25 August, 1866. N. 325.

Aus:
The Money Market Review, 25. August 1866. S. 220/221.
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Railway Debentures falling due in a Money Panic.

In a circular the directors of London, Chatham, and Dover Railway Co. announce that they are unable to renew debentures which have recently matured to the amount of £400,000, or to pay the interest last month on any of their debentures; also that the Court of Chancery has appointed, on behalf of the creditors, a receiver and manager, who take the entire income of the Co., and, after payment of the working expenses, hold the residue at the order of the court. All the rolling stock, plant, and movable chattels are assigned to other creditors, to prevent their seizure and appropriation by any special creditors.|

212

Debentures of railway Cos. are always falling due, in good times as well as bad. When the times good, the renewal is easy, when bad, very difficult or impossible. Laing , when chairman of the Brighton Co., attempted to correct the evil by giving a higher rate of interest for long terms of years; but longdated debentures may fall due in bad times, even if the periods of their renewal are less frequent. Then arose the notion of debenture stock (originated with the Bristol and Exeter Co) whereby the debenture debt virtually converted into a permanent stock, requiring no renewal in good or bad times. The Great Northern Co. has made wonderful use of this method of converting debenture debt into a simple annuity, the principal of which can never be demanded by the creditor. The London and North Western and other cos. have also availed themselves of it to some extent. With all this, the amount of railway debentures payable at fixed periods and now outstanding, is very large, and in a crisis such as that from which we are now emerging, has been a grievous source of difficulty and discredit. Debenture stocks are generally at a discount, and the conversion from debenture debenture bonds, the principal of which is guaranteed is, therefore, nearly impossible just now.

Aus:
The Money Market Review, 25. August 1866. S. 221.
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The Increase and Employment of Capital.  Zusatz von Marx.
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(Cos) (Law of partnership)

Not overtrading in merchandise and manufactures, which enrich rather than impoverish, but overtrading in too numerous schemes and projects, many of which are crumbling to pieces every day.

Roads and railways lock up capital irrecoverably, since they are almost valueless except for the purposes for which they are used.

What an enormous amount of capital has been dissipated by many of the Cos. which of late years have sprung up. The public fail to see that many of such cos. have their foundation not on capital but on credit, and induce those of a speculative tendency to embark in schemes neither required nor calculated to become useful or productive. It is the business of such Cos. to foster and encourage credit. … Large sums divided among the directors of such Cos und der avarice of the shareholders for large dividends.

There is a wide difference between capital as originally drawn from various channels, and concentrated for and employed in legitimate purposes, and capital swelled out to enormous proportions by premiums on shares and exorbitant dividends. There is no increase of real capital to the country under such circumstances of fictitious value.

It may be thought, prima facie, that the best law of partnership, is the one which enables persons to associate themselves together for the purposes of trade and commerce with the least amount of restrictions as to the manner in which they choose to combine. This may be the case where private partnerships alone are concerned … But public Cos., dealing with vast interests, and in which a large body of shareholders are virtually governed absolutely by a board practically irresponsible for their acts, require a certain amount of organization, and at this point the law steps in, and defines the obligations of the Co. in a rigid manner. … Die directors, Governors, proprietors der B.o.E., which is a Limited Co., only responsible to the amount of the Bankstock they hold.



2 March 1867. N. 352.

Aus:
The Money Market Review, 23. Februar 1867. S. 237.
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The Joint Stock Co’s Directory for 1867. London. Charles Barker et Sons. 8, Birchin-lane.

The importance of directors as a body in the State has often been a subject of remark, and in some matters they absolutely rule the H.o.C. Their number in U. Kingd. 9,932.

Official Return of Cos under the Limited Liability Act: 1864: 992 Cos, with proposed capital 237,391,818£. 5 Cos. registered without nominal capital, total 997. 1865: 1,013 Cos. registered, proposed capital of £205,391,818; 20 Cos without nominal capital, total 1,033. 1866: 758 Cos registered, proposed capital £76,599,823; 10 Cos without nominal capital, – total 768.

Aus:
The Money Market Review, 2. März 1867. S. 263/264.
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Overends. Report of Liquidators and Report of Defence Committee.

Nach dem Report der Liquidators the liabilities, at the date of suspension, £18,000,000, now reduced to £3,640,655. Davon 1 mill. further ab für 1/2 Mill. already in hand, and other 1/2 produce of assets actually disposed of, but not yet paid for. Dann noch verschiedne respective Einnahmen berechnet für Payments on bills, proceeds of securities not yet realised etc.

Aus:
The Money Market Review, 2. März 1867. S. 265.
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Leeman’s Bill respecting Dealings in Bank Shares.

