# Money Market Review. Jahrgang 1868.

## January 4, 1868.

### The Year 1867 in its Commercial and Financial Aspect.

Most prominent amongst the disasters of 1867: the breakdown of the system of direction of joint stock Cos. Most conspicuous this in railways. First London, Chatham and Dover Co; dann London, Brighton, and ; the embarrassments of that Co. increased gloom and depression in railway market during whole of April. Then followed disclosure of similar breakdown, from the like causes, of ; the open calling in question of the soundness of the ; the urgent needs and equivocal expedients of the . The cumulative effect of these successive exposures has been most disastrous upon railway property. Total Depreciation of 14 Mill. £ on the ordinary stocks of those railways alone. That enormous sum does not represent 1/2 the total amount of loss sustained by the holders of railway stocks and shares. The whole loss mainly due to the unskilful, injudicious and reckless mismanagement of the resp. boards of directors.

Money market: On 1st Jan. 1867 amount of bullion in Bank o. E. £19,274,859, in Bank o. F. £28,580,000; minimum rate of discount in England 31/2, in France 3%. On 7 February B.o.E. rate reduced von 31/2 to 3%, on 30. May to 21/2, on 25. July to 2%, at which it continued for the remainder of the year. On 18 Sept. bullion in B.o.E. £24,493,447, highest point ever reached, reduced to £21,941,047 on 20 December, whilst £40,600,000 on that day treasure of B. o. France, highest amount that Bank ever held.

With such plethora of money, for which no profitable use to be found in commerce, Foreign Gvt Loans, aber nicht so viel zu erwarten ; nämlich: January 1867, at 811/2 Chilian Loan of 2 Mill. £ in 6% Stock. (17 mill. £ applications for that loan) February: Queensland loan of £550,000 in 6% Debentures at 81, and the Danubian Loan of £1,264,420 at 71. In March loan of £250,000 sought on Debentures of Ceylon Gvt. at 102, but only £90,000 taken, ab 30 November £100,000 subscribed at £108. 13s. 6d. In May Gvt. of New South Wales loan of £832,000, subscribed at 851/2, has since shown profit of about 13% to the subscribers. June: loan of 2 Mill. £ in 5 P.Ct. guaranteed Bonds of the Russian Orel and Vitebsk Railway, few subscriptions. June, ditto, new Chilian loan, at 7%, taken at 891/4, of £1,120,920. In August Russian 4% Railway loan of £12 Mill., very few subscriptions. In November, Egyptian 9% Loan for 2,009,200 at 90; and a New Zealand 6% loan for £470,000, subscribed at 1041/4. Finally, in December, Nova Scotia 6% Bonds for £225,900 subscribed at par; a South Australian Gvt. 6% loan on Bonds for £140,500, at and above £107; and Portugese 3% Loan of 5,500,000£, at 381/2, of which £3,750,000 offered for subscription.

Trade and Manufacturing Industry in a depressed and comparatively profitless state throughout the year.

 Exports for first 11. months: 1865: £150,832,344. 1866: 173,913,222. 1867: 167,931,378. Decr. nearly 6 mill. as compared mit 1866. Imports for first 10 months: £160,506,818 193,699,380 181,370,314, falling off of about 12 mill. compared mit 1866.

Revenue Returns show decrease of £800,000 for the quarter (last quarter of 1867)

### Commercial Morality.

Edward Greenland, set at liberty by Hardy, absconded to Genoa, refused to come and give evidence, to further the ends of justice, in regard to transactions of large amount etc.

Wilkinson, of Joint Stock Discount Co, rightly convicted; released upon extraordinary memorial got up and signed by many of the leading bankers and merchants of the City, countenanced by Times, now asking in dolorous accents: „What is to be done to resuscitate, not commercial credit, but commercial morality?“

### B. o. England Rate of Discount.

 6 months ending June 30. 1867: £3, 0, 3 against 1866: £7. 17. 2 〃             〃     Dec. 31 2. 1. 31/2 5. 16. 5 For the year: 2. 10. 81/2 6. 16. 71/2

### Stock and Share Market during 1867.

Besonders distinguished durch Panic in railway Stocks und collapse of a false system of accounts wodurch many railway Cos. have long been paying dividends out of capital.|

20
Alterations in the values of the funds during 1867:
Stock. Amount outstanding March 31, 1867. Price 31. Dec. 1866 Price 31. Dec. 1867 Rise. Increase in Value in Amount of Stock.
3% Consols. 397,896,594£. £901/8 921/8 2 £7,957,931
3% Reduced. 106,857,504 891/4 92 23/4 2,938,581
New 3%. 222,104,705 891/4 92 23/4 6,107,879
Total Increase in value. 17,004,391
Alterations in Values of Railway Stocks during 1867. (Ordinary or original Stocks of Leading Cos.)
Railways. Amount of Ordinary Stock. Prices, Dec. 31. 1866. Prices 31 Dec. 1867. Rise in 1867. Fall in 1867. Amount of Depreciation in 1867.
Bristol and Exeter £2,022,000 £88 £84 £4 £80,880
Caledonian 4,734,000 124 713/4 521/4 2,473,500
Glasgow and Southwestern 3,132,000 118 97 21 657,720
Great Eastern 8,336,000 29 311/2 21/2 a)
Great Northern. Ordinary 4,468,000 120 109 11 491,480
Dto. A. 1,159,000 1281/2 1091/2 19 220,210
Dto. B. 1,159,000 129 125 4 46,360
Great Western 8,181,000 543/4 441/4 101/2 859,005
Lancashire and Yorkshire 12,694,000 1291/4 1231/2 53/4 729,905
London, Brighton, and Southcoast 5,373,000 87 481/2 381/2 2,068,605
London, Chatham and Dover 3,000,000 161/2 181/4 13/4 b)
London and North Western 29,830,000 121 1141/2 61/2 1,938,950
London and South Western 7,734,000 84 77 7 541,380
Manchester, Sheffield et Lincoln 4,393,000 53 451/2 71/2 314,475 319,475
Metropolitan 1,800,000 127 1161/2 101/2 189,000
Do. Extention 1,900,000 1071/2 1031/2 4 76,000
Midland 11,356,000 1231/2 104 191/2 2,214,420
North British 2,759,000 38 341/2 31/2 96,565
North Eastern. Berwick 7,973,000 1081/2 99 91/2 757,435
Do. Leeds. 1,394,000 67 61 6 83,640
Do. York 3,220,000 101 93 81/2 273,700
North London 1,525,000 120 115 5 76,250
North Staffordshire 3,230,000 74 61 13 419,900
South Eastern. 7,688,000 671/2 67 1/2 38,190
Total Depreciation. £14,652,570
Less total increase in value of Grt. Eastern

a)

less 208,400

zusammen

less

260,900

Less Total Incr. in Value of Lond. Chath. Dover.

b)

less 52,500
Resultat: £14,391,670

Dieß nur die closing prices of each year, aber die fluctuations during the year show a much wider range. The actual depreciation on the whole of the lines enumerated £14,391,670 = 101/3 P.Ct. on the aggregate Capital stated, the total amount of which is £139,010,000.

### Prices of Foreign and Colonial Loans contracted in 1867.

 Foreign Loans: Nominal Amount £:26,894,540. Contract Value: £17,406,068. Difference zw. Nomin. Amount und Contract Prices: £9,488,000 = 35% issued below par. Colonial Loans: £2,267,500 £2,139,880. Difference £127,620 or equal to 5% below par.

### Joint Stock Banks and their Reserve Funds.

Z.B. London Joint Stock Banks invest their socalled Reserve Funds in current business. Three of the leading joint stock banks of London have leately lately issued fresh capital, and taken the opportunity of adding to the reserve funds by charging a premium for the new shares. These premiums are to be paid in the course of the next 14 months. The reserve funds will then have attained, irrespective of any additions in the mean time for interest, viz: 1 Mill. £, 1/2 Mill. £, £417,839 £417,849. If we add hinzu the „rest“ of the National Bank (£461,593) und of the National Provincial Bank of England (£250,386), die total reserve dieser 5 Banks = £2,629,818.

### Indian Exchanges. Past and Present.

Nominal Sterling value of the „Company’s Rupee“ in India fixed at 2sh. If below 2s. in exchange for a rupee on India in favour of England, against India; if above 2s. against England, in favour of India. Less than 2s. st. drawn by India on England against India, in favour of England, above 2s. against England, in favour of India.

The fluctuations in Indian Exchanges, and their wide range, in some respects periodical. During prevalence of the southwest monsoon or the rainy season, when little produce exported, and business of all kinds comparatively at a standstill, oft difficult to work a profitable operation in exchange unless durch some indirect or circuitous channel.

All legitimate exchange transactions founded in something to be exchanged, or passing between one place and another, or one country and another. That something must be goods, produce, money, or securities for money invested. Suppose British manufactures wanted in India. Shipper of them may want his money or part of it, without waiting for returns from India. If the goods sent known to be saleable, and have been indented for or ordered by his correspondent on the spot, and the shipper and the party on whom he draws respectable, it is the business of a bank on this side to give money for bills against such goods, duly hypothecated or made over to it, either to a proportionate extent of the market value of such goods, at the place where they are to be sold, or, in the case of parties of undoubted responsibility as drawer and drawee, to the full amount of invoice, provided nothing is charged therein but actual cost, freight, insurance, and other expenses. Such transaction not speculative. It involves merely a change of ownership in the goods, until the bills drawn against them are paid on the other side. But often foreign markets over supplied by consignments for which there is no immediate demand. In a similar way produce shipped from India to England, and drawn against the banks becoming the purchasers of the bills, under hypothecation of the produce, with this difference, however, that the bulk of the produce is more on consignment for sale, |21 on shippers account, than in execution of orders. Außer China, Un. Kingdom Hauptmarket for India. The excess of exports from India to Un. Kingd. over and above imports gives rise to larger dealings in commercial bills of exchange than take place from England to India, which, allowing even for the difference of usance, are, generally speaking, negotiated on less favourable terms to the exporter than bills drawn from this side.

At particular seasons money is in demand for remittance to India, more especially silver, to enable the banks to avail themselves of exchange purchases. (Not for last 12 months to any extent.) Large exports of silver to India, partly weil its currency almost exclusively silver rupees ⦗a gold currency now recommended by the Indian Currency Commission⦘, partly weil balance of trade, commercially speaking, largely in favour of India. The price per ounce, English standard, at which bar silver is purchased in London, varies according to demand and the supplies received from the West Indies and South America, or that may be obtainable on the Continent. That price seldom falls below 5s. 03/8d. per ounce, or exceeds 5s. 11/2d. Under exceptional circumstances it may reach 5s. 2d. or 5s. 21/2d. per oz., but only under the powerful action of a short supply and great demand, the prevalence of an exchange in India greatly against England, and a scarcity of money in India.

