## [The Money Market Review, Januar bis Juni 1867]

### Currency Theories and Currency Facts. (Money Market Review 5 Jan. 1867)

All bankers etc believe still that high rate of interest the only specific for too little gold and too many notes. Nun confer the following facts:

1866
Bank o. E. Bank o. France. Both together
Commenced year mit coin und bullion £.13,106,183 £16,747,095 £29,853,278
Closed year mit coin und bullion 19,247,859 28,580,987 47,828,846
Smallest amount of coin and bullion 11,857,786. (May 23, ’66) 15,503,172 (Jan. 18, ’66) 27,360,958
Largest amount of coin and bullion 19,247,859 (Dec. 26, ’66) 29,876,779 (Sept. 6, ’66) 49,124,638
Smallest amount of coin and bullion held at the same moment Jan. 17 et 18: 28,535,006
Largest amount of coin and bullion held at the same moment Dec. 26 et 27: 47,828,846
Rate of Discount. Minimum. 1865 3%. 1866 31/2% 1865: 3%. 1866: 3
Maximum 1865 7 1866 10 1865: 5. 1866. 5
Average. 1865. 4.74. 1866 7. 1865 3.70. 1866: 3.69

1866 closes mit maximum of coin and bullion, and minimum rate of discount. As soon as B.o.E. lowered discount rate, it accumulated coin and bullion. The B.o.F. accumulated coin and bullion with low rate, B.o.E. obtained little or none mit high rate.

That in times of panic depositors get frightened gilt nicht für B.o.E. Before 11 May B.o.E. had deposits of about 18 Mill., they rose after failure of Overend und Peto immediately to 28 Mill. Ebenso mit Loans (Discounts) der B.o.E. on private securities: At the beginning of 1866 £34,621,837, at its close: £33,699,478. Lowest point on 21st February, when securities, private et public, 27,935,943; highest £44,312,101, on 30 May, just after panic. Immediately before the panic the securities held by the Bk.o.E., mit 6 und 7% interest, about 30 mill.; immediately after panic, mit 10% interest, they rose to 44 millions. From 25 April to 30 May they increased £15,109,993. Ferner: Active Circulation on 25 April, before Panic, £22,161,115 with 6% rate; after the panic, or rather during its continuance, on 30. May £26,018,795 mit 10% rate. Bullion and Coin on 25 April £13,855,776 und on 30 May £11,878,775.

The panic of May 1866 shows therefore: Sudden increase of money lent to Bank o. E. ; correspondingly sudden increase of money lent by B.o.E. on securities; Rapid addition to notes in the hand of public, material decrease in store of coin and bullion, Advance in Discount Rate to 10%.

The sudden increase in Deposits of B.o.E. due chiefly to growth of balances of bankers and other money dealers who curtailed their loan business and augmented their reserves. Also due to transfer of accounts from other banks to B.o.E. by frightened depositors. Sudden increase in money lent by B.o.E., wegen difficulty of obtaining money elsewhere. Borrowers driven to the B.o.E. by distrust prevailing in the general market. Addition to Circulation for bankers tills, large notes almost alone increasing. Diminution in bullion and coin partly from additional reserves of sovereigns kept by provincial bankers, partly from distrust of continental creditors who would only accept gold in payment of debt. The advance of rate to 10% due to the Overstone theory, to contract active circulation und attract gold; the remedy failed nach beiden Seiten. Notes in hand of public did not decline materially, nor bullion increase until after 15 Sept., when discount rate reduced von 10 to 8%.

Now as to the Accounts of Bank of France: As a rule the deposits lent to B.o.Fr. less than the money lent to B.o.E. 1866 commenced mit £10,011,417 deposits at B.o.Fr., closed mit £20,938,445. The Minimum was £9,267,141 on 25 Jan. ’66, Maximum £.22,627,120 on 28 June ’66. Deposits same course wie in England. On 26 April £.12,000,683 und on 31 May £19,398,308. French Moneylenders thought that the English crisis demanded caution and increase of their reserves. But B.o.F. did not raise interest. Ebenso amount of securities (loans) on 20 April £36,073,336 (at Bk. o. Fr.) und on 31 May £43,250,463. Good deal of borrowing on English account at Paris. Bullion increased at B.o.F. during English Panic von £20,706,955 on 26 April to £22,523,808 on 31 May. The English 10% drove money away, the French 4% attracted it. Ferner: Notes in Circulation of B. o. France 889,969,375 fcs, on 26 April, und 919,872,775 fcs on 31 May, also stieg von 35,598,775£ auf 36,794,911. Nach der currency school hätte die Note Circulation bedeutend steigen müssen mit 4%, did not in any appreciable degree.

Divested of all superfluous figures, the facts stand as under:

 B. o. England Deposits £27,298,585 Notes with the Public. 21,933,365 B. o. France. Deposits 20,938,445. Notes mit dem Public. 37,478,793

 B. o. England. Securities. £33,699,478 Coin and bullion 19,247,859 B. o. France. Securities. 39,618,728 Coin and bullion. 28,580,987

Die B.o.E. hold more Deposits than B.o.F. und much less Note Circulation. Und B.o.F. verpumpt mehr zu niedrigerer Rate of Discount. The panic yielded Profit to Bk. o. England in proportion to its intensity.|

Value of Imports. Month ended October 31.
Enumerated Articles. 1864: £20,309,746 1865: 23,606,789 1866: £19,530,442
Imports. Ten Months ended October 31.
Enumerated Articles. 1864. £.181,283,856 1865: 160,909,954 1866: 193,698,047
Less Raw Cotton. 62,098,915 43,899,564 67,175,970
119,184,941 117,010,390 126,522,077
Less Corn 17,054,343 15,928,658 23,143,400
102,130,598 101,081,732 103,378,677
Exports. Declared Value. Month ended November 30
All articles: 1864: £12,065,213 1865: 15,567,742 1866: 15,080,430
Exports 11 months. Ended Nov. 30
All articles 1864: £148,340,865 1865: 150,832,344 1866: 173,913,222
Less cotton yarn and manufactures: 50,908,229 52,030,217 68,267,228
Exports, exclusive of manufactured cotton: £97,432,636 £.98,802,127 £.105,645,994

Cotton as usual 1/3 of the entire exports of Gr. Brit., and throughout 1866 the proportion of 1/3 has been very far exceeded.

### The Aberaman Iron Works Co. (limit.) (Meeting of Shareholders. Jan. 5. ’67) (Money Market Review)

Mr. Henry Pawle (London stock broker exposed the case).

