the same reason, and so were Wages. It was a period of bold, sanguine, and experimental outlay. It was also a period of ostentatious expenditure. Large numbers of people seemed to get rich all at once, and, of course, they hastened to show how naturally their habits and tastes could rise with their fortunes. The panic of May, 1866, brought to a sudden end all this artificial prosperity. Ausserdem kam politische Unruhe, German War, Fenians, Cattle Plague, Cholera, dismal and rainy weather. The disorganisation of the India trade has extended throughout the last 12 months. The Railway Discredit occupied all the winter, and the strikes, and severe weather, prolonged to the end of April. Dann die preussisch-französischen Quängeleien.

It is quite certain that there has scarcely been any period when debts were so difficult to collect, and when the usual bills drawn by wholesale dealers on the retailers in country towns met with such irregular payment. The draper and grocer sells less because his customers have to meet the calls of some Railway, Banking, Finance, or Trade Co., either in or just out of the Court of Chancery, and hence are compelled to live in smaller houses and reduced style. The tradesman in the manufacturing town cannot pay because his working class supporters are earning 20% less wages, with uncertain employment, and are, besides, in large debt for goods obtained on credit during some recent strike or lock out.

Deposits and balances in banks are low, because hardly any one has any surplus means or income; and the rate of discount remains low for first-class bills, because but few such are in circulation.

### The Clearing House Accounts. (communicated by W. Stanley Jevons).

Der Economist wunderte sich last week, daß Clearing House operations nur 3 × grösser in 1866 als in 1839, namentlich auch weil Export trade 31/2 grösser seit jener Zeit und the sphere of operations of Clearing House sehr enlarged.

Aber in early part of 1839 trade was very much inflated, and prices exceedingly high (higher in general than they have ever since been), and in March 1839, the climax of speculation (see ) was reached. The total amount of bills drawn (nach Newmarchs tables of the amount of inland bills 1830–53) in 1839 > than any previous year in the tables, or any year after until 1853. Although the amount drawn in 1840 was but little less, the bill circulation much reduced in 2nd qr. of 1841, und continued low until end of 1844.

On the other hand, in May 1867, year of collapse of speculation, which may well by this time have reduced the current amount of transactions. The comparison of May, 1866 mit March 1839 daher nicht conclusive.

Ferner: The Clearing House Transactions, including large part of the inland trade of the country, cannot increase as rapidly as the returns of our foreign trade, influenced by a complete reform of the Tariff. I am not aware that the returns of the income tax, corn sales, excise duties, assessed taxes, or any other available data lead us to |133 suppose the increase of inland trade to be at all so rapid as that of our foreign trade. … Lubbocks returns of the operations of his own Bank, („Statistical Journal, Sept. 1865“) show, in actual numbers, that the amount of currency afloat is no measure at all of the amount of transactions accomplished.

## 25 May, 1867. N. 1239.

### The State of the Money Market.

The savings of the country accumulate day by day , and unless there is a daily increase in the channel by which they are to flow out, they will encumber the market und bring down interest; a fortiori mit diminishing foreign trade. Generally, when money is cheap, credit is good. Dieß Jahr das Gegentheil. The railway scandals, the number of private ruins, or semi-ruins, going on all through the country, the disenchantment with old names by the fall der Overends, the alleged complicity of banks mit railway errors, tend to generate distrust. 1864 credit viel besser mit 8% als jezt mit 3. (und diese nur nominal)

### The Causes of the Existing Depression.

Bankers can only lend to one set of customers the money left with them by another set … Trade is dull, losses heavy and general, and accumulation almost suspended.

Since Sept. 1866, average price of wheat over 60s., or 50% beyond the average price of about 40s., which had prevailed during the 4 years preceeding ’66. Corn dear all over West Europe. An advance of 20s. per qr on wheat means a home trade crippled in all its ramifications; and if an enhancement almost as serious extends to France and Germany, the effect is a similar falling off in the purchasing power of some of our best foreign .

Nach dem influence der harvest, condition des Cotton Trade. It is now ascertained that a large part of the activity of the cotton trade last year was premature and speculative. Goods were sent to India, Australia, and elsewhere, on manufacturers’ account, and have not been sold, if sold at all, at remunerative prices. In all these markets, therefore, there is more or less dead stock to be cleared off by such demand as may be stipulated by falling prices. Since the close of 1866 the manufacturers have by short time and total cessation of work reduced the production by about 1/5 und daher der price of middling Upland cotton has gone down von about 15d. to under 12d. a lb. The average price of middling Uplands in 1865 was 19d p. lb.; in 1866 151/2 d., or 18% less; the real revival of the cotton industry depends entirely on the re-establishment of a low price of the rawmaterial. The world cannot afford to buy anything like the same quantity of goods mit cotton at 19 or 15 or 11d. p. lb, as when at 7 or 6 or 5d. In order to employ fully our people, machinery, mills, warehouses, ships, all the industries set in motion by a large volume of export trade, die alten cotton prices nöthig.

The severe regimen of the past 12 months has brought down the cost of producing most of the great manufacturing staples of this country not much less than 30%, taking into account the fall in the prices of raw materials, and in the wages of labour.

In times of active prosperity our weekly accumulations probably 2 to 3 mill. l. Since May 1866 they have fallen short of that sum.

### United States. Strikes. Taxation. Local War Taxes.

In April last addition to the Federal Debt of 5 Mill. l. St. The increase of debt to be entailed by the Volunteer Bounty Bill of last session will not be less than 20, may reach 40 mill. l. st. Under special arrangements, their will be two collections of income tax in the course of the present fiscal year.|

134

Der Standard Kerl fährt fort in seinem Brief vom 7 May: „Whatever may be the causes of the movements among the working men of Europe, the agitation among the working classes in the U. States is due to the increased cost of living produced by the great and growing taxation. The struggle is not for political advancement, nor for social recognition, for the labourer has as many political privileges as the millionaire, saving only the power to purchase votes; and, outside of the cities, there are practically no distinctions of class. On Dec. 1, 1860, the debt of the State of New York was 34,182,975 dls, and on Dec. 1, 1866 it was 51,753,082 dls. It has been increased some 10,000,000$by the legislation of past winter. The debts of the Counties and Towns of New York State have grown in the same proportion, so that the total State, County, and Town Debt of New York certainly not less than 90,000,000$. In Massachusetts the increase has been greater; its state and local debt was in 1860 about 12 Millions $; now it is in round numbers 55 Mill.$, and will soon be increased by 15 Mill. $. Rhode Island was free from State Debt in 1860, and her County and Town indebtedness was small; now her State debt alone is 3,626,500$. |135 Vermont had no State debt in 1860; it is now 1,567,500$. The State debt of Connecticut was, in 1860, about 50,000$; now it is something over 10 Mill. New Hampshire, in 1860, had State debt of 82,000$, now it is 4,169,818$. In some of the Western States the increase has not been so great. Iowa statedebt has grown from 322,000$to 622,000$; in Missouri from 23 Mill. $to about 38 Mill.$; in Wisconsin from 1 Mill. $to 2 Mill. In mehren states the Town und County Debts have increased much faster than the state debts; in other States they include State debts – viz., debts incurred by the States in aid of Counties and Towns have been transferred. The Municipal Debt of New York (City) about 22 Mill.$. The County and Town debts were incurred principally, in the effort to meet the demand of the Federal Gvt. for troops. Under the threat of conscription, the people offered enormous bounties for volunteers; in some localities as high a sum as 3000$paid to each volunteer. Of course the only method of equalising this forced loan was by taxation. It is probable that the Federal Gvt. will in time assume all the debts incurred in carrying on the war – State, County, and Count Town debts. In fact, Congress has already established a precedent by assuming the war debts of several of the States … Our working men may strike therefore, and strike till doomsday; they cannot remove one atom of the burden of taxation. They have a remedy in their hands. All other means of relief exhausted, they, the majority, will surely use it. That remedy is repudiation. Just here speaking of the debt and of the working men’s movements, I may cite the opinion of (of Boston), who will be recognised in Great Britain as a good authority. He says: ‚The condition of the poorer kind of mechanics is lower than before the war. They are bleeding at every pore. They are falling into the wretched tenement life.‘ Daily News New York Correspondent, d.d. 7 May 1867 says: „The Labour strikes still continue all over the country … The cause of all the trouble is, of course, the excessive lowness of wages. I doubt if in the history of the country wages have ever been so low, estimated as they ought to be, ⦗Currency more than 1/3 depreciated⦘, in food and clothing, and house rent, and not in money. The harvest last year was bad, and daher flour, which usually sells at 9 or 10$ a barrel, has been 18$throughout the winter, and is now 21. In fact, the dearth so great that the Northern States have been importing wheat and the demand has been so great that it has actually paid to send it from San Francisco round the Cape to New York. Until the last year or 2 California has never been able to supply her own wants. The consumption and waste of Cattle during the War has also been severely felt in the markets. Beef and Mutton are double their old price, and show no sign of falling. The high tariff and heavy internal taxation keep up the price of clothing. A coat costs more in this country now than a whole suit used to cost 4 years ago. The abrogation of the Reciprocity Treaty with Canada, which the protectionists were able to secure by the aid of the hostility towards the Canadians, bred by their conduct and language during the War, at once nearly doubled the price of timber, as the greater portion of the timber to be found in the market in this part of the country has for many years been drawn from the great Canadian pine forests. As most houses in America, outside the large cities, are built of wood, this rise has put almost a stop to house-building. It is safe to say that it now costs 3 times as much to construct a house in any material as it did 3 years ago. Of course, people must have shelter, and the population is growing as rapidly as ever; consequently house-building would go on as of yore at any price, if there were no fear of a fall. Aber keiner glaubt that the present state of things will last, daß vielmehr either on the resumption of cash payments, or at some period not very remote, prices will come back, if not to the old standard, to one very near to it. Consequently, there is a general reluctance to fix capital in any way that can be possibly avoided. Men do not like the idea of putting 10,000$ into a thing which in 3 or 4 years may sell for, or yield them interest on, 5000. There has accordingly been an almost total cessation of housebuilding for the last 3 years. This is no exaggeration. In the large cities wealthy men, who will be comfortably lodged, and to whom the price of any house is but a trifle, have every year been building themselves a few dozen mansions in each of the great towns; but it is safe to say that the increase in the number of houses for |136 for the class of moderate means, or for the working class, have not been 1/20 part so large as the increase of population. In New York the state of things is rather worse than elsewhere; rents here have more than trebled since 1863; but all over the country there is a positive distress for house room. People of small incomes are compelled to deny themselves all their luxuries, and many of their comforts, in order to keep a roof over their heads; while the working men are crowded into miserable lodgings, or find themselves forced to choose between absolutely bad food and bad clothing and the surrender of their homesteads … During the War, the excitement, the steady rise of prices under the expansion of currency, and the great demand for labour kept up by the enormous drafts made on the Market by the Army and Gvt. Orders, kept the labouring classes in good spirits; but they now find themselves down upon what the goldminers call the hard pan, and they can think of no mode of relief but a rise in wages. The Manufacturers go to Congress every year, and plead the dearness of labour as a reason for asking for higher protection; this raises prices, and the labourers in their turn go to the manufacturers, and plead the dearness of living as an excuse for asking higher wages, and so on, in one unvarying round. The manufacturers, of course, find trade extraordinarily dull; there is no demand for anything; and yet prices remain high as ever. Many of the great mills and workshops are kept going merely to keep the operations together, and prevent suffering. Daher strikes besonders irreasonable und less likely to produce a result than at this moment; and yet strikes are the order of the day. There is no trade in which a strike is not raging. The Trades Unions are not here the perfect organisation as in England. The country is too large, and the working men are too little of a distinct class, and are largely divided by difference of origin and religion into too many distinct sects, for any Union to secure the wideness of ramification or perfection of discipline secured by those of England. The consequence is that strikes are partial, isolated, and desultory; but they are incessant. They are at this moment more general than they have ever been and there is no immediate prospect of their termination. The 8 hour law, passed by the Illinois Legislature last winter, and which has just gone into operation, has thrown the large towns in the State into commotion, and given the Striking Mania in the West a violence which it does not display in this part of the world. Absurd this 8 Hours’ Agitation. It was begun by some of the better class of the workmen, believing in its salutary effects on the moral and physical condition of the labourers. Owing to the enormous profits which the manufacturers were making 2 years ago, the economical objections to the scheme made little impression on the agitators. They denied that a reduction in the hours of labour would materially diminish production, and maintained that even if it did it ought not to cause a restriction in wages, as long as capitalists were making, as many of them were, 100%. All that would happen, if 1/5 were taken off the working hours, would be that the enormous gains of the employers would be slightly diminished, while the condition of the whole working class would be greatly improved. The argument drawn from these large profits has of course since lost all its force. They have disappeared. The reduction of 1/5 labour would be = reduction of 1/5 production, und daher an increase of prices. But, unfortunately, by the time this demonstration of the absurdity of the movement was ready, the rank and file of the Irish, and other foreigners, ignorant and bigoted, had entered into it with zeal; politicians had got committed to it, and it has raged on without rhyme or reason, until it has at last got an act passed in Illinois, and has come near doing so in Pennsylvania and some other States.“

## 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. nämlich $9.95 per head in Great Britain und Ireland. 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.“

## June 8. 1867. N. 1241.

### The National Bank System of the United States.

This System has been in course of establishment und diffusion throughout the Union during the last 5 years.

The schemes during the last 40 years for establishing a single bank, or series of banks, specially selected und empowered by Congress, for the transaction of Federal Financial Business all utterly failed. The history of the two socalled Banks of the U. States a history of mistakes and disasters. Unter Andrew Jackson  |138 conviction prevailed that any powerful banking organisation, under control of the Federal Executive, would be a grave departure from the Constitution, and dangerous to Public Liberty. Daher regulation of Banks to be matter of purely State concern and policy. Even the Washington authorities required to provide themselves in New York and elsewhere, under the title of Sub-Treasuries, with separate offices of deposit for the collection and custody of the public revenue, until disbursed for Gvt. outgoings.

The exigencies of the Civil War compelled the banks generally to suspend specie payments on 28 Dec. 1861. In the preceding April (1861), an Act was passed by Congress – authorising a suspension of the Independent Treasury Law – that is, permitting the Secretary of the Treasury, at his discretion, to lodge the revenue collections not in the Sub-Treasuries, but in any banks considered eligible. Aber nicht much use made of this permission; and, as a matter of fact, the New York Banks were principally forced to suspend specie payment, in consequence of their large subscriptions in coin to the loan of 250 Mill. $opened in July, 1861. The War extended in the course of 1862. Chase überzeugt, daß to provide efficient financial support for the Federal Gvt, necessary to override all State Legislation on Banks, to suppress all the local issues of existing State Banks, to convert them into National banks, to require each National bank to invest considerable part of its paid-up Capital in Federal Securities, and to furnish strong inducements to the establishment dieser national banks, in small und remote places, hitherto not reached by, or unable to support, any private institutions of their own. Opposition in Congress und von den Banking interests of the larger States. Danach Chase[’]s scheme became law on 25 March, 1863, under the title: „An Act to provide a National Currency secured by a pledge of United States Bonds, and to provide for the circulation and redemption thereof.“ Dieser Act intricate und long (65 Sections.) Sein outline, mit subsequent amendments, ist: 1) An officer is established at Washington, called the Comptroller of the Currency. Under his charge all the machinery of the Act is placed. 2) Any number of persons, not less than 5, may constitute themselves into a Co. with liability limited to twice the value of the shares held for the purpose of forming a National Bank. The shares to be$100 (20l.) each.

3) In cities und places exceeding 50,000 persons, the capital of the National Bank to be not less than $200,000 (say 40,000l.), – in smaller towns not less than 100,000 (say 20,000l.) But at the direction of the Secretary of the Treasury, National Banks may be formed in places von nicht mehr als 6000 inhabitants mit Kapital of$50,000 (10,000l.) Half the capital to be paid up before commencing business, the other half by 5 monthly instalments.

4) Before commencing business, each National Bk. to transfer to the Comptroller registered Bonds of the U. States zu, at least, 30,000$, or in the case of the smaller banks, 1/3 of the paid up capital. In return for such transfer, the Comptroller shall deliver to the Bank, Circulating Notes of one dollar and upwards registered and countersigned on behalf of the Federal Gvt., but with blanks for the signatures of certain officers of each National Bank: the amount of the notes so furnished for issue not at any time to exceed 90% of the market value of the Bonds lodged as Security. 5) The Total Amount of the National Banknotes to be created under the Act not to exceed$300 Millions (60 Mill. l. St.) In the original Act of March, 1863, these 300 millions were apportioned among the several States, half according to representative population, half to banking capital, resources, and business. By amended Act of June, 1864, the distribution left to the discretion of the Secretary of Treasury; and in March, 1865, other amendment adopted, wodurch the State Banks encouraged to convert themselves into National Banks, regardless of any precise ratio in the distribution of the National Bank Note Circulation.

6) Each National Bk. to be primarily liable for the payment of the Notes issued by it under its counter signature, but failing such payment, the Un. States Treasury will redeem the notes and reimburse itself by the sale of the Bonds held by it, and by the exercise of a prior lien over the general assets of the defaulting bank.