Dieser par 2s. = 1 Rupee selbst illusorisch, aber convenient central or fixed point round which rates of exchange may fluctuate. Two shillings = 1/10£. By cutting off the right hand figure of a sum in rupees, if a cipher, a sum in pounds st. remains. By adding a figure to a sum in pounds st. if a cipher, a sum in rupees is obtained.

The Scotch banks, some few years ago, were in the practice of considering the par of exchange on London 21 days’ date. Their drawing rate is now 10 days’ date.

If in exchange dealings with India exorbitant profits are sometimes obtained, the reaction will assuredly be the greater in a contrary direction, and either the producer, merchant, or consumer will be the sufferer. The banks (though there are few left now) have of course a great deal in their power in rendering exchange transactions favourable or unfavourable for themselves. …  In proof of the uncertainty attending applications for India Council Bills, at the last bidding on the 4. inst. no allotment was made, the Gvt. having unexpectedly decided upon minimum rate of 2% on Calcutta, and 3% on Bombay, in advance of former rates.

### Dates. of 1867.

Jan. 7. Resuscitation of Agra Bank. March 25 Strike of Engine drivers on Brighton Railway; terminated on the following day. June 19 Broadhead disclosures. October 2: Panic on Paris Bourse from apprehension of war, Garibaldian movement at Rome, forced liquidation of Credit Mobilier etc. 25 October: News of stoppage of the Commercial Bank of Canada. 21 October Stoppage of mit liabilities for £1,650,000. 8 November: Colliery explosion at Rhondda valley, near Cardiff, 178 lives lost.

## January 11, 1868.

### Railways und State Control.

reluctantly admits: „sole remedy for the present discredit in the railway market is an independent audit of the accounts of railway Cos by official auditors appointed by the State.“ „The Govt is the only uniform authenticator possible.“ the audit ought not to be optional but compulsory upon every Railway Co.

### Caledonian Railway.  Zusatz von Marx. Schließen (Report of Committ. of Investigation)

Ihre accounts enthalten all frauds possible. Directors gentlemen without business experience. Rely only upon their officials, 17 of whom were paid salaries in proportion to the dividend declared. The dividend declared July 1867 was nearly 6% p.a. Then erschien challenging statement, daß sie nur etwas über 4%. Committee now states it (noch zu hoch) etwas unter 3%. In den 2 last financial years expenditure of capital £1,982,765, dividends for same period in ordinary stock £556,726, little more than 1/4 of the sum borrowed.

### Contract Corporation (Lim.)  Zusatz von Marx. Schließen (Chancery in(?))

Shares 100£. Haben nun ganz to be paid. Shareholders ruined. Mit alle dem erhalten Creditors nur 2s. 6d. in the pound.

### Silk in 1867. (Annual Circular of Durant et Co.[)]

Total importation scarcely 10% in excess of 1866, deliveries almost identical. Prices for all, but the best classes (always small proportion of the whole) so to 20 to 25 P.Ct. below those of the commencement of the year. Manufacturers have kept their stocks at the lowest possible point, thus escaping serious mischief.

### Agricultural Implements. 1867. (Annual Circular of Burgess and Key.)

Great increase in the demand for agricultural implements, besonders for reaping and mowing machines. Mainly from the necessity for machinery which the increasing deficiency of agricultural labourers creates, besonders in all that relates to the securing of crops.

## January 18, ’68.

### Causes of Present Commercial Depression.

Depression in industry, falling off in Exports and Imports and in the Revenue, enormous accumulation of unused gold in B.o.E., large proportion of people only partially employed, or unable to earn an income adequate to meet their expenditure. … Distrust of Joint Stock Cos. und want of confidence in Railway Directors one of the reasons. Aber Hauptsache: Falsch that the losses sustained by certain members of the community have been the gains of other members, and, that, therefore, the public in its totality has sustained no loss. But the difference between the gains of one class and the losses of the other has been enormous.

Those losses have been the natural result of excesses which prevailed during the 2 or 3 years of enterprise and speculation which immediately preceded the panic of 1866. During that period an immense amount of property so called – i.e. property which was nominally and apparently real, but in fact fictitious – was created, and bought and sold according to its nominal value. A joint-stock Co. put forth its prospectus, proposing to raise a nominal capital of 1 Mill. St., on which one 10th, or £100,000 was to be paid. The one million being subscribed, and the £100,000 paid, the shares rose to a premium, and the value of the £100,000 became £500,000, and at that value £500,000 of hard cash, let us say, was invested in them. The purchasers or owners believed that they were in actual possession of bona fide property to that amount, and, on the faith of that assurance, they bought and sold other property, and entered into other contracts and engagements, and launched out, and lived, and consumed, and expended accordingly. But when the panic came the £400,000 which had been created in the shape of premium gradually melted away. As the depression resulting from the panic continued, the £100,000, the amount originally paid also disappeared. The whole became worth nothing at all. After a time this not the whole loss. The Co. being in the winding up court, there were numerous debts to be paid, and the calls of the liquidators to meet. These are eating into and consuming whatever property the hapless holders of the shares had reserved to themselves. They have been compelled to abandon or withdraw from the contracts they had entered into on the faith of this property, so called, and to curtail their expenditure, and to lessen their business transactions, if not utterly to abandon them, in order that they may have the means to meet the calls. This occurred not in one but in 100 Cos. The number of traders, investors, and other individuals thus involved and impoverished many thousands. The number of those who have become indirectly compromised in their failure must be greater still. The share property of those persons entirely vanished. Nun kam hinzu 10% discount enforced during 3 months after the Panic. Impossible to estimate the loss this inflicted. Hence the general distrust. No manufacturer or merchant or trader can be certain that a man with whom he deals has not been seriously „hit“ in some Co., or may not be seriously compromised by his transactions with somebody who has been so „hit“; and every one is therefore suspicious and distrustful of those with whom he may come into commercial contact.

The melancholy exposures of the mismanagement of railway boards have of course enormously added to the evil, though they had perhaps not much to do with it originally. Losses der holders of ordinary stock in 1867 zwischen 15 und 17 Mill. St., and the losses upon the whole of the railway stock would probably be at least double that amount. All these things act or react with more or less severity upon ever widening circles. The halfyearly dividends, upon due receipt of which numbers of families were mainly, or, perhaps, wholly dependent for subsistence, most materially reduced or vanished altogether. In all such cases the friends of such families must have become sufferers with them. Shares, bonds, and other securities have been unsaleable, or saleable only at a fearful sacrifice; and, in most cases where that sacrifice, from urgent necessity, has been submitted to, the produce of the sales by the necessity which compelled the sale. The money in those cases has not come upon the market for re-investment, for, if not so absorbed and consumed, it would rather seek safety and comparative unproductiveness in the banks. Hence one source of the enormous accumulations of money in the hands of bankers. Distrust, want of confidence, sends it there and keeps it there. All classes made directly or indirectly partakers in these losses. Everybody has been „pulling up“, reducing his establishment, or economising his expenditure, from want or prudence. Equivocal state of politics in Europe, and consequently unsettled state of commerce all over the Continent, as well as the not satisfactory aspect of things in America, has something to do with the prolongation of this condition of trade, but not much, in comparison with the principal causes. We have enormous accumulations of money in banks, because merchants and traders have no adequate amount of legitimate trade in which to employ it. Commerce contracted in its operations, trade dull, demand slack, credit at a low ebb, confidence checked, because such large numbers of our population reduced and impoverished by enormous losses, which, affecting in the first instance only particular classes, have now in natural course of things, extended to and involved the whole community.

### Railway Profits. Delusive Government figures.  Zusatz von Marx. Schließen (Competition of Railways)

Nach supplementary statement about railways recently published by Board of Trade, „ordinary capital“ paid up at end of 1865 in England und Wales, in round numbers, 187 Mill., in Scotland over 8 Mill., in Ireland 14 Mill. Total of ordinary capital, possessing no priority, thus 2191/2 Mill. Nach diesem Parliamentary Return the average rates of dividend upon this unguaranteed capital were, in 1865, in England und Wales over 51/4%, in Scotland 43/4, in Ireland 31/2%, thus making average nearly 51/4%. Now this quite delusive. In 1865, when these figures were rendered to the Board of Trade, the whole thing was a fiction from beginning to end.

The competition encouraged by Parliament has had this effect that it has brought many of our railways to the merge verge of bankruptcy, and now the only method to maintain the public service, is to cast aside the theory, or ruin the railways.|

### Joint Stock Banks Profits. Banking Profits und Rate of Discount.

Reports issued during present week. Except London und Westminster Bank, considerable falling off in amount of profits for past 6 months, as compared with the 6 months ending June last.

Auch profits of Lond. und Westm. vermindert, vgl. mit 1866. In 1866 its net profits £463,685, in 1867 £293,712, the decline £169,973. Für die 3 Banks (London und Westminster, London Joint Stock Bank und Union Bank net profits in 1866: £983,046, in 1867: £669,629; difference = £313,417, equal to nearly 1/3. Jedoch die average B.o.E. rate of discount in 1866: £6. 16s. 71/2d. und in 1867: £2. 10s. 81/2d. Thus banking profits, although much affected, do not diminish in an equal proportion to the fall in the value of money.

### U. States Currency.

Washington Jan. 16. Senate passed the Bill repealing Mr. MacCulloch’s authority to contract the currency.

## 25. January 1868.

### The Stock and Share Markets during 1867.

Alterations in values of shares of Joint Stock Banks of London in 1867.
Amount paid. Prices Dec. 31. 1866 Prices Dec. 31. 1867 Rise in ’67 Fall in ’67 Amount of increased Value. Amount of Depreciation
Alliance (lim.) £25 £19 14 5 £200,000
B. o. England. Stock 249 239 10 1,445,300
City. 10 15 12 3 150,000
Consolidated (Lim.) 4 43/4 41/4 1/2 75,000
Do. (New) 2 3/4 dsct 1/4 pm. 1/2 25,000
East London. (lim.) 5 3 3
Imperial (lim.[)] 20 26 18 8 160,000
London and County. 20 64 59 5 187,500
London Joint Stock. 15 44 36 8 576,000
London and Westminster 20 97 97
National Provincial 42 137 135 2 20,000
Do. (2nd et 3d issues) 12 39 381/2 1/2 27,500
National 30 68 62 6 240,000
Union of London 15 45 361/2 81/2 680,000
Totals £25,000 £3,771,300

The reductions for the year, calculated on the prices of Dec. 31, 1866, are as follows: Imperial Bank 303/4 P.Ct., Alliance 26 P.Ct., City 20 P.C. Union, 19 p.ct., London Joint Stock, 18 P.Ct. National 83/4 PCt. London and County 73/4%.

