1 Sept. 1866. N. 326.

The Money Market Review, 1. September 1866. S. 247/248.
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Paper of Leone Levi (Prof.) read at British Association at Nottingham.  Zusatz von Marx.
(Rate of Interest.)

Abolition of Usury Laws in 1839. Levi shows that during the last 20 years since Act of 1844 the average rate of interest has been progressively rising.

Von 1845–49 Average Rate £3 s.11 d.7
1850–54 dto 3 15 6
1855–59 dto 4 11 8
1860–64 dto 4 15 3
to 1865 dto 4 16 0

It is not the higher average, but the sudden, frequent, and extreme fluctuations that constitutes constitute the evil of Act of 1844.|

During the last 37 years: first 12 years average about equal für Banks of England and France;
9 years lower für B.o.E. than B.o.F.
last 15 years higher für B.o.E. than B.o.F.

Aber Levi giebt no sufficient reason: besonders auch nicht für difference in der Rate der B.o.E. und dem der of France. Principal Reason: Act of 44?

Die Reasons of Levi für den rise des Average in England sind:

1) Large Increase in English Trade:

  • 1849 Exports: £63 Mill., 1865 £165,860,000
  • 1854. Imports: 152£ Mill. 1865. 271,000,000.

Shipping has increased in the same proportion. Levi forgets, that with this increase of trade, concurrent increase in profit, wealth and amount of loanable capital. Die Advocates of the Bank Act say, that an increase of trade necessitates no increase of currency, but only an increase of capital. In one sense they are right. The same amount of currency will be sufficient, if currency eked out by an expansion of credit, and the holders of „loanable capital“ be thereby enabled to command higher rates of discount for the temporary use of it. That is the object of the arbitrary limitation upon the banknote issues, and it has answered, as shown by the higher average rate, and the extreme fluctuations. As to the increase of trade per se, so French trade in last 20 years increased in the same proportion. Dennoch in France 4%, while in England 10%, in France now 3, while in England 6%.

2) Annual Export of precious metals for the East. Zeigt nichts für den average der last 15 or 20 years. Silver did not return, but we obtained, in exchange for it, something else, which we exported to other countries for equal or greater amount of silver and gold, and, therefore, the temporary abstraction of those amounts will not account for a permanent rise.

3) Immense Number of Joint Stock Cos: In 1864 and 1865 were 832 Cos. formed mit authorised capital of £362,935,000, much of that capital invested or prepared to be invested in public works. But, the capital of a Joint Stock Co. is not so much capital taken out of the country, nor so much currency taken out of circulations; it is only so much money transferred from the names of the respective subscribers to it, at their bankers, to the credit of the Co. as their bankers. The formation of a new joint stock Co., and the aggregation of their capital, differs in no material respects, from the formation of a new firm of bankers, merchants, or traders, and the combinations of their capitals.

The Money Market Review, 1. September 1866. S. 248/249.
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„Great Authorities“ on the Bank Act of 1844.  Zusatz von Marx.
Money or Capital wanted? (in Crisis)

One authority Bonamy Price (in Economist und Daily News)[.]  Zusammenfassender Kommentar von Marx.
Dieß Vieh entdeckt, daß Notes nicht Kapital sind, und daß in den Crisen nicht money, sondern capital was wanted.

The capital, bankers deal in, is in the shape of money. Money not only represents, but commands capital; therefore, the term used as synonymous with capital. If it be commodities or capital which traders want during a crisis, and not gold or banknotes, perhaps Mr. Price will tell us how it happens that gold and banknotes and not capital or commodities are always found to be the appropriate remedy? When banknotes are issued, commerce relieved, panic at end.

The Money Market Review, 1. September 1866. S. 251/252.
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Great Eastern Railway. Ditto London, Chatham and Dover.