7) National Banknotes to be received at par in all Revenue collections, except for Custom Duties, and to be paid by the Gvt. at par for salaries, wages, and debts, but not for interest on public debt, nor in redemption of the „greenback“ currency. The effect of this provision is to give the National Bank Notes a modified compulsory circulation between the Federal Gvt. and the Public, but not to render them legal tenders as between individuals.

8) In 17 places, viz. 1) New York, 2) Philadelphia, 3) Boston, 4) Albany, 5) St. Louis, 6) New Orleans, 7) Louisville, 8) Chicago, 9) Detroit, 10) Milwaukee, 11) Cincinnati, 12) Cleveland, 13) Pittsburgh, 14) Baltimore, 15) Leavensworth|139 16) San Francisco, 17) Washington, each National Bk. to have constantly in hand, a sum equal to at least 25% of the aggregate amount of its Circulation and Deposits, in lawful money of the U. St. (i.e. specie or greenbacks.) National Bks. in other than these 17 cities, need have only 15% of similar cash reserve, and of this 15%, 3/5 may be balances due to the Bank from its Correspondents in these 17 cities.

9) The Secretary of Treasury, at his discretion, may select National Bks. to be depositors depositories of public money except Customs duties) and to be employed as financial agents of the Gvt.

10) The Federal Taxes to be paid by National Bks. shall be – one % p. annum on the average amount of their Circulation; 1/2% p. annum on the average amount of Deposits; and 1/2% p.a. on the amount of capital not invested in U. States Bonds.

11) The Federal Taxes to be paid by State Banks to be 10% p. annum on the amount of their Circulation, and corresponding rates on their deposit and Capital.

12) Each National Bank to forward to the Comptroller quarterly full returns of its condition and business, and also monthly returns of a less elaborate character. The Comptroller may, at his discretion, order a personal verification of these returns.

13) All laws relating to usury which may prevail in the several States to continue in full force, and be applicable to all transactions of National Banks.

The principles of this arrangement come to this:

Ⅰ) Almost absolute control by the Federal Executive at Washington over all the National Banks. The Secretary of Treasury, at his discretion, can authorise the formation of Banks in all places of less than 6000 inhabitants; he can select National Bks. to be depositories of public money and Federal financial agents; he can constantly interfere in the affairs of each bank, by rigidly enforcing the condition that the Notes furnished shall only be 90% of the market value of the Bonds lodged; and, at his pleasure, tighten or relax the power of affecting the credit of any Bank, by directing the visit to it of a Special Inspector.

Ⅱ) The establishment of at least 300 mill. $circulation of National Bk. Notes , ultimately payable by the Federal Treasury out of the proceeds of Federal Securities, that is, of 300 millions of what may be called Greenbacks N. 2. These National Bk. Notes to be forcibly substituted (for the 10% tax on the circulation of the State Banks is virtually prohibitory) for the notes of the Banks previously existing under laws and constitutions adopted by the several States. The 300 mill. of National Bank Notes to be apportioned over the country virtually at the discretion of the Secretary of the Treasury. Ⅲ) The sudden and complete creation of a Federal Gvt. Banking Organisation of the most absolute character, differing only from the Bank of France in the circumstance that instead of creating, as in France, a large Central Bank, with a monopoly of Circulation and a monopoly of Branches, and a management largely nominated by the Minister, the procedure consists in scattering 1600 or 1700 separate institutions over the country, but placing them under the effective control of an office in Washington, compelling each of them to invest 1/3 of their capital in Federal Securities, and selecting from time to time from the most favoured Banks those which shall become depositories of public money and Gvt. financial agents. Folgendes ist der Progress of the National Banks, subsequent to First Act, March 1863, und Amended Act, June, 1864. Date Number of Banks. Capital paid up$ Circulation. $1863. October 63 6,700,000 No return 1864 Januar. 137 14,500,000 April. 309 42,000,000 1865. Jan. 643 135,000,000 67,000,000 July. 1264 325,000,000 131,000,000 1866 Januar. 1626 403,000,000 213,000,000 Oct. 1659 415,000,000 280,000,000 1867. Jan. 1649 419,000,000 291,000,000 April. 1649 419,000,000 291,000,000 The progress became rapid after Jan. 1865, when pressure really put on the State Banks to conform to the new system. Prior |140 to April, 1865, it is probable that most of the 6 or 700 National Banks opened were entirely new institutions. Z.B. out of 152 Banks established up to Feb., 1864, not less than 46 opened in small places where, up to this time, no bank had existed. It was, undoubtedly, a principal feature of Chase’s scheme to promote the creation of New National Banks in the more remote und primitive parts of the country. ### Manufacturing Markets. Demand for goods only moderate. Prices well supported. Iron steady. Falling off in the transactions in coal. ## June 15. 1867. N. 1242. ### The National Bank System of the U. States. Um das für den Krieg nöthige Geld beizubringen, Chase offered to capitalists, and others the inducement of large immediate profits für die National Banks undertakers. Z.B. The profit and loss outline of the case stands at presents present thus for any 5 persons setting up a National Bk. on the basis of subscribing$100,000 (20,000l.) in lawful money. (Assume 5$= 1£.): 1) 20,000l. deposited with the Comptroller in Un. States Bonds, 6%, in coin, equal at present price of gold to, say, 81/2 in greenbacks, will produce annually 1700£ (nämlich 20 000£ à 81/2%). 2) The Comptroller will issue for this deposit 90% of National Bk. notes, say 18,000l.; against these 18,000£ in Notes the Bank must keep 15% of Legal Tenders, or 2,600£, leaving 15,400l. available for advances at, say, the same rate of 81/2% in paper, producing per annum 1309£. (15,400 à 81/2%) 3) The result is, therefore, to give an immediate gross return of over 15% p. annum, or 3,009l, on the 20,000£ put down. The private bank, started purely on its own credit and connection, has gradually to get out and establish a circulation for its notes. Erst nach mehren Jahren it can command a circulation of such magnitude as to be of importance in the profits of the business. Die National Bank launches at once of the whole of the (virtually) Gvt. Notes received by it from the Comptroller, and for the simple reason that they possess almost all the qualities of a legal Tender note. Daher die rasche multiplication der National Banks, besonders in the more remote parts of the country. The Sub-Treasuries were mere offices or vaults for the safe storage of its revenue collection. Waren in no sense credit institutions. So lange as the Federal Gvt. had a surplus revenue and no public debt, they answered. Nicht so, when , and Gvt. became borrower on large scale, and by means of the issue of inconvertible paper. It became, then, apparent, apparent that the Secretary of the Treasury was utterly destitute of the appropriate Organisation. There was no central and powerful Bank, and the Sub-Treasuries were warehouses, not places of financial business. Dieß new organisation has all the faults and dangers, and scarcely one of the advantages and safeguards of a chief Federal Bank. In a table (C) below, we give from the official returns collected by each State, an abstract of the condition of the State Banks at the end of 1862, or rather early in January 1863, a year after the suspension of the cash payments, and just before the passing of the first National Bank Act at the end of Feb. 1863. The number of banks in each state was in no case unmanageable; in New York State f.i., it was 308; in Pennsylvania 94; in Illinois 25; and the local supervision was aided by general local knowledge. In the 3 groups of states included in the table C, there were 1205 banks, but 998 davon in the 11 commercial and leading States, forming the Eastern and Middle Regions of the Union. Their PerCentage of Assets und Liabilities were: B) Summary of Condition of the 998 State Banks in the 11 Eastern and Middle States, 1st Jan. 1863. Liabilities. P.Ct. Assets. P.Ct. Circulation 11.3 Cash reserves 12.1 Due to other Banks 10.7 Gvt. Securities 17.3 Deposits 40.0 29.4 Other liabilities 4.5 Due by other Banks. 12.6 66.5 Loans and Discounts 54.2 Capital paid. 33.5 Other investments 3.8 Total: 100.0 100.0 | 141 In the cash reserves, appearing here as equal to 12.1%, of the assets, were included, of course, legal tender notes of the Federal Gvt. In actual specie the Banks in the above category seem to have held about 7% of their assets. The Gvt. securities included State Bonds as well as Federal Bonds. In Cash Reserves and Gvt. Securities, the State Banks held very nearly 29.4% of their total assets. The large items on both sides of the account of sums „Due to“ and „Due by“ other Banks, arise from a practice early adopted in all American returns of distinguishing the balances between one set of banks and another, in order to ascertain in some degree with what exactness the system of exchanges was kept up. On the Liability side, the Circulation was only 11.3%, and the Capital paid up was 33.5%. At the end of 1862, the State Banks had so arrived at a condition of no little strength. We find from table C, that in the 5 Middle States, including New York and Pennsylvania, the Circulation was only 5.7% of the liabilities, against 26% in the more remote and less commercial Eastern States, and 32.5% in the still less populous and less wealthy North Western States. Where the facilities and resources of capital and credit are largest, the quantity of circulation is least. The public have to pay for every Note they retain, and, daher, they retain exactly as many as it is worth paying for, and no more. In table D returns of the 261 State Banks existing at the close of 1861 in the 10 Southern States, just before the Civil War. Diese Figures less trustworthy than in table C., from the more scattered nature of the Banks, and the incipient disorders which, in 1861, prevailed in the South. They give, however, forcible evidence of the greater poverty of the South as compared mit dem North in the comperative largeness of the Circulation and Loans, in the Smallness of the Deposits, Reserves, and Gvt. Securities. Table C.) Un. States. Twenty Northern etc States. Official Return of State Banks therein, Jan. 1, 1863, prior to passing of Nt. Bk. Act. 25 Feb. 1863. 00,000’ are omitted. Thus, f.i., 65.5 = 65,650,000 Liabilities Assets A.) Six Eastern States (507 Banks) B.) Five Middle States (491 banks) C) Nine Northwestern States. 207 Banks D) Total 20 States. 1205 Banks. A. B. C. D.$ P.C. $P.C.$ P.C. $P.C. Circulation. 65.5 26.0 31.5 5.7 19.6 32.5 116.7 13.2 Due to other Banks. 20.5 7.1 68.4 12.4 1.3 90.3 10.2 Deposits. 66.7 3.0 267.7 48.6 21.2 34.1 355.7 40.2 Other Liabilities. 11.4 4.0 28.0 5.1 4.6 1.0 44.0 5.0 164.2 60.1 359.8 71.8 46.8 67.6 608.8 68.6 Capital paid up. 126.8 39.9 155.2 28.2 15.7 32.4 297.7 31.4 291.0 100.0 551.0 100.0 62.5 100.0 844.5 100.0 Assets.$ P.C. $P.C.$ P.C. $P.C. Cash Reserves Specie 12.8 4.5 51.2 8.3 7.4 12.0 71.4 7.5 Cash items 1.1 42.0$ 7.0 1.1 1.7 44.2 4.5
Other Banks.
Balances due 52.2 25.2 10.1 46.3 7.7 9.2 14.8 81.8 9.5
Notes in hand 11.9 4.0 29.0 5.0 7.4 12.0 48.3 5.1
Stocks 8.0 2.9 146.1 24.3 8.5 13.7 162.6 17.2
Loans 216.3 76.0 265.8 44.2 24.5 39.2 506.6 53.0
Real Estate 4.5 1.7 13.0 2.0 1.6 2.6 19.1 2.0
Other Investments. 2.6 0.8 8.3 1.5 2.5 4.0 13.4 1.3
284.4 100.0 601.7 100.0 62.2 100.0 947.4 100

A) Six Eastern States: Maine, 69. New Hampshire, 52. Vermont 40; Massachussets 183. Rhode Island 88. Connecticut 75. All: 507.

B) Five Middle States: New York: 308. New Jersey, 52. Pennsylvania, 94. Delaware 5, Maryland 32. Total: 491.

C) Nine North Western States: Illinois, 25; Indiana 37; Ohio 55; Michigan 4; Wisconsin 64; Iowa, 14; Minnesota 7; Kansas 1; Nebraska 1. Total: 207.|

142
Table D.) Unit. St. Ten Southern States. Official Return of State Banks at Close of 1861, prior to the Civil War.
D) Five Southern States.
147 Banks.
E) Five South Western
114 Banks.
F) Total Southern States.
261 Banks.
Liabilities.
$P.C.$ P.C. $P.C. Circulation 39.6 32.0 31.5 27.3 71.1 30.1 Due to other Banks. 4.2 3.3 6.1 5.5 10.3 8.0 Deposits. 16.5 13.0 21.5 19.0 38.0 12.0 Other Liabilities. 4.1 3.3 5.6 5.0 9.7 4.1 64.4 51.6 64.7 56.8 129.1 54.1 Capital paid up 56.3 48.4 51.0 43.2 107.3 45.9 Total. 120.7 100.0 115.7 100.0 236.4 100.0 Assets$ P.C. $P.C.$ P.C.
Cash Reserves
Specie 8.1 6.7 21.5 18.4 29.6 12.4
Cash Items 0[.]2 1.8 1.5 2.0 0.8
Other Banks
Balances due 5.1 4.1 11.0 9.3 16.1 7.0
Notes in hand 3.8 3.2 6.0 5.1 9.8 4.0
Stocks 10.0 8.3 8.0 6.8 18.0 7.2
Loans 79.3 65.8 61.7 52.7 141.0 60.0
Real Estate 10.6 8.4 2.2 1.7 12.8 5.0
Other Investments 3.5 3.5 5.1 4.5 8.6 3.5
Total. 120.6 100.0 117.3 100.0 237.9 100.0

Unter

• D) Five Southern States: Virginia (66) North Carolina (31) South Carolina (20) Georgia (28) Florida (2) Total: 147
• E) 5 South Western States: Alabama (8) Louisiana (6) Tennessee (14) Kentucky (44) Missouri (42). Total: 114.

## 22 June 1867. N. 1243.

### The National Bank System of the U. States.

Table E brings into distinct contrast by means of Per Centage Proportions the 1649 National Bks., April 1867, mit den 1205 State Banks, in the Northern Portion of the Union, Dec. 1862.

Table H Abstract of the official Returns of 1626 National Banks, Jan. 1866, and of 1649 National Banks, April 1867 (Union, North und South)

Table F. Results of Detailed Return (Table I) on New York State brought in Smaller Compass.

Table G Total U. States Circulation in 1861, 1862 und 1867.

Table I New York State.

Table K Distribution of 1466 State Banks, Dec. 1862, and of 1649 National Banks, Dec. 1866.|

143
Table E.) United States. Condition of 1205 State Banks, Jan. 1863, compared mit 1649 National Banks, April 1867. Per Centages of Liabilities and Assets.
1649 National Banks. April 1867. A.) 6 Eastern St.
807 Banks.
B) 5 Middle St.
491 Banks.
C) 9 North Western St.
207 Banks.
D) Total
1,205 Banks
Liabilities
Per Cent. Per Cent Per Cent Per Cent Per Cent
20.4 Circulation 26.0 5.7 32.5 13.2
7.7 Due to other Banks 7.1 12.4 10.2
37.0 Deposits 23.0 48.6 34.1 40.2
Other Liabilities 4.0 5.1 1.0 5.0
65.1 Total 60.1 71.8 67.6 68.6
34.9 Capital paid up 39.9 28.2 32.4 31.4
100.0 Total 100.0 100.0 100.0 100.0
Assets.
P.C. P.C. P.C. P.C.
7.0 Cash Reserves 4.5 15.3 13.7 12.0
8.8 Other Banks 14.1 12.7 26.8 14.6
34.7 Stocks 2.9 24.3 13.7 17.2
48.2 Loans 76.0 44.2 39.2 53.0
Real Estate 1.7 2.0 2.6 2.0
1.3 Other Investments 0.8 4.5 4.0 1.3
100.0 Total 100.0 100.0 100.0 100.0

In group A circulation of the 507 Banks 26.0% of their total liabilities, the deposits to 23.0% and so forth.

A distinction must be made between the State Banks of the 5 large and leading Middle States and the Banks of the East and NorthWest. In the National Banks the circulation is 20.4%, but in the Middle States it was in Dec. 1862 only 5.7%. In the National Banks the Cash Reserves are 7%, but in the Middle States they were 15.3 p.c., and even the average of the 3 groups gives 12%. In the National Banks the Cash Reserves and Gvt. Securities together are 41.17% of the assets. In the Middle States they were 39.6%, or very nearly the same; and in the North West the proportion was 27.4%.