Alterations in values of Miscellaneous Shares (most important) during 1867.
Amount paid. Prices 31. Dec. 1866 Prices 31. Dec. 1867 Rise during 1866 1867 Fall during 1867 Amount of increased value Amount of Depreciation
Anglo-American (Lim.) £10 £153/4 £191/2 £33/4 £225,000 £ ―
Atlantic Telegraph Stock 341/2 521/2 18 108,000
- - 8 P.C. Stock 721/2 941/2 22 132,000
Credit Foncier of Engl. (Lim.) 10 5 31/4 13/4 350,000
General Credit et Discount (Lim.) 71/2 5 51/8 1/8 25,000
Hudson’s Bay. 20 163/8 143/4 15/8 162,500
Internat. Financ. Soc. (lim.) 5 3 23/4 1/4 37,500
London Financ. Assurance (lim.) 30 141/2 71/2 7 280,000
London and Provincial Marine (lim.) 2 2 11/2 1/2 32,250
National Discount CO. (Lim.) 5 143/4 11 33/4 600,000
Ocean Marine Insurance Co. 5 201/2 201/2
Peninsular and Oriental Steam 50 63 55 8 320,000
Thames and Mersey Marine (lim.) 2 53/4 43/4 1 100,000
Universal Marine 5 2 41/2 21/2 125,000
Royal Mail Steam 60 961/2 62 341/2 517,500
Totals £615,000 £2,399,750
 Home Funds improved in the year £17,004,391 Indian Gvt Securities dtto 2,490,008 Colonial Bonds etc dtto 2,887,659 Foreign and Colonial Banks dtto 202,148 Total improvement £22,584,206 Less depreciation in Engl. Railw. (Ordinary Stock.) £14,391,670 London banks 3,746,300 Miscellan. Cos. 1,784,750 Total Depreciation £19,922,720 Net Improvement £2,661,468. £2,661,486.

(Rechnet man Depreciation auf Railways 30 Mill. (andre als ordinary stock included), so bleibt grosse Depreciation, selbst von all other not enumerated concerns abgesehn.)

### Italian Deficits.

 Deficit in 1864 £12,640,000 in 1865 (Estimate) 8,280,000 in 1866 (Estimate) 4,000,000 At the beginning of 1867 total debt about (estimate) 240,000,000 Add deficit of 1866–67 (ascertained) 32,800,000 Add deficit of 1867–68 (not ascertained) 52,200,000 25,200,000 Summa £298,000,000 or about 300 Mill. £. St. at close of 1867.

Hereupon Victor Emmanuel lays violent hands upon the property of the Church, and decrees that the priest shall pay for the soldier.|

### Midland Railway.  Zusatz von Marx. Schließen (Börsenmogelei und Directors.)

Special meeting last week. Nämlich in December (’67) hatten die directors circular erlassen, worin proposed to raise 5 Mill. St. for completing works etc[.] Darauf fiel value of stock sehre. But, apart from this, there were circumstances connected with the issue of the circular convening the meeting of last week which aroused grave suspicions of unfairness. The circular was dated 14. December, and did not reach its destination until 3 days after, during which interval heavy sales of stock were made, and the decline in market price was singularly rapid. Hence reasonably inferred that these sales, pressed at that particular moment, indicated that priority of information used by some persons behind the scenes.

### Caledonian Railway.  Zusatz von Marx. Schließen (Ersatz des Verschleisses.)

Dagegen Caledonian Account keeping: In the last 3 half-years not one penny has been charged to revenue for replacement of 524 engines belonging to the Co. In the last 2 half-years nothing has been charged to revenue for replacement of carriages; but, on the contrary, all that had been so charged to revenue for 4 half-years previously, about £8,000, was written back to the credit of revenue and charged to capital, so that for 6 half-years nothing whatever is charged to revenue for replacement of carriages. For the last 2 half-years nothing whatever is charged to revenue for renewal of waggons. Meantime, for the 2 years under review, £450,000 is charged to capital for new rolling stock, although the traffic of the line now considerably lower than 2 years ago. The engineer employed to inspect the rolling stock shows that a large number of the engines are nearly done, and that no less than 100 must be replaced out of revenue in the next 5 years. … Besides neglecting replacement, the Caledonian kept down even the repairs by employing a large proportion of new stock, and throwing the old on easy work … , complacently assumed as correct by the auditors … Graham, the Co’s Engineer, stated that „his instructions were to charge to capital every expenditure in the nature of additions to previously existing works, such as additional siding accommodation, lengthening of station platforms, enlargement of stations, sheds, and workshops, and additional buildings of every description, and that, in charging to capital the cost of such additional works, no deduction was to be made of any previously existing works of which they might be in substitution.“

As long as shareholders are „drugged with dividends“ they will sanction everything directors put before them.

### Banks and Railway Cos.

Exposures in railway affairs have shown that many of the leading banks have been ministering to the profligacy of railway directors. Lent money to railway Cos. which have no parliamentary power to borrow. Every such loan illegal. The Union Bank lent the Brighton Railway Co. thus £500,000. Laing forced the Bank, because its been illegal, into taking preference stocks that rank below all pre-existing preference issues. A Scotch Bank figures amongst the creditors of the Brighton Railway Co. Scotch Bank have encouraged Scotch railways in their course of illegality. They lent the Caledonian £500,000 on floating loans.

### Overend, Gurney et Co. (lim.) Report of the Liquidators.

Report of Liquidators, showing result of liabilities (outstanding) and assets on 31. Dec. ’67.

Contributories (omitting the members of the late firm, who held 8,323 shares) about 2,219, holding in the aggregate 91,667 shares. Two calls of £10 each made and the total amount paid by the shareholders so auf 11/2 mill. £ St., davon upwards of 1 mill. paid during the past year.

Liabilities at date of suspension on 10. May, 1866 = £18,727,915. On 25. Febr. 1867 reduced by £3,640,655 15,087,259, leaving at that date £3,640,655. The indebtedness, during 1867, further reduced by the realisation of securities etc and dividends paid, by £2,449,800, leaving £1,190,855 only. The calls already made have impoverished and beggared many shareholders and family. First call of £10 p. share paid in full by 1,864 persons, holding 77,658 shares, and is in course of payment by 43 others, holding 3,658 shares. There are 238 other persons, holding 7,752 shares, who cannot pay that call in full, and 116 others, holding 4,174 shares, who will not be able to pay any portion of it. With any additional call, an additional number of the contributories will be pressed out of the paying rank and must fall into the category of the utterly insolvent and ruined. The shareholders already lost all their capital = 11/2 mill. £, and contributed besides über 11/2 mill. £ as contributories.

### Capital of Railways in U. Kingd. Board of Trade Return. (für 1866)

Capital authorised to be raised to end of 1866 on railways in U.K. = £466,151,633 on shares, und £154,412,773 by loans. Total = £620,564,406 showing, as compared mit 1865, increase of capital authorised in Session of 1866, of £44,272,743. Total amount paid up on ordinary shares was £228,245,629, being increase of £8,647,433 in 1866. The amount paidup on preferential shares and stock £134,455,098, increase of £10,191,623. Amount raised on debenture stock £14,105,594, increase of £310,219, and on debentures £105,065,863, increase of £7,244,766, making the total amount of capital paid up to 31 Dec., 1866, £481,872,184, increase of £26,394,041, as compared with amount paid on Dec. 31, 1865.

### Lawyers and railways

In the 6 years 1861–66 the railway Cos of the U.K. paid £1,378,167 for legal and Parliamentary expenses. It exceeds £19,000 a month.|

### Railway Trains (1866)

In 1866 in England and Wales railway trains run distance of 117,313,154 miles, or 22 Mill. miles more than distance of earth from sun. In 1866 the Scotch railway trains run 17,680,579 miles, und the Irish 7,814,120 miles. Zusammen U.K.: 142,807,853 miles, as compared with 139,527,127 miles in 1866. Increase in 1866 of 3,280,726 miles. Of the 142,807,853 miles in 1866, passenger trains contributed 73,383,356 miles und goods trains 69,424,497 miles, showing an increase in 1866, gegen 1865, of 2,176,538 miles in the distance run by passenger trains, and 1,104,188 miles by goods trains.

### Causes of Commercial Depression. (Eingesandt von G. Townend. Mincing Lane.[)]

One of the reasons excessive competition amongst Joint Stock Banks. It is part of the business system of these banks in the East and elsewhere to advance to shippers on the security of goods shipped. It was formerly their custom to advance only to the extent of 2/3 of the value, but of late years, and till very recently, so great has been the competition and so eager the anxiety to do business, that advances have been made to the full cost value of the goods. Men of small means, aware that they are trading with the capital of a bank, have thus been induced to make speculative shipments. The demand thus occasioned for the productions of the countries where the banks may be located, has been immense; prices have risen enormously, and production been stimulated accordingly. Wealthy firms have first looked on in astonishment, but gradually become the most eager shippers, the most tenacious holders and ultimately the heaviest sufferers. Consumers on this side, alarmed at the largeness of supplies, purchase only for immediate wants; prices fall considerably; the goods continuously arrive, are sold at a great loss, and after a time – crisis.

The fraudulent system for railway construction. A contractor tenders for the construction of a line, for which he is to be paid in the stock of the Co; the tender being based upon the price at which the stock is disposable. In other words, if the contractor finds he can only realise the stock at 70 or 50 P.Ct. discount, he will only do £30 or £50 of work for every £100 stock he receives. Therefore it is evident that stock so issued ceases to be stock except in name; it is in reality a £30 or £50 share; and the public who are deluded into purchasing under the impression that they are buying £100 fully paid up are deceived and ensnared. And this acts as a tax upon the people, as a dividend is expected to be earned upon the apparent stock, and fares are charged accordingly. Besides, the mischievous impression gets abroads abroad that the construction of railways is not remunerative.

Recent disclosures have endlich shown that some Cos. are founded only for the benefit of promoters; and others with entirely fraudulent intentions.

