11 August, 1866. N. 323.

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The Money Market Review, 11. August 1866. S. 167–169.
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Count out on Watkin’s Motion for Enquiry.

Pitiful exhibition of this country in the eyes of foreigners.

Merchants and traders who had nothing do with share speculations or financial shares have been compelled to countermand their orders, manufacturers obliged to discharge their workmen, trade and commerce paralysed throughout the country, because money could not be had to meet engagements and pay wages. Our Foreign minister wrote to our foreign creditors, telling them that we had been overtrading and speculating, and were in temporary difficulties. 10% rate cause of the protracted discredit. The adjourned debate, which should have been resumed by Mr. J. B. Smith , on 3 August, was met by a „count out“. Resolved to shelve all inquiry. Der  Zusatz von Marx.
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würdige
Northcote: „Can you, or ought you, to make money when money is scarce? … There are those who say that the money that there is in the country represents the capital, the loanable capital, or gold, or this or that or the other, for there are different theories as to what money really is … the other school says, that money is only a form of credit.“ A small amount of wit goes a long way in the H.o.C. This These empty remarks excited the laughter of the H.o.C. „It is hopeless for you to investigate practical questions tending to legislation unless you have made up your mind on which of the 2 theories you intend to proceed“ (says Northcote)[.] These different argument arguments secundum Northcote „arguments against inquiry“. Millions of money „labouriously“,  Zusatz von Marx.
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says the Money Market Review
„and honestly  Zusatz von Marx.
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(!)
acquired by the mercantile and industrious classes, periodically filched from their pockets to enrich the pockets of the moneylender“[.] Gladstone (summus!) added that „whatever the nature of the report, he was quite sure, that so far as it dealt with principles and causes, it would not weigh with the H.o.C.“

Fawcett said that the „panic had been produced by the reckless spirit of commercial gambling which had spread itself over the country“. Gladstone (obgleich gegen inquiry) said „that commerce so far as he had observed, had been in a sound and satisfactory state. The charge of excessive speculation and recklessness was not applicable to the manner in which for some years past the general commerce of this country had been carried on.“ Gladstone further says: „we must recognise the great benefits derived from the working of this Act.“ „At any rate the convertibility of the banknote – the first object of currency laws – has been placed beyond the smallest question – not only beyond the absolute reach of dangers, but beyond the slightest taint of danger or suspicion.“ True? The suspension of the Bank Act has preserved the convertibility of the Note. The Banknote was endangered by the Bank Act during each of the 3 panics it has brought upon us, for it brought in view the bankruptcy of the Bank itself. If the doors of the Banking Department were once closed, as they would have been but for the suspension of the Act, how long does Gladstone imagine it would have taken to exhaust the gold in the issue department? When the 10 or 12 mill. of gold withdrawn, there would still be 14 mill. of notes to come in for gold, and there would be no gold to meet them. And the Bankact has preserved the Banknote!

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The Money Market Review, 11. August 1866. S. 169/170.
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Ministerial Opposition to any Change in the Bank Act.

The banking interest is powerful, and as a body is identified with the Act of 1844. The Bank has a plethora of gold, which cannot be touched, and thus it has so long maintained a 10% rate.  Zusammenfassung von Marx.
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Throw the 2 departments together! It |209 is foolish to make the Bank promise to pay in gold, notes issued upon the Gvt. debt to it only!

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The Money Market Review, 11. August 1866. S. 172/173.
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Clearing Houses for Banking.  Zusatz von Marx.
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(Country Clearing)

A few years back the private bankers of London alone used the Clearing House. Then, joint stock banks admitted, and, sill still more recently, established in London a „country clearing“, but only partial in its operations at present. A country banker having cheques upon another banker in the same place presents them over the counter for payment in notes or coin, and thus, in the settlement of the account between these bankers, notes and coins are required. The London bankers settle their accounts by an interchange of cheques and bills, and this economy of notes belongs alone to the Clearing House.

Sir John Lubbock , banker, honorary Secretary to the London Bankers, was the author of the country clearing, and in June (1866 1865) read  Diesen Titel notierte Marx in „Heft 3. 1868“ der „Hefte zur Agrikultur“ (MEGA² IV/18. S. 728.12). Er exzerpierte darüber in seinen Auszügen aus R[obert] H[ogarth] Patterson: The Science of Finance (ebenda. S. 750.36–37 und 755.20–21).
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paper upon this subject before the Statistical Society
. In diesem paper Lubbock took an amount of  Diese Angabe und die folgende Tabelle exzerpierte Marx bereits in seinen Auszügen aus R[obert] H[ogarth] Patterson: The Science of Finance (MEGA² IV/18. S. 750.36–37).
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£23,095,000
, which passed through his bank in a few days, and found that it was made up as follows:

Clearing £.16,346,000
Cheques et bills which did not pass through the clearing 5,394,000
Banknotes 1,137,000
Coin 139,000
Country Notes 79 000
£.23,095,000

These figures taken at the close of 1864, approximately represented the general average of the transactions of all clearing banks, and, upon that assumption: 70% of the whole (£700,000 in each million £) passes through the clearing house. Of the second 5,394,000 – £3,603,000 included transfers made from the account of one customer to another, and the remainder, or £1,791,000, represented cheques and bills on banks which did not clear. Also: 70% of the whole passed through the Clearing House; 94% of the whole was done without the aid of what is usually termed money – notes and coin. 6% was done in notes and coins, in the following proportions:

B.o.E. notes 84%
Country notes 6  
Coin 10  
100. 