### Money Investments.  Zusatz von Marx. Schließen (Shares) (Panic) (Limited Liability Cos)(Money Market Review. 12 Jan. 1867)

Difficulty to invest money 6 or 700 Millions. Consols not a sufficient field now. Railways securities and Shares of all sorts distrusted.|

26

In a recent letter to Times Messrs. Spackman and Sons give these figures:

Numbers of Cos. Capital nominally Created. 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: 44 10,295,000 7,920,000 2,052,500
Total 4 years: 876 £373,230,500 £268,156,900 £35,648,640

These figures show not amount called up on these 876 Cos. irrespective of deposits on allotment. Some of these Cos. have also made allotments since their first issue of shares, whereby the amount of capital offered, or the liability of the public to pay calls, is increased, worüber giebt Spackmann:

 To the capital offered of £268,156,900 Add new issues by existing companies in 1864 35,315,000 Do Do 1865 15,090,600 Do Do 1866 about. 300,000 Total capital offered £318,862,500

The new issues of 1863 here omitted; but the liability on account of deposits and calls upon the 876 Cos. at least 320 Millions. Objects of these 876 Cos thus stated:

Numbers of Cos. Capital authorised. Capital Offered. Deposits.
Manufacturing and Trading. 283 £.84,770,000 £64,902,900 £10,114,040
Banking 58 72,950,000 51,950,000 5,252,750
Financial and Discount 50 69,350,000 45,750,000 4,391,250
Railways 44 36,796,000 25,516,000 3,385,250
Assurance 33 28,775,000 15,375,000 1,677,500
Shipping 43 25,238,000 19,353,000 1,869,100
Building and Investment 38 13,485,000 9,745,000 1,810,000
Mining 147 12,448,500 11,145,000 3,018,800
Hotels 82 7,640,000 6,752,000 1,293,350
Gas 17 3,875,000 3,185,000 587,500
Miscellaneous 81 17,903,000 14,483,000 2,249,100
Total 876 £373,230,500 £268,156,900 35,648,640

The Investor’s Manual giebt folgendes Statement, worin Foreign Loans, Foreign Cos., Railways etc eingeschlossen:

Capital created Capital called
1865 Shares. Foreign Loans etc £.135,735,814 £73,332,876
1866 49,288,800 59,695,719
£185,024,114 £133,028,595
Deduct Spackman’s figures für 1865 und 1866: 83,438,900 14,229,296
Apparent balance of foreign et colonial loans, calls etc £101,585,214 £118,799,299

Some portion of these calls and subscriptions of 1865 and 1866 were made on the Continent, but the Continental portion is comparatively trifling. Ferner: the statement does not include investments in Great Britain in previously existing foreign securities. During 1865 and 1866 these have been large, particularly in U. States Securities of all kinds. Ferner: these statements of calls made in 1865 et 1866 do not include the large sums invested in limited Liability Cos. which are never brought before the public; nor the calls made by the Liquidators of companies defunct, nor money raised on Lloyd’s Bonds. Probably the calls made upon investors in limited Joint Stock Cos., foreign und other securities during 1865 and 1866 much more than £133, und die commitments of British public contracted within past 4 years very much more than 320 Mill., probably nearer 500 millions. … Corporate breach of trust ought to be held criminal, as in Wilkinson’s case. As the matter stands, a director of a Joint St. Company or an Auditor has imagined that he may indorse with impunity almost any swindle whereby honest investors may be robbed of all they possess, to the amount of millions, while a poor clerk who steals a £5 note is transported.|

### Petroleum. Zusatz von Marx. Schließen (Demand und Entdeckung neuer nützlicher Anwendbarkeit einer Waare.)

The American papers, referring to the statistics of the production of the oil regions during 1866, hope that science may do something to bring petroleum into use for other things than illumination. Yield of 1866 so far in excess of demand that it is calculated the present year commenced with a surplus on hands in the various markets of the word world of 733,000 barrels of refined, „which will have to be consumed before the production of 1867 can be brought forward“.

### The State of Minnesota.

Zwei Hauptgründe des quick development of U. St: 1) rich land und the facility with which possession of it can be obtained; 2) extraordinary advances made of late years in facilities for internal and external communication by railway and steamboat.

The Co. of the St. Paul and Pacific Railway Co (Minnesota) has, by legislative grant from Congress to the State, and from the State to the Co, about 1,600,000 acres of the most desirable land in the State. They may be bought for immediate payment or on credit; and actual settlers may locate on lands not yet subject to sale, yet with an indefensible title. Germans have flocked to Minnesota. Minnesota chiefly settled by Germans; 4th State in the order of area in Union, and 30th in population, nach Census von 1860. Danach:

Area. □ miles. Population.
Texas 237,321 604,215
California 188,982 379,994
Oregon 95,274 52,465
Minnesota 83,531 143,855
Minnesota 31st State in order of population per □ mile, but 25th in increase of population per □ mile from 1850–1860. In no respect its progress more marked than in value of flour and meal produced and sent to market.

1850 1860 Increase P.Ct.
Minnesota: Flour and Meal. Value $500$1,310,000 2619
Illinois: Ditto $5,781,483$18,104,804 213
1850 1860
Wheat 1401 bushels 2,195,812 bushels
Rye 125 124,259
Indian Corn 16,725 2,987,570
Oats 30,582 2,202,050
Tobacco 0 38,510 lbs
Wool 85 lbs 22,740 dtto
Peas and Beans 10,002 bushels 18,802 bushels
Irish potatoes 21,145 2,027,945
Barley 1216 125,180
Buckwheat 515 27,677
Butter 1100 lbs 2,961,591 lbs
Value of farming implements 15,981 dollars 1,044,009 dollars
Value of live stock 19,403,662 10,245,079
Acres of Ploughed Land. 1900 433,276
Area: □ 83,000. Population: 173,855

Her prairie grasses are as well adapted for the grassing as her corn and other grains for the fattening of cattle, as those of Illinois or Iowa. From the northern boundary of Iowa, itself a sheep breeding State up to St. Paul, the country is perfectly adapted to sheep husbandry. The growth of wool may be made almost next to that of wheat. Only danger, that the increase of production may exceed the means of transport.

### Rate of Discount in 1866.

• Amsterdam: Year 1866 opened mit 8% discount rate; Second week 61/2, Eighth Week 6, Eleventh 51/2, Eighteenth 6, Nineteenth 61/2, Twenty seventh 7, Thirty Second 61/2, Thirty Third 6, Thirty Ninth 51/2, Forty Third 5, fifty first 41/2.
• Berlin. 1st week 7%, 8th week 6, 16th week 7, 19th week 9, 29t week 7, 30 week 6, 32 week 5, 44 week 41/2, 51 week 4%.|
• 28
• Brussels: Commencement of year 5%, 9th week 4, 20th week 5, 22nd week 6, 33d week 4, 38th week 3%.
• Frankfurt: 1st week 6%, 2nd week 7, 3d week 51/2, 4th week 5, 7th week 41/2, 10th week 4, 12th week 41/2, 16th week 5, 19th week 6, 20 week 7, 26th week 6, 33 week 5, 34 week 4, 41 week 41/2, 46 week 31/2.
• Hamburg: 31 changes in rate of discount during 1866. First quarter fluctuations from 41/2 to 7%, Second quarter von 51/2 to 81/2, Third quarter von 31/2 to 61/2; Fourth quarter von 31/2 to 41/2.
• Paris commenced mit 5%, 7th week 41/2%, 8th week 4, 12 week 31/2, 19th week 4, 30th week 31/2, 35th week 3%.
• London: 1st week 8%, 8th week 7, 11th week 6%, 18th week 7, 19th week 9, 20th week 10%; Continued to 33d week 8%, 34th week 7, 35th week 6, 36th week 5; 39th week 41/2, 45th week 4, 51st week 31/2.