Table F.) New York State. 308 State Bank, Dec. 1863, und 313 National Banks, April 1867 (Details in Table I.)
National Banks. April 1867. State Banks. Dec. 1862.
Per Cent. Per Cent.
Liabilities.
Circulation. 13.0 9.1
Deposits 45.0 47.0
Due to other Banks. 13.5 13.4
Other Liabilities 2.0 4.3
73.5 73.8
Capital paid up 26.5 26.2
100.0 100.0
Assets.
Cash Reserves 22.3 16.7
Due by other Banks 5.4 10.3
27.7 27.0
Government Securities 26.6 28.0
54.3 43.0
Other Assets 2.5 2.0
100.0 100.0

The State Banks held 28% assets in Gvt. Securities, the National Banks hold a trifle less, 26.6%. Cashreserves in den National Banks , Discounts grösser in den National Banks by 6/10% (er sagt about the same.) Paidup Capital grösser in den National Banks (er sagt (der Economist ) about the same) Deposits etwas grösser (by 2%) in den State Banks. Aber, Circulation der National Banks 13%, der State Banks 9% (Unterschied von 4%) (in both instances secured by the deposit of public securities). |

144

We have seen that in New York State, the National Banks are hardly more numerous than were the State Banks. But the case is very different in the less commercial parts of the Union. A statement (K) gives the distribution of the 2 kinds of banks in detail; and we find there an increase of 120 banks in Pennsylvania , 85 in Ohio, 31 in Iowa, 57 in Illinois, 34 in Indiana etc. Früher, obgleich das building derselben free, 207 State Banks had grown up in the 9 North Western States, at the end of 1862. Jezt statt dieser 207 sind da 434 National Banks. The State Bank Circulation of these 9 Banks was 191/2 mill. of dollars in Dec. 1862. The National Bank circulation pertaining to them in Dec. 1866, was 501/2 millions, or 21/2 times greater. Diese expansion der Note Circulation in the North West – the eminently agricultural and grazing region – sicher Schuld an increase in price of articles of food, and in the wages of ordinary manual labour which has occurred during the 2 last year years.

In his Report of December 1861, Chase estimated amount of gold und silver coin in the whole Union at 275 Millions $(say 55 Mill. £. St.) Danach können wir in approximate form beurtheilen die additions to the amount of Circulating medium, besonders in the Northern or Federal States. Dieß in der folgenden Tabelle G. Table G. Estimates of Circulation in 1861, ’62 und 67 Jan. 1861. North. South. Total. Mill.$ Millions $State Banks Notes 140 60 200 Coin. Gold and Silver 200 75 (?) 275 Total 340 135 475 510 710  Notes of State Banks 180 Greenbacks 290 Fractional United States Notes 20 490 Coin 20? 510, increase of 50% over 340 Mill. of Jan. 1861.  Notes of State Banks 6 Notes of National Banks 290 Greenbacks 375 Fractional Un. States Notes 29 700 Coin 10? 710 These 710 Increase of 40% over the 510 mill. of Dec. 1862 und 100% over the 340 mill. of Jan. 1861.| 145 The 710 millions includes about 13 mill. of National Bk. Circulation established in the Southern States. In stating this part of the case, most American writers confuse themselves and their readers by making deductions for the quantities of Coin, Greenbacks etc held in the tills of Banks and the vaults of Sub-Treasuries. Such deductions are – fallacious and misleading Upon this , there seems to be good reason for concluding that at the present time the Circulating medium in the U. St. is very nearly double the amount before the Civil War, or in January 1861; and that out of the present 710 millions of dollars (say 142 Mill. £ St.), it will be necessary to redeem at least 220 to 250 Mill. dollars, (44 to 50 Mill. l. St.) before the volume of the currency will approach the level at which it stood when cashpayments were suspended. H.) U. States. National Banks. Founded Febr. 1863. Official Return at dates as under. 00,000 omitted. April 1867. 1649 Banks. Jan. 1866. 1626 Banks Liabilities.$ P.C. $P.C. Circulation National Banknotes 291.9 20.0 213.2 15.2 State Banknotes 5.9 0.4 45.4 3.2 297.8 2.586 258.6 Deposits Government Deposits 30.0 2.0 29.7 2.1 Private Deposits 510.6 35.0 513.6 37.0 540.6 543.3 Due to other Banks To National Banks 91.1 6.2 96.7 7.0 To other Banks 23.1 1.5 23.8 1.7 114.2 120.5 952.6 65.1 922.4 Capital Paid up 418.8 403.3 29.0 Reserves 60.2 43.0 3.0 Profits 31.1 29.0 2.0 510.1 34.9 474.3 1462.7 100.0 1396.7 100.0 Assets.$ P.C. $P.C. Legal Tenders. 92.6 6.3 90.0 6.3 Specie 10.4 0.7 16.0 1.1 103.0 106.0 Due von Other Banks. Balances Von Nat. Banks. 94.0 7.0 93.2 6.6 Other Banks 10.7 0.8 14.6 0.7 Notes 13.7 1.0 20.4 1.4 118.4 182.2 Government Securities: U. S. Bonds for Circulation 338.5 23.0 298.0 21.2 for Deposits 38.4 2.6 in hand 46.6 3.1 142.0 10.0 Compound Interest Notes 84.0 6.0 97.0 7.0 507.5 537.0 Advances und Discounts: Loans und Discounts 597.1 40.0 498.8 36.2 Stocks und Mortgages 20.2 1.3 17.5 1.2 Real Estate 19.6 1.1 15.4 1.1 Cash Items 87.8 5.8 89.8 6.2 724.7 621.6 Expenses 14.0 1.3 5.5 1.9 Total 1467.6 100.0 1398.2 100.0 | 146 K.) Distribution of 1466 State Banks in Dec. 1862, and of 1649 „National Bank“ in Dec. 1866. Six Eastern States St. Banks. Nat. Banks. Five Middle Sts. St. Bk. Nat. Banks. Nine Northwest. States State Banks. Ntl. Banks. Five Southern States State Banks Nat. Banks Five South West. States St. Banks Nat. Banks Maine 69 61 New York 308 313 Illinois 25 82 Virginia 66 35 Alabama 8 3 New Hampshire 52 39 New Jersey 52 54 Indiana 37 71 Nth. Carolina 31 5 Louisiana 6 3 Vermont 40 39 Pennsylvania 94 201 Ohio 55 135 South Carolina 20 2 Tennessee 14 10 Massachusetts 183 208 Delaware 5 11 Michigan 4 42 Georgia 28 9 Kentucky 44 15 Rhode Island 88 62 Maryland 32 32 Wisconsin 64 37 Florida 2 Missouri 42 15 Connecticut 75 83 491 611 Iowa 14 45 147 51 114 46 507 492 Minnesota 7 15 Kansas 1 4 Nebraska 1 3 507 492 491 611 207 434 147 51 114 46 ### The Pollution of the Lee. Zusatz von Marx. Schließen (Sewage Irrigation) About a Year ago, First Report of the Rivers Commission on the state of the Thames. In Folge davon der Thames Navigation Act of last session (1866), in which many of the recommendations of the Commissioners were adopted, and many of the grossest abuses of the former management provided against or remedied. Jezt Second Report derselben Commission to the River Lee. The great prevalence of the cholera in the East of London (1866) last year was attributed to the foul state of the water furnished by the company which draws its supply from the river Lee. This river is one of the northern tributaries of the lower Thames. It rises in the county of Bedford, above about 3 miles above the town of Luton, and with its tributaries drains a large area of Hertfordshire. It is a tidal river for about 5 miles in length, and is navigable for barges a distance of 28 miles. So old is this navigation of the river, that King Alfred availed himself of it to visit Ware, and that Parliament legislated for the river in the time of Queen Elizabeth. The weirs, locks, and other works are kept in good repair, nor has the river trade been injured by railway rivalry. In this respect the Lee presents an advantageous contrast to the Thames, but the comparative rates at which the 2 rivers are drained for the supply of London are out of proportion. While the Thames has a minimum dry weather flow of 350 millions gallons daily over Teddington lock, and supplies 48 mill. gallons daily to 5 London water companies, the Lee, with a dry water flow of 40 mill. gall., is said to be mulcted of 38 mill. gallons by two water companies. This almost incredible statement rests on the authority of the engineer to the East London Water Works Company. The New River Co. provides for about 840,000 persons, and the East London Waterworks Comp. for some 675,000. The first Co. furnishes about 24 gallons per head daily, the second co. 18 gallons. Few of the houses are put on the constant system; in most, the water is turned on for 35 minutes, and the poorer houses have a Sunday supply. The New River Co. lays pipes to the doors of houses, but does not hold itself responsible for anything further, and as the landlords very frequently provide the most scanty means of storing the water, there is a continual water famine. Of this, the engineer to the New River Co gives some examples. Die Company takes credit that it furnishes a Sunday supply to so many of the poorer class of houses, and the culpable indifference of the landlords has led to these exceptional privileges being granted to their helpless tenants. Whether such |147 privileges ought to be exceptional, and whether it is certain that „in few cases can it be truly said that the turncock[’]s services on Sunday are necessary“, are questions on which the consumers and the co. would, probably, differ. The systematic way in which the sewage of the towns on the banks of the Lee, and the refuse of an agricultural and industrial district are poured into the river, schlimmer als die pollution der Thames selbst. At Luton, indeed, where the Lee is yet „a slender stream“, the sewage is clarified by the lime process before passing into the river. This purification is the result of legal measures taken by a landed proprietor, and, though not a perfect remedy, is an improvement. As we drop down the river much litigation is found without any such result. „We learn“, say the Commissioners, „with something approaching to dismay, that one manufacturer alone employs from 1 to 2 tons of oxalic acid in bleaching straw plaits, but are somewhat reassured upon consideration that the poisonous character of this substance is entirely destroyed by admixture with the carbonate and sulphate of lime contained in the water of the river.“ Then, the river is polluted by sheep washing, and, as the preparation for dipping sheep contains arsenic, another noxious ingredient is added to the new witches’ cauldron. But, besides these directly poisonous substances, the river receives the sewage of Hatfield, Hertford, Ware, Enfield, Barnet, and Tottenham. The foulness of the stream after passing by all these places, or their outlets, is such that the enormous volume of sewage, pumped in by West Ham, which has a population of more than 22,000, makes no visible alteration. Every town complains of the town next above it, and gives cause of complaint to the town next below. At Luton, a perpetual injunction has been obtained against the town authorities. At Hertford, the New River Co. is threatened by the authorities of Ware. Ware itself passes on both grievance and complaint. Bishop Stortford has been threatened by several parties. „Our neighbours at Sawbridgenorth have told us that we have been poisoning them. We have said that we are sorry for it, but we think that they contribute to the nuisance to some extent themselves, and we have, therefore, not heeded what they had to say.“ Indeed, Bishop Stortford prides itself of having discovered a plan for the utilisation of sewage, and having appeased the discontent of its own inhabitants at the expense of strangers. „The nuisance of which the inhabitants have complained from the smell of the river was during the summers of 1864 and 1865, but it was very much abated in consequence of our having wet seasons, and a plan was adopted that succeeded remarkably well, and that was this: During the summer when the water is very short, the filth will sometimes almost crop up to the mouth of the drains, and when there has been a flood in the winter, this accumulation has been stirred up by a large and a heavy rake behind, so that we have passed it on to our neighbours to some extent. We thought we had kept it long enough, and by the use of the flood water relieved ourselves from a considerable quantity of stink by that means.“ The Commissioners see no hope in the litigation opened by Edmonton against Enfield, by Tottenham against Hornsey, by the Lee Trustees against Tottenham. What the Commissioners propose is a Conservancy Board, acting for the entire watershed, and bound to provide for the cessation of the present supply of sewage to the river, as well as for its general maintenance and protection. A few fresh details in diesem Second Report on manner wie sewage to be applied to land und success of grassfarming under the system of irrigation. Crops of Italian ryegrass, grown under sewage irrigation at Worthing, are cut at the rate of from 5 to 8 tons to the acre, whilst adjoining pasture lands are almost bare. „A small dairy has been established, the cows being stall-fed on the cut grass; the milk produced, from its richness and superior quality, commanding a preference in the town.“ Irrigation was tried at Tottenham under the direction of the surveyor to the local board, and his report was, that the system had to contend against much prejudice, but was, in itself, successful. There was, however, a difficulty in procuring land for the experiment where every acre was so valuable for building purposes, and those who had land in cultivation were the most reluctant to run the risk of their crops being injured. Of course, so long as all the refuse of town and country can be turned into the rivers, people will refuse to look beyond the present need. But when the rivers are closed to them, they will admit that the disposal of sewage becomes a practical question. ## June 29. 1867. N. 1244. ### Austria. Iron, Coal and Railway facility. Zusatz von Marx. Schließen (Working of means of transport) The ore of the iron mines of Styria and Carinthia abundant, produces steely-iron, renowned all over the world. Difficulty to work them because of the absence of fuel. Lignite was for a time employed, but there was not enough of it to be got; then turf used, but the supply not sufficient. Recourse must therefore be had to coal. This found in large quantities, and easy of extraction at Fünfkirchen, within some 40 miles of the river Drave, one of the tributaries of the Danube. The valley of the Drave extends to Styria and Carinthia, and is in communication by means of the South of Austria railways with Trieste on the one hand and Vienna on the other; also with Pesth. A railway from Bares on the Drave (not far from the railway) to Fünfkirchen would enable the coal of the latter place to be carried to the rich ore deposits of the 2 provinces. The Austrian Gvt. has taken active measures to execute it as quickly as possible. Part of the line will be opened on 1st July 1868, and the other part a year later. The iron of Styria and Carinthia of great hardness and solidity, and at the same time is light. It is pre-eminently suitable for Bessemerising, and for making steel. Wird daher market find in all the parts der world. All that was needed to turn it to full account was the construction of a short railway to pits. Not only will the coal pits of Fünfkirchen obtain by means of the railway a profitable market in the iron works, but [they will] be able to send coal to Vienna, where it is very dear; also to Trieste, and through Trieste it is believed to all parts of the Adriatic and the Mediterranean. The coal is very good, and the deeper it gets the better it becomes. It is specially suitable for making coke. At the pit mouth it only costs about 6d. p. cwt, so that the use of it will not affect the cost price of iron. The pits are of considerable extent. In 1866, the extraction was about 225,000 tons. ## July 6. 1867. N. 1245. ### The National Bank System of the United States. The notes of the States State Banks were purely a local issue, and were, therefore, constantly and rigidly controlled in quantity by the frequent exchanges and clearings. Notes issued by a small National Bank in Maine may, and do, float away 1000ds of miles from their point of starting. It is hence a common occurrence for National Banks to have to provide for the redemption of a very small fraction indeed of the Notes they have originally paid away. The wide action of the Notes of National Banks has already reduced a large part of them to a discount; and to remedy this discredit, the Comptroller urges that all National Banks shall be compelled to redeem their Notes at par at New York, by means of funds maintained there in the hands of correspondents – that is, of some one or more of the New York National Banks. Aber, says the Comptroller: „If all the provincial National Banks are to redeem their Notes in New York, they must constantly maintain there large funds – the New York Banks will compete for the custody of these funds, and the more adventurous of them will bid for accounts by offering high rates of interest on country deposits. But if the New York Banks give high rates of interest for money left with them, they can only make a profit by advances more or less hazardous, and subject, therefore, to onerous terms. In order, then, to avert the catastrophe of a Banking collapse, Congress must pass a stringent law prohibiting Banks from allowing interest on any sort of deposits.“ Such legislation would be futile and mischievous. The Comptroller proposes other checks for the supervision of the 1600 banks. Z.B. Prevent Persons from setting up National Bks. who find the means of borrowing the largest part of the available means, and applying them to most objectionable speculations. Also clauses for monthly instead of quarterly Bank Returns: the quarterly Returns enable Banks „to prepare for a good exhibit on these particular days“. Schon cry in different parts of the Union about the dangers and abuses arising from the patronage des Secretary of the Treasury in regard to the selection of National Banks to be depositories of public money and financial agents of the Federal Gvt. It is a paramount object with a National Bk. to obtain the custody of the Gvt. money. Selection for such a trust is used as an |149 advertisement to attract private deposits and private business, and largely succeed. The First National Bank at New Orleans, holding Gvt. Deposits, has just failed, under disgraceful circumstance – about 300,000l. has been made away with in a clandestine manner, and a leading authority in New York writes: „The machinery of the National Bks. has proclivities to weakness et danger which cause wellfounded apprehension. Disclosures at New Orleans, and disgraceful previous failures of Natl. Bank Banks in various parts of the country, leave no room for further doubt. The best way for a shrewd manager of a Nl. Bk. to obtain private deposits, is to get up an appointment for his institution as a depository of Gvt. fund.“ Sagt ferner: the increasing number of Banks which even on the face of their quarterly returns do not hold the amount of cash reserved reserve required by law. The returns of October 1866 showed that 55 Banks then held reserves considerably below the prescribed limit. It is now complained in New York, „that the Comptroller has not announced publicly how many of the Banks are defaulters in their reserves since Oct. 1866, nor what measures have been taken to correct this serious defect“. Up to March, 1865, or just at the close of the War, the circulation of the Nl. Bks. no more than about 25 mill. l. St. The expansion to the present limit of 50 millions l. is the work of the 2 last years. Their paid up capital only 30 mill. l. in March 1865, has risen to 84 mill. l. since that time. The advantage and strength of the State Banks arose from 1) Rigid enforcement of cash payments; und 2) perfect freetrade, subject to a few reasonable preliminaries, in banking business. The danger and weakness of the National Banks arises: 1) They have been called into existence, and been distributed over the country by the arbitrary discretion of a public officer, acting in most cases in perfect ignorance or misapprehension of circumstances, exceedingly prone to be influenced by motives of party patronage, and chiefly intent not on supplying the fittest banking institutions to the several parts of the Union, but on finding active and wealthy sympathisers with the Republican party, who, through the medium of the Nl. Banks, would support, first, Northern measures, and next, the views of the majority of Congress. 2) Under conditions like these, Nl. Banks have been set up by persons having no adequate knowledge of the business. They have started a Bank either chiefly as a party measure, or as a convenient mode of getting nearly double rates of interest for their money, or with a view of attracting deposits and employing them in private speculation of their own, or with the object of commanding a deposit of public money, and becoming Gvt. financial agents. 3) As the Circulation of the National Banks is essentially general and not local, the check of constant liability to its return through the exchanges does not operate. 4) The supervision of the Comptroller at Washington over 1600 Banks, of necessity, almost worthless for any purposes of practical control, ausserdem nicht desirable that all the Banking institutions of a country subject to the regulations of a party political officer. The imperfections of the Nl. Bk. System became already practically manifest: 1) in the admitted imperfection of the returns made by the Banks; 2) admitted abuses prevailing in the administration of many of them; 3) admitted exercise of unjustifiable patronage in the selection of particular banks to be depositories of public money, and to be financial agents; 4) admitted necessity of further stringent legislation (f.i. the prohibition of interest on deposits) If no modifications speedily introduced: The large number of incompetent, inexperienced, careless, scheming and speculating people, who have forced themselves or been attracted into the control of the Nl. Banks, will grossly mismanage the business; dissipate the deposits in foolish or disreputable advances, and the Banks will fail. Under the law of prior lien, the Gvt. will, out of any available assets, as far as possible, pay itself first, and in full, and the ordinary creditors, as in the recent case of New Orleans, will be left without a farthing. The Notes of the failed Bank will be at least to some extent covered by the lodgement of Federal Gvt. securities, but there will be a wide field for ingenious financing in the realisation, sudden or gradual, of these securities, and in the cancelling, sudden or partial gradual, of the particular Nl. Bk. tainted by default. A series of failures of Nl. Bks. may create a panic and bring down a large part of the organisation at once, or the distrust and dissatisfaction may operate more gradually. During the last 2 years, the Nl. Banks have had all in their favour. They have run up their Circulation from 25 to 60 Mill. St., and prices have all been rising. They have now reached the limit of their Note Issue. Process of reaction has set in which, by the by, will render cash payments again possible. This kind of reaction wird Masse dieser hastily set up concern ruiniren. ## July 13, 1867. N. 1246 ### 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 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. 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 come in and compete for that sort of labour , 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 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). Schließen 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. ### Workhouse Reports. Zusatz von Marx. Schließen (Communal (self) Government.) 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. 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. ### Paris 10 July. Bankruptcy of Pollet, the banker of The Economist: Roubain Schließen Roubaix. Liabilities 16,000,000 fcs, assets: 20,000,000f. Just condemned by the Court of Lille to 5 years imprisonment and 5000 3000 fcs. 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. ## 20 July 1867. N. 1247. ### Finance of the American States. (VonGeorge Walker, Springfield Massachusetts gegen den Standard Correspondent ) Zusatz von Marx. Schließen (Loanable Capital of the West.) In the New York Financial (nicht Commercial) Chronicle of April 27, 1867 carefully prepared table on the indebtedness of the 36 States composing the Union, in 1860 and 1866. The figures are derived from the latest State reports, and are official. Total of these debts in 1866 = 352,194,290$, but in 1860: $255,839,769; increase only during the 6 years within which the war occurred of$96,354,521. In the 3 largest States of the West – Ohio, Indiana, and Illinois, the aggregate debt was reduced in that period from 37 to 31 millions, and in Pennsylvania, after New York, the most populous state of the Union, reduced 2 millions. The largest increase was in the rich States of Massachusetts (18 millions), Connecticut (10 mill.), New York (171/2 mill.) Hier und the other North Eastern States the greatest stimulus given by the war to manufactures, and other productive industry, and in them, consequently, the largest boundies bounties paid to voluntary volunteers, and most voluntary monetary relief furnished to the families of the absent soldiers. In the West, no considerable bounties were paid, and no debts, on account of them, could therefore be created.