These figures show the proportion of the transactions of bankers which passes through the Clearing House. Subsequently, he shows the proportions made in banknotes or coin by the public in London, and the following are the figures he supplies of payments by his customers into his bank:

Cheques and bills £18,395,000 or 97%
Banknotes £408,000
Countrynotes 79,000
Coin 118,000 3%
£.19,000,000 = 100

Estimated by both tests, at least 9/10 of that large portion of English commerce, settled by London bankers is performed by methods of currency other than banknotes and coin. The country clearing, established by Lubbock|210 belongs only to a particular class of country bankers. To use Lubbock’s words: „the country banker, A, receiving a cheque drawn on another country Banker, B, sent the cheque by post direct to B. B then requested C, his banker in London, to pay the amount to D, the London correspondent of A.“ In 1858 Lubbock thought that the complication of this system might be avoided by the establishment of a central office in London, for the special purpose of clearing country cheques, established in November (1858) the Country Clearing House at London. But this economy does not yet attach to a very large proportion of provincial business. Liverpool should have its own Clearing House, for cheques and bills between Liverpool bankers, so should Manchester, Glasgow etc. The requirements of banknotes whereby commerce is expressed has been gradually reduced, relatively to the magnitude of our commerce, by the banking facilities we have described. If our commerce depended, in fact, at this moment, upon banknotes as much as in 1844, when Peel’s Act passed, it would be simply extinguished.

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The Money Market Review, 11. August 1866. S. 174.
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Glasgow Chamber of Commerce on Banking.

That the Bankact of 1708, limiting all banking cos., except B.o.E., to 6 partners, produced numerous weak banks, subject to failure in all times of difficulty;

the exclusive privilege of issuing banknotes in London obliges the B.o.E. – and this impracticable – to hold a stock of bullion not only for its own transactions, but for those of all other banks and financial cos;

It has led to the establishment of Great Joint Stock lending Cos., who issue credit, in all other forms, except banknotes, without obligation of holding stocks of bullion corresponding to their credit;

that, by abolishing monopoly, all banks would be on an equal footing etc.

In Scotland, proved by long experience, that the keener the competition among banks, the smaller has been the amount of banknote issues.

It is only issues of credits for 2, 3, or 6 months which, by exciting speculation, derange prices and the foreign exchanges.



16 February 1866 1867 . N. 350.

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The Money Market Review, 16. Februar 1867. S. 203/204.
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Overend, Gurney et Co. Further Disclosures.  Zusatz von Marx.
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(Judgment of Malins.)

Sir Richard Malins, Vice chancellor, on 9 Feb. refused die motions of Oakes und Peck to have their names removed from the list of contributories. 7 directors in the Co und one gentleman who signed the articles of association for 600 shares, but did not become a director. Bei der formation der new Co., Barclay, Gibbs Gibb, Gordon and Rennie consented to become directors; the fullest disclosure was made to them of the actual state of the concern. They were told that the firm insolvent to 2–3 Mill. £. St. J. H. Gurney told them that from 1860 the total result of all the operations of the firm was a loss. There was a positive deficiency of at least £3,117,000. Malins declared that the conduct der 4 new directors „was a fraud“. Nebst all dem andern, den Lügen des Prospectus etc, they told the shareholders [„]that they could inspect the memorandum and articles of association and the deed of covenant, whereas there were really two deeds, only one of which was offered for inspection.“ The 9 members of the old firm conspired of course mit den 4 new directors in the false representations made to the public.

Debts: £5,250,000 (nach den liquidators) Uncalled capital of Shares 3,500,000. £.

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The Money Market Review, 16. Februar 1867. S. 206/207.
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Conviction of Greenland, late manager of the Leeds Bkg. Co.

Disastrous failure dieser Co in autumn of 1864; in Folge von frauds und forgeries, carried on for long time by Greenland (auch Frommer(?)), the manager, who made ciphers of the directors, and engrossed to himself the entire control of the business of the bank. Up to the time of its failure, the Bank paid 25% dividend p. an. The first call – nach stoppage – for 70l. p. share, the 2nd for 40. Widespread misery. In many cases sudden deaths from suicide or broken hearts. Einzige Cause: Greenland, and the knaves and forgers with whom he had associated himself. The forgers had escaped. A poor half witted clerk to one of them (Marsden) was prosecuted for forging an acceptance, and though it was proved that he did it by direction of his employer, and that both Greenland and the bankclerks knew that it was a forgery at the time when it was received, he [was] sentenced to 15 years’ penal servitude. At length, the |254 Leeds Chamber of Commerce, failing to obtain evidence of his many other crimes, discovered that Greenland had been in the habit of making false returns to the Gvt. in regard to the note issues of the Bank. Indicted and tried at the Central Criminal Court, the Leeds chamber of commerce being the prosecutors. He now sentenced to 15 months imprisonment with hard labour.  Es geht um das Alter von Greenland: Er ist beinahe 70 Jahre alt.
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Das Vieh ist verging upon 70.



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