## 1 February, 1868.

### Brighton Railway und Manchester, Sheffield, and Lincolnshire Railway Co.  Zusatz von Marx. Schließen (Verschleiß of steamers)

Nach den last reports die new directors stated in plain terms that all till now told about the finance of the Brighton Co. is simply false. Dividends at the rate of 6% p.a. were regularly paid, and we are now told that there never was any dividend at all earned on the ordinary stock. The capital, in the course of a few years has been doubled without any corresponding addition to the net profit.

Was die Manchester, Sheffield etc angeht No depreciation fund has been made for the steamers, which stand in the books at £161,000. Mr. Watkin treats this jauntily as a small matter. Aber: die

### A Joint Stock Discount Syndicate and its Doings.

Dieß history findet sich in report of some proceedings in the Rolls Court on 25 Jan. ’68. In November, 1865, when shares of fallen to a considerable discount, Wilkinson, the managing director, together with another director and 2 shareholders, Fox and Stafford, and some other parties, formed themselves into a „syndicate“ or club, for the purpose of forcing up the market price of the shares. Plan of the syndicate to „earwig“ some of the largest shareholders in the concern, and induce them to enter into written agreements not to sell any shares without the permission of the syndicate, whilst the syndicate themselves were to purchase 5,000 shares, to be apportioned amongst them. Carrying out of this scheme entrusted to Stafford who was to receive £1000 when he should have got the price up to £1 discount, and another £1000 when it should reach £1 premium, and a final sum of £2000 when it should have risen to £2 premium. The syndicate held regular meetings, and kept a minute book of their proceedings. But where was the money to come from to pay the £5000?

It was arranged that the money for the purchases should be provided out of the funds of the Co. The persons concerned in the purchases accepted bills for the amount, and those bills being discounted by Wilkinson, on behalf of the Co., the proceeds were paid away for the shares. In carrying out the scheme it was necessary, to disguise the transaction, that some of the shares should be bought in the names of other persons than those of members of the syndicate. Dazu Fox introduced his friend Gledstanes, to Mr. Stafford, as a person to whom 500 of the shares to be purchased might be transferred. Mr Fox, to satisfy the scruples of Gledstanes, undertook that the shares should not remain in his name, but be at once transferred to a nominee of the Co., and that Gledstanes should not be called upon to pay anything or incur any liability in respect of them. Relying upon this undertaking, Gled. accepted and executed transfers to him from several persons to the number of 500 shares, and at the same time executed transfers of these same shares in blank, leaving Stafford to fill in the name of the Co’s nominees. Gled. for some time heard no more of the matter; but, in mean time, shares fell, despite the purchases of the syndicate. This, it is said in the published report, was „in consequence of sales to the amount of 2000 shares by the chairman of the Co.“ The shares continuing to fall, the syndicate, on the 27. Jan. 1866, caused the transfers to Gled. to be registered, but did not fill up and register the transfers he had executed in blank, as they had agreed to do; and, consequently, when the Co. failed shortly afterwards, Gled. found upon register and put upon list of contributories. Gled. contended that his name ought to be taken off that list; that the whole scheme was known to and approved by the directors (was den Chairman nicht verhinderte to sell on his account 2000 shares); that the transfers he had executed to some nominee of the Co. ought to have been registered also. This well between Gled. and his friends of the syndicate; but as between him and the creditors of the Co., the Master of the Rolls „could not see it“. The syndicate purchased some 5000 shares and „let in“ all the friends in whose names they caused them to be registered.|

### Steel and Iron Rails (from Circular of W. Bird et Co.)

The scientific demonstration of the worthlessness of iron rails as compared mit steel does not practically affect trade. The former are still ordered largely, even for countries where steel rails could be delivered at little additional cost. Small proportion, do., of Bessemer steel rails purchased by home lines. The high price of steel rails enhances greatly the difficulty in extending their use and introduction, and as now iron rails can be had at £2 to £2. 10s. per ton in exchange for old rails (weight for weight), iron seems likely to maintain its footing for some time. Wrought iron rails are still in existence which have lasted 20 years and upwards, even on main lines, and it is therefore not impossible to make them of good quality. Deteriorations introduced partly due to the wretched quality of the mode of payment proffered in exchange. However bad the iron rails, yet exceeded in many instances where they are now complained of by the paper money which paid for them. The steel trade in its infancy, and some of the new methods of producing first class cheap steel will become more formidable competitors in the rail trade of this country then hitherto the Bessemer.

### U. States Finances on 1st. January 1868 (Monthly Statement of  Zusatz von Marx. Schließen M.Culloch , Secretary of Treasury)

On 1st Jan. 1868: Debt bearing interest in coin. Dollars 1,890,102,091: 80 Cents. Debt bearing interest in paper: $328,491,230. Debt on which interest has ceased$15,871,640. cts 83. Debt without interest $407,851,290. ct.85. Total Debt Jan. 1:$2,642,316,253. ct. 48. During the month of December the debt was increased $2,943,680. 80c., but total debt for Jan. 1, 1867 was$2,675,062,505 c.43, showing reduction, during the past year, of $32,736,251. c.95. McCulloch continues his policy of funding the various obligations of the Gvt. into 5-20’s, and in this way, during december, increased the coin interest debt nearly 50 mill. The total issue of 5-20’s now$1,373,804,750. There was no contraction of currency during December.

## 8 February 1868.

### Aus  Titel von Marx notiert in „Heft 3. 1868“ der „Hefte zur Agrikultur“ (MEGA² IV/18. S. 729.12) und in Exzerptheften 1877 (IISG, Marx-Engels-Nachlass, Sign. B 139) und 1878 (IISG, Marx-Engels-Nachlass, Sign. B 148) sowie im Notizbuch 1878/1879 (IISG, Marx-Engels-Nachlass, Sign. B 152) Schließen R. Dudley Baxter: „National Income of the U. Kingd. 1868.“ (Macmillan et Co)

Nach Baxter folgende dimension of Population:

Persons
A) Upper and middle class 1) With independent incomes. 2,759,000
2) Those dependent. 3,859,000
Total 6,618,000
B) Manual labor classes 1) With independent incomes 10,961,000
2) Those dependent 12,130,000
Total 23,091,000
Total Estimated Population: 29,709,000

Nach demselben Baxter folgende Vertheilung amongst the various classes of the population:

Class A. Incomes (Annual) Persons Amount. £. St.
1) Great fortunes £5000 to £50,000 and upwards 8,048 £127,692,860
2) Moderate fortunes £1000 to £5000 47,228 84,284,210
3) Middle incomes £300 800 to £1000 173,036 88,730,580
4) Small Incomes a) £100 to £300 800 995,688 112,246,350
b) under £100 (below income Tax) 1,535,000 83,780,000
Totals: 2,759,000 2,799,000 £496,734,000
(Manual Labor) Class B. Incomes. (Annual) Persons. Amount. £. St.
5) Higher skilled labour and manufactures 1,345,044 £66,352,814
6) Lower skilled labour and manufactures 5,087,921 160,652,345
7) Agriculture and unskilled labour 4,528,720 97,639,481
Totals 10,961,685 £324,644,640
Grand Totals 13,720,685 £821,378,640
 Average Income for each Person of independent means: Ireland Scotland England £31 £53 68 For each person of the whole estimated population 14 231/2 32

Ireland, remarks der Baxter, „presents the singular phenomenon of a decreasing population and an increasing income“. Its population diminished von 8 mill. in 1841 to 61/2 Mill. in 1851 (nearly 20%), and again in 1861 to 53/4 mill. (nearly 12%). Estimated that it has further declined in 1867 by 4%; yet the property charged to income tax has risen from 21 mill. in 1855 to 241/2 mill. in 1865, being increase of 16%.

Enormous disproportion of unskilled to skilled labor; 10 millions of Persons against 1,345,044. Ireland für sich genommen ist natürlich disproportion still greater.

In the East of London, sagt Baxter: „the dock labourers earn, in full work 15s. a week, but so great is the competition that even in ordinary years they are employed but little more than half their time. During the past year (1867) 5s. a week has been considered tolerably fortunate.“ The Silk weavers have been for years in a chronic state of distress. The men’s nominal wages are 12s. but their real earnings do not average more than 6s. a week. The cabinet makers of the Kingdom are set down as earning 30s. a week, but those at the East End of London, a very numerous body, are in the „slop trade“, and are ground down by the Jew dealers, who own what are called the „slaughter-houses“, in which advantage is taken of the necessities of the small „garret masters“, many of whom are not earning more than 7s. 6d. per week. „None but those who have examined the facts“, sagt Baxter, „can have any idea of the precariousness of employment in our large cities, and of the large proportion of their time in which they are out of work, or of the loss of time in many well paid trades from drinking habits.“ Those drinking habits are a fearful evil, … but, sagt die Money Market Revue, we have a strong impression that much of this evil arises |27 partly from overwork and underfeeding, and partly from the bad ventilation and bad drainage of the localities in which they are compelled to reside.

Do all these figures and details, sagt Money Market Review, furnish us with what they profess to give – namely an account of our national income as a nation? We are bound to say that they do not. „We are“, says Times, „all living upon one another, and each income is spent in making up a number of other incomes, and every shilling of each passes through 50 other incomes and contributes to swell them in the course of 1 year.“ To add up all these several incomes into a grand total, and call it the total or gross income of the nation, is merely to foster a delusion. A landowner with £5,000 a year might just as well add up the wages of his steward and household, the rents of his tenantry, and the profits of his tradespeople to make up an income of £20,000 a year. The net actual income of an individual shown by the total amount of his receipts after deducting all the necessary outgoings for keeping up the estate or source of his income. And the net annual income or wealth of a nation shown by the net amount in hand after deducting all the necessary outgoings for the maintenance of its State and the sustenance of its people. Dazu other facts to be considered, returns of exports und imports, amount invested of our surplus income in foreign loans and securities etc.

### Den Titel dieser Schrift notierte Marx in „Bibliographische Notizen zur englischen politischen Ökonomie 1864–1868 u.a.“ in „Heft 3. 1868“ der „Hefte zur Agrikultur“ (MEGA² IV/18. S. 728.23). Pattersons „The Science of Finance“ (Edinburgh, London 1868) exzerpierte er im April/Mai 1868 in „Heft zum fixen Kapital und Kredit 1868“ (MEGA² IV/18. S. 749–751, 755, 762–765, 793–802 u. 807/808). Schließen R. H. Patterson. „Railway Finance.“ (1868)

In past years the question was raised as to whether the State ought not to buy up the railways as a means of increasing its revenue. Now the question has changed its complexion, and the interference of the State is demanded chiefly in the interest of the railway Cos themselves, as a method of relief from pressing embarrassments.