The State of New York has just published a return on its indebtedness, embracing the State debts, and the debts of counties, cities, towns and villages within it. State Debt now $51,753,082, but of this 34,182,975$ existed before the war and more than 18 mill. of it represents the costs of the Erie canal, a gigantic work of internal improvement, nearly 400 miles in length, which has existed for 40 years, and has contributed many times its cost to the wealth of the State. Interest on it defrayed by the tolls of the canal, paid by the whole inland commerce between the West and East. The county, city, town, and village debts $85,675,645; of this$41,927,998 created for bounties and other war purposes; residue grown out of internal improvements, roads, bridges, waterworks, railways, schoolhouses, almshouses, prisons, asylums for the infirm, hospitals, all built by the help of the municipalities; debts temporarily created for them. Greater part of them only municipal guarantees; no burden whatever, on account of them, falling on the people. Total Debt of New York, alles zusammen, less than $140 mill. Population of New York nearly 4 mill. that of the late loyal states about 24 Mill. Southern states had never great local debts, weil no improvements. If the State and local debt of the whole loyal North on so large a scale as those of New York = 850$ mill. Aber die population of Ohio, Indiana, Illinois 51/2 mill., their aggregate state debt: 31 mill. The population of New York is 3,880,000 und its State debt 51 mill., more than twice as large as that of these Western States per capita. The disparity of local indebtedness noch grösser, weil in den new agricultural states not so many municipal bodies capable of creating debts as in the older and richer states in the East, and very few of them have an established credit. Their wealth is chiefly inland, and of this much is unimproved. No loan fund in the West to make the advances necessary to create debts. Little banking capital (proportionally), no savings’ banks, few insurance or trust company companies; and private capitalists can do better than lend their money on county or city bonds. To a very large degree, the ordinary hand to mouth business of that section is done on Eastern capital; and there is certainly no local capital which can have been immobilised in the manner supposed. Their absolute inability to borrow must, therefore, have kept the Western local bodies from contracting considerable debts. The total bank capital of the Union is 420 millions; and all of this is invested in Federal Bonds, and, therefore, the loanable capital which they control must come from the people in the form of deposits, and from their circulation of 300 millions. Of this bank capital, New York has 116 millions, the 6 New England States 145 millions, and Pennsylvania and New Jersey 60 millions; while the 12 Western and Border StatesOhio, Illinois, Michigan, Wisconsin, Iowa, Minnesota, Kansas, Missouri, Tennessee, Kentucky, Nebraska, Colorado, with a population of nearly 12 mill., have only 68 mill. of banking capital. The savings’ banks of the |155 East also hold a very large fund, much of which available for local loans. The savings’ bank of New York $141 mill., of Massachusetts 67 mill.$, the other North Eastern States, including Pennsylvania and New Jersey, hold proportionate amounts. Mit exceptions, here and there, z.B. 8 or 9 mill. $in California, savings’ banks are unknown in the U. St. The savings banks of the West are her broad acres of cultivated land; and the only deposits of its people the seed, the growing crops, the horses, the meat cattle, the hogs, and the farming implements, with which the land was stocked. Nearly the whole loanable capital of the Union is held in the Eastern und middle States, und no appreciable part of their capital is invested in the local debts of the West. Daher kann die indebtedness (State und Local) der U. St. not exceed$ 650 mill. Added to Federal Debt, as shown by the June statement, of 2515 mill. $, the total public debt of the American people would be 3,165 3165 mill.$, a sum which does not much exceed the anticipated amount of the Federal Debt alone when the war was ended. Dagegen schreibt der Standard Kerl von 4 4000, und probably nearer 5000 millions.

## July 27. 1867. N. 1248.

### Effect of Trades Unions on Prices and Wages.

Trades Unions are introduced into all trades, but more or less into all trades of skilled labour, not at all or very little into agriculture or other departments of unskilled labour. Dieß would nicht raise manufacturing produce, weil in the barter of gold for skillmade articles an equal force would be operating to raise sowohl den value of gold (mining being also a skilled labour) and the articles. Daher reduced the price of agricultural produce. (as gegen Gold) If labour migrated from agriculture to mining and manufactures easily and quickly, this process would be arrested, but in matter of fact it does nothing of the sort. Der agricultural labourer is like the capital sunk in the plant of a particular trade; it cannot be got out for any gains or by any means. Much labour is cooped up in agriculture, which for its own gains and earnings had better gone to manufacturers. Aber andrerseits: Any fall in home-grown corn, or other agricultural produce very slight. It cannot be effected except by an increase of quantity und dann nöthig resort to inferior soils and greater difficulties of production. The fall in the price of these articles already checked by the economy of nature. Also, upon the whole: the prices of all articles would continue unaltered. If in manufactures the rise in wages reduced profits 1 or 2%, capital would flow into agriculture as long as it could obtain a greater rate of profit. Aber even the augmenting difficulties of further production would reduce that profit. So kein Anlaß to go to agriculture. Also result: a general reduction of profits, in trades of skilled labour, becauses because wages forced up by it, and prices remain the same; in agriculture, because of resort to inferior soils. Hier supposed that money (gold etc) was produced within the country.

### How to retain farm labourers?

Allgemeines Gekohl auf den Agricultural Meetings über scarcity of labourers. Sir Stafford Northcote (President of the Board of Trade) attempted to make out, on agricultural meeting in Devonshire, daß derselbe Mangel in the mercantile navy, the works and employments of the large towns und manufacturing districts. Darauf Remonstrances: The Rev. E. Girdlestone (Canon of Bristol and Vicar of Halberton, in Devon) in a letter to a newspaper, stated that there are about 60 farms in his parish, and that, with very few exceptions, the pay of the ablebodied agricultural labourers is there 8s. a week; in some cases only 7. And that a like scale of wages prevails throughout a large part of Devonshire. He added: „In many instances, deduction is made, not only for rent, but for grist at the farmers’ price, so that the labourer sometimes does not carry home more than 3s. 6d. in coin. I know 2 strong lads in one family, aged resp. 16 and 14, who receive from the farmer who employs them, the one 3s. 9d., the other 2s. 6d. a week; and the farmer, reckoning these miserable earnings of the 2 lads together with the father’s wages, stated in a public paper that he gave his labourer 14s. a week.“ Another Vicar in Hampshire says: „The wages received by an able-bodied labourer when engaged in |156 ordinary work is 9s. a week. Out of this they have to pay one s. a week for houserent. … There is no ale, cider, or any other emolument given.“ Well, does any one wonder that rural labourers get away from Devonshire and Hampshire the first available opportunity? … How are the farm wages of such districts to be increased? To some extent by the depletion of the market. But this process, especially in backwards backward regions of the West of England, must be a slow one. … If most of the estates in England were judiciously managed, some of the present tenants must, perhaps, either give up their farms, or give up some portion of their land.

### Strike of Agricultural Labourers.

Strike in Buckinghamshire; village of Gawcott, near Buckingham; demanded advance of 2s., namely from 10 to 12s., with an additional sh. for Sundaywork, which would be necessarily the case with shepherds, horsekeepers, cowmen, and the like. Appeals have been made to the public und subscriptions have, indeed, aided them. Some of the Gawcott farmers have yielded. The same demand is being raised in other parishes in the neighbourhood. Rural labour has been scarce for several years past, while at this particular time the prices of all kinds of provisions, besonders bread and potatoes, very much higher than for some years. Discomfort of insufficient cottages, long distances between the places of work and the abode abodes of many of them. The agricultural labourer has no other mode of righting himself than by combining with his fellows to demand better wages. Farmers are not to be expected to give more than they are compelled to do by the rates current in the labour market; and meeting, as they do, at their vestries, and in fairs and markets, they can and do practically combine together to keep wages down to the lowest possible point. Until very recently, that point was very little beyond the merest maintenance for a human family.

The movement of the labourers in some of the worst paid of our agricultural districts for an advance of wages must be regarded as a part of the great movement in English agriculture which is imminent.

## 3 August 1867. N. 1249.

### Paris. 1 August. Failures in Building Speculation.

Building Cos. in Paris seem not destined to prosper, notwithstanding the vast number of new houses which the immense demolitions of Prefect Hausmann necessitates. The difficulties of the Great Immobilière Co. are well known. The directors of another Co., the Immobilière de la Rive Gauche, were obliged to avow in a recent meeting of shareholders that its debts were 15,607,428f., and the assets, consisting of houses and building ground, only 10,563,266f. So deficit of 5,044,152. A third building Co, that of the Boulevard du Temple, failed some time back. The great speculators in housebuilding are also said not to be prosperous.

Manufacturing Towns: Iron trade has continued very inactive.

## 10 August, 1867. N. 1250.

Blue Book: Reports from ministers et Consuls on industrial Questions and Trades Unions:

## 17 August, 1867. N. 1251.

### What Bankers should at Present do with their money.

Much of every country bankers business’ banker’s business deposits are employed in his own district at comparatively unvarying rates, and he can now get upon these 4, 41/2, or even 5%. For such old money, so to speak, he can afford to give 2%, or even a trifle more. But nicht upon new money, which he has to send to London to employ. London Bankers only give 1%, and even this rate – miserable as it is to the depositor – is not very satisfactory to the banker. In most parts of England, vestiges of the old „fixed price“ of money. 5% gilt noch als natural rate (in Folge der früheren usury laws.) Die country bankers können daher sich so leicht raise money to 10 or 12%, in times of difficulty, wie at London. Andrerseits brauchen sie nicht so zu reduciren. Aber auch, verglichen mit „London bills“ und the larger bills of all great cities sind „country bills“ the bills of less known people. Der country banker knows them, and charges them more.

### Failures of Three National Banks in the U. States.

2 in State of New York, 1 in Massachusetts, Liabilities 230,000l., including the paid up capital of 82,000l. The causes: advances imprudently made on bad securities, and speculations in land. … Most prolific grain harvest secured, South, North, und West. Guter cotton crop steht before.

Standard Correspondent schreibt New York, 30 July: »Within the past 5 days 3 National Banks have failed: Unadilla National Bank (Unadilla, New York); Newton National Bank (Newton, Massachusetts), Weedsport Nat. Bank (Weedsport, New York)[.] The liabilities of the first at least $750,000 (mit Capital:$,100,000), the liabilities of the 2nd $210,000, of the 3d$200,000; the capital of each of the two last named: $150,000. Ausserdem, the Pegnonnock Nl. Bank (Hartford, Connecticut) has just lost$50,000 by the peculations of an officer. Cause der disasters: reckless speculation, und equally reckless extravagance in living, induced thereby on the part of Bk. officers. In every instance numerous poor depositors ruined.[«]

The Unadilla Bank organised some 12 years since as State Bank, had profitable business. Nach institution des National Bank scheme, its managers deposited $110,000 in Federal bonds und received a charter as a Nat. Bank and$100,000 in Nat. Bank currency. As it had long enjoyed the confidence of the community, it became a sort of savings Bank for the surrounding country; und enabled to carry on a fair business in advancing money, or paper, to the farmers and shopkeepers of the neighbourhood, obtaining the full state rate of 7% upon its loans. Received so not less than 13% upon its capital stock (nämlich ausser den 7% mindestens 6% upon the bonds deposited mit der Gvt.[)] They (its managers) invested a large sum in the purchase of petroleum lands in Pennsylvania, another in real estate in various towns, und another in a scheme for making cheap paper upon a „patent“ process. Endlich its notes protested. Run. Usual closing of doors. Struggling farmers, widows, orphans, small shopkeepers, dealers in produce have become paupers. One man committed suicide; two persons have become insane. … Trade is at a standstill in the east. The losses of some of our New York dealers in dry goods are to be counted by millions. Stewart, Lord, and Taylor, Arnold and Constable, Lake and M’Creary, and other heavy dealers in dry goods, are offering their goods at less than their original cost in Europe, and yet their stores are deserted. The paper money system makes an „easy“ money market just at this time … The advocates of the Nat. Bk. system assert that at all events the notes of Banks, being secured |158 by the bonds deposited with Gvt. bonds in excess of the amount of circulation, will always be redeemable at Par. Dieß only partially true in the cases of isolated failures; for the only value of the currency lies in the public confidence, and if the public refuse to accept at par the notes of broken Nat. Banks the holders must suffer, and the holders are the mechanics und labourers. Wenn aber viele National Banks auf einmal caput gehn, then the value of the notes nur »what the bonds, held as „collateral“ security, will sell for in time of general financial disaster and distress«. But the depreciation in the value of the notes is the slightest disaster of people in connection with Nl. Bank failures. The ruin of 1000nds upon 1000nds of depositors whose money has been used up in foolish speculations by bankers, is a calamity of vastly greater magnitude.

## August 24, 1867. N. 1252.

### The Credit Foncier of England.

Rechnungsablage oder „Interior“ dieser (relatively guten) Finance Co.

Die direct liabilities only £127,922 (darunter 43,605l. für deposits)[.] Contingent liabilities of 368,757l. Singular smallness of their debts. Ihr „written up“ Capital = 1,800,000l. Diese Co. neu, formed out of the ruins of the „Credit Foncier and Mobilier of England“. In the assets of the old Co taken over by the new one figurirt: Fully paid shares and stocks, 1,159,000l. valued at £305,466 und in their Report the directors say that „the difference between the sums at which the securities were valued in the Co’s books and their par value is no less than £.1,146,717[“]. Now the whole funds of the Co., whether belonging to themselves or others, only £1,997,000, and when there are losses of this magnitude from the fluctuation in the value of securities, who can be sure of anything about it? The directors tell us they used to value their securities at the price of the day, but now for property like this there is „practically no market“, i.e. the property cannot be sold at all or for anything; and, therefore, the directors are obliged to value it themselves. Of course, we do not know what the Co. gave for these shares; some of them may have been bought in cheap market, others allotted under par by special arrangement. Dennoch the value of the property has fluctuated to that amount, and to somebody’s loss, and the doubt remains whether Cos. which deal in articles of so unstable a value, can be relied on to secure a sure income.