### Minimum Rates of B.o.E. Minimum Bankrate of 3% (8. Febr. 1867) (Money Market Review)

B.o.E. Rate ranged from 4 to 5%, not more nor less, during 134 years von 1704 to 1838 1839 6%, fell almost immediately to 5, and then to 4, and in 1844 to 21/2%. Nach den Tables of McHaffie and the „Investor’s Manual“,

Average Rates of Discount of Bk.o.E: 1864 71/16%, 1865 4.74%, 1866: 7%, average of the 3 years more than 61/4%. In 1857 average 62/3%, in 1847 51/3, in 1856 51/2, but before 1864 never average of more than 7%, and never any 3 consecutive years with average of more than 6%.

Maximum Rate of discount of B.o.E. from 1704 to 1846 never more than 6%, only once and for a very short time, minimum mostly 4%. Since 1844 minimum 2 und maximum 10%, while on the average Bankrate gradually increased. During the last 3 years minimum average rate of B.o.E. higher than maximum of the 140 years before Act of 1844, and much higher than the average of any 3 years that ever passed before.

Andrerseits niedrigeres Minimum. 1845 and chief part of 1846 21/2%, with a concomitant mania for railway speculation. 1847 panic mit nominal minimum maximum of 8%. (few would lend and few could borrow on any terms.) 1848 3%, 1849, 1850, 1851, 1852 fluctuated between 2 und 3%. Next interest rose continuously until 1857, other panic; average minimum 62/3% mit maximum of 10%. 1858 minimum of 21/2%, averages of 1858 und 1859 3% und 2.66% respectively. After 1859 the minimum average rate rose. It was 1860 41/5%, 1861 51/6%, 1862 27/12%, 1863 45/12, 1864 71/16, 1865 4.74% und 1866 7%. After 1857 panic recovery much more rapid that than after 1847, and the average value of money much higher in succeeding years. In 1866 extreme of dear money as in 1847 et 1857, und in 1867 extreme of cheap money as in 1848, 1858 sq.

### Beispiele of successful Joint Stock Cos. (Money Market Review 2 March 1867)

African Merchants Co, just declared dividend of 15% p.a., with rest (of profits) of £33,000. Shares £10 each, 3£ paid, market price a merely nominal premium.

Anglo-American Telegraph Co just paid dividend of 10% „on account“, being at rate of 20% p.a., £10 shares fully paid up, with about now £15.|

29

Birmingham Financial Co 10% dividend p.a. Shares £20, £5 paid, to be had at considerable discount.

Berlin Waterworks Co, paid just dividend 8% p.a.; shares with £10 full paid, at a nominal premium; City of London Brewery Co dividend 9% p.a. Price of the £100 stock is about £130. The Electric and Telegraph Co 10% dividend. Price of 20£ stock about 130l. Forestreet Warehouse Co dividend of 10%. Price of 20£ share, 12 paid, is about par, i.e. 12£. Lion Brewery Co dividend of 8%. The 25l. share, with £10 paid, at small discount. London General Omnibus Co pays just 71/2% p.a. Price of 4£ share mit 4£ paid up, is about 31/4. Westminster Palace Hotel Co dividend 6% p.a.; 10£ share, mit £10 paid, is worth about £7. Alhambra Co dividend of 15% p.a. (average of past year 171/2%). The gross revenue of this undertaking 1866 no less than £39,237, an almost incredible sum for this sort of undertaking. York-street Flax spinning Co, Dividend and bonus of 20% p.a., mit reserve of undivided profits of £100,000, which is equal to all the capital paid up. Price of the £50 share, mit £10 paid, about £20. John Crossley et Sons (lim.) has just issued his annual report, dividend for 1866: 20% p.a. 15£ share, with 10£ paid, about 20£.

### Full Board of Trade Returns. 1864. 1865. 1866. (Money Market Review 23 March 1867.)

1864 1865 1866
Total Imports £226,161,840 219,393,987 238,714,094
Total Exports £160,449,053 165,835,725 188,827,785
Difference £65,712,787 53,558,262 49,886,309

Diese numbers of course far from literally conclusive. The imports represent nearly all the commodities brought into the market at the computed values of the importers, and that, too, with continuously falling markets during the later period, and rising markets previously. The exports represent in value merely the articles of British et Irish manufacture which are enumerated at the declared values of the exporters, excluding all raw produce brought into the market and again exported. Still shows that exports increase relatively more rapidly than the imports. Ferner folgendes über den Charakter der Imports:

Imports as valued in the years
1864 1865. 1866.
Enumerated Articles £226,161,840 219,393,987 238,714,094
Deduct raw cotton 78,203,729 66,032,193 77,521,406
147,958,111 153,361,794 £161,192,688
Deduct silk, raw and manufactured. 12,925,347 17,692,499 15,894,333
135,032,764 135,669,295 145,298,355
Deduct sugar unrefined. 14,404,150 11,302,624 10,799,591
120,628,614 124,366,671 134,498,764
Deduct Tea. 9,438,760 10,044,462 11,129,741
111,189,854 114,322,209 123,369,023
Deduct Timber. 10,960,244 11,500,960 10,459,904
100,299,610 102,821,249 112,909,929
Deduct Wool. 17,667,441 17,071,017 19,858,476
£.82,562,169 £85,750,232 £93,051,453

(Hierzu ist zuzufügen aus den Statistical Abstracts Import von Corn und Cattle etc)

The values of our merchandise imported during the last 3 years as shown above have not increased much, and the increase is attributable chiefly to silk, tea, and wool. The import of raw cotton has not varied much during the 3 years, constitutes about 1/3 of the whole, amounting in the 3 years to the astounding sum of 222 millions £. Then putting together the few items of raw cotton, sugar, silk, tea, wool, timber, they comprise 6/10 of our entire import values, or in round numbers 423 Millions out of 684 millions in the 3 years.|

30
Exports of British and Irish Produce as valued in the years
1864 1865 1866
Declared values £160,449,053 165,835,725 188,827,785
Deduct: Cotton Manufactures 45,799,090 46,923,384 60,685,022
114,649,963 118,912,341 127,962,763
Deduct: Linen Manufactures: 8,172,813 9,156,990 9,576,163
106,477,150 109,755,351 118,386,600.

The export values risen from 1601/2 mill. in 1864 to 189 mill. in 1866, or about 29 mill., of which cotton manufactures constitute more than 1/2, or nearly 15 Millions. Aggregate export values of the 3 years in round numbers 515 millions, of whic which cotton manufactures constitute 153 millions, or about 30%.