Great Eastern expended during past year on capital account more than £800,000, its receipts of capital were nearly £700,000 less at 30 June 1866 than 30 June 1865. On 30 June 1865 cash balance of more than £400,000 in hand, at 30 June. June 1866 cash account in debt more than 1 Mill. Money crisis had its effect upon Great Eastern. They have not been able to renew their debentures as they fell due, and found the utmost difficulty in paying off that part of their mortgages which fell due in the late crisis. The preference charges are this half year not met from revenue; charges have been made to capital for calling stock etc and by such means dividends, never earned, have been paid. This last half year no dividends paid, because capital account never so much overdrawn.

For last half year:

  • Increase of Expenses £150,911 (£103,454 in Preference Charges, 47,452 in working expenses)
  • Increase in Gross Revenue: £14,151. Balance against Dividends: £136,760.

If the Great Eastern could only banish all lawyers, contractors and engineers from their domain, they might do very good.|


Was die London, Chatham und Dover angeht, so haben sie, instead of applying the earnings of the Beckenham and Dover Line (the socalled „general undertaking“) to the debentures of that particular section, to which they belong, applied them to the loss in the Kent Coast of the Metropolitan Extensions, the Lease of Sevenoacks Line and other matters with which the Debenture holders on the Beckenham and Dover line have nothing to do.

5 January, 1867. N. 344.

The Money Market Review, 5. Januar 1867. S. 5/6.
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Barned’s Bank etc. Public Official Audits.  Zusatz von Marx.
(Overends und Times)

Professional Accountants make things pleasant to the people by whom they are employed. Overends’ case „typical“. With official accountants, it would have found it its way into the Bankruptcy Court. The liquidators, acting in concert with the partners and the solicitors of the old firm, and the new one, have hitherto contrived to baffle all the endeavours of the shareholders or others to obtain an insight into the real state of affairs past or present. A few weeks ago the partners of the old firm denounced in the leading type (by Justitia) of the Times, if not in the leading columns of the Times as criminals of the deepest dye, and the new directors as swindlers, who ought to be forthwith arraigned at the Old Bailey. But, a few days after, another writer in the leading columns of the Times, upon precisely the same state of facts and information, laboured to exculpate both the partners of the old firm and the directors of the new Co. from all moral imputation, and even from all legal responsibility. Still more recently – Times of 27. December 1866 – the City Editor of that Journal without any additional facts or information, not only exculpates all these parties, but this to show that the old firm was not insolvent at all at the time when the transfer took place. Es existiren immer noch no official figures as to the liability of the old firm. Times City editor says: Liabilities taken over were £4,199,000 and assets handed over £4,887,000.

Those assets, says City Editor:

Securities held against liabilities: £1,082,000
Private Estates: 2,320,000
Goodwill 500,000
Premises in Lombard street 45,000
Balances due to partners in books of the old firm 940,000
Total: £4,887,000

Der City Editor of the Times seeks to make out, daß danach nach dieser Rechnung die firm was not insolvent at the time of transfer; that „there was no insolvency of any kind“.

Woher dann »the present (undisputed) insolvency[«]? Not consequent upon losses or bad business of the new Co., for it is boasted that they made a profit on their legitimate business during their 9 or 10 months’ existence, of some £200,000. Aber the whole of the capital (of the new Co.) is gone, and there are still 5 Mill. £ St. unliquidated. Towards the liquidation of these, already call made upon the shareholders of 1 Mill. £, and two other calls of 1 Million each, are expected. How this, with the solvency of the old firm and 200 000£ profit of the new one? …|


As to the bills taken over, great number of them, which were taken as good, have been renewed from time to time, and were bad, and known to be bad, or at least doubtful at the time, and are still unpaid. The „goodwill“, as encumbered not only with the legitimate discount business, but with the bad business too, was a mere fiction. According to the examination of John Henry Gurney they were loosing year after year before the transfer. The „balance due to partners“, in the books of the old firm – a myth. This no mere question of bookkeeping. Of what was that £940,000 composed? Of undrawn profits, it is said. But, first, we were led to believe that this £940,000 were profits accumulated during the years following 1861, in which no profits were divided, but now we learn that no profits were made, and could, therefore, not accumulate. Again, it is said, these socalled profits are largely composed of nominal half-yearly additions of enormous rates of interest upon those millions of bad debts. If so, these profits as bad as the bad debts themselves.