The directors say that they have at stake in the following Cos., or in properties connected with them, the following sums:

 City of Milan’s Improvement Co. £.243,615 Varna and Rutschuk Railway 196,467 Belgian Public Work Co. 107,279 Irrigation Co of France 282,740 Imperial Land Co. of Marseilles 325,666 Millwalls Docks Co. 145,526 1,301,293

besides a large stake both in the und Paris Streets Improvements Co. |159 Added die leztern, probably all this these investments = Capital of the Co. Profit on some of those investments may make up for loss in others. And as respects the income to be derived from these securities, such is of course the case. A person who bought all these things to hold would have some income from some of them; there is no common cause why they should all cease to earn. But a finance Co. buys to sell; the great profit such Cos. hope to make, and once apparently did make, did not arise from the earnings of a railway Co. or a dock Co., but from the changes in the share market. And the fatal fact, that securities of this kind all high in good, all low at once in bad times. This does not indicate a secure source of profit on which investors might rely for an increase, but rather a system of sharedealing, which will yield great sums in very sanguine times, at the cost of being left with a property for „which there is no market“ in depressed times.

### Subways.  Zusatz von Marx. Schließen (Gas Cos. etc)

Nämlich for Gas und Waterworks (Repairs) (statt daß sie jezt beständig die Strasse aufbrechen.[)] In 5 years there were 5,332 openings of the street in Gray’s inn Road and Holborn. Although the gas and water Cos. were informed whenever paying was to be done, they invariably waited till afterwards, in order to get over the ground again. The result: permanent deterioration of the roadways. Nach Mr. Bazalgette ganz verdorben die new street of Southwark, „one of the most perfect pieces of paving“, by the Cos. cutting their trenches, breaking up the concrete, disturbing the arch of stone paving. All this would be obviated by the use of subways. The Gas Cos. say that as Parliament has once allowed them to do as they like, it has no right to make them consult the convenience of the public The safety of the subway system is merely a question of ventilation, and a downcast and an upcast shaft for every 3 miles would be sufficient. (Nämlich die gas pipes to be laid in subways). (One explosion in such a Paris subway, aber 15 explosion explosions in the Paris sewers from leakage through the earth.)

### United States. Finances. (Official Report of McCulloch 7 August 1867)

Total debt 1 August, 1867: $2,686,685,896. Increase since 7 months of January by$11,623,391. Since January decrease of about 11 Mill. $greenbacks afloat, their issue on 1 August being$369,164,844.

1867 imported at New York $53,431,860 worth of Foreign Dry Goods, während 7 months, 1866 während same period$80,442,325. Decrease of $27 Mill., about 1/3 of import of 1866.  (7 months) During the 7 months of 1867, the total Customs receipts at New York$71,260,915 decrease over 10 Mill. $of 1866 81,309,466.  Vom Jan. 1 to Aug. 3 1867, the New York Specie export$38,427,856. Same 7 months of 1866 51,824,771.

Nearly all the export of 1867 made in the last 3 months, wahrscheinlich for maturing of bills drawn by American pleasure travellers in Europe (Paris Exposition).

Specie Production in 1867, von California und Nevada mines, Increase gegen 1866, besonders in den Nevada mines. Bulk of the bullion from those mines seeks outlet |160 through San Francisco.

 During first 1/2 of 1867 amount sent to that city $22,193,291, same time of 1866$21,137,763.

The following table shows (Average Rate of Taxation almost tripled everywhere, since 1860) the ratio for each inhabitant of the total taxation in 1860 and 1866, and also for 1866 the proportion levied by the City, the State, and the Federal (U. St.) Tax.

Cities. 1860 1866

Total Tax.

$. c. City Tax$.  c.

State Tax

$. c. Federal Tax.$.  c.

Total Tax.

$. c. New York 12. 12 17. 34 1. 84 13. 95 33. 13 Philadelphia 6. 68 8. 17 1. 27 13. 95 23. 39 Boston 15. 32 21. 98 2. 49 13. 95 38. 42 Cincinnati 11. 25 10. 39 1. 50 13. 95 25. 84 Chicago 6. 18 8. 57. 1. 17 13. 95 23. 69 San Francisco 18. 71 18. 71 4. 96 13. 95 37. 62. ### Improvement of Land. Zusatz von Marx. Schließen (Les nouveaux propriétaires) Nothing is more common than to see a man, who has made a large fortune in trade or manufactures by most intelligent activity, when he becomes a landed proprietor, to be remarkable chiefly for his exaggerations of the semi-feudal abuses in the management of his estate. He becomes, as it were, assimilated to the territorial class. His preservation of game is more monstrous than that of the old aristocracy; and his restrictive control of his tenants is not less stringent and mischievous than theirs. ## 31 August. 1867 N. 1253. ### The Finances of Russia. Consul Michell’s Report of Russian finance friendly to Russia; he obtained his appointment partly through Russian influence. It shows that that Gvt. never succeeds even temporarily in avoiding a deficit. Before 1832, each Russian department spent at its own discretion; deficiencies made up by the issue of inconvertible notes, sales of property, or by leaving debts unpaid. In 1832 a slightly better system introduced, but Treasury still unable to make expenditure and revenue meet, and compelled every year either to borrow money abroad, or to take money from the State Banks of Deposit, or issue inconvertible paper. Between 1832 and 1861 thus obtained 216,000,000l., average deficit for 30 years of 7 Mill. l. a year.  Official admitted deficit of 1862 over l.1,500,000; 1863 1,700,000; 1864 6,300,000. 1865 2,700,000 1866 5,700,000. Michell shows that this is far within the truth. The State helps itself from the National Bank as it pleases, giving only inconvertible |161 paper in return; and so, in one way or other, the Russian Gvt., von 1861–1866 borrowed 75, 75 Mill. l., or at the rate of 15 Mill. l. a year, an average deficit of nearly double the old amount. Much of all this debt met by notes which bears bear no interest, and the interest bearing debt bears no proportion to the real indebtedness of the State. No one knows how much paper is afloat, total enormous, but public debt = 286 Mill. l., mit annual charge of 11 Mill. l., or average of about 41/2%. As the ordinary revenue in 1866 = 53 Mill. l. St., Russia owes, apart from her paper, nearly 6 years income, and has mortgaged nearly 1/5 of her usual receipts, not a very formidable state of affairs when compared mit English, French, or Dutch accounts, but very formidable when compared mit dem true analogue, India, which owes barely 2 years income, and has mortgaged little more than a tithe of her revenue. India, moreover, has no inconvertible paper. Yet India can borrow at 5%. Michell says, as to the unknown quantity of inconvertible notes: „The accounts between the Treasury and the State Bank are so complicated as to defy any inquiry for the purpose of making a statement beyond dispute. Practically, the State helps itself to whatever it wants from the Bank, which is thereby compelled to issue more inconvertible notes to ‚strengthen the branches‘, and thus to suspend its own charter. The Treasury has broken the State Bank, for it has long been unable meet its engagements to pay specie. Nor could it return to the public their deposits if demanded, except by a corresponding new issue of inconvertible paper.[“] „Irrespective of 45,000 men serving in the Imperial army, the 800,000 rank and file, supplied by a total population of about 55 millions, constitutes 14/10% of that portion of the population liable to conscription, while the numerical relation of the army to the population of the empire (70 mill.) exceeds that of France and Prussia by 1/3.“ „At the same time“, says Michell „the number of young men eligible in Russia for service is comparatively far smaller than in other countries of Europe, where about 1% of the population yearly reaches the age of 20 years, and of these 40[%] are fitted for military service. In Russia, owing to the mortality of the children, it takes 50 millions of the population to produce the number of young men of 20 years that France can command with a population of 38 mill. According to this calculation, the number of men of the class liable to military service, who reach the age of 20 years in Russia, about 400,000 p. an.; of these, perhaps not more than 160,000 are fitted for the army; but the actual number yearly taken is 100,000, and these only return to their families after 8 years’ service. Official Expenditure 33% of revenue; in der That immer viel mehr. Ausserdem charge to the country by the fact that the annual expense to the male taxable population of furnishing a contingent of 100,000 recruits cannot be less than 31/2 mill. roubles, while their liability to transport and quarter troops is estimated at 15 Mill. roubles, constituting a tax of 60 to 70 copecks per male; while in order to possess irregular troops, 3 mill. of a population occupying the most fertile provinces of the empire are exempted from all taxes and contributions.“ ## September 14, 1867. N. 1255. ### The Common Schools of America. Rev. James Fraser was sent out, to make the inquiry, by the Schools Inquiry Commissioners. His Report now printed. He begins by the State of Massachusetts. By its laws every township is bound to keep up common schools for the instruction of all the children of the township in the rudiments of education. Every township containing 500 families or householders is, in addition, to keep up a high school of the second class, in which general history, bookkeeping, surveying, geometry, natural philosophy, chemistry, botany, the civil polity of the State itself and of the U. States, and Latin are to be taught and every township containing 4000 inhabitants is further to provide instruction in Greek, French, astronomy, geology, rhetoric, logic, intellectual and moral science, and political economy. These schools are supported almost entirely by local taxation. There is a State School Fund, contributing towards their expenses, but this contribution is small, positively and relatively. In 1864, the average sum contributed by the State School Fund less than 1/4$ for each child, while the average sum raised by local taxes almost 61/2$for each child. School fees are unknown in Massachusetts, Illinois, and Ohio; in some other States they are permitted, but limited by law. Where they do not exist, each township is bound to raise such sums of money for the support of its schools as it judges necessary. If it refuses or neglects to raise the money, or to choose a school committee, it is liable to penalties, and receives no aid from the State School fund unless it raises 11/2$ for each person between 5 and 15. These penalties difficult of infliction, and instances where they are evaded. The law says the common schools are to be kept for at least 6 months in the year. In 1864 more than 1/4 of townships failed in this respect, 32 townships out of 68 (of more than 4000 inhabitants) did keep no First class school (as by Law), in 1864. Nach dem Law der High Schools to be open 10 months in year. Of the 118 High Schools of Massachusetts, in 1864, only 88 fulfilled the requirement; 14 kept open for 8 months only, 16 for less than 8 months. These breaches insignificant. The public duty by no means neglected in the chief States. In Boston, more than 1/8 of the whole amount of taxation, about 21/2% on the capital of the city, spent on education; in New York city 1/5 of its ordinary annual taxation, 51/2% on its capital. „The cost“, says Fraser, „being defrayed by taxation, is proportionate to the property of the parent, not to the number of the children he sends to school.“ |163 „It is nothing more than a sober conclusion, that an American farmer frequently gets an education for his family at a cost to the community of not more than 10sh. a year per , 1/3 of the amount at which our own Committee of Council have been in the habit of rating the cost of the education of the children of an English mechanic or labouring man.“ The community, defraying the cost, has the right to insist on guarantees, that the education is effective. Each township elects a school committee, charged with the management and control of the scholars at large. The duties of the committee are to appoint, examine, and, if necessary, dismiss the teachers; to visit and inspect the schools, to provide books and apparatus, and maintain and keep in order a sufficient number of school houses. As to the books to be used, the school committee bound to take care that „no book calculated to favour the tenets of any particular sect of Christians be purchased or used, and to require the daily reading of some portion of the Bible in the common English version.“ There is a growing demand in the U. States for a central bureau of education, or a Ministry of Public Instruction. „The supreme control of schools absolutely in the hands of local administrators“ and want of „a properly authenticated and independent officer“ to see that legal requirements are not ignored or evaded. At present the law rests too much on the sentiment of the district.

The Massachusetts Factory Act is almost if not quite inoperative. Parents are bound to send their children to school under a penalty, but this seems to be seldom inflicted. But the demand for compulsory attendance is growing loud and vehement. „It is argued that if the State taxes me, who perhaps have no children, towards the support of schools for the security of the society, I have a right to claim from the State for the security of the same society, that the schools which I am taxed to maintain shall be attended by those for whose benefits they were designed.[“] Others ask if the State has a right to put its subjects into prison, but no right to send them to school; a right to take away life, but no right to make life useful and bearable. Diess richtige Sprache für the descendants der early colonists, who „in 1642, only 22 years after the landing of the pilgrim fathers from the Mayflower, enjoined upon the municipal authorities,“ (by a public Act passed in the General Court of the colony) „the duty of seeing that every child within their respective jurisdictions should be educated“. These Public schools supported by the people for the people, instruction offered freely to everyone, powers given by the law to render that instruction compulsory.

## 21 Sept. 1867. N. 1256.

### Waste of Educational Revenues. (in England)

Oxford und Cambridge have almost fabulous income. They don’t know what to do with their money. Prof. Rogers hat vieles brought out. Mr. Forster tried to get at the facts (as member in the Committee on Mr. Ewart’s University Bill), but was outvoted. Nach Rogers die revenues of Oxford reported von 2 200,000 to 800,000£ St. Nach Roundell’s exact numbers für the different items, revenue of 500,000l. Dafür educated about 1,400 undergraduates, chiefly of the upper class, members of the Established Church. Und diese 1400 pay for their own |165 education into the bargain, z.B. 20,000l. a year for tutors’ fees. The fixed charges of every college for tuition, chamber rent, food, and attendance, at least 60l. a year for each undergraduate. At Cambridge, average annual cost to a parent 300l., though some young men live on 150l. But the academical year consists of only 24 weeks. During the rest of the year, the young men have to be maintained at home etc. On what, then, are these endowment endowments spent? On Prizes. The University of Oxford alone, independent of the colleges, is not more than 27 27,000 or 30,000l. Von den incomes der colleges (13,000 für Merton College, 30,000 St. John’s College, Cambridge) nur 200 or 300l. a year is directly spent on instruction. Das actual money für die Professors lecturing in den colleges fast nur von den fees paid by the undergraduates. The revenues go to the Fellows and the scholars. These fellowships may be retained for life if their holders do not want to marry, and have no objection to taking orders. Some who hold them for life do nothing in return for the income. A man gains a fellowship at 24 years, and vegetates then on his 300l. a year. He does not live in Oxford or Cambridge. Because he was first in a competitive examination, when young, he is maintained for the rest of his life at the expense of all future competitors.

## September 28, 1867. N. 1257.

### Further Failures of the National Banks in New York State.

2, mit paid up Capital of about 100,000l., Liability to depositors and customers about 450,000l. more. Farmers’ National Bank, of Brooklyn (New York) und the First National Bank, of Kingston (New York.)

„The Farmers’ Bank of Brooklyn“, organised 1852, State Bank; with a nominal capital of $500,000, the capital stock being divided into 25,000 shares of$20 each. High place, under prudent management, in the public confidence; large profits; its dividends, paid semi-annually, about 8% of the capital stock. Its shares quoted 118 to 120, and were practically out of the market. It sustained the storm of 1857, when the Banks were tumbling by 100nds, and was thenceforward looked upon as perfectly sound. In 1865 transformed into Ntl. Bank. A settlement was made, its assets were divided, converted into the „Farmers’ Nl. Bank[“], with a capital stock of $300,000, represented by 15,000 shares at$20 each. The shares appropriated by the stockholder of the old State Bank. Its affairs proceeded without interruption, its stocks being quoted in Wallstreet at 108 to 110. A Branch Bk. at Green Point, a suburb of Brooklyn, was established. People were induced to make the Brooklyn Bk. a sort of Savings’ Bank, and two Savings’ Banksthe Germania and the Dime [–] deposited large sums in its vaults. Nach official statement on 1st July 1867 its deposits: $1,156,135. These deposits made by the Savings Banks aforesaid, small tradesmen, farmers and market gardeners living in Long Island, by speculators, manufacturers, private gentlemen, and mechanics – the largest deposit by one individual probably not exceeding$15,000. The President of the Bank and others connected with its management used these individual deposits for the purpose of speculation.|

166

The nature of these speculations shown by list of the offices filled by the President, who was treasurer of the Tionesta and Sugar Greek Oil Comp., treasurer of the Beaurehoff Run Oil Co., treasurer of the Challenge Gold and Silver Mining Co., director of the Trust River Navigation Co., president of a Company of Divers and Wreckers, and director of a Co. for making „whisky“ by a cheap „patent“ process. Upon all these bubble cos., the manager of the Bk. wasted the funds of depositors, and the capital of the Bank. They squandered so much that on 1st July 1867 they were unable to show to the Gvt. Inspector the Currency Reserve (of 15% of deposits and circulation) required by law to be kept in hand by every Nl. Bank. They were duly warned by the Gvt. Officer. The prescribed 30 days granted to Nl. bankers as a time for complying with the requirements of law expired, and, the Currency reserve not being shown, the Comptroller of the Currency appointed a receiver, who entered upon his duty on Saturday. The liabilities of the Bank were: (on 1st July 1867): $1,851,307, but since that time, the amount has been swollen by speculation to at least 2 Mill.$. The available assets: Real estate, valued at $26,000; cheques on solvent Banks,$49,524; U. St. Bonds, deposited as a basis of circulation $285,500; U. States Bonds, on hand,$3,300; bonds and mortgages $1,900; city certificates$800; cash on hand in Circulating Notes of other Banks, about $27,000; legal tender notes, compound interest notes, fractional currency, specie, and cash in an Albany Bank, to redeem the outstanding Circulation of the Old State Bank, about$100,000; or in all, something less than $500,000. Other assets mentioned, but not available or at least doubtful; probably 1/2 mill.$ is a liberal estimate of the assets; 25% on the Liabilities. This is equivalent to the ruin of 100nds of small tradesmen, poor depositors, farmers etc[.] The effect of the failure was seen in the mob that besieged the doors of the Bk. on Saturday – a weeping, cursing, howling, distracted mob of old men and young men, old women and young women, Yankees, Germans, Irishmen – representatives of the Cosmopolitan population of an American seaport city. The creditors of the Germania and Williamsburgh City Dime Savings’ Bank – whose failure probably involved in that of the „Farmers’ Bk.[“] – surrounded the latter’s doors with frantic demands for their „money“, the Directors of the Savings’ Bk. being unable to afford them any relief. It is unnecessary to dwell on these scenes – being the inevitable concomitants of all Bank failures in all lands.