### Indian Exchanges. (Past and Present) Money Market Review 23 March 1867.

When the merchant prices of Leadenhall Street held rule over our Indian Possessions, they ruled in a great measure the „Course of Exchange“ with and from the 3 Presidencies. 3 to 4 millions £ were required annually for home disbursements, which, after the commercial privileges of the Co. had been put an end to, was generally raised by 60 days’ sight drafts on the Treasuries of Bengal, Madras, and Bombay. These drafts were offered to the public at such rates as the authorities of Leadenhallstreet deemed it proper to fit fix. The rates of exchange for such undoubted paper varied from about 1s. 10d. to 2s. 1d. per rupee, according to circumstances, and, until the overland route became available for the conveyance of specie and bullion to India, this mode of remittance was almost the only one that could be resorted to, except bullion remittances, via the Cape, occupying a period of 3 to 4 months.

The fixing of the rates of exchange by the old East India Co. was a preventive to speculation and uncertainty in Indian exchange, such as exists under the present arrangements of the Indian Council. The old Co, virtually declared to Public: „Here are our drafts on India, at a certain price; take them or not, as you think proper.“ The India Council, after feeling the market, and ascertaining the probable demand, in secret fixes a minimum rate for each Presidency, and invites tenders for bills to be sent in on or before the 1st and 3d Wednesdays in each month. Of course the highest tenders the most successful, tenders at the same rates receiving pro rata allotments, according to the amount of the bills tendered for and to be drawn. The sums allotted to the respective applicants are required to be paid for on or before the 15th and 29th of each month. No tenders are admitted for less than 10,000 rupees, nor drafts drawn for less than 5000 rupees each. The rate of 1s. 10d. per rupee, at which the capital of the Indian railways should be received at the Indian Treasury in London, was fixed by the Old East India Co under contract with each railway, favourable to the railways, rate below what in ordinary times prevails.

The exceptional circumstances connected with the Bombay Presidency, for the last 3 or 4 years – arising from the great increase of wealth in the first place, and the speculative mania which set in at Bombay, followed by numerous failures of banking and finance Cos., both in London and India – reduced, for the time, all calculation of exchange dealing to a matter of great uncertainty, risk, and frequent fluctuation. Not 6 months ago, the drafts of the Indian Council on demand were almost unsaleable at 1s. 10d. to 1s. 101/4d., and the Indian Gvt were compelled to resort to the unfavourable expedient under ordinary circumstances of importing gold from India, and the still more unprofitable and obsolete mode of supplying themselves with funds, by the importation of silver.

The opening of banks in London (whether as head offices or agencies), in connection with India, has tended to equalise exchange, and afford greater facilities for the negotiation of mercantile drafts against outward shipments, as well as for effecting remittances by means of bank drafts, than previously existed. The exchange for of money on this side for money to be paid in India, after expiry of 30 or 60 days’ sight, involves question of two |31 different currencies. The Bank granting drafts must make provision for them at a remote place, either by sending out funds, or redrawing from India. The currency, in which provision has to be made for drafts on India, in the absence of other modes of remittance, is silver rupees, coined in India, not be had to any extent here. The silver out [of] which it is coined is all shipped in bars, Mexican dollars, or 5 fcs pieces, from the country or from France. Hence the actual cost of placing the money to be given in exchange in India for money received in London has always to be clearly ascertained from this source, mainly, which suffices to a great extent to regulate the course of exchange between the 2 countries under ordinary circumstances. During the late crisis and the high rates of discount the silver shipments to India were almost nil, there being as little demand for this metal as for the Indian Council or bank drafts.

Commercial bills against indents or shipments to India from a large portion of bank remittances against their own drafts drawn, and are taken at a difference, according to quality, to yield a larger profit than silver remittances, allowance being made for corresponding risk. Bills drawn on this side against outward shipment have almost invariably a currency of 60 days’ sight, while on the other side bills drawn against produce shipped homewards are drawn at 6 months’ sight. This custom had origin mit Old East India Co; first 10 months’ date from India, then 8, then 6 months. The contraction in the currency of bills drawn from India has no doubt arisen in great part from accelerated communication, via Cape, and the overland route. Faster sailing vessels. Also greater expediency through the aid of machinery and other appliances in loading and unloading cargo at the ports of shipment and discharge than 20 or 30 years ago. Andrerseits even 6 months bills often mature before the produce they represent can find a market. No such usance in the Australian trade as 6 months’ sight. All shipments of wool and other produce are drawn against at 60 days’ sight, or, at the utmost, in exceptional cases, at 90 days’ sight. Average passage for sailing vessels from Australian colonies is less than from India, but nothing like this difference. Australian Exchanges remarkably steady compared mit Indian ones, from the shorter usance, and the moneys of the 2 countries nearly the same, the rates varying from about 11/2 discount to 11/2 premium.

### Railway Discredit (30 March 1867. Money Market Review)

is at its acme. The crisis more damaging to railway credit than we anticipated. Extent was not known to which railway financing had gone, aided by the newly created capital of finance Cos. Zahlungsfähigkeit of Great Eastern, Great Western, Manchester, Sheffield, and Lincolnshire, and North British.

### Dealings in Bank shares. (30 March. ’67. Money Market Review.[)]

It is very well to say that, as time bargains are entered into for a fortnight only, they must be entered into afresh at the expiration of every fortnight; but there are such things as „contangos“ and „backwardations“, with the aid of which a speculative account may be kept open for months. Bear accounts in bank shares, it is well known, are kept open for several months during the recent pressure, by „carrying them over“, and that part of the Stock Exchange practice enabled a parcel of unprincipled scoundrels to prompt the depositors of some banks to demand immediate payment of their money, whereby failure of the Bank effected.

### Stock Markets. (Week ending 30 March 1867.)

Again almost general fall in English Railway Stocks, in which the daily transactions, bona fide, and speculative, important. The disgraceful revelations and Co. and the serious financial embarrassments of the Great Eastern, Great Western, and North British lines. Unfortunately, the halfyearly accounts have shown at the same time diminished profits in the face of increasing receipts. Fearing further reduction of their income, many holders have sold, and the decline in prices has increased the anxieties of the debentures holders. Zugleich strike der engine drivers und firemen threatened throughout the country, has actually occurred upon the Brighton line.

### Railway Collapse.

„Railway Accounts, A letter to Lord Redesdale. By John B. England.“ (London 1867) Money Market Review (20 April 1867.[)]

England giebt folgendes:

1860. 1867.
Ordinary Stock Loans and Preferences. Total Capital Ordinary Stock Loans and Preferences Total Capital.
South Eastern £7,400,000 £4,200,000 11,600,000 7,600,000 12,100,000 19,700,000
Brighton 4,600,000 3,800,000 8,400,000 5,400,000 13,200,000 18,600,000
Chatham 900,000 300,000 1,000,000 2,000,000 10,700,000 12,700,000
Summa £12,700,000 8,300,000 21,000,000 15,000,000 36,000,000 51,000,000.