The Money Market Review, 5. Januar 1867. S. 7.
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The Cotton Circulars.

Decline in the prices of raw cotton in 1866 unusual, but not extraordinary.

Quotations 29 Dec. 1866. From Msrs Smith, Edwards, and Co’s Circular.
1865 1866
Orleans. Middling. 21.1/4d. 153/8d.
Brazil. – Peruvian 201/2d 15d.
Fair Dhollerah 171/2d. 123/8d.
Bengal. fair. 121/2d. 87/8d.
Stock of Raw Cotton in Ports of Great Britain, taken from Ellison and Heywood’s Circular.
31 December 1862 Bales 433,900 Bales
1863 Bales 327,500
1864 Bales 575,727
1865 Bales 405,488
1866 Bales 581,570
Imports into Great Britain. (Ellison and Heywood)
In 1862 1,445,000
1863 1,377,600
1864 1,606,390
1865 2,034,730
1866 2,436,394
British Imports and Exports of Raw Cotton. (Ellison et Heywood)
Imports: bales 1862: 1,445,000 1863: 1,377,600 1864: 1,606,390 1865: 2,034,730 1866: 2,436,394
Exports: bales: 1862: 564,900 1863: 661,000 1864: 732,480 1865: 890,830 1866: 1,136,565
Net Imports: 880,100 716,600 873,910 1,143,900 1,229,829 1,299,829

Decline of 1866 not so great as might have been expected. Gross and net import larger than in any of the 5 years. But cotton market still supported by rumours of very limited supply of the U. St.|


The Money Market Review, 5. Januar 1867. S. 7.
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Separation of Acceptances from Deposits in Bank Balance Sheets.

With exception of a few Banks, like London and Westminster, these items thrown together in the public Bank accounts. Acceptances represent the liability of a Bank to be called up to pay that sum; deposits money actually deposited by the Public. The latter show the confidence of the Public in the Bank; the acceptances the confidence of the Bank in the issuers or guarantees of the Bills they accept. During the recent crisis, when Bankrate at 10%, the rates „out of doors“ for the very best Bankers bills varied often from 1 to 3% below the Threadneedlestreet minimum. This variation entirely owing to the respective amounts which each billbroker held of the bills of each bank.  Zusammenfassung von Marx in eigenen Worten.
The bank, of whose acceptances his portfolio was full, had to pay more or [was] declined at all.

The worst features of the recent troubles may be traced to the undue facilities which existed for issuing and placing acceptances.

The Money Market Review, 5. Januar 1867. S. 9/10.
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The Conservative Land Society.

 Zusammenfassung von Marx in eigenen Worten.
Macht seit 15 Jahren sehr gute Geschäfte. Hauptzweck den Arbeitern Wohnung zu verschaffen und sie zu proprietors dieser Wohnung zu machen.
Hat gekauft bis 1866 (Ende) 67 estates in 26 different counties, besides assisting individual shareholders and depositors to leasehold and freehold houses and villas.  Zusammenfassung von Marx in zum Teil eigenen Worten.
While paying 4% (yearly) to depositors, and 5% (nebst additional 1% bonus for the first year) annually to shareholders, enable workmen to acquire property at a cost little more than the rent they would otherwise have to pay year by year.

The Money Market Review, 5. Januar 1867. S. 12.
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Overends.  Zusatz von Marx.
(Friends of the Co.)

Thought the parties implicated did not themselves dare to do anything that might have betrayed a fatal consciousness of delinquency, yet their friends and confidants carried their deposits out almost at the same moment (9 May) at which Oppenheim was carrying his investment (15,000£) in.


  • 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