28 July 1866. N. 321.

The Money Market Review, 28. Juli 1866. S. 99/100.
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Banking Act of 1844 etc.  Zusatz von Marx.
(No Royal Commission, discussion in Parliament)

Erst Watkin’s motion postponed from Friday last to Monday, Monday he was again foiled.

Reason for no Royal Commission of Inquiry „that a time of panic is not a fit one for such an investigation“. In fact, on some pretext, the inquiry is to be shirked. B. o. France does not find it necessary … to impose upon commerce 1/3 of the changes in discount as the B.o.E.

Report of the Associated Chambers of Commerce in their annual meeting in London (Febr. last) gegen den Act. Vgl. British Quarterly Review. (July 1866)

Bk. o. Fr. has reduced its interest von 4 to 31/2%. 61/2 und 7% Market Rate of Discount (Bankrate 10%) für best bills in London.|


The Money Market Review, 28. Juli 1866. S. 101.
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The Drain of Capital for New Investments.

Nach Table sent von Spackman et Son to times Times:

Cos formed Capital authorised Capital Offered. Deposits.
Half Year ended June 30. 1865 160 £.56,302,000 £41,492,000 £.6,551,870
Ditto … 1866 32 8,220,000 6,635,000 1,649,000

Company making is thus shown to be, for the time, almost extinguished.

The figures of the past 31/2 years are thus given by Spackman:

Cos. Capital authorised Capital Offered. Deposits.
1863 263 £.100,053,000 £.78,135,000 £.8,875,550
1864 282 155,887,500 106,523,000 12,545,800
1865 287 106,995,000 75,578,900 12,174,790
1866. Half Year. 32 8,220,000 6,635,000 1,649,000
Total. 31/2 year. 864 £.371,155,500 266,871,900 £.35,245,140.

Diese figures stellen nicht allen drain upon the resources of the country in the shape of new investments dar; for they do not comprise foreign and colonial loans raised partly or wholly in England, some new issues of shares created entirely, and some new Companies omitted by  Zusatz von Marx.
the illustrious

Also zuzufügen, ohne auf 63’, 64’, 65’ Rücksicht zu nehmen, nur für First Halfyear 1866.

    Foreign and Colonial Loans advertised between 1 Jan. und 30 June 1866.
  • Argentine £500,000.
  • Two Egyptian: £6,321,700.
  • Queensland Debentures.
  • Cape of Good Hope Debentures.
  • Chilian.
  • New Zealand etc
    New Cos advertised in first Halfyear 1866 (omitted ditto by Spackman.)
  • London Meat Consumers.
  • National Coal.
  • London and Suburban Land.
  • Staffordshire Wheel and Axle.
  • United English and Scottish life.
  • South Buckley Coal.
  • South Cornwall Mines.
  • Buckley Mountain Co.
  • Terras Open Workings Co.
  • Ehehardt’s Gunpowder, Montpellier Mining.
  • North Eastern Waggon.

Putting all this together, the drain upon the investment resources of U. Kingd., nominal or real, nearly as follows:

For Half Year ended 30 June last.
Capital offered, as rendered by Spackman … £6,635,000
Other Capital offered, not included by Spackman 12,400,000. Summe £19,000,000.
Deposits, as rendered by Spackman £.1,649,000
Deposits and calls 21,500,000
Foreign Loans partly subscribed in England to £4,000,000
Calls in the same Half year 1866: for Foreign Loans in England nearly £15,000,000

As regards Foreign Loans, a large portion of the proceeds is remitted in arms, ships, munitions of war, machinery, and railway iron; while of the ostensible amount of capital for new Cos only a percentage ever raised and paid upon.|


The Money Market Review, 28. Juli 1866. S. 102/103.
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American Money Matters.  Zusatz von Marx.
(Specie Drain)