The Kingston Nl. Bank failed durch speculations on the part of its officers. It was organised under the National System, capital $200,000. The cashier has sunk his own private capital of$130,000, and $70,000 to$80,000 of the money of the Bank; i.e. money of depositors, and the President has withdrawn not less than $90,000 from the Bk. of deposits or currency. The Federal Gvt. is responsible only for the Circulation Notes of the Collapsed Banks, welche secured sind by Federal bonds deposited in Washington. Aber die depositors must look to the humbug mining and stock Cos. for their money. Result: widespread ruin among small traders (shopkeepers) etc and farmers. The Comptroller of the Currency has made „a black list“, in which appears the names of all Nl. Bks. suspected of unsoundness. It is not exposed to public inspection. Not less than 7 Nl. Bks. – 2 of them New York banks – are in this list described as „shaky“, as most fit to be watched.| ### Mulholland’s (Irish man of Business) Remarks On the Currency at the Belfast Social Congress. Any person who contracts a debt comes under an obligation to pay money. … A bill or note may have the effect of postponing the payment of the debtor, while, at the same time, enabling the creditor to anticipate the effect of payment. But the creditor can only realise in the present by the possession of a bill or note the effect of a future payment, by finding some one who has loanable capital at command. When trade is in a natural condition, the supply of this floating uninvested capital is usually equal to the demand, and the interest for loans at its normal state. Aber when a period of speculation and excitement, with inflated prices, had led to a general extension of transactions, there is, necessarily, an increase in the amount of indebtedness. When this indebtedness has to be liquidated, it is found that there has been no corresponding increase in the supply of unemployed capital. In fact, the supply in such cases is generally smaller; for many who formerly preferred the small but sure return from interests to the risk of speculation may have been induced by the contagion of such excitement, and the example of large gains, to withdraw their capital from its accustomed employment, and to embark it in the ventures of the day. The demands for loans having increased, and the supply to meet it diminished, advance nothwendig in the rates of interest demanded by holders and offered by borrowers? Such an advance in the rate of interest is simply an indication that enterprise and speculation have exceeded the limits beyond which they cannot pass with safety. … At last the amount of debt so far exceeds the amount of available loanable capital that a money crisis or panic ensues. Where trade is „International“ as well as domestic „money[“] must have a real, an intrinsic, an international value. It must not only be the measure of the value of other commodities, and the medium of their payment, but absolutely their equivalent. Gold and Silver alone combine all the necessary conditions. In the we had the first symptoms of the financial pressure that continued with but slight intermissions until its culmination on the 11. May, 1866. The high rates given for deposits have proved so attractive, that the amount deposited at call, or short notice, in the London Joint Stock Banks alone, now amounts to about 100 millions. Für diese immense liability they keep a small reserve of money in the B. o. England. Diese Bank proceeds to do with them what the bankers who lodged them felt could not be done with safety – it uses them for the discount of mercantile paper, or it includes them with its own reserve. Now, the same money cannot be a reserve for the joint stock Banks and a reserve for the B.o.E. also. It is, in fact, no reserve for the Bk. of England at all, and it ought not to appear as such in their weekly statements, but be noted as „cash held on account of bankers“. In May, 1866, the total reserve shown in those statements seemed at first sight not to be unsatisfactory, but it was in reality less than the balance held on account of other bankers, so that at that time the B.o.E. had no reserve of its own whatever. We see in the recent history and present position of the commerce of the U. St. a striking example of the effects of an inconvertible currency. Deprived of the healthy check of convertibility, it was certain to become redundant. There had been in that country all the symptoms of a fictitious prosperity – the feeling of an universal increase of wealth. This apparent increase in the value of |168 all property from the inflation of prices was so deceptive, that it misled a leading statesman so far as to make him declare publicly that the war had not only enriched the nation, but added to the wealth of every individual in it. … An artificial level of prices stimulated importations, but it destroyed their export trade, and a heavy balance, due to foreign countries, accumulated against them. To pay this, the money by which they had measured values was found useless, and fell to a heavy discount. A complete collapse must have occurred before this time had not their Government bonds been received in Europe instead of gold. ### Correspondent. Paris. 26 Sept. 1867. #### Pereires. Abtritt der Pereire vom Credit Mobilier. Vermögen von 4 to 6 Mill. £ St. gemacht. »In success the Pereires were worshipped.« Jezt fällt alles über sie her. Sie haben railways in Frankreich established, a service of no small magnitude, considering the lack of enterprise in this revolution-tossed country. They have, too, had no inconsiderable part in promoting the remarkable extension of material prosperity in France after the Coup d’état. ### Mortality in England in 1865. 490,909 persons died (1865) in England. Davon 199,843 oder 40%, under 5 years of age. 70 in a 1000 of children under 5 years died in the course of the year. The deaths between 5 and 10 years only 19,733, less than 1/10 of the deaths of the first 5 years, and about 1/8 in 1000 living. The third quinquennial period, 10 to 15, is the least mortal of all our lifetime; 10,420, less than 5 in 1000 of the living boys and girls of that age. In an equal number of children under 5 and of children between 10 and 15, 14 of the former die when only 1 of the latter [dies]. From the age of 15 upwards the ratio of mortality never ceases to increase. Von 15 to 20 were 13,484; von 20–65, the working time of life, 155,051, the ratio increasing from less than 1/8 per thousand of that age living in the first decennial to more than 32 in the last. After 65, the ratio increases very rapidly. ## October 5, 1867. N. 1258. ### Suggestion Introduction (by Mr. Hutton, at Belfast Social Congress) of Prussian Rentbanks into Ireland. Zusatz von Marx. Schließen (Interest Bearing Currency) The Prussian Rent Banks seem to us a rudimentary and infantine financial device … Stein had to buy out, on behalf of the peasant cultivators, the manorial Lord. The Rentbanks – no banks at all – were simply a Gvt. department charged with this peculiar financial arrangement. The Govt. valued the interest of the „lord“ at such and at such a sum, and issued to him bonds with 4% interest – bonds in every sort of sum from 30s. to 150l. – payable at the option of the Gvt., but not at the holder’s option. The landlord was compelled to take them, and the idea of issuing them in various sums was that he might keep them or pay them away – in every mode that he thought fit. These bonds were secured on the estate, and the tenant was obliged to pay a certain rent-charge annually for their liquidation. There was an annual „drawing“ (Ziehn wie bei Losen), according to the continental fashion, and the bonds „then drawn“ were discharged out of the sums so paid by the peasants. If the peasants did not pay their annual quota, the State took and used very ample powers of entry and confiscation. Der Lord forced to take these bonds. It is plainly a severe act of despotic finance. … In fact, no interest-bearing security is really suitable to currency purposes, because its value changes from day to day. The interest accrues de die in diem. It is one thing on the 1st Oct. and a greater on the 2nd Oct. A sum, therefore, has to be done whenever the bond changes hands, and no population has ever borne, or will ever bear, a kind of currency requiring so much labour … |169 Prussia may have much to teach us in other departments; but, surely money is our own subject; we understand that if we understand anything. And so it is. ## October 12, 1867. N. 1259. ### The Money Market here and in France. Zusatz von Marx. Schließen (Credit Mobilier etc) (Cotton, Wheat etc) The Credit Mobilier Co. (in France) was raised up to be a kind of Providence in the moneymarket, and its stoppage, therefore, troubles people. It was raised up, according to its original programme, to „regenerate industry“, and it was known to have the Gvt. aid in so doing. Its original statutes are full of the most patriotic aims … L. Bonaparte patronised the Crédit Mobilier, and we see the result. A pretty full list of the shares it holds has been given, and greater rubbish could not have been collected, worse even than those of our Finance Cos. They, at least, have had no political aspect, but the Crédit Mobilier has. It is the representative of the „Imperial Initiative“, and when it fails, the Empire is damaged. The state of the Cotton Trade, of Liverpool especially, is gloomy. Cotton has been falling in price rapidly. In Indian cotton, it is probable that many have been obliged to sell to meet bills drawn upon them, and it is not yet at all clear that the price has gone down to the point at which the manufacturers will begin to work. Before the cotton famine we had „Three years’ clothes in advance for the human race“. Beforehand, this great supply was called overproduction; but it had the best effect. It enable enabled us to get through the cotton famine with ease otherwise impossible. But until the whole world is satisfied that cotton has reached its final fall, no similar stock will again be accumulated. The fall in the raw material is ruining many, but no corresponding augmentation of our manufacture occupies our surplus capital or employs our population. Wheat crop bad (barley und oats good.) Our foreign purchases will have to be large. The largest augmentation (in wheat import) is from Russia; and the Russian exchange almost never rises to the point at which gold goes. Large orders, too, are gone to California. Slack Employment: The bad state of credit has, undoubtedly, made the employment of the people worse than it has been for a long time. In some departments, f.i. iron trade, the prospects are improving. Still, compared mit late years, employment will be bad, and consumption too. This evil is of a self-intensifying kind. The worse any trade is, the less those engaged in it can spend on other things, and the worse, therefore, the trade in such other things will be also. ### L. Bonaparte’s Cost. ### Our Wheat Crop. Zusatz von Marx. Schließen (Lawes’ Experimental fields) Mr. Lawes’ experimental fields in Hertfordshire consist of land of fair quality on a chalk subsoil, which has also been artificially drained, and for 24 years wheat has been grown, year after year, on one portion of the land without any manure; on another portion, with a yearly dressing of farm yard manure; and on several other portions, with dressings of artificial manures, varying on each portion, but the dressing on each constituting in fact high farming. In other respects, |170 each portion is treated like every other. „As the preparation of the land“ „the quantity of seed sown, the time of sowing, and every other operation is each year the same for all the plots, the difference of result between plot and plot in the same year is due to the difference in manuring; and as the operations are also conducted, as far as possible, in the same way from year to year, the variation in the produce of one year compared with another should represent the variation of the climatic conditions or season.“ Lawes notices that von 1860 to 1863, there was a progressively increasing yield from year to year; the great crop of 1863 having been the largest grown during the whole series of 24 years, while the subsequent 5 crops show a progressively declining yield. There is little doubt that these cycles of advancing and declining crops are due to season, and that the same results will be found to have occurred in the ordinary farm crops during the same seasons. On the plot unmanured crop of 1866 bushels 121/8 of dressed corn per acre, in 1867 only 87/8 bushels, decline of nearly 1/3. Average produce of the unmanured land for 15 years, 1852–1866 was 151/4 bushels per acre; that of 1863, the largest, was 171/4 bushels. On the plot manured with 14 tons of farm yard manure to the acre, produce in 1866 was 325/8 bush., in 1867 bush. 271/2. On the plot dressed with artificial manure, the highest farmed and most productive, 1866 321/2, in 1867 291/8 bush. p. acre – the average crops for 15 years on the 2 last plots being 355/8 und 361/8 per acre respectively – falling off in this year, compared mit last year, but the proportion of deficiency is nothing like so great on the „unmanured“, i.e., ill-farmed land. The produce of 1867 is not only less than that of any of the 4 preceding years, but also „very inferior to the average of the preceding 15 years“. The produce without manure is unusually low, „indicating that the season was specially unfavourable for the crop on lands out of condition“. The quality of the grain, as show shown by the weight, per bushel, is above the average in every case, except where there was no manure employed. On the unmanured land, the wheat this year was 56-1 lbs per bushel, against an average for 15 years 75-5 lbs p. bush. Here again, we see the greatest loss from season falls on the poor farmer. Lawes estimated the crop of 1866 at 10% below the average, fears the present will be 20% less than the average. ### Money and Trades Unions. If the Trades’ Unions can, as they say, „raise the price of all things“, where do they get the money to pay that augmented price? Under a metallic circulation, as a rule, higher prices require more of the precious metals. The operations of the Trades’ Union have no tendency to improve Banking. The „consumer“, as he existed before the rise of prices, cannot find the money. He is very commonly a person mit fixed income. If he buys less of one thing, he must buy more of another. The new money must be found, either by making the miner work harder and so bring fresh gold into the world, or by changing the distribution of gold, and diverting to the country affected by the Trades’ Unions a part of the gold which used to go elsewhere. Beides unmöglich. Wenn the Trades Unions can cause a general rise of price, how will they get more gold for the same things? ### The State and the Currency. (Communicated) Mr. Patterson in Fortnightly [Review] (July, 1867) proposes: „That the State should secure the substantial value of the note circulation, by requiring that every bank of issue shall deposit with a Gvt. office an amount of Consols fully equal to its note issue, at the same time allowing each bank to security secure the convertibility of its own notes, by keeping in |171 inhand hand so much gold as experience shows in each case to be requisite.“ What we (the State Currency men gegen Patterson) propose is, that all banknotes above a certain amount to be fixed by the H.o.C. should be issued by Gvt. in exchange for properly assayed gold, 22 carats fine, at the rate of 77s. 101/2d. p. ounce, exactly as sovereigns are now issued by the Mint in exchange for the same kind of gold at the same rate. Giving banknotes in exchange for bullion at the exact value of this last per standard ounce, and which is to lie idle in a vault as long as the amount of banknotes which represents it is in circulation, is a very different thing from being a dealer in bullion, nor does it involve any transactions in either home or foreign securities. The H.o.C. must determine what amount of banknotes may be issued against securities other than gold coin or bullion , and this amount banknotes should be unalterable without their consent. The duty of the Gvt. would be simply to take care that any one who wanted banknotes for bullion or gold coin should be able to get them, or vice versa. This could be arranged by 3 issuing establishments at London, Edinburgh, and Dublin, where stores of bullion, gold coin, and banknotes should be kept for the purpose of being exchanged one for the other according to the wants of the public. The State banknotes legal tender everywhere but at the issuing establishments; here they would be simple certificates on gold. They should go as low as one sovereign; dadurch holders of banknotes kept away from the issuing establishments until they required gold for exportation, and the tedious process of changing 5£ St notes into sovereigns, and back again into 5£ notes, would be thereby avoided. Any one who lived in Scotland or Ireland, will admit the 1l. notes’ convenience of carriage and superiority to sovereigns, often light, and to be weighed. The legitimate business of a banker to lend and borrow money already in existence. To each of the 3 issuing departments, there should be a Gvt Clearing House Department, open to all bankers on payment of an annual fee; they should be permitted to settle with each other by drafts on the reserves they have previously lodged at the Clearing House Department, such drafts to be payable to Clearing bankers only. ## October 19, 1867. N. 1260. ### The Low Price of Bank Shares and its Dangers. Low price of Bank Shares now and high prices derselben 2 years ago. As a rule people do not keep at the bankers, without interest, more than the sum of money which they want for current expenditure, and this they must keep somewhere. If a man distrusts the old banker, he selects a new banker, and the aggregate result – the sum total of the money – on the running accounts of all banks is not diminished. Auch die interest bearing deposits, trotz low rate of interest, probably, as great or nearly as great as ever. Even at this low rate, people do not know what better to do with their money. They do not like to go into the funds at a high price. Four causes of the fall in the Prices of the Bankshares: 1) Banking far less profitable trade than it once was. Zwar nicht so fluctuating as the public quotations of the value of money would indicate. A great deal of money is employed at 5% by country bankers in the discount of local bills, which they know to be good, which are not known, and by their nature cannot be |172 known in the London market. In respect to the great London joint stock banks (and in a minor degree, to almost all other banks, too[)], they charge far less, they also give far less; lose therefore not out of their profits the whole difference of the discount. Trotzdem on the whole banking far less profitable. 2) Many banks, besonders those conspicuous banks whose shares are most watched, have greatly increased their capital. A banker, it is true, wants no capital in his own proper business; as justly said, a banker does not begin his true business till he begins to deal with the capital of others. Aber die public demands rightly, that a banker should have a visible guarantee fund to meet the possible losses he may make with their money, and that this fund should be approximately [proportionate] to that money. 3) Leeman’s bill has put a stop to the speculative (dealing in) sale of bankshares. A low price of bankshares is the greatest of all temptations to joint stock bankers. The only mode of raising the value of the shares is to augment the dividends und, in order to augment that dividend quickly, managers take statt securities insecurities. This season of cheap money is the season for warning. It is in that sort of time that the beginnings of panics are laid; and may be laid the sooner if from any accidental cause, like this low value of their shares, bankers or other money lenders, should be unduly anxious to employ their money, and unduly regardless of the quality of the securities upon which it should be employed. ## October 26, 1867. N. 1261. ### Liverpool Bank Scandal Bemerkung von Marx. Schließen (In Money Market Review zu sehn[)]. ### The Finance of Trade Unions. The most remarkable point elicited by the London Commissioners, that they are all insolvent, even the Amalgamated Carpenters und Amalgamated Engineers. The Unions join together the most dissimilar things in the world – the cost of supporting men in sickness and old age, and the cost, or alleged cost, of getting them good wages; benefit societies – and strike societies, strikes are an incalculable element; no one can tell how often they may happen, how long they may last, and what their cost may be. You might as well endeavour to settle a priori the cost of a continental war. This matter was referred to an Actuary by the Commissioners. The rules of the Amalgamated Carpenters Society provide that in consideration of a contribution of 1sh. weekly, each member shall be entitled to 12s. a week when sick, to from 5 to 8s. a week when old, according to the duration of his membership, and to a funeral benefit of 12l. These die objects of ordinary friendly societies, but, in addition to these, the society gives help to members „out of work from causes other than sickness“, i.e. in the disputes with masters, and aids in emigration, as well as upon the loss of trade tools. Mr. Tucker, the Actuary, stated he could form no estimate of the liabilities from such sources; as they depend upon human passions. When a Trades’ Union will quarrel with an employer, or pay members to leave the district, cannot be determined by statistics. If a merchant were asked to pay his life insurance premiums, either to defray the costs of „lock-outs“, or to provide for his family after his death, he would think the proposer mad … It may be said a member |173 of a Trades’ Union might make himself tolerably safe by paying a considerable weekly payment in addition to that required by benefit societies, by paying a large strike premium over and above his common benefit premium. But he does precisely the reverse. The actuary who reported upon the 2 model societies (Engineers und Carpenters) reported that, even as benefit societies, and not including the wages-augmenting element, they were completely insolvent. The subscriptions utterly inadequate even for an ordinary benefit society. „If“, says Tucker, the actuary, „the society continues to be conducted upon its present footed footing, although a continued influx of new members may defer the period, the Amalgamated Carpenters und Joiners Society must ultimately become bankrupt.