### U. States Currency.

Washington. Feb. 4. The Anti-Contraction Bill, suspending M’Culloch’s authority to contract the currency, finally agreed by both Houses of Congress, and is now law.

### Manchester Trade. (Circular of B. Barbour and Brother.)

Month opened with better feeling, continued with few intermissions to its close. Aggregate business very large, not only clearing out stocks, but placing producers, particularly of the better qualities, under contract for the next 2 months. Operations mainly in the good adapted for India and China. Shipments thither continue in excess of 1866. These operations entered into, not so much for immediate as in anticipation of future demand for these quarters. Largely of a speculative character, through which prices unduly forced up, affording the speculator a later prospect of resale at a profit. Effect of such transactions to distract our market and to disarrange all ordinary calculations; they force spinners into the Liverpool cotton market to cover their contracts, stimulating an unhealthy action on prices there, at a time when the most reliable accounts from America promise an abundant supply.

## 15 February, 1868.

### Saturday Review. Defender of fictitious Accounts and Railway Management.

„The conduct of the directors“, says Saturday Revue, „in paying interest on their extension stock out of capital, although it appears to have been illegal, was a prudent and reasonable act.“ Vice Chancellor Wood said that „the permanent holders of the stock and shares of the Co. would (his decision against the Metropolitan Co.) derive benefit and advantage from the refusal of the Court to permit the declaration of a doubtful dividend.“ But, says S. R., „it had not proved beneficial to speculative holders merely holding on until doubtful dividends should enable them to sell at speculative prices.“ S. R. wants an „elastic discretion“ der managers, meaning a dishonest discretion. „Justice is blind“, says S. R., „and sometimes she is proud of her blindness; and it is unfortunate for all when matters which require the exercise of this elastic discretion are brought under her stern cognizance.“ Was ever anything more rankly immoral thus openly and unblushingly propounded in the pages of a public journal?

### Railway Accounts. By H. E. Bird. Accountant. London (Effingham Wilson 1868).

389 Cos., of which Board of Trade treats, had raised 489. Mill. Capital at 30. June 1867. „Lloyds’ Bonds“ not included; 260 Mill. in some form of priority (davon wieder 1271/2 mill. in form of debentures, loans and debenture stock, the whole of which is terminable or to be liquidated in full at fixed dates, except the debenture stock, amounting to about 141/2 millions, which is permanent or fixed debt.) Remaining 229 Mill. are ordinary stock.

 1) Debenture Loans £.110,558,698 (Davon £76,591,473 p.a. interest £4. 8s. 91/2d.) 2) Debenture Stock. 14,620,656 Davon: £11,026,565 bore interest 4% or under, £3,594,091 of 5%. 3) Temporary Loans. 2,480,766 interest not given. 4) Preference Capital 132,202,712 Davon 231/2 Mill. at 4%, 303/4 at 41/2, 53 at 5, nearly 2 at 51/2, rather more than 17 at 6%, nearly 6 mill. at 61/2 p.a. 5) Ordinary Capital 229,197,867 Average dividend not given. 6) Total £489,060,699
 Priority Capital: £270,585,760. Ordinary Capital: 164,250,146. Total: £431,835,906 £434,835,906.

While there was paid in dividends on the „ordinary“ stocks of 16 leading railway Cos. in the 3 half years from 31. Dec. 1865, to 30. June 1867, a sum of £9,431,024, the amount charged to capital during the same 18 months on the lines „in operation“, and exclusive of the new lines and branches, was no less than £10,511,220.|

### Caledonian Railway Meeting (at Glasgow 13 Feb. ’68)

Break up of the directorate and falling foul of each other. No dividends upon the ordinary stock (wie dito bei Brighton Railway ) for some time to come. Yet its price stands at 78 – some 5% higher than South Eastern with bona fide dividend of 4%. The price artificial one. No secret that the market has been „rigged“. It was the last card of Colonel Salkeld (the chairman) to keep up the price. A new direction must cancel all fictitious purchases; and the sooner this selling, the better. Price, Holyland, and Waterhouse, official accountants, say that „if all proper charges to revenue had been made, not only no surplus available for dividends upon the ordinary stock of the Co., but balance on debit side.“

Price of Cotton End of 1866 End of 1867
Middling Orleans 153/8d. 73/8d.
Pernambuco 153/4 73/8d.
Singapore 12d. 91/8d.
Fair Dhollera 12d. 87/8d.
Bengal 87/8d. 67/8d.
Ejyptian 20l. d. 133/8d.
Comparative Import of Raw Cotton into Europe. (Ellison and Haywood.)
1866 1867 1868
Actual Bales Actual Bales Estimate Bales
America 1,163,000 1,226,000 1,400,000
Brazil 407,000 437,000 540,000
Egypt and Turkey 200,000 198,000 220,000
Westindies etc 112,000 129,000 130,000
East Indies etc 1,867,000 1,511,000 1,300,000
Total. 3,749,000 3,501,000 3,590,000

Price of middling Orleans at beginning January (68ʼ) 71/4d per lb, end of January 81/8d. Demand for the moment very large. In the first 4 weeks of this year „taken by trade“ 313,200 bales of cotton against 136,080 in corresponding 4 weeks of 1867; „taken for export“ in first 4 weeks of ’68 bales 74,210 against 37,480 in 1867; „taken for speculation“ 38,050 in ’68 gegen 19,880 in 1867; while the imports of first 4 weeks of ’68 bales 298,565 against 190,676 in 1867. The demand has thus exceeded the supply.

## 22 February 1868.

### Railways. Paying Weight and Dead Weight.  Zusatz von Marx. Schließen (Wear and Tear.) (Permanent Way.)

Twenty years ago Mr. Samuel, the then engineer of the Eastern Counties Railway, called the attention of the directors to importance of the question involved between dead and paying weight. He demonstrated by actual experiments, carried on for 18 months, that the problem could be solved of assimilating the proportions of dead and paying weights at speeds varying from 30 to 50 miles per hour. He did this by his celebrated light engine, „the Enfield“. Was disregarded by the Board. Mechanical invention has gone no further in that direction.

That the dead weight carried by the Metropolitan is destructive to the permanent way is obvious from the facts. The way first laid with iron rails case-hardened. Before long they were so worn that deemed expedient to alter the quality, and steel railways for renewals were obtained from John Brown et Co, Sheffield. These also gave way; other rails for renewals obtained from Ch. Cammell et Co, Sheffield. All this in 5 years, 3 renewals in 5 years over the heaviest portions.

### Decline in Trade with Un. States.

Nach commercial advices from New York the imports of dry goods (comprising all manufactures of wool, cotton, silk, flax) during January ’68 only £1,020,000 less than 1/2 amount in corresponding month of 1867, und about £700,000 less than average importation of same month during last 19 years.

## 29. February 1868.

### The Caledonian Railway.  Zusatz von Marx. Schließen (Old Hudsons’s Maxim)

Latest Phase: Shareholders so infatuated or demoralised as to entrust to the chairman and old board such a mass of proxies as has overridden the decision of the general meeting, and practically re-delegated the reins of power to them. After this, who can believe for one moment in the genuineness of a Caledonian railway dividend? The accountants (to Committee of Inquiry) set forth dividend as very small; majority of shareholders would like to make them and the market value very high. (per xxx or xxxxx).

Up to this moment there has ruled that famous principle in railway accounting enunciated by old Hudson, when chairman of the Eastern Counties Railway, that „expenses should be made to square with the dividend, and not the dividend with the expenses.“

A) Imports. Computed Value of Principal Articles.
Month ended Nov. 30.
1865 1866 1867
Totals enumerated: £19,910,403 £17,841,738 £15,514,473
11 months ended November 30.
Totals enumerated £180,417,221 £211,541,118 £196,884,787
Deduct. Wheat 8,573,672 11,214,682 22,102,884
£171,843,549 £200,326,436 £174,781,903
Deduct raw cotton 49,294,092 70,665,438 48,338,241
£122,549,457 £129,660,998 £126,443,662
B) Exports Declared Value of All Articles of British and Irish Produce.
Month ended December 31
1865 1866 1867
All articles £15,030,088 £14,914,563 £13,252,593
12 months ended December 31
£165,835,725 £188,917,536 £181,183,971.

## 7. March. 1868.

### Profits of the Bank of England.

Rate of dividend for the half year.
Half year ending Sept. 5 1866 61/2
March 6 1867 51/2
Sept. 4 1867 41/2
March 5 1868 4

1865 1866 1867
Imports year ended 31. Dec. Computed Value of Articles enumerated: £219,393,987 238,773,192 220,862,585
Exports ditto. Declared Value. British und Irish Produce und Manufacture 165,835,725 188,917,536 181,183,971
Month ended December 31
1865 1866 1867
Totals enumerated £38,930,967 27,174,309 23,977,798
Year ended December 31.
Totals enumerated £219,393,987 238,773,192 220,862,585
Deduct wheat £9,775,616 12,983,090 24,985,096
£209,618,371 225,790,102 195,877,489
Deduct raw cotton 66,032,193 77,521,406 51,997,766
£143,586,178 148,268,696 143,879,723
 Quantities cwts: 1865: 8,731,949 1866: cwts 12,295,803 1867: cwts: 11,272,651 Computed value: £66,032,193 £77,521,406 £:51,997,766
A) Exports January B) Imports. B) Imports December
January 1866 £14,354,748 December 1865 £38,930,067
1867 12,768,842 1866 27,174,309
1868 12,252,688 1867 23,977,798.

### Railway Finance (Inserted)

If placed to capital , there will be a perpetual reduction of future dividends of shareholders (common stock); if charged to revenue, that course would be ruinous to his present income. |

### Import of Cotton in 1867.

 U. States: cwt 4,715,733 First year since 1861 in which cotton Import from U. St. > import from British India. British India: 4,449,259 Ejypt 1,127,541 Brazil 628,761 Turkey 57,024 Bahamas und Bermuda 10,623 China 4,707 Mexico 22 cwts Other Countries 278,981 Total cwt 11,272,651.

Quantity Exported from U. Kingd. in 1867 cwts 3,130,593, leaving 8,142,058 cwt, excess of imports over exports, quantity 4 times exceeded, in 1859, 1860, 1861 und 1866.