A New York Bankers’ Circular d.d. July 6 says: „The heavy specie shipments to Europe, which were going on at the date of our last circular, June 6, suddenly ceased at the close of the succeeding week, and have since been not only moderate in amount but less than the current receipts of gold and silver bullion from Australia.“ In other words, the specie drain from the U. St. to Europe has been checked by the changes in the price on gold, which on 5 June was 146, and on 5 July 153%. A fluctuation of 7% apparently separates the two periods – one of efflux, the other of stagnation – with no contraction of notes, no action on prices, and no parliamentary or other generalship to balk the enemy. The recent specie movement from the U. St. dates from 1st May. On that date, it may be fairly assumed, the first notes of alarm were sounded in private letters from England. But the U. States Treasury was then well stocked with specie, so that 35 Mill. dollars were thrown on the market, in response to the demand. Parting with that sum, the U. States Treasury withdrew from the „Gold-room“ and left the continuing wants of commerce to be provided on the usual terms of demand and supply. From 1251/2, at the opening of the „Gold-room“ on May 1st, the price was carried to 1681/2 on June 18, to recede, however, as stated, to 153 on 6. July. Thus the precious Metals were acted on in the U. St. as mere articles of commerce. Prohibitory Acts, 1st passed by State of New York (Feb. 18, 1863) prohibited loans on gold coin or bullion, 2nd , passed by Congress, (March 3, 1863) restricted the sale and price of gold; the 3d , passed by Congress (June 17, 1864) absolutely prohibited in certain cases the sale of gold. It so defeated its intended object, that formally repeated on 2nd July, 1864, 15 days only after its enactment.) At no period whatever have banknotes and coin in the U. St. stood in anything like the relation maintained in this country. So, obviously, the exchanges control themselves in the U. St. The banking in New York has been deliberately accepted by the Congress as the model for the national banking system.

The Money Market Review, 28. Juli 1866. S. 105/106.
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Coal Export from Port of Newcastle von 1854 to 1864. (in Tons)

Coastwise. Tons. Intercolonial and Foreign. Total. Increase over previous Year. (Tons) Decrease over Previous Year (Tons)
1854 49,880 44,751 94,631
1855 65,870 47,101 112,971 18,340
1856 61,364 70,786 131,150 19,179
1857 60,998 84,553 145,551 13,401
1858 70,385 69,553 139,938 5,613
1859 91,201 150,125 241,326 101,388
1860 104,383 179,453 283,836 42,510
1861 85,060 170,880 255,940 27,896
1862 127,613 229,810 357,423 101,483
1863 140,387 229,856 370,243 12,820
1864 160,710 229,150 459,860 89,617
1865 159,640 302,362 462,002 2,142
Total. 1,177,491 1,878,380 3,055,871

Nur in 1858 und 1861 decrease, diese years periods of strife between masters and men in regard to wages. 1864 rendered memorable in the coal trade of Australia Colonies as the year of the great „lock out“, when the whole of the mines were laid off for a period of 8 weeks.|


The Money Market Review, 28. Juli 1866. S. 106/107.
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Demand for Money and Demand for Capital.

An increase of the monetary requirements of the country is by no means synonymous with an increased demand for capital. The former does often coexist with a decrease in the demand for capital. Notably during every commercial crisis. (sc. panic.) When large failures or suspensions take place, demand für capital diminishes, demand for currency increases. These events diminish the amount of business, hence for the use of capital on loan. The suspended firms cease business, the distrust occasioned induces other forms to contract their operations. Hence demand for capital lessened. But the monetary requirements of the commercial classes increase. Bills, by means of which trade is carried on, become temporarily distrusted. The bills of all merchants connected in business mit den suspended firms are looked upon with distrust both by the banks and by the public. The parties dealing with such firms refuse to accept bills from them and require payment in banknotes. Hence increased supply of banknotes required, although the ordinary amount of business is diminished. But such increase of banknotes only to be obtained from the B.o.E. But when increased demand for its notes, Bank raises the rate of discount. Legal limit of notes, decrease of reserves points to the approximation to that limit. Hence raising of rate of discount. The Bank says not: „we cannot lend so much capital“; it say: says: „we have not enough of notes wherewith to transfer the capital“ to make the loans. Thus rate of interest rises contemporaneously with a diminished demand for capital throughout the country. Every rise in the rate of discount depresses the markets, at once depreciating the value of goods of all kinds, and still further contracting credit. Hence failures and suspensions multiply, and, with every new failure, bills become more distrusted, and banknotes are more called for in payment. Another diminution in the Bank reserve of notes, up again goes the rate of discount. Thus a momentary commercial difficulty aggravated into a serious crisis, mercantile firms go down in scores, the trade of the country is immensely diminished, 10 of 1000nds of the working class thrown out of employment. The legal limitation of Banknotes has totally upset the natural course of things, and made the rate of interest to depend, not so much upon the supply of capital, and the demand for it, as upon the artificially made fluctuations in the amount of the medium (banknotes) by which capital is transferred.