Also in a comparatively small district Railway Capital raised in 7 years by 30 millions (verte)|

33
1860 1866
American Lines. Capital. Traffick. Capital. Traffick
New York Central £7,700,000 £1,250,000 £.7,800,000 £2,900,000
Pennsylvania Central 5,600,000 1,100,000 7,200,000 3,500,000
Totals 18,100,000 2,950,000 20,100,000 8,600,000
1860 1866
English Lines Capital. Traffick Capital Traffick
Great Western £.27,000,000 £1,800,000 + £45,000,000 £3,600,000
Great Eastern (E.C.
(Eastern Counties Proportion)
11,300,000 950,000 24,000,000 1,800,000
North British 4,600,000 290,000 20,000,000 1,310,000
South Eastern 11,600,000 1,050,000 18,000,000 1,360,000
Brighton 8,400,000 820,000 16,500,000 1,190,000
Totals 62,900,000 £4,910,000 £123,500,000 £9,260,000
+ Besides £270,000
a-year rent charges

England explains, that it is the practice more or less with all British Railway Cos. to pay out of capital charges for reproduction and maintenance and other matters which ought to be paid from revenue, and that the closing of a capital account would in such cases be almost equivalent to the closing of the dividend.

### The Bullion Movement. (April 27, 1867 Money Market Review)

 9 Jan. 1867 Bullion and Coin in both Bank departments: £19,438,000. 27 March 1867 19,627,232 24 April 1867 19,336,927 4 September 1852 (year of the first full development of Australian Gold discoveries 21,838,000 (quarterly average of the weekly amount of bullion in Bank, against average active circulation for the same period of £23,982,000)

A great cause for the large stock of gold in the Bank, is the continued absence of the usual demand for silver for India. A slight temporary movement took place in that direction 2 or 3 mails ago, consequent on reports by telegram of a considerable rise in the exchange on England. The demand immediately supplied by shipment of £200,000, chiefly from Continent, without any marked effect being produced on foreign exchanges, or causing shipments of gold from this country to France. The demand for India has again, to a great extent, subsided.

With such a large stock of gold, and no probable outlet for it, the Bankrate seems likely to undergo further reduction at no distant period.

The absorption of money in investments in securities to a greater extent would temporarily relieve bankers of a portion of their surplus funds, but not materially affect the Bank of England, as regards its stock of gold, more particularly as the Bk. o. France is overburdened with gold. Circumstances beyond the pale of our home transactions must supervene to bring about the exportation of gold. … Exports of gold at this moment taking place in payment for stock which foreign holders, frightened at the idea of war, have precipitately sent here. Withdrawals of gold from the Bank for this purpose will only go on for a few days.

### Week ending 4 May 1867. Railway Collapse.

Die Enthüllungen des Investigation Committee, und South Eastern, [haben die Angst] vor neuem Railway Panic vergrössert.

### The Stock Markets. 10 May 1867.

Friday, 10 May 1867 has been the very antithesis of Friday, 11 May 1866. The turn for the „speculators for the rise“ seems to have begun, railways, of course, excepted.

### Movement of gold.

 First quarter of 1867 imported £2,153,182, of 1866 £2,425,989 of 1865 £2,651,237. The largest imports were from Australia, sent £1,168,510 (first quarter of 1867) 1,309,178 (corresponding 3 months of 1866) 533,032 (--------------- 1865) From United States Gold receipts: £210,524 (to March 31, 1867) 353,522 (--------------- 1866) 987,829 (--------------- 1865) Exports of Gold from U. Kingdom £1,471,794 (to March 31, 1867) 1,396,364 (--------------- 1866) 1,470,514 (--------------- 1865). Von diesen gold Exports largest to France: £1,078,848 (to March 31, 1867) 943,759 (--------------- 1866) 881,361 (--------------- 1865)

### Caledonian Railway. (17 Years ago) (Money Market Review 25 May 1867)

Vor 17 Jahren a committee of investigation into affairs of the made a report, in which the same outline of facts was given as that which is now reproduced, though at this moment not in one case but in many.

Even before opened as a through line from Carlisle to Edinburgh and Glasgow, the Caledonian Railway was committed, by the policy of the board, to a host of leases and guarantees, which, under any circumstances must have absorbed the whole revenue of the line. The Investigation Committee directly charged the directors with personal interest in these guarantees and leases, supported by the significant fact they brought to light that, while the Caledonian Railway was undergoing this process of insolvency at the direct investigation of the board of directors, the directors themselves reduced their holdings in Caledonian Original shares to a bare qualification. Astonishing that after so many years’ experience of interested antagonism between Directors et Shareholders, the same wrong should be perpetrated up to this hour. The Caledonian 50£ share of that day fell, upon the report of this committee, to something like £6 or 7, or to about 12 or 14% of the money paid; but since that time its value has risen to a great deal more than |35 the shareholders paid originally, and the £100 stock at one time touched nearly £140. Dieß dadurch hervorgebracht, that the injudicious or iniquitous bargains were for the most part cancelled. (Repudiation.)

### Debt. (Money Market Review. 25 May 1867.)

The debts of Gr. Britain et her Colonies: 945 Millions St; in British Railways et Canals: 500 Mill. £. St; Joint Stock Banks: 85 Mill. £. St. Finance Cos., 15 Mill. £. Other Joint Stock Cos 70 Millions £; zusammen debt and investments of British Empire, public and private, in a marketable form, about 1715 Mill. £. Then the debts of the Foreign States, contracted chiefly within the last half century, estimated at 2,566 mill. £.; Aggregate: 4,281. Mill. £. Foreign railway capital hier nicht included (much davon British). Altogether, as a mere estimate, world’s debt 5000 or 5,500 Mill. £. St. All this virtually created since commencement of present century und Debt increases now much more rapidly. A few years ago Egypt owed nothing, Turkey very little, Italy and Mexico were comparatively small debtors, France owed in 1860 less by 125 Mill. St., and U. States has entailed debt of 670 Mill. £. St. (federal and confederate) Half the debt of the universe is ours Here lies one secret of the rapid progress of the Anglo-Saxon race. We trust our colonies with our money … they apply our money to useful and reproductive purposes.

### Committees of Investigation. (Money Market Review June 1. 1867)

At recent special meeting of the , a very intelligent shareholder, referring to the appointment of a committee of inquiry or investigation said: he had a great faith in committees, they were generally the result of some previously packed arrangement, when such committees issued their reports, they seldom gave really valuable information, and resulted in the appointment of the committeemen as directors. There is much general truth in this outline of railway investigations. As a rule they have been little better than a farce, and the truth has been bought off by a set seat in the board-room, or some other method by which damaging facts may be concealed or compromised.