## March 14, 1868.

### Board of Trade. Railway Returns up to end of 1866.

A) Capital authorised by Parliament up to close of 1865
Shares Loans Total
England and Wales £357,496,302 £119,714,054 £477,210,356
Scotland 48,742,293 16,303,523 65,045,816
Ireland 26,650,650 7,384,841 34,035,491
Total £432,889,245 £143,402,418 £576,291,663
B) Capital authorised at the end of 1866
England und Wales £388,605,689 £129,762,809 £518,368,498
Scotland 50,104,794 17,024,623 67,129,417
Ireland 27,441,150 7,625,341 35,066,491
Total £466,151,633 £154,412,773 620,564,406
Increase in 1866: £33,262,388 11,010,355 £44,272,743
C) Capital paid up at 31 Dec. 1865
England and Wales. Scotland. Ireland. Total.
Ordinary Cap. ohne priority £186,939,352 £18,307,847 £14,350,997 £219,598,196
Debentures (terminable loans) 80,420,076 11,636,265 5,764,756 97,821,097
Preference Capital 99,930,392 19,055,152 5,277,931 124,263,475
Debenture stock or funded debt 12,315,007 1,206,768 273,600 13,795,375
Total 379,604,827 50,206,032 25,667,284 455,478,143
D) Capital paid up at 31 Dec. 1866.
England and Wales Scotland Ireland Total.
Ordin. Cap. ohne priority 193,674,973 19,797,076 14,773,580 228,245,629
Debentures (terminable loans) 86,659,720 12,566,082 5,840,061 105,063,863
Preference capital 109,322,884 19,460,908 5,671,306 134,455,098
Debenture stock or funded debt 12,566,697 1,254,732 284,165 14,105,594
Total £402,224,274 53,078,798 £26,569,112 481,872,184

Authorised Railway Capital end 1866: 6201/2 mill. (round numbers), wovon nearly 482 mill. actually raised. This is irrespective of money raised on simple contract, such as balances due to bankers, accounts unpaid to lawyers, contractors, and others who supplied money, labour, or materials for the purposes of the various Cos. The 482 mill. do not include money raised upon „Lloyds’ Bonds“, these being securities not directly authorised by Parliament. Vgl. 1866 mit 1865 raised 261/2 mill. und as indicative of the growth of distrust, nur 83/4 mill. in ordinary stock, 173/4 mill. in the forms of priority stock. 1866 was with railways a year of pawning and borrowing, and creating securities mit rights in priority of the ordinary stockholder.

### Overend et Gurney, Co. Meeting of Shareholders 13 March.  Zusatz von Marx. Schließen (Für Proceedings against Directors.)

Mr. Linklater, the solicitor said, had now come out that at the time of the transfer to the Lim. Co. of the business there were 3 deeds prepared and executed between the partners of the old firm and the directors of the new Co. Only one of them, the deed of transfer, accessible to intended shareholders; the deed of arrangement, which would have inclosed disclosed the absolute insolvency of the old firm, being held back as a private or secret deed. In the 1st deed the partners of the old firm guaranteed that the assets should realise 20s. in the £ upon the debts and liabilities transferred. By the 2nd deed it was made apparent [that the assets] were not likely to realise anything of the kind, and that they might fall short to the extent of 2 or 3 mill., and the partners therefore covenanted with the Co. to make good the too probable deficiency out of their private estates. But this deed stipulated that whatever might be the exigencies of the Co., they should not be entitled to call upon the partners to make good the deficiency before the end of 1868. To that provision, Henry Ford Barclay, before he consented to join the lim. co., took exception; and to meet these objections, another deed was prepared at the last moment, providing that in certain events the stipulations of that deed in reference to those deficiencies should be in some way modified and relaxed. All this, as Linklater said, showed that the parties were aware at the time of the issue of the prospectus that the statements it contained, and the prospects it held out, were false and delusive and therefore fraudulent.|

## March 21, 1868.

### Railways. Their Construction and Management. Paper read by R. F. Fairlie, Society of Arts, 18 March ’68.  Zusatz von Marx. Schließen (Wear and Tear)

Paying portion of the load does not exceed 5% of the whole weight of the train … As to engines, costs to be reduced: first, by abolishing the tenders, and next, by amending the construction of the locomotives themselves, so that their weight may not only be lessened, but better distributed. A better distribution of the weights of the boiler over a larger number of wheels, with adjustments to meet and neutralise inequalities in curves and gradients, would prevent injurious impact upon the rails, and so save wear and tear to rails, wheels, and boiler. Every traveller experiences sudden or continuous shocks from the impossibility of engines of ordinary description adapting themselves to surface inequalities. These shocks inflict damage on the rails and to the rolling stock; this is the main cause of the constant necessity for expensive renewals. Mr. Fairlie has produced engines now in operation on the Neath and Brecon Railway, which work without the possibility of such oscillations.

## March 28, 1868.

### The Indian Trade. English Exports to India during last 15 years.

 1853: £7,324,147. 1854 £9,127,556. 1855: £9,949,154. 1856: £10,546,190. 1857: £11,666,714. 1858: £16,782,386. 1859 £19,844,920. 1860 £16,965,292. 1861: £16,411,756 1862: £14,617,673 1863: £20,002,241. 1864 £19,951,637. 1865 £18,260,413. 1866 £19,957,342. 1867 £21,844,619.

Die Ausfuhr von 1867 die größte on record. Exports to Bombay and Scinde presented a slight declension 1867, to Madras a small advance, to Bengal and Pegu considerable increase. The construction of railways in British India involved supply of large quantities of plant, engines etc.

## April 4. 1868.

### Crisis of 1866 und Nachwehn.

Never a period of dull suffering and depression so long and continuously felt. … Two main elements of distraction and depression of late: Windings up and railway insolvency. Enormous calls under windings up. Others sufferers by stoppage of their dividends. Dann uncertainty der victims as to their ultimate liabilities, preventing them from dealing with their remaining means. Crippling of resources and paralysis of action. Andrerseits now beginning to tell the payment of creditors of Cos. in liquidation, and the settlements with debenture holders in Railway Cos. These transfers of capital are coming largely in relief, and every day they will become more operative, as seen by course of Overend etc, Imperial Mercantile Credit etc. These transfers not absolute equivalents, but come greatly in mitigation. The fearful expenses in winding up, going in diminution of the property of creditors and debtors, constitute a transfer to attorneys, accountants etc to their profit.

A.) Imports. „Computed Real Value.“
January
1866 1867 1868
Enumerated Articles £10,394,443 £10,063,066 £9,477,083
Deduct Raw Cotton 3,341,901 1,076,616 688,424
£7,052,542 £8,986,450 £8,788,659
Deduct Wheat 984,355 1,551,919 2,091,896
£6,068,187 £7,434,531 £6,696,763.
B) Exports of British and Irish Produce und Mnfct. Declared Value
January and February
All articles £29,470,811 £27,232,914 £26,593,667

Also Import und Export Abnahme in Trade.

### Railway Wear and Tear. Cost of Production.

An enormous amount of useless and unprofitable force is expended upon every train on every railway, and this useless expenditure of force aggravates the loss to proprietors, by so wearing the rails as to make them require frequent renewals at very great expense. Take the case of the Metropolitan Railway . Mr. Fairly proved (sieh oben, March 26 21. ’68) that 30 tons of dead weight are carried carried on that line in proportion to 1 ton of paying weight. What business can be well carried on at a working expenditure of 30% in proportion to a paying expenditure of 1%? Opposition against improvement in this respect on part of engineers not belonging to the newest school in practical engineering.

## April 11. 1868.

### Commercial Credit and Morality.

Liverpool Chamber of Commerce 1867 appointed a subcommittee to consider Sir John Rolt’s (late Attorney General) Bill on Bankruptcy law, and „other laws bearing upon commercial morality“. On 6. April ’68 the Chamber met to discuss the report of the latter Committee.

### Worn Coin.

£15,000 will again be proposed this session to cover the deficiency in the wear of silver coin withdrawn from circulation in the course of the year, the coin being received at the Mint at its nominal value. There will also vote of £500 to pay premium at 2% on old copper coin sent into the Mint, and the carriage of bronze money remitted in exchange.|

### Cotton.

Lately „spurt“ in the cotton market. „Middling Uplands“ worth at the end of February 91/8d. per lb, and at the end of March 115/8d. „Fair Pernambuco“ rose from 10d. to 114/8d., Fair Ejyptian from 81/8d. to 101/8d. Fair Dhollera von 81/8d. to 101/8d., Fair Madras von 73/4 to 93/4d. und Fair Bengal from 71/8d. to 83/4d. The causes of this advance in market attributed to reduced cotton receipts at shipping ports of U. St. und increased demand at Manchester for manufacture. Nach dem circular von Ellison und Haywood the broad facts stand thus:

Home Consumption in Bales.
1868 1867.
In 121/2 weeks – total 765,280 468,820
In 121/2 weeks – average p. week 61,222 36,063

The inference evidently, that a consumption of 61,000 bls every week cannot continue.

Computed Stocks in Bales. End of March
1868 1867
In Liverpool and London 461,341 689,608
370,723 523,926
832,064 1,213,534

Should rate of consumption continue at £61,000 61,000 bales a week, in hand a stock which would supply the demand for 14 weeks. If the consumption should relapse, sufficient stock for proportionately longer period.

Exports of Goods and Yarns. Two Months
1868 1867 1866
Piece Goods. Yards 483,219 411,880 373,004
Piece Goods. Value £7,754,000 £8,504,000 £9,273,000
Yarn. Pounds. 33,983,000 20,937,000 20,923,000
Yarn. Value £2,737,700 £1,904,000 £2,258,000

These figures show present quantity of manufactured cotton at maximum, while the value obtained from the foreigner for the largely increased product is much smaller than it was 2 years ago … The rapid decline in prices here, consequent upon an excessive supply, has produced diminution of arrivals. Manchester is buying more than she can sell at a fair profit, and Liverpool is cutting its own throat by raising the price against Manchester by rampant speculation.

