5 January, 1867. N. 344.

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The Money Market Review, 5. Januar 1867. S. 5/6.
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Barned’s Bank etc. Public Official Audits.  Zusatz von Marx.
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(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? …|

246

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.

Aus:
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.|

247

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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.
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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.

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

 Zusammenfassung von Marx in eigenen Worten.
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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.
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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.

Aus:
The Money Market Review, 5. Januar 1867. S. 12.
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Overends.  Zusatz von Marx.
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(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.



1) Banking et Currency.

  • Bank Act of ’44. p. 189, 194, 195, 198. (Bankrate of 10%) (200. 213–14. 216.[)] „Debats“ on the Act. (244 224) 244. Expansive Clause (247–8) 249. Profits of Panic to Bk.o.E. 216. Govt Debt to Bank o. Engld. a legalised Fraud. (198), (199)
  • Economy of Banknotes (191) Separation of Acceptances from Deposits (247) Abuse and Use of Bank Deposits (216, 217)
  • Bill brokering et Money dealing (252) Limited Liability applied to Banking (224, 225) Rate of Interest (L. Levi) (212–13) Clearing Houses for Banking. 209, 210, 263–4. Demand for Money and Demand for Capital (203)
  • Influence of Weather on Money Market. (230)
  • Commercial Credit and Commercial Debt Insurance (220, 221) Bills of Lading (Schwindel) (241, 242)
  • Fall in Gold, Rise in Prices of Commodities (276)
  • Joint-Stock Banks. London und Westminster. Liabilities und Securities (265)

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