### Investment of Money  Zusatz von Marx. Schließen (Funds. Increase in their Price) (Money Market Review June 1. 1867)

Some part of the existing supplies of capital – very small part, indeed – invested in selected things, chiefly Government securities and guaranteed securities of colonial dependencies. Hence a considerable advance during the last 3 or 4 weeks in the prices of the soundest stocks. Within that period, f.i., the value of the Funded Debt has increased no less than £23,000,000. The fundholders are richer by that amount than they were a few months back. In Railways during the last fortnight average rise of fully 5%. This change means about £5,000,000 in value. Vastness of their unemployed resources has compelled B.o.E. and B.o.F. to reduce their rate of discount to 21/2%. Indian Gvt Securities during the month have advanced fully 2%. The most solid securities are first selected after the country has emerged from a collapse. Present Plethora.

### Pre-Preference Railway Stock. The North British Bill before Parliament. (Money Market Review June 1 ’67)

In defiance of all expostulation, the directors of the North British Railway Co. persist in promoting their bill before Parliament for raising £1,875,000 by „pre-preference“ stock – that is, a security which, in order of priority, is to |36 override all other priorities excepting debentures or mortgage-bonds. It would amount to wholesale confiscation of existing right. Not yet even shown that this little less than 2 millions required for any legitimate purpose. No doubt, wanted for somebody – lawyers, perhaps, or contractors, or Parliamentary agents, or bankers … their money is to be raised in somebody’s interest, and that interest is not the interest of the existing proprietary … If the doctrine of pre-preference is permitted at all by Parliament, where is it to stop? Lawyers, contractors, Parliamentary agents, and bankers have only to run up long bills, and pre-preferences may be created ad libitum. The last priority holds good until the next is created; and then „the devil take the hindermost“.

### London and Westminster Bank. Its Progress. Proposed issue of new shares. (Money Market Review June 1, 1867)

On 1st April, 1864, business of James Loyd et Co purchased by the London and. and Westminster. On

On 30 May 1867 directors of London and Westminster make known, through the medium of the press, intention to propose at shareholders meeting in July (1867) increase of £1,000,000 to the paid up capital. At present Nominal Capital £5,000,000, in 50,000 shares, at £100 each, of which 1 Mill. £, or 20£ p. share, is called up. Besides, Reserve fund of £480,000, entirely formed by banking profits, reserved from time to time, except £40,313. They propose to double the subscribed capital to 10 Mill. and the paid up to 2 Mill.

Bank began business in March, 1834, with paid up capital of about 50,000£. By the end of that year 17,713 shares had been subscribed, and 15£ called up on each, the amount actually received being £182,255. April 1836 the last call of £5 per share was made, and a new issue of 9,333 shares took place at a premium of £4 10s. each. In 1841, 10,000 shares were offered at par, and taken up, with the exception of a few sold at a premium in 1842. The last addition to the capital in 1847, 20 years ago, when 10,000 shares issued at par. (The items under the heads of deposits, in following table, money really deposited, payable on demand; the acceptances of the London and Westminster have always very properly been kept distinct.)

Paid up Capital. Deposits (Circular Notes etc) Increase of Business
Year ending December 1836 £597,255 £643,332
1846 800,000 3,287,589 £2,644,257
1856 1,000,000 11,438,462 8,150,873
1866 1,000,000 22,672,559 11,234,097.
 For London and Westminster 6.28% London and County 7.33 Union 7.79 London Joint Stock 9.23

A paid up capital of 2 mill. and reserve of 1 Mill. für die London und Westminster would be equal to 12.72 of the business now transacted.

Die Einnahmen der London und Westminster during last 7 years:
Net Profits. Dividends paid Rate of dividend p. ann. Profits reserved.
1860 £.219,565 200,000 20% £19,565
1861 254,567 220,000 22 34,567
1862 232,426 220,000 22 12,426
1863 277,738 250,000 25 27,738
1864 472,438 300,000 30 172,438
1865 333,847 300,000 30 33,847
1866 463,685 300,000 30 163,685

Average annual net profits of the last 7 years have been 321/4%, dividend paid 251/2 p.c., amounts undivided nearly 63/4%. The shares of the bank have for 3 years past stood in market at average of £95 each, equal to £75 premium, whereas the 50,000 new shares are to be offered to the shareholders at £30 each, or only 10£ premium.|

### Unprecedented Accumulation of Gold. (June 8, ’67 Money Market Review)

This week, B.o.E. holds nearly 21 Mill., B.o.F., 341/4 Mill. gold, together more than 54 Mill. Between 1856 and 1866 the maximum amount of bullion and specie in B.o.E. about 20 Mill. £, and in B.o.F. about 25 Mill. Maximum Discount Rate (i.e. the rate at which these great banks are content to lend money on the best bills) therefore put down to 21/2%. Commerce does not care to borrow money just now at 21/2%, though a few months ago it clutched it greedily at 10%.

### The Rebound in the Stock Markets. (June 8, ’67, Money Market Review)

There seems to have been a good deal of „bear“ slaughtering of late … Distrustful investors began to buy Gvt. Securities, and Indian Stock, then colonial securities, then dividend paying foreign stocks, now they are even absorbing our railway investments.

### Pre-Preference Stocks. North British Railway (June 8, ’67 Money Market Review) (H. o. Commons).

The Expiring H.o.C., of course, ready for every infamy. That House passed the „North British (Carlisle Deviation) Railway Bill“, by which it is empowered to to create „Pre-Preference Stock“ of £1,800,000. The H.o.C. condones past misconduct and grants a premium upon it in future.

### The War between Railway Shareholders and the Board Rooms. Midland Railway (8 June ’66 ’67 Money Market Review)

The battle between railway officialism and railway proprietorship is still waged with ever increasing violence, but … up to the present time officialism seems to have the upper hand. So in Meeting 3 June (adjourned später until 13 June durch die shareholders) der Midland Railway Co. Directors insist to wage war upon London und Northwestern durch competing line to the Scottish border (to cost on paper 2, in reality at least 4 Mill.); they make no concession as to proposed amalgamation mit Glasgow and Southwestern Co., by which the Midland Co. literally guarantees minimum of 4% upon a capital of something like 8 Mill. £.

### The Report of the Parliamentary Committee on Limited Liability.  Zusatz von Marx. Schließen (Watkin) (Société en commandite“ commandite).

Watkin Chairman of it.