February 2, 1867. N. 348.

The Money Market Review, 2. Februar 1867. S. 136/137.
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Venial Offences and Convenient Scapegoats.

There is always something very curious to be observed in the  Zusatz von Marx.
(so zu sagen criminal Revelation)
pages of commercial panic in the remarkable cleverness and facility with which some of the chief delinquents manage to escape, and the fatality with which some one or more of their comparatively innocent colleagues or instruments are made to „stand committed“. Directors misapply or otherwise squander the funds of the shareholders and destroy their property, and the unlucky manager or somebody else is put in the pillory, and the chief offenders are tarred and feathered by deputy. The scapegoat has carried away their sins, perhaps to bury them in the desert sands of a penal settlement, and „the law is satisfied“ and „justice is appeased“. Wilkinson is convicted of fraudulently misappropriating a cheque, but the director who signed the cheque, escapes unhurt … Peto auch scapegoat für die directors, solicitors, auditors, der Chatham etc railway Co. Bei der falschen Transaction der Co., bei dem issue der debentures (um zu prove that part of their sharecapital subscribed paid up). As none of that capital had been really subscribed, it was necessary that a sham subscription list should be made up, and sworn to before a magistrate, and this was done by an exchange of receipts between Peto et Betts and the Co, the Co. acknowledging the receipt of so much on account of so many shares, and Peto and Betts acknowledging the receipt of so much on account of their contracts. Thereupon two gentlemen, one from the office of Freshfield et Newman (solicitors), and the other from the office of Peto and Betts, appear before a magistrate, and depose to the bona fide subscription of a certain proportion of the capital. Gross Fraud upon the Legislature. But it is alleged that railway Cos. and their solicitors, however respectable, never regard this as an obligation to be strictly performed, and that for many years past almost every subscription list got up in compliance with it has been more or less a sham. Hence it seems to have been imagined that no great crime was committed by anyone in the transaction. But the committee of investigation bring this up as charge against the contractors, but not against the solicitors, one of whom must not only have had knowledge of it, but must have sanctioned and advised it.  Zusatz von Marx.
O Freshfield, Freshfield!
Trotz dem verlogenen Brief  Zusatz von Marx.
(in Times oder so)
, statement of 3 or 4 persons shows daß Dein partner Newman advised and sanctioned the transaction.|


The Money Market Review, 2. Februar 1867. S. 137/138.
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Joint Stock Financing.

The International Financial Society, pioneer of the modern finance associations, first imitator of the Paris model, paid first 25% dividends, gradually less, is compelled at length to admit that there is nothing wherewith to pay any dividend. The accounts for 1866 are duly audited. All the securities valued at the lowest market price. There was a profit last Midsummer „brought forward“ which has been „absorbed“, and a loss of £23,934 incurred, which has been written off against the Reserve Fund reducing it to £4,846. At this time last year (1866) it was 10 × the amount, and at one time was more than that. Aber the severe financial pressure was met without a call upon the shareholders. Its capital seems intact. (of 3/4 of mill. £) It seems chiefly the possibility of calls that renders the 3/4 Mill. £ paid by the shareholders worth in the market only 10s. per £. The greater portion of the securities on which advances have been made by the London Financial Association represent railway property, u.a. on more than 20 completed British railways.


  • 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