A clique or cliques of „speculators for the fall“ fastened upon certain Banks etc, in 1866, made to fail by the operation of these unscrupulous tricksters. Thus Agra and Masterman’s Bank. A telegram was sent out to India by the operator to a certain clique that it had failed. At that time not the smallest foundation for that rumour. Effect run upon the different branch banks in India (by depositors); London bank unable to meet them, chiefly owing to the great distance; result failure of the London bank. … dealings for time at Stock Exchange, i.e. speculators who have no shares allowed to make fictitious sales of shares they do not possess, for delivery at some remote date, upon the prospect of buying them at a lower price, in the interval. Before the said telegram was sent to India, a clique of speculators had sold the sales shares largely for future delivery, and this was one of the expedients resorted to in order to render those operations profitable. In order that these miscreants should pocket their illgotten gains, widows, orphans, and dependent persons have been ruined or brought to the verge of ruin. If, from any cause, as mit der Agra and Masterman’s Bank, there should be a sudden demand for all the money lodged by the depositors, while the money lent can only be recovered by instalments as they fall due, no bank could meet such pressure. In 1866 no less than 51,000 persons in England and Wales registered as the holders of shares in joint stock banks, including persons in every grade of life. Aber die number of depositors, 20, 30, perhaps 50 × greater. We do not want banknotes if we can keep banking accounts and make our payments by cheques.

Aus:
The Money Market Review, 2. März 1867. S. 266/267.
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Limited Liability. High Nominal Shares.

Small sum paid upon deposit. Few intended to be permanent investors. All thought that, if ever a period of adversity arrived, some one else would have to bear the brunt of it; besonders so long as premiums reigned. The experience of last crisis has shown that there is no market for shares of heavy nominal amount of which only a little is paid. The terror of coming calls has outweighed all intrinsic merit; £100 shares with £10 paid, were, and still are, unsaleable.|

255

Aus:
The Money Market Review, 2. März 1867. S. 268.
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London, Chatham and Dover Railway Co.  Zusatz von Marx.
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(faux frais)

Mit Bezug auf die Section called „The General Undertaking“: Of £6,710,000 capital issued, the enormous amount of £2,945,296 for interest, commission, and „loss on issue“; which means that, in paying away to contractors for work performed securities of the nominal value of £6,710,100, they were received by the contractors as only £3,763,804 in cash. There is one item of £1,500,000 of ordinary stock which is put down as issued at a loss of £1,113,663; that is, the 1 million and 1/2 of stock went for £386,337.

Aus:
The Money Market Review, 2. März 1867. S. 269.
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Plethora of money.

There is always a large amount of floating capital in the country which is never invested, so to speak, but only laid out from day to day, or, at all events, in the very shortest-dated securities. So long as trade is brisk, this money proves remunerative enough for the purpose for which it is intended … But although a good deal of our capital is not available for investment in permanent securities, there is still a very considerable amount kept out of employment by sheer distrust.

Aus:
The Money Market Review, 2. März 1867. S. 270/271.
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 „1915“ ist das Pseudonym eines Verfassers einer Reihe von Leserbriefen an die „Money Market Review“.
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1915
on Overends.  Zusatz von Marx.
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(David Barclay Chapman)

The fellow, redolent as he is of the history of 1853–58, macht ein enthusiastic revival of himself. Aber in fact, he secured upwards of £27,000 on 3. Aug. 1865 (out of the House)[.] The stigma on the „revered“ brows, that they had surreptitiously rescued all their connections and friends from bitter loss, and involved others in bitter loss, for the comfort of all their connections and friends.

Aus:
The Money Market Review, 2. März 1867. S. 271/272.
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London, Chatham et Dover  Zusatz von Marx.
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(Zusammensetzung des Investigation Committee) (Solicitors) (Scapegoats)

Dieß Committee speaks only of contractors, nicht of the directors, and still less of the solicitors. Now, auf dem first meeting in St. James Hall, „a cut and dried“ committee proposed by Cornelius Surgey, and enforced. (He intimated that he had many proxies.) This Surgey himself is or was the broker to Messrs. Freshfield and Newman; another member of the committee is a near relative of Surgey’s own partner; another most active member was for years a partner of Newman’s brother-in-law, Newman being the principal manager of the business of Freshfield and Newman. Ferner: the new board is composed of the members of this committee, with the addition of Lord Harris as a figure-head. The board remains practically Surgey’s committee. Then this Surgey, who professed in his long speeches at St. Martin’s Hall to know nothing of the Co. and its past management, turns now out to be the very man upon whose advice the board raised loans on the new stock created in 1864 rather than sell it to the proprietors and the public, when it could have been disposed at [a] far better price than it would have fetched since, viz. about £40 instead of which it was eventually sold for £27. 10s., after the Co. had paid enormous amounts for interest and commissions on temporary loans. … Within the last few years an amount closely approximating to 1/4 Mill. St. has been paid to the solicitors of the Co. for their own charges, not including amounts paid to other parities. If this amount was not paid for the purpose of keeping the Co. right in legal matters, what was it paid for?



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