### British Mining. The Cost-Book System etc (Money Market Review 15 June ’67.)

In the whole circle of share investments mines unquestionably the most speculative. Copper at 100£ and Tin at £115 healthy speculation, at recent prices das Gegentheil. For some time past British mining has been under a cloud, owing to disturbed state of markets for minerals and metals. Coal and iron, copper and tin, all heavily smitten by European political complications and Panic-crisis. Pressure more severely felt in Cornwall, Devon, and North Wales than in South Wales, Durham, and Northumberland. The minerals with which the huge furnaces of the ironmasters fed are geologically more concentrated than those which supply the furnaces of the copper smelters of Swansea, and the tin and lead smelters at Cornwall. Much greater still, moreover, required for the production of 100 tons of sulphuret of copper, or black tin, than like quantity of iron ore or coal. A good vein of iron stone once reached may and probably will last for a generation, but a lode of copper-ore is quite a different thing. A few fathoms of a good vein, comparatively speaking, will amply repay the miner for such time and labour expended in patient exploration. It is the coyness of these more precious metals which renders metalliferous mining so attractive to speculators, and it is to their possession that the county of Cornwall owes its pre-eminence as a mining |38 district. The state of the metal market is, therefore, a matter of prime importance to the Cornish miner … . … In mining, where it is impossible to predicate whether 500 or 5000£ may be needed, and where the unremunerative expenditure of to-day may be superseded by the profitable returns of to-morrow, a fixed nominal capital (wie bei limited liability Cos) seems to be singularly out of place. – Not one of the dividend-paying mines either in Cornwall or Devon is constituted under the Cos. Act of 1862, that distinction being exclusively reserved for the „progressive“ or non-dividend concerns.

### Brighton Railway Co. Report of Committee of Investigation. Money Market Review 22 June ’67.

Brighton Railway Scandal shows greater moral delinquency than even London, Chatham and Dover . Falsehood and deliberate concealment and suppression of facts, practised upon shareholders, public, and Parliament itself, not in a single case only, but habitually and systematically, during a period of several years. Not only Leo Schuster, the late chairman, and the directors, but the Officials of the Co., have been implicated in these transactions, and become obnoxious to these imputations. The main charges against the directors are grounded upon unimpugnable Acts of Parliament, and legal and other documents, and upon their own printed and published reports. The Committee of Investigation presided over by Lord Westbury, ex Chancellor. Report over 50 closed folio pages. During Laing’s chairmanship, from 1849 to 1854 incl., the increase in the capital of the Co. only £735,000, and the increase in net profits £125,000. From 1855–1866 (Leo Schusters Regirung) increase in Kapital £8,072,000, whilst increase in net profits £113,000 only. This increase of Capital to £8,072,000 raised almost entirely by preference stocks and debentures, by which the revenues of the Co. subjected to a permanent charge of nearly £400,000 in order to earn the additional net income of £113,000 a year. The capital at the end of the years was:

Ordinary Stock Preference Stock Debentures and Debentures Stock
1854 £4,615,000 £1,237,000 £1,837,000
1866 5,373,000 6,345,000 4,042,000
Increase £758,000 5,108,000 £2,205,000

But, in addition to this, the Co. stood committed in March (’67) to fresh liabilities for further extensions amounting to £3,093,000. Nur verhindert durch Zwischenkommen der Shareholders.

But even these figures fail to show the whole truth, for the committee discovered that the increase of 113,000£ in the net income shown by the accounts was to a considerable extent fallacious, da the whole expense of renewals of permanent way and rolling stock had latterly not been charged against revenue, and nearly 1/2 Mill. £, representing interest on outlay on works in progress, had been paid out of capital, thus relieving revenue and increasing dividends. Outlay on Victoria Station and the Westend and Crystal Palace, and some 42 other new lines, of nearly 7 Mill. £ zwischen 1855 and 1860. In The history of the Surrey and Sussex, the Chichester and Midhurst, and the West Sussex Junction Railways, the cennurable censurable conduct of Leo Schuster and the other directors most manifestly appears. In regard to |39 these 3 lines, Peter Northall Laurie, the late chairman, asserted and published in his letter to the proprietors of 13 April (’67) „that each of them was promoted originally by independent parties, without the concurrence and assistance, and against the wishes of the Co“ und daß nur feeling it [to be ] the interest of the Co. daß sie nicht should fall into hostile hands, die directors „submitted proposals for their absorption into the Co’s system“. Mr. Laurie, therefore, in 13 April letter „submitted to the shareholders that the honour as well as the interest of the Co. required that these engagements should be fulfilled“. Now, the Committe Committee of Investigation conclusively shows that these statements were utterly untrue. It states:

In regard to the Surrey and Sussex line „the scheme was formed and the Bill originally promoted in the Session of 1864 by Mr. Carnsew, a solicitor who had been previously connected with the Brighton Co. in other lines; Mr. Hood, one of the Brighton Co’s engineers, Mr. Fuller, the Co’s land surveyor, with Msrs. Wilson as contractors“. The Committee publishes in extenso a long letter from Msrrs. Messrs. Faithfull, Son, and Coode, the solicitors of the Brighton Co. which confirms the Committee’s conclusion, viz: „That the Surrey and Sussex line was a sham Company, got up by persons connected with the Brighton Board, adopted by that Board, and palmed off on the shareholders of the Brighton line as a real and independent Co.“ When the bill of this sham Co. had received the Royal assent, Mr. Slight, the secretary, by direction of Schuster, the chairman of the Brighton Co., writes to Carnsew, the solicitor of the sham Co., „that looking to the fact that all the money is to be found by us, we shall infinitely prefer that the Surrey and Sussex board should consist only of members of the Brighton board“. And to keep up the farce, L. Schuster, James Scott, John Nix, Peter Northall Laurie, William Coningham, James Wishaw, and Colonel Barttelot, M.P., were appointed directors, with an allowance of £500 a year; Sir Fred. Arthur and Mr. Lushington were appointed auditors, with £100 a year; Mr. Slight became secretary at 150l. a year; Carnsew and Hood were confirmed in their positions as solicitor and engineer. Yet, notwithstanding all this, the shareholders of the Brighton Co. were told by these same directors, in the report presented at their general meeting a few days after these events, that „the Surrey and Sussex line was promoted by an independent Co, but that the directors had taken such steps as would result in the Brighton Co. being authorised to subscribe towards the Capital of the Surrey and Sussex Railway“. At that moment, as we have seen, they had bound the Brighton Co. to provide all the capital. The same deception was practised upon Parliament also. Msrs. Faithfull were instructed in the ensuing session to take power in a Bill of the Brighton Co. „to contribute 500,000£ towards the capital“ of this sham Co., and that power was taken accordingly. „This deception“, the Committee say, „is the more unjustifiable, as on the 18. May |40 previously Mr. Schuster and his colleagues, as directors of the Brighton, went through the form of sealing an agreement with the same Mr. Schuster and the same colleagues as directors of the Surrey and Sussex for an entire amalgamation of the two Cos.“

That agreement, however, the Committee state „was unknown to the shareholders when they sanctioned the subscription of £500,000. It had never been presented to their notice, and the very fact of its existence had only recently been disclosed“. They regret that „it is impossible not to feel that the report presented to that meeting, as well as Mr. Schuster’s speech on that occasion, were purposely designed to conceal from the proprietors the true nature of the engagements entered into, and that those who penned that report, and are responsible for its issue, and more particularly Mr. Schuster, were guilty of a deliberate misrepresentation of the origin and character of the undertaking“. It remains to be seen whether chairmen and directors of a railway, or any other Co., can be permitted to practise such deceit upon their shareholders with impunity. The sum of £277,144 has been abstracted from the funds of the Brighton Co. on account of the authorised subscription to this „Sham Co“. Muß sich zeigen ob diese Schweinhunde can, by a series of gross misrepresentations, practised upon their shareholders and the Legislature, thus divert or misappropriate those funds without being held responsible in a Court of Equity for their repayment. Another matter mentioned in the Report of the Committee, in regard to this „Sham Co“. It appears that „during Mr. Slight’s absence, Mr. Jenkins, a clerk in the Brighton Co’s service, acted as secretary until very recently, when Mr. White, a clerk of Mr. Faithfull’s, was appointed to succeed Mr. Slight, and, a few days before the appointment of the Committee, removed all the books and papers from the Brighton Company’s Office“. Mssrs. Faithfull were the responsible solicitors to the Brighton Co, were originally connected with the „Sham Co.“, and were parties to its socalled amalgamation with the Brighton Co. These books and papers were the property of their clients, the Brighton Co. How could they remove them?