### The London Flour Co. (lim).

Resolution passed in October 1867, to wind up the Co. voluntarily, but certain shareholders, suspecting that the accounts had been tampered with, discovering that the above resolution was informal and invalid, filed petition to have the Co. wound up by the Court. Alleged that Directors had systematically paid dividends out of capital, recklessly carried on the business etc[.] Admitted by directors that they had put directors’ fees and managers’ salary to capital account and not to revenue, and also that the liquidators, professedly appointed under the resolution of October ’67, one of whom was the chairman of the board of directors and brother in law of the managing director, were proceeding to sell the property without reserve. Petition filed early in December 1867; pressure of business on the Court caused delay. Adroitly seizing this interval of grace, directors, before Court opens again after Christmas, issue a notice, this time proper, convene meeting on 8 Jan. ’68, in order to pass a resolution to wind up the Co. voluntarily; and their notice is accompanied by stamped proxy papers directed to the directors and with postage stamps duly annexed for their return. At this meeting directors obtain bare majority of 3/4; but the petitioners stated on the hearing that proxies were improperly used on behalf of the directors, and thus the resolution was passed. By the time the petition came on for hearing, 15 Feb. ’68, the shareholders, having become alive to their interests, reverse their last decision of 8. Jan., and support the petition in such numbers that the directors then have but slight majority on their side. Vice Chancellor Stuart expressed himself strongly against directors, made order for winding up the Co. by the Court. Directors appeal. Independent shareholders show majority to oppose appeal. Lord Justices declare shareholders bound by the resolution passed at a meeting held after the petition had been presented, and which, from taking place almost in holiday time, was in the nature of a surprise upon the shareholders, who in fact alleged that several of them accidentally prevented from opposing the directors’ plan.

The more culpable directors, the greater the difficulty under which shareholders labour at meetings under directors’ influence. Generally imposible impossible to obtain justice, attempt is a farce except in case of some colossal undertaking whose magnitude has invested it with such publicity that the shareholders can have matters somewhat their own way by the publicity of the proceedings. In the general run of Cos., shareholders who complain are cried down, improperly called to order, their resolutions put to the meeting in such way that the shareholders do not understand question before them, majority is often unfairly arrived at, and proxies rejected on most flimsy pretexts. After the decision of the Lord Justice in this case, it is open to the directors of the most mismanaged Co, when they find their game is up, to call a meeting. meeting, shuffle through resolutions to wind-up voluntarily, and appoint their own nominees as liquidators.

### The City Offices Co. (limited)

Last half yearly meeting very badly reported. For the last 5 years 1/2 Mill. £. St. invested in property yielding no return and which, at present price of shares, stands at something like £100,000 only. Shares mit £25 paid. Directors, mit hohen Gehaltern Gehältern who, after 5 years’ trial, have entailed nothing but loss and disappointment on their shareholders, managed both to carry their report and get a vote of unabated confidence.|

## 18 April 1868.

### International Contract Co. (lim.) und Accidental Marine et Insurance Corporation. (lim.)

2 circulars recently issued by the Liquidators of these 2 bankrupt Cos.

The Internat. Contract Co. started mit nominal capital of 4 Mill. £. St., in 80,000 shares, small proportion paid up auf die 50£ share, so leaving enormous contingent liability. This practically unlimited liability of the shareholders seemed to afford ample security to credulous creditors; and, if all the shares had been applied for and allotted to bona fide shareholders, it might have been so. We see now the true value of this enormous nominal Capital and unlimited liability. Co. was only a few months in operation before it collapsed, and claims already sent it in to the official liquidator nearly 2 Mill. £. St. Of these claims only a portion as yet adjudicated upon, result that upwards of £165,000 will rank as proofs, leaving a sum of upwards of £1,761,000 still to be litigated and proved. Director claims to a large amount by the Peruvian Railways Co., now in liquidation; the London Wharves and Wharehouse Co., now also in liquidation; und claim of more than 1/2 Mill. £ St. by Edward Pickering (who, it seems, likes to pick), the managing director of the Co! These latter claims, the liquidators state, arise upon „certain fictitious operations“ in connection with the Peruvian Railway Co. and others. Besides these claims the Co. Defendants in 5 Chancery suits, instituted by the Peruvian Railway Co. and others, under which there are certain alleged liabilities for indemnity and otherwise. The whole sum at present collected under the winding up accounts no more than £10,000. The list of contributories has been settled, and 229 persons, holding 38,663 shares, representing £1,540,000 capital, have been fixed as liable. But the liquidators say that, „having regard to the number of contributories who are but the nominees of certain of the directors or promoters of the Co., and to the fact that many of the remaining contributories are not in a position to meet their liabilities, they cannot hope that more than £70,000 or £80,000 will be raised by calling up the whole of the remaining capital.“ A list of persons liable as past members about to be filed, aber bevor dieß settled, liquidators consider it impossible to form any estimate of the amount realisable from calls upon this class of contributories.

In the case of the „Accidental Marine and Insurance Corporation“, the liability of past members the question embarrassing both liquidators and creditors. Creditors can only expect very moderate dividend, in addition to that already declared. Amount of unpaid capital upon the shares transferred during the 12 months prior to the commencement of the winding up is £80,250. Of this £16,340 is considered good, £24,090 doubtful, und £39,620 wholly bad. Liquidators therefore estimate value of the list of past members von £15 to 25,000£, whilst the claims actually admitted £197,077, and those still pending will amount to £50,000 more. Schwierigkeiten mit past members. Ihre liability confined (von jedem derselben) to the debts which had actually accrued at the time they ceased to be members. Ferner: At whose expense these proceedings necessary to establish the liability of past members to be conducted. Many of the creditors (deren Forderung von später datirt) no interest in enforcing the liability of past members. Endlich past members only liable to contribute to the extent of the amount remaining unpaid upon the shares they had held after proof that the present holders und any intermediate holders have been exhausted, and are absolutely unable to pay more. Daher cost of litigation würde alles auffressen. Die Liquidators bemerken: „There has not hitherto been a single instance of this past liability having been actually enforced, in the winding up of a Co. under the Act of 1862, and in most, if not in all the cases where an attempt to do so is now being made, there exists considerable difficulty in assessing and enforcing such liability, whilst it is certain that in this as in every other case the attempt to enforce it will involve the liquidation in very considerable expense and litigation.“

### The Market Value of Finance Co. Shares.

Market Prices
March 1866 March 1868
Credit Foncier of England 2 prem. 7 disc.
Discount Corporation 11 disc. 21/4 disc.
General Credit 1/4 prem. 21/2 disc.
International Financial 1/2 disc. 13/4 disc.
London Financial 51/2 disc. 25 disct.

Credit Foncier of England, hieß 2 years ago the Credit Foncier and Mobilier of England, paid at the outset fabulous dividends. Adverse Rumours then, shares fell continuously. In July, 1866, 20£ share reduced to £10, with £9 paid up instead of £5, £2 p. share being taken from the reserve fund, and £1 being paid up in cash. Subsequently £1 paid. Thus no further liability. The necessity of the last call explained at meeting of 25 Feb. 68 when shown that capital of Co. locked up in undermentioned investment:

 In Millwall Docks about £150,000 Irrigation Co. of France 320,000 Imper. Land Co of Marseilles 270,000 London, Chatham and Dover Railw. 302,000 Varna and Rustchuck Railw. 196,500 Paris Streets Impt. Co 300,000 City of Milan Improvements Co 244,000 Belgian Public Works Co 107,000 Total £1,889,000

Shareholders have paid £8 p. share on 200,000 shares, zusammen £1,600,000, against invested in legitimate Joint Stock undertakings £1,889,000, aber diese investments not realisable at anything approaching the original cost, owing to the glut of shares and universal distrust in market. The 10£ share now fallen to 3£.|

34

General Credit Co. advanced £160,000 to Lond. Chath. and Dover und diese sagen, sie sollen das Geld bei Peto suchen. Loan on Portuguese railway securities of £151,000 scheint fairly settled. Kapital der Co. £2,000,000, in 200,000 shares of £10 each, wovon £7. 10s. paid up. Market price only £5. The discount of £2. 10s. on 200,000 shares total depreciation of 1/2 Mill. £. St.

Value of British Exports January 1868 £736,950 gegen £557,062 in Jan. 1867 und £918,673 in 1866. Each of the 3 chief Australian colonies – South Australia, Victoria und New South Wales – has done with us more business of late. Exports to South Australia in Jan. ’68 £140,714 gegen £52,995 in Jan. 1867; those of to Victoria £316,846 gegen £260,347 in 1867; und von to Neu South Wales £176,427 gegen £67,847 in Jan. ’67. Dagegen we sent in Jan. 1868 less goods and produce to Western Australia, Queensland, Tasmania und New Zealand.

## April 25, 1868.

### Falsification of Railway Accounts. Working Expenses.

There falsification under 2 heads, as estimates of future liabilities und statements of actual results. First evil meist in form of underrepresenting future capital outlay, z.B. Estimated cost of Midland approaches to London £2,216,000; kosten bereits £3,450,000 und werden noch viel mehr kosten.

Falsification of actual Results: selten by fictitiously augmenting revenue receipts, meist durch suppression of working charges. Z.B. sagt das Brighton Railway Investigation Committee of 1867, daß zu Revenue ought to have been charged:

 Maintenance of way, works, stations £27,918 Locomotive Power 10,258 Carriage and Waggon Department 28,462 Law and Parl. Charges 44,682 Printing, new shares etc 5,250 Commission allowed on issue of stock to contractors 2,145 Interest upon expenditure for works in progress in 1866 175,178 Additional loss on Channel Island traffick 1,665 Total £295,558

By these means the directors were enabled to pay in ordinary dividends £215,718. Daher non payment of a dividend 1867.

Locomotive Power: Includes all cost of fuel, wages of drivers, cleaners and others (sometimes repairs of engines und tenders, gehört eher zu maintenance of rolling stock) Convenient and vicious deductions may here be made for the conveyance of materials used in construction of new works, such being charged to capital at arbitrary rates.

Maintenance of Way: Hier gross systematic falsifications. To show fictitious profits, the permanent way allowed to lie for years almost uncared for. Endlich all or part of the sum required charged to capital. Or this expenditure may be charged as „additional works“. If a viaduct falls in, the cost of rebuilding may be charged to capital. Improved rails or sleepers, or repairing and enlarging stations, all such items open to colouring which policy may dictate. When works destroyed or removed to make room for others, original cost of the old works, or of their removal, should be sustained by revenue. Schwer zu bestimmen cost of maintenance of way per mile, as it depends entirely on soil, traffic, and nature of the works. Laing, 1849, estimated such repairs and renewals on Brighton line at £265 p. mile p. annum; experience has shown this to be minimum charge.

Maintenance of Rolling Stock: Often charged to capital in small or large proportions; while disabled vehicles stand in the Co’s yards, and only really exist in reports furnished to the shareholders. Thus, on North British last half year deficiency of 2,319 vehicles now written off the stock. Charge for these renewals and repairs should in most cases equal, if not exceed, 9% p.a. on first cost. Nach paper read by Fletcher at Institution of Civil Engineers, annual charge on North Eastern should be 121/2% on cost of locomotives, 12% on cost of carriages, 61/2% on cost of waggons. No certain rule for the mileage, however; speed and burdens carried must influence the result.

