October 19, 1867. N. 1260.

Aus:
The Economist, 19. Oktober 1867. S. 1181/1182.
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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 Ricardo 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.



Inhalt:

  • London. 1868.
  • 1866 „The Economist“ (Jahrgang 1866) vol. XXIV.
  • The Social Economist, 1. Oktober 1868
  • „The Economist“ (Jahrgang 1866) (Fortsetzung)
  • Jahrgang 1867.
  • Register der obigen Auszüge aus dem Economist für 1866 und 1867.
  • The „Money Market Review“. Jahrgang 1866.
  • The Money Market Review. Jahrgang 1867.
  • Register Money Market Review Jahrgänge 1866 und 1867