The histories of the „Chichester and Midhurst“ und the „West Sussex Junction“ Railways auch full of „abundant matter for comment“. To the controversy between Mr. Mackenzie and the the shareholders are immediately indebted for the investigation. At the close of 1866 the Union Bank not only refused any further advance to the Co., but were pressing for a reduction of the existing balance. To raise money for this purpose, Schuster, through Mssrs. Scrimgeour, the Co’s brokers, induced Mr. J. T. Mackenzie, on 15 January 1867, to purchase £300,000 of their preference stock upon the express „condition that no further stock was to be sold, directly or indirectly, by the Co. for 6 months from that date“. On the faith of that contract, Mackenzie advanced some £200,000 to the Co., and he then discovered that, in breach of that contract, Mssrs. Scrimgeours Scrimgeour, the brokers, had themselves been supplied with £33,000 of stock by the Co. on the day of its date, that the Union Bank had |41 at the same time an open power of sale over £700,000 at 30% below par. Mackenzie, therefore, refused to carry out his contract, in consequence of the directors having committed a breach of the terms, and the directors instituted legal proceedings to compel him to do so. Thereupon, Mackenzie filed a Bill in Chancery praying for an injunction, and that the contract might be declared void. The matter was subsequently arranged upon terms which leave a balance of nearly £75,000 owing to Mackenzie, and „the Committee are of opinion that, if by this illegal and irregular transaction any loss be incurred by the Brighton Co., the directors are liable to indemnify the Co. against such loss“.

In order to support dividends, the directors paid them out of capital instead of revenue. At the same time, the proprietary body were willing supporters of the malpractice. »We do not know one single instance, in which railway shareholders do not gladly shut their eyes in order to get dividends.« They play thus into the hands of the directors. Die Brighton Railway has a lot of unprofitable branches – no less than 12 branches – costing 100% to work. Its prospect on 2 or 21/4% dividend, therefore, a mere myth and idle vision.

### City Buildings Cos. (22 June ’67. Money Market Review) (Colonial Loans)

These building Cos have, with the aid of the credit and finance cos., beautified and improved our City to an extent which private enterprise could not, possibly, have done; but they have helped, at the same time, to bring about a scale of expenditure in the shape of rent and attendant charges which has acted to some extent oppressively upon the merchant and private trader.

It is to [be] expected that in the present state of the money market new colonial loans will come forward.

### Schuster’s Reply. (Money Market Review 29 June ’67.[)]

Most impudent, but mere trash. Abuse and malignant insinuations against the Committees of Investigations which are „the most favourable mode of injuring a property, and it might be the most lasting method of destroying the prosperity which others had build up“. die Investigation Committees as being composed „either of ignorant or designing men“. Vulgar claptrap in Schuster’s style and manner of defence. With all that, he leaves the main facts uncontroverted. Schuster sucht herauszulügen die Surrey and Sussex line als independent undertaking of Wilson, contractor, Fuller etc[.] Bestätigt, in fact, nur die Anklage des Committee. The Bill having passed, Faithfull et Co, their solicitors, wrote to the Brighton Board: „We have much pleasure in formally announcing that this Bill has received the Royal assent, and this pleasure is increased as, by the Bill being passed, the whole of the scheme which we submitted to the directors in June, 1863, has been sanctioned.“ Also: für mehr than 2 years the directors had under their consideration a scheme, of which this Surrey and Sussex Junction formed the last link, and, when the Act for that last link had been passed, their solicitors congratulate them officially.

Schuster, of course, sittlich entrüstet über die Anklage, daß the Directors Report to the meeting of 29 July, 1865, und Schuster’s speech (as Chairman) on that occasion were „purposely designed“ to „palm off the sham Co. as an independent Co“. Schuster sagt selbst in his Reply that „on the 29th May, 1865, we entered into a provisional agreement with that Co., to take over their line, and your directors and officers became the provisional Co. for its promotion“. By that agreement and the subscription contract which |42 they executed in pursuance of it, as we learn from Faithfull’s letter, the directors not only became the actual promoters of the Co., but they bound themselves, within 3 months after the passing of the Act, to pay to Mssrs. Waring all moneys they had paid or become liable to pay in connection with the Bill, with 5% interest; and to pay Mssrs. Wilson the expense of the Bill of the previous year, not exceeding £6,800; and also to pay to Carnsew and Hood and any other persons all their costs in the promotion of this Bill. On 29 July (shareholders general meeting) the Directors’ Report stated that „the Surrey and Sussex was promoted by and an independent Co.“, und daß für die advantage et Security der Brighton Co, the directors „had entered into a working arrangement with that Co. and, subject to the approval of the proprietors, had taken such steps as would result in this Co’s being authorised to subscribe towards the capital“. The directors of the Brighton Co being at that moment the promoters and directors of that Co. and the subscribers of the whole of its capital Schuster’s speech (29 July 1865) was even more explicit and precise in its misstatements. „An independent Co.“, he said, „went to Parliament for and obtained that line“, and further on: „It was, as I have said, introduced into Parliament by an independent co., totally unconnected with us“, and, after dilating on the advantages of the line, he continued: „On these considerations, therefore, we come to the consideration to make terms with that Co. for working the line (which terms will be submitted to you by-and-by) at a certain percentage

Schuster declares cooly that that ex[-]Lord Chancellors (Westbury) know nothing of railway affairs.

### Clearing House. 1839.

Sir John Lubbock in his letter to Money Market Review, May 9 (worin erste officielle Clearing House bulletin since 1839) giebt für 1839 (Aus Babbage in Journal of the

Average Clearing House Amounts for 1839 were
Average of each day of the Week Average of each days of Week (1839) omitting 4th of each month and settling day.
Thursday £.2,725,000 2,367,400
Friday 3,098,000 2,912,900
Saturday 3,621,700 3,575,000
Monday 3,927,700 2,653,200
Tuesday 3,292,600 3,123,200
Wednesday 2,734,400 2,514,700
Total 18,400,200 17,146,400

The largest amount which passed through the Clearing House in any one day in 1839 was £6,209,900 und the smallest £1,529,700.|