„Salaries, office expenses, and directors fees“: generally include not wages to engine drivers and others, falling under head of locomotive power etc Any proportion that is thought fit, transferred to an open capital account as expenses on works in progress; thus the Metropolitan directors have charged 1/2 of office expenses.

„Canal, steamer, and sundry charges.“ (telegraph etc) May or may not include reserves for renewal and depreciation.

„Rents, Debenture and Preference Interest“: davon oft deducted interest on capital expended on works in progress. The more capital is returned as interest, the less will be employed on productive works. Sum thus distributed amongst proprietors, not profit, but return of capital. If capital may be dissolved in interest for one year, why not for 10?

„Loss or Gain on Issue of new shares and debentures“. Premium not to be placed to revenue, as losses are to capital.

### Injuries consequent upon the vibration and Smoke of Trains.

Wenn Railways – (im Gegensatz zu Private Industry) als Use of Property sanctioned by Legislature in particular way – do damage to other Property durch vibration, smoke etc können sie, falls nicht case of negligence, nicht zu Schadenersatz angehalten werden. If every occupier of a house near a railway should have an action for the injury done to his nerves by the vibration and passing of the engines, railway fares would be raised to Public.|

## May 2, 1868.

### The Market Value of the Finance Co. Shares.

stated that the Co possessed at close of 1867: £44,081 in cash, £19,813 in bills, £241,737 lent on securities, £717,227 in investments, Total £1,022,858. 150,000 shares of £10, worauf £5 paid. Present quotation £3 to £3. 5s. A large amount invested in Metropolitan Sewage Co, a concern, for the present, speculative, although it may become ultimately profitable.

Statement issued by the Directors, Sept. 67, showed:

 Dr. Loans, investments, and current accounts £1,379,791 Cr. Securities held against money lent, viz: Railway Debentures £330,743 Lloyd’s Bonds 919,785 Preference Shares 730,580 Ordinary Shares 919,785 £2,900,893

The Liabilities to public last July (’67) £280,000, reduced in following Sept. to £228,000. Capital of 40,000 shares of £50 each (£2,000,000), paid per share 30£, also £1,200,000. The market price p. share 22 discount, or only 8l. per share mit £30 paid. So der 40,000 shares Marktpreis £280,000 instead of the £1,200,000 paid by the shareholders. Of course, die Railway investments not worth anything like par, aber durch depreciation der shares [the difference] too great. Large portion of the securities held consist of bonds and shares of Welsh Railway. Seven railways in which the association held an interest had been opened for traffic in 12 months. Daher:

Summary of the Position of the financial Cos:
Prices of Finance Shares.
April 1865. April 1867. Present Price. April 1868.
Credit Foncier of England. £6 pm. ⦗on 100,000 shares. £5 paid.⦘ £7 disc. ⦗on 200,000 shares. £9 paid⦘ £7 disc. ⦗on 200,000 shares. £10 paid.⦘
General Credit. £2. 10s. pr. ⦗250,000 shares. £4 paid⦘ £3 disc. ⦗200,000 shares. 7l. 10s. pd.⦘ £2. 10s. dis. ⦗200,000 shares. £7. 10s. paid.⦘
Internat. Financial £1. 10s. pr. ⦗150,000 shares. £5 paid.⦘ £2. 15s. dis. ⦗150,000 shares. £5 pd.⦘ £2. 15s. dis. ⦗150,000 shares. £5 paid⦘
London Financial. £7. 15s. pr. ⦗40,090 shares. £15 paid⦘ £23 disc. ⦗40,000 shares. £25 paid⦘ £22 disc. ⦗40,000 shares. £30 paid⦘
Values of the Properties at the respective Periods:
Credit Foncier of England £1,100,000 £400,000 £600,000
General Credit 1,625,000 900,000 1,000,000
Intern. Financial 975,000 337,500 437,500
London Financial. 910,000 80,000 80,000
Total £4,610,000 £1,717,500 £2,117,500.

## May 9, 1868.

### The Cotton Statistics Bill. Read 2nd time on H.o.C. 6 May ’68.

Mr. Bazley, on moving second reading der Bill[,] said its object was to ascertain correct information in reference to all the cotton which arrived in the U. Kingd., and practical effect would be to prevent undue speculation in this important staple.

### Pacific Railway etc.

Officially announced that the Great Railway Route to the Pacific will be opened for through traffic from New York to San Francisco on 4 July. 1869.|

## 15 August. 1868.

### The Exports of Gold and Operation of Bank Act.

Decrease in coin and bullion £571,260. Decrease in reserve of notes and coin: £141,140. Coin and Bullion in B.o.E. £20,800,729. Reserve: £11,267,469.

During last few weeks there has arisen a moderate but continuous demand for gold for exportation, followed by an increased but still inconsiderable demand for it on account of the new French loan, and the customary demand at this season for our harvest operations. The demand for harvest purposes have been earlier than usual, heavier than usual, and more universal and less gradual than usual, because such has been the nature and character of the harvest itself. But all these demands put together small compared with total amount of bullion in hand. Yet effect on Money market considerable. Consols depressed to nearly 1%, other home securities in proportion, while many foreign securities have fallen 2 or 3%. Why all this? Rational cause there is none. But for years public mind accustomed to associate drain of gold, whether external or internal, with a rise in value of money, and a fall in the prices of all ordinary investments. Stupid investors, whenever what is called a drain of gold occurs, it is to them, a sign of ill omen. They rush to sell in anticipation of the fall, and thus actually produce it, as in this case. Dieser Blödsinn legitimate offspring of the Bank Act of 1844, and the policy of the Bank directors under its provisions.

### The New Act on amending the Law relating to Railways.

Der Akt enthält nicht Compulsory official Audit.

### Indian Railways in their most recent Financial Aspect.

has lately issued his annual report. During year ended 31. March 1868, 349 miles of new railway opened for traffic, including the Jubbulpore branch of the East Indian, consisting of 225 miles; 29 miles of the Grt. Indian Peninsula to Nagpore; 27 miles of the Delhi line between Ghazeeabad and Meerut; another section of the Delhi line of about the same length between the western terminus of Umritsur and the river Beas; and the remaining 41 miles of the Great Southern to Errode, where it forms a junction with the Madras Railway. Drawback: the works on the Great Peninsula are proved to be defective, especially on the Bhore Ghât incline. The „through“ communication between Bombay and Calcutta, which would have been completed this year but for this mishap, now postponed. Engineers’ estimates have been exceeded in every instance, while the contract has not in all cases been observed.

The principle of the guarantee system by the Gvt. must not be abandoned.

 Capital required according to the last Estimate, 31 March 1868 £93,916,000 Authorised by Gvt. to be raised do. do. 84,386,000 Total raised do do 76,579,016 Withdrawn for expenditure do. do. 75,071,656 The amount of capital raised during year ended 31 March 1868 £9,102,540 Expenditure during same year 7,024,960 Estimated Expenditure during year ending 31 March 1869 £6,077,000 Stands on balance to the Credit of the various Cos 1,682,000 Leaves, according to Estimate, to be raised during 1868–69 5,574,000 Revenue Receipts in gross for year ended June 30, 1867 £4,875,112 Revenue expenses 2,537,812 Net Profit 2,337,300

The Revenue for the Indian Railway System during year ended 30 Jun. 1867 nur £32,337 in excess of previous year, but year ended 30 June 1866 there was increase of £962,984 over that ended 30 June 1865, and thus in 2 years the addition to the revenue upwards of a mill. £.

For the years ended
June 30. 1866 June 30. 1867.
Net Revenue £2,304,534 2,336,871
Guaranteed interest 2,936,672 3,179,095
Advanced by the State 632,138 842,224

If there was trifling increase in the net revenue of 1866–67 over that of 1865–66, the expenditure of capital advanced much more rapidly, and consequently the payment of interest by the State become far more onerous upon the state than in the previous year. The Revenue of 1865–66 exceptionally increased by the traffic in cotton from the interior to the coast under the stimulus of the high prices in U. Kingd. and the attendant mania in India. This stimulus removed, the traffic of the railways relapsed into its normal condition. The wonder is that the traffic was so well supported in the latter year.

## 22. August. 1868.

### The General Estates Co. (lim.)

Nach Report von Fagg and James, the official liquidators, the Co. formed in June, 1865. Projector: James Clifford Hodges. Objects proposed: acquisition of leasehold and real property in City and elsewhere for the purpose of making a profit by them, but not clear in what way the profit was to be made. The immediate and real object of its formation was the purchase and taking over of several heavily mortgaged properties belonging to Hodges and which Hodges did not know how to dispose of advantageously. Shares, allotted in July; only 5,925 taken up; total amount, therefore, of paidup capital with which the Co. commenced operations, only £11,850; but that was of no consequence. If they had not paid up capital they had unpaid capital, for which the shareholders would be liable, and they had besides the credit of a corporate company which they could utilise by the creation and issue of debentures and bills. No sooner was the Co. constituted than |42 the directors contracted with Hodges for the purchase of his properties, – certain houses in the City, and some building land at Clapham and Balham, for £65,712 paid to him – after deduction of £27,800, for which they were in mortgage – partly in cash and partly in debentures and acceptances. In a few months, and still having no more than their original amount of capital, they contracted mit Sir M. Peto for the purchase of an estate known as the Spread Eagle property, in Gracechurch street, for £100,000. They had no money to pay even the deposit, but had convenient bankers, who lent them £10,000 for the purpose. Purchase not completed, because they were unable to find the remaining £90,000; contract ultimately cancelled, the Co. forfeiting £6,120 of the deposit, besides paying the law expenses. Nevertheless, early in 1866, they agreed to purchase an estate at Holloway, but were unable to complete the contract, it ended in forfeiture of £100. In March, 1866, they took a lease of some ground in Philpot-lane, at a rental of £750 a year, and agreed in expending £5000 in building thereon. Put up building, for which builder now claims £8000, and for which he holds possession of the premises, said not likely to realise £.5000.

One of the properties purchased from Hodges a building lease of a house in Limestreet, to which was attached a condition in favour of an existing tenant. Premises were rebuilt without any regard to rights of this tenant; consequence action of trespass and action of ejectment, compromised by agreement to pay £1,100 as compensation. But the £1100 never paid, constitute a claim against the Co. which awaits the decision of the court. But the reckless improvidence of these directors did not end here. On portions of the Balham estates they granted building leases, engaging to make advances to the builder as the works progressed. Thus they advanced £5000 to one