“ A society which has such future liabilities as a superannuation, may easily have large funds in hand, and yet be wholly unsound; more especially when it has been very many years in existence, and only admits young members. In the first years of a superannuation office, as in the first years of a life insurance, the incomings are present, but the outgoings are postponed. Members are attracted by the „strike element“ to join bad benefit societies. The Central Committee of the Union are sure to have immense funds in hand from the „benefit payments“. Out of the monies subscribed for sickness and old age they can, if they like, fight the employers. If they had to deal with a strike fund alone, they would have in comparison but an empty treasury. The constant hopes and the continual payments of a benefit society keep the strike society together; but if the strike society cannot hold together of itself, it ought to fall. One of the first and most necessary reforms is the separation of the 2 elements of the provident fund from the „contentious fund“. ## November 2. 1867. N. 1262. ### Trades Unions’ Finance. The societies are as yet financially young; their superannuation fund does not begin to tell for years, because they only take young members. Therefore, their great apparent prosperity quite consist consistent with real insolvency, even so far as the risks of old age and sickness are themselves concerned. But if you added to these liabilities the strike liabilities, the insolvency is indisputable. ### Bank of England. Zusatz von Marx. Schließen (Separate Reserves for Bankers’ Accounts) If the Banks all issued notes, and at the same time instituted an efficient system of note exchanges by means of which they returned to one another the notes of their respective issues, as in Scotland, the return by the Banks of the notes in circulation made up immediately after a general exchange of notes would represent the notes in the hands of the general public as distinguished from the banks. As a matter of fact, such a return is made weekly by the banks in Scotland, and shown, in round figures, that the 1l. notes in circulation 2,500,000l. und die notes of 5l. and upwards, 1,500,000l. These returns show with great accuracy the amount of the natural circulation of the country. Aber in England there is a national circulation und an artificial or factitious circulation. The national circulation is the notes in transitu, or circulation outside the banks. The artificial consists mostly of the B. o. England notes held in reserve by the non-issuing banks. The amount |174 so held varies, not according to the actual requirements of the public, but the anticipated requirements, and in times of mistrust the apprehensions of the non-issuing banks. Daher die increase in the apparent circulation on 9. und 16 May 1866. The increase in that one week was nearly 4 millions. This operated on the B.o.E. reserves precisely as if much bullion shipped out of the country. Wären die Bankers accounts getrennt gewesen von der übrigen Reserve, so on 16. May, 1866, supposing they held 10 Mill. £ belonging to other banks, all the specie they had of their own was 2,323,805l. against 41,207,708l. of liabilities, for 11,120,995l. of which they were under statutory obligation to provide a separate reserve of gold. ## 9 November 1867. N. 1263. ### State of Trade. Aggregate Exports for the 9 months ending 30 Sept. 1866. 1867. £.141,936,898. £.137,202,497. Die Imports much less than last year. 1866: £.155,812,883 und 1867: £141,448,055 für die 8 months ended 31st August. Aber die 2 capital items have curiously changed Cotton. Corn. 1866: £58,204,544. 1867. £39,752,424. 1866: £:8,192,693. 1867: 14,680,483 Corn. Wheat. From: 1866 1866. (in £) 1867. (in £) Russia £.2,263,829 £.5,334,125 Denmark 182,637 233,112 Prussia 1,755,805 3,437,432 Schleswig Holstein et Lauenburg 72,284 63,093 Mecklenburg 326,064 427,081 Hanse Towns 337,494 341,815 France 1,676,745 361,220 Turkey, Wallachia, Moldavia 150,432 1,030,200 Ejypt 5,565 254,344 U. States 180,658 1,285,863 British North America 4,156 2,273 Other Countries 1,237,024 1,909,880 Total 8,192,693 14,680,438. Die imports of other sorts of corn, and of wheat, meal, and flour, not in the aggregate very different from last year. Import of Cotton. Raw. From 1866. 1867. Unit. States £.29,349,669 22,606,517 Bahamas und Bermudas 46,816 56,437 Mexico 28,591 121 Brazil 3,973,456 2,716,300 Turkey 515,714 273,333 Ejypt 6,626,740 6,674,842 Brit. India 16,139,879 6,942,842 China 78,000 20,965 Other Countries 1,445,679 1,061,067 Total. 58,204,544 39,752,424 Prussia and Russia the largest creditors on the Continent; take as a rule not much bullion; great falling off of the Indian debt for cotton, which has of late absorbed so much für bullion.| ### Trades Unions and Friendly Societies. Mr. Pitt, in 1793, passed the first law relating to Friendly Societies, followed by a whole crowd of successors. Ihr aim: to exempt from the general prohibition of combination certain particular associations so as to encourage and protect „by voluntary subscriptions of the member thereof, separate funds for the mutual relief and maintenance of the members in sickness, age, infirmity“. Viele „friendly societies“ solvent, many insolvent. Und insolvency often very gross, selbst in sehr respectable societies. Thus „The Preston Branch of the Manchester Union“ had a deficiency of 23,880. The favours given to the Friendly Societies: 1) The right of suing, and being sued at law, especially, what was vital, the right of suing their own members for arrears, and their own officers for defalcation. The right was, indeed, given in an absurd way. In the case of Joint Stock banks, those constituted under the original Act, cannot sue for themselves, a public officer must sue for them. Friendly societies are under the same disability; they cannot sue on their own account as a Railway Co. does; a trustee has to sue for them. 2) Exemption of the transfer of interests in them from certain stamp duties, though only to a certain amount. Wegen dieser privileges der Friendly Societies, all other associations of workmen tried to be Friendly Societies whatever else they were, and so to gain the right of suing their defaulting members and officers. Und dieß um so easier als, by a series of enactments, it had become very difficult to say what a Friendly Society was or was not. No blame can be attached to the founders of the Trades Unions for coupling together 2 antagonistic aims, for the law encouraged them in it, and gave them no chance of gaining that for which they most cared, unless they attempted the other also. The attempt was, however, vain. Aber Judges decided that Strike Societies were illegal as in restraint of trade; and, therefore, that although they were benefit societies also, they could not sue for payments in arrears by members, or for sums in the custody of defaulting and resisting officers. So die Trades Unions are now wholly unable either to sue or be sued. No legal defect can be more absurd or fatal. We cannot understand those who wish that these societies should be half legal and half illegal. That they be permitted to combine, but not allowed to provide the funds which alone make that combination effectual. Abolish all notion of wages-combinations being in restraint of trade; we professed to legalise these combinations years ago, and now it would be impossible to destroy them by a sidewind, and pernicious to attempt it. ### Occupation of land in England. The tenant farmer would make a great sacrifice in purchasing land; he would be employing his money at 3%, instead of 15. In fact, he borrows the largest amount of the capital at a rate which does not exceed 3%. Upon similar grounds the yeoman sells his freehold. He will not hold a property which yields him 3%, when he can get for the money which he obtains for it, perhaps 5% on a perfectly secure mortgage, 7% by building or buying cottages, or 10 to 15% in some industrial enterprise. Land, hier, at the market price, of 30 years’ purchase, lower than in France, Holland, Belgium. Some of the largest properties in Europe are to be found in Belgium. ## November 16, 1867. N. 1264. ### The Economic Side of the Workhouse Inquiry. Quite clear from the evidence already received by the Commission of Enquiry that the report des Lancet upon the Farnham Workhouse was undertoned. It is rare to meet, even in fiction, with anything quite so horrible as the little story of the sick pauper woman, roasted to death from sheer supine neglect. … wretched race of „masters“ selected to keep down masterful beggars. The main source and reason of all the barbarities now exciting so much just indignation has been the desire to save expense, to keep the rates as far as possible „down“. Das management der workhouses is mean, aber zugleich viel waste, peculation etc. Local boards are not good managers of money, as we all know from the experience of vestries and municipalities, and local boards working through contracts are peculiarly liable to imposition and jobbery. Witnesses seem to doubt whether (in dem Farnham case) supplies paid for ever arrived. At all events it is quite clear the workhouse did not get the full benefit of its position as a great wholesale buyer. ### The Bank of England (Communicated) A banknote is a promise to pay, a cheque is an order to pay, no analogy between them. A banknote is a transferable promise on the part of a bank to pay to bearer, on demand, a certain amount of coined gold; it circulates side by side with gold in endless succession; it liquidates debts like coin; and men in business are practically bound to accept it when in circulation. A cheque is an order to a banker to pay over a specified sum of money; it requires endorsement on being paid, nor is any one practically bound to accept it when offered to him in payment of a debt etc[.] An order to pay Notes is not the Notes themselves. ### Railways’ Cos’ Act of 1867 Zusatz von Marx. Schließen (Auditors) Durch seine clause 30 haben die shareholders control through the auditors und leztre responsibility they had not before. It is a striking fact that the auditors have never discovered, or at any rate disclosed, any one of the numerous cases of forgery of stock, false returns to the Board of Trade, payment of unearned dividends, charging of revenue expenses to capital, or any other of the various forms of „cooking“ accounts by which shareholders have been lured to ruin by their directors. ### Iron Production in Sweden. (1860–1866)  Production Tons. Export to England. Export to other countries. TotalExport. 1860 134,700 tons. 51,000 44,600 95,700 1861 142,600 32,200 37,100 69,300 1862 126,200 42,700 44,800 87,500 1863 123,000 45,600 45,100 90,700 1864 135,000 45,000 48,300 93,300 1865 146,100 43,400 44,500 87,900 1866 164,200 56,000 57,300 113,300 ## Nov. 23. 1867. N. 1265. ### Necessities from Improved Statistics of the Supply, Consumption und Stocks of Cotton in this Country. leztens(?) falsche Angaben der Cotton Brokers’ Association at Liverpool, haben a close monopoly over trade, and maintain it by the usual expedients. Of late years oft excess of the actual over the estimated quantities in bond. Ausserdem cotton trade has outgrown even the progress of Liverpool. London is rapidly becoming a considerable port in the cotton trade – especially as regards arrivals and stocks. ## 30 November, 1867. N. 1266. ### Financing. The Details of an Actual Example. (London, Chatham, and Dover Railway und Peto) Vor May 1866 system in vogue to raise money in the discount markets for „financing“ purposes by the creation of fictitious bills purporting to be drawn on the Continent, America, and elsewhere; Accommodation bills of the very worst character – of persons trading under false pretences and Credit. Early, in 1866, was in extremis, violent effort made to avert the crash. By a certain elaborate machinery of trusts, the Railway Co. purported to contract to sell to Peto certain lands at Blackfriars said to be surpland surplus land, aber nach evidence der parties now before the Courts, not surplus or available land at all. Upon the security of these alleged available lands, Peto arranged on 21 Febr. 1866, for an advance of 135,000l. from the then Imperial Mercantile Credit Association, which failed in June, 1866, and for 190,000l. (in all 325,000l.) from the General Credit and Finance Company. These 2 Cos. were not to advance any actual money at all. They were to give their acceptance to Bills to be drawn from time to time during a twelvemonth by „firms or individuals resident on the Continent of Europe, and in that behalf approved by the Credit Cos.“; and the bills so drawn and accepted were to be handed to the Borrowers „for Discount“. The Credit cos. were to be paid a commission of 5% for the twelvemonth; i.e. 6,750l. as commission on the 135,000l. und 9,500l. as commission on the 190,000l.; and in the untoward event of the Finance Cos. being at any time under actual cash advance, the rate of interest to be charged by them was to be 4% p. annum above the minimum Bankrate; such rate never to be computed for this purpose at less than 8% p.a.; so that for the use of actual cash, the Borrowers had to pay 12% interest and 5% commission. The following are the actual clauses of the Deed of 21 Feb. 1866: 3) „The Credit Co. (Mercantile Credit Association) will advance to the said Sir M. Peto the sum of 135,000l., and such advance shall be made by Bills of Exchange to be from time to time drawn by firms or individuals resident on the Continent of Europe and on that behalf approved by the Credit Co, who shall accept the same accordingly, and deliver the same to the said trustees for discount.“ 4) „The said advance and credit shall continue for the space of 12 Calendar Months from the 21 Febr. 1866, and during that period all Bills to be accepted by the Credit Co. as aforesaid, shall be satisfied out of the proceeds from fresh Bills to be drawn on and accepted by the Credit Company as aforesaid, so that the Credit Co. shall never be called on to pay the said Bills or any of them.“ 6) „The said Sir M. Peto shall pay all stamps in respect of the said Bills, and all costs and charges and expenses of, or in anywise incident to, the said loan or transaction.“ 7) „The said Sir M. Peto shall, as and when the Bills for the said sum of 135,000l. be presented for acceptance, as the consideration for such acceptance, pay to the Credit Co a commission of 5l. p.c. on the amount thereof for the whole period of 12 months.[“] 8) In case the Credit Co. shall pay any of the Bills so drawn as foresaid, the said Sir M. Peto will forthwith repay to them the amount paid by them, with interest thereon at the rate of 4l. p.c. above the current rate of discount at the time being, at the Bank of England, from the time of such payment to the time of such repayment as aforesaid, such Bankrates never to be computed at less than 8%. The 325,000l. in money was to be taken from the Discount Market, at any rates which might be necessary, and applied to the purchase of materials for partly finishing |178 a London Railway. But the transaction was to be disguised by procuring Bills to be drawn from abroad in amounts, appearance, and dates, as nearly like ordinary mercantile Bills as possible, and the process was to go on by means of renewals for at least a year. The Finance Co. came forward as the intermediate party, and carried off 5% commission for the use of his name. We see, in this case, the exact details of the kind of transactions by means of which the Rate of Discount was carried to and maintained at the exorbitant figures which prevailed so long before the final collapse of May 1866. So long as Overend and Co. could keep their credit, there was a place in London where Bills of the kind in question were not too severely criticised. The Finance Co. fared badly by this transaction. Of course the „firms or individuals resident on the Continent of Europe“ being mostly boys in offices signing Bills at a few shillings a quire were quite unprepared to provide 325,000l. Peto was still less prepared – and the London, Chatham, and Dover Railway even still less than Peto. The Finance Cos., therefore, were left to find the money as well as they could, claim now against Peto and the Railway, for the principal, interests, and Commission. It was alleged last Session before the Parliamentary Committee on the London, Chatham, and Dover Bill, that the Borrowers, so far, were more acute than the Lenders; that not only was the alleged surplus land not really available, but that the same pieces or plot of land were positively made to do duty as security on the same day to the 2 lending Cos., that is to say, the land was pledged twice over. ### Landlord and Yearly Tenants. Wm. Walton, (farmer) of Clawton, near Alton, Hants, writes to the papers: „It is neither the want of capital, industry, nor judgement that keeps the farmer poor and the land half cultivated, but it [is] the want of security for the extra capital employed upon the land. All landlords who do not give sufficient security for capital laid out upon their farms, particularly cold clays, are the whole and sole cause of the land not being properly cultivated. 1/3 or 1/2 more corn, beef, mutton, pork, and all other food for men, could be produced in old England by this little word security.“ ## 7 December 1867. N. 1267. ### Money Market. England is a large importer of vegetable produce, and, therefore, her paying account is largely dependent on the season of the year. All tropical produce on the one hand, and all the produce of iceclosed northern countries on the other, are paid for in the autumn, and, perhaps, the greater part in the later autumn, and, therefore, the value of money always, other causes being taken out of the account, tends to rise from October onwards. … An augmenting trade is necessary to employ our gradually accumulating capital. If even for a year trade does not increase, a certain amount of saving clogs the market which it is difficult to employ. Now both Imports and Exports less than last year. 1866 1867 Imports (9 months) 174,168,898£. 161,963,750l. Exports (10 months) 158,832,792l. 153,051,639l. But if trade should revive, there is not yet any great accumulation of |179 capital to keep down the rate of interest. Much bullion in the Bank of England und Bank of France, aber their liabilities have also much amended. The private deposits of the Bank of England were: 1864: £12,666,764, 1867: £,18,507,007. In the Bank of France no increase of deposits, but of note circulation. 1864 nämlich £.28,891,656 und 1867: £45,693,632. ### Paris 5 December. Credit Mobilier. Meeting of Shareholders Saturday last. Danach Verlust durch decline in the values of securities held f.51,192,260. Presumed Loss on different accounts (bills, advances to Cos., doubtful Credits) 3,160,886. Zusammen 54,353,146; Nach Abrechnung von Profits: f.47,542,000 (= 1,901,688 £ St) Dieß loss. Liabilities: f.68,152,000. Assets: 143,402,000f. Bleibt balance of 72,250,000f. Aber capital actually paid up f.122,792,000 out of 124,000,000 due. Bleibt der obige loss of 1,901,688l. St. Die shareholders wanted to have a detail of the securities held by the Mobilier; verweigert, because such a document would encourage adverse speculation. Aber aus dem Report des Censors ergiebt sich, that part of the securities consist of debentures of the North of Spain Railway, and the Immobilière Co., the Transatlantic Steam Navigation Co. to 28,675,000f., and shares of the Magasins Généraux, North of Spain Railw., Immobilière Co, Spanish Credit Mobilier for 22,500,000f. ## December 21, 1867. N. 1269. ### Why Money is dearer in the Autumn than in the Spring. Our imports are smallest in the beginning of the year, and augment continually as the years year goes on. Accordingly, we have more to pay in the autumn, and money is dearer; and less in the spring, and money is cheaper. Allerdings andrerseits our exports grow too as the year goes on, wie die folgende Table zeigt: Monthly Imports. Import. Exports. Monthly Exports. 1865. 1866. 1867. 1865. 1866. 1867. Jan. 6,348,256l. 9,847,564l. 9,452,759l. 10,489,339l. 14,354,748l. 12,786,842l. Febr. 12,855,353 16,610,192 14,828,289 11,376,214 16,116,063 14,446,072 March 13,010,659 19,891,687 17,183,770 13,770,154 17,520,354 15,148,707 April 13,079,816 22,455,968 18,701,332 12,071,111 15,366,414 13,804,908 May 14,595,979 23,225,301 23,275,243 13,194,758 15,870,131 15,936,864 June 15,409,877 23,243,939 20,054,958 13,227,062 14,630,120 15,490,091 July 18,964,728 19,597,929 18,166,789 14,113,410 14,957,834 15,562,430 August 21,000,023 20,940,303 19,784,915 14,158,648 17,450,156 17,880,999 Sept. 21,633,447 18,356,015 20,515,950 17,316,681 16,671,078 16,145,584 15,547,225 16,895,894 15,849,142. Die augmentation der Exports aber nicht so great as die der imports. But an increase of export trade, combined with an increase of import trade, would of itself rise raise the value of loanable capital; it would bring more bills and more warrants to Lombard street, even though no gold was exported. But there is a tendency to export gold; da wir mehr Credit für unsre exports geben als wir commonly take for our imports; and, |180 therefore, what we have to pay comes to be paid sooner than what we receive comes to be received – thus making the balance against us. ### The Panic in the Railways. There has been so much painful experience, so many boards of directors have circulated so much which misled, that all which boards now say is searched between the lines; is suspected of ambiguity even when plain; is taken in a sense unfavourable to the railwhen railway whenever doubtful; is believed when against the board, and disbelieved when for the Board. Staat soll official Accounts machen. ### American finance. McCulloch’s Report (1st Nov. 1867) Dollar = 3s., die Revenues der U. St. now 73,595,098l. (waren zwischen 12 und 13 Mill. vor dem Krieg.) (Darunter von Customs 26,452,671 und von Internal Revenue: £39,904,130. Expenditure for the year ending June 30, 1867 war: 52,009,367l. proposes to reduce the taxation to the level of expenditure, or nearly so. Sein Estimate for 30 June 1868 ist: Revenue: £62,574,288 und Expenditure: 58,990,381l. Paper dollar now about 70 cents to the coin dollar, nearly 3s. instead of 4s. 2d. McCulloch hat greatly reduced the currency. Nach dem Chronicle (New York):  Currency on 1st Nov. 1865:$929,767,080 vis. 454,218,038$Greenbacks and fractional currency, 270,000,000$ National and State Bank notes 205,549,042$Interest bearing notes. Currency on 1st Nov. 1867:$772,040,669 vis. 387,871,277$Greenbacks und fractional Currency 297,980,095$ Nl. and State bank notes 71,875,040$Interest Bearing Notes Reduction in 2 years of$172,040,669 oder nearly 26 mill £ St. Much discussion has arisen why this great diminution has not brought the value of paper nearer to the value of gold. But the greater part of the reduction, say 19 Mill. l. on the Interest bearing Notes which, like Exchequer bills, do not pass easily from hand to hand. Ausserdem Geschäft contracted seit , so daß ohne McCulloch’s interference, paper would have gone down much lower.

 On the 31st August 1865 Federal debt on highest point: $2,757,689,571. On 1st November 1867$2,491,594,450.

In der Debt included alles legal paper (Issued by the Federal Gvt.)

## December 28, 1867. N. 1270.

### Conciliation versus Strike.

Mundella, eminent employer of labour in the Midland counties.

Of any particular trade, it is usual to say that the price of labour ought to be the same as in any other trade, but this, if true, only shifts the difficulty, for what then settles the price of labour in all trades. And, in accurate science, it is not true, for a rise or fall in wages, when legitimate, must begin somewhere, and the trade which takes the lead ought not to be proscribed because it is the first.|

181

Some say: „Trades’ Unions are not wanted; the men need not be disappointed at not getting an increase of wages now. Capital will flow into the trade, if wages there are lower than in other trades, and the incoming of that capital will at once raise wages.“ Aber, thus it may be said, when masters propose a reduction: „You, too, need not be so anxious about it; if you do not get the reduction now, you will get it soon,“ – that is if you ought to get it. Supposing wages are higher in that trade than in other trades, capital will flow out of the trade, and that which remains will be rewarded better. Of course both these augments are arguments of pure theory; no capitalist ever voluntarily submitted to pay more wages than he could help, because, even if he did so, wages would be gradually reduced by an inevitable diminution of competition; nor will labourers ever, to the end of the world, give up a claim to an augmentation of wages, because their successors, or even themselves in later life, will have an increase by the gradual augmentation of employment. Both capitalist and operative always look to the present, and not to the future market.

Mundella sucht zu settle by friendly bargain. Since 1860, he and others have worked at Nottingham a joint council of operatives and capitalists, who after due argument settle what shall be paid. These he calls courts of conciliation. As to their structure we own we are rather sceptical. We fear the critical question will be: „Is the casting vote to be given to the master or to the workmen?“ As to the decision of any tribunal, we have great doubts. Aber jedenfalls „Before a strike has occurred, it is far easier to reason calmly than after a strike.[“]

Mundella says: „When difficulties mit den workmen – they had the actual samples of the native and foreign manufacture on the table before them, with the prices: they went into the whole question of competition, and showed the delegate (of the workmen) that with the increase demanded, it was impossible to compete with the foreign trade. Experience of 7 years“ zufrieden stellend.

We doubt, says Economist, about the composition of the Nottingham board, but as to the desirability of some such board, and some such discussion, at all places, we have no doubt whatever.

### Farmers and Farm leases.

John B. Brandram, of Chapmore End, near Ware, Herts, know known in the district as an enterprising farmer, writes:

„Die farmers verlangen meist keine leases, weil the dislike of the great majority of our landowners to grant leases is so well-known, that most applicants for farms would think it a mere farce and waste of words to ask for one. The competition for farms is so great, owing, in a great measure, to the increase of the population, and the decrease of the number of farms, that when there is a farm to let, there is nearly always a great number of applications for it, and thus the owner can dictate his own terms, which generally are a yearly tenancy, with 6 months’ notice to quit … Rents have risen so much during the last few years, that many farmers are afraid to incur the responsibility of paying the present rent for a term of wages … Besides, a prudent man may well hesitate to bind himself to the payment of a fixed rental for a 14 years’ lease in the face of a probable heavy increase in his labour account.“ Another Tenantfarmer writes: „Suppose the farm to be fairly drained, it must be manured. A good dressing of London dung costs 4l. per acre; and to feed bullocks and make the manure in the yards at the present prices of feedingstuffs, straw, and meat, will cost nearly as much. This manure will directly improve the land through |182 the whole course of the rotation of crops 5 or 6 years, and indirectly, by the increase of green crops for many more years … I maintain that as soon as a yearly tenant goes beyond the old crop and fallow system his investment is not commercially sound … Why is it that so little of the abundant surplus capital of the country is invested in the cultivation of the soil? Simply because there is no security.“

# Register der obigen Auszüge aus dem Economist für 1866 und 1867.

## 1) Money Market. (1866)

• p. 11, 13, 19, 32, 33, 34, 38, 40, 41, 43, 44, 46, 47. Sharemarket (52) Rise in the Rate of Interest (5 May) (52) Sharemarket (53) State of the City, Panic (53, 54) Money Market 55, 56. Comparative view of Money Market 1856–66 (59, 60) Bankshares (60) Money Market 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 77, 84, 85, 86, 87, 89, 90, 91. Reduction of Discount Rate 93 92. Money Market (96, 97, 99, 101, 104, 106, 110) (Bank o. England 110, 111) 117, 118. Rates of Discount on Continent (31)
• Money Market (1866) Before Crisis (1 (Eight P.C)[)], Prospective Value of Money in 1866, p. 1, 3, Investments in 1865 (5), Bubble Cos, 5, 11, 12. Effects of 8% (5) Market Prices of Investments in 1865 (5, 6.) Recent Dividends of Joint Stock Banks (9, 10) Reduction of Discount Rate to 7% (23) to 6% (34)
• B.o.E. Interest on Deposits (36)

## 2) Crisis of 1866.

• Figures on it (57, 58) Grounds for Confidence (61, 62)
• Crisis of 1866 p. 73, 74, 82–84, 98.
• Ten P.C. p. 73, 75, 76, 78, 82, 81, 88. (Profit et Interest)
• Agra and Masterman’s Bank Failure (69, 70) Its Reaction on India (89)
• Overend et Gurney (71, 72, 95, 100, 108, 109.)
• Protection for Bankshares (70) Dealing in them (Bears) (76) Bulling and Bearing (81, 82) Bill for regulation sale in them (123) Low prices of Bankshares (171, 172)
• Northcote and Gladstone on the Panic (90, 91)
• Circulation of Banknotes since Panic (98)
• Credit Mobilier and Finance Cos. (11, 12, 13, 14) (24, 25)
• Finance Paper and Rate of Discount (48, 49)
• First Interior of a Finance Co (107) Financing Details (177, 178)
• Credit Foncier of England (158, 159)
• Account of Joint Stock Banks (92–93) How a shareholder should watch its Co. (84)
• Liquidation of Bank of London (113)
• What to buy? (G – Gʹ Sich selbst verwerthender Werth) (112)
• Failures (1866) 60, 61, 82, 107, 108. 1867 (p. 153)|

## 3) Banking and Currency.

• Suspension of the Bankact (57) French Opinion on it (l.c.) Its practical effect (62) New facts relating to it (84). Guthrie etc on Bankact (68) Proposed Inquiry (87)
• Bank of E. and its Bankers Accounts (173, 174, 176) Its Reserve (95, 96) Acceptances and Deposits (117)
• Clearing House (122, 131, 132, 133)
• Billbrokers (1857), Bankers (1866.) [(100)]
• Rediscounting (131)
• Memorial of Liverpool Merchants (Anfang 1866) (p. 7, 8)
• Banking Question (18) Gvt. Notes (117) Mulholland (167, 168.) State and Currency (170, 171)

## 4) India. English Railways. Money Market (1867)

• Savings and Trade (130) Causes of Depression (131, 132, 133, 140) What Bankers should do with their money (157, 169 (Trade), 174, 175 174, 178, 179) Why money dearer in Autumn than Spring (178, 179 179, 180)

## 5) Railways.

• English Railways (33) Making Minor Railways (39, 40) Non Paying Railways (98) (99) Its history (102, 103) Peto (104) (110) (106–7) Brighton Railway (131) Railways’ Act 1867 (176) Panic in Railways (1867) (p. 180)

## 6) Ireland.

• Land bill (54, 55) Law Courts (74) Railways (85) News (96)
• Emigration (21 121, 124, 127, 137)
• Holdings (Parliamentary Return) (1867) [(125)]
• Tenant Report (129) Prussian Rentbanks proposed by Hutton für Ireland (168, 169)

## 7) Land in England and Agriculture  Schließen

• Crops and Harvest for 1866 (99, 100) Wheatcrop (1867) (Lawes) (169, 170) Corn Duty (41)
• Cattle Plague. Gvt. Relief (8, 15, 51, 52)
• Cattle feeding (85–86) Supply of Animal Food (62–64)|
• 185
• Ownership of Land (88, 113, 114, 115, 175) Entails (80, 81)
• English Farmers (12, 13) Tenant Right or Leases (Improbements) (108) Farming of Leicestershire. Grass Land (118, 119) A Territorial Magnate (116, 117, 121) Yearly Tenants (178, 181, 182) Chambers of Agriculture (95)
• Game Laws (18) Ukase (58, 59) Farmers Protest (176 76) Police and Game (122)
• Deerfarmers (42, 43, 67, 68) Deer versus sheep (76, 85)
• Agricultural Labourers: Strikes (12, 40, 53 52, 156) Wages (155, 156)
• Sewage (111) Pollution of Thames (51) Of Lee (146–147)

## 8) India.

• Indian Bills (72, 76, 77, 80) East Indian Railway Scandal (50) Railways (87, 88) Money Market (100) Deranged Exchange, action upon English Market (100) Progress (130) Orissa Famine (151–152)

## 9) Miscellaneous

• (Law of Demand and Supply) (105, 110)
• Coal Supply (1–3, 15–17) London Gas (93. 94. 130) Gas (Subways) (159)
• Saving Banks (70) National Debt (117) Frauds of Shopkeepers (110)
• Mortality in England (1865) (168.)
• Trade Returns (29, 30, 33) für 1867 (123, 125) Foreign Trade (115)

## 10) Cotton.

• During the Civil War (45, 46) Cotton Market Liverpool May ’66 (56, 61, 66) Cotton. (101) Improved official Statistics wanted (176)

## 11) Manufacturing Markets

• (1866) (p. 77) und 1867 119, 121. 123. 124. 125. 126. 127.

## 12) Labour, Poor, Conflicts.

• Houses for Poor (21, 22) Torrens Bill (125)
• Workhouse Hospitals (32, 33) Workhouse Reports (152–153) (176)
• Master and Servant (116)
• Industrial Partnership (Fawcett) (103, 104, 115)
• Courts of Arbitration (Mundella) (180, 181)
• Strikes. Iron Workers (112, 113) („Labour mere commodity“ 113.) 118.
• Trades Unions: Commission (120, 125) Effect on Wages (150–1) (155) Money and Trades Unions (170) Finance of Trades’ Unions (172, 173)|

## 13) United States.

• Trade with America (4) French Commerce with U. States (7) Protectionism (15)
• Finance: 41, 42, 113. Revenue (19–21) Taxation (137, 154–55, 159–160, 180.[)]
• Banking: Evidences of Pressure (1867) (128, 129, 133–136) Shipbuilding (126, 127) American inconvertible Currency (45) Antidote against Commercial failures (119, 120) Sound state of American Banking (1866) (26–28) Apprehended commercial convulsion (38) Why no Panic in America (1866) (78–80) National Banks (137–140) (140–146) (148–149) Failures of Nl. Banks (1867) (157, 158, 165, 166)
• American Public Schools (162–3) Waste of Educational Resources [(]in Engld.) (163–4)

## 14) Russia.

• Finance (Michell) (23, 24) (160–161)

## 15) France.

• Bank Inquiry (22, 23, 30, 31, 34, 35, 36, 37, 38, 45, 114, 124, 127.[)] Bk.o.F. (68)
• Effect of Overend’s Failure (64)
• Pereires (168)
• Bankruptcy of Pollet, Roubaix Banker (153)
• Failures in Building Speculation (156)
• Fraud in Cognac (168 68)
• Tableau Général du Commerce (120. 122)
• Agriculture (34) Beet root sugar (120)
• Aneline (120)
• Bonaparte’s Cost to Europe (169)

## 16) Austria:

• Iron, Coal, Means of Transport and their effect. (148)

## 17) Sweden:

• Production of Iron (1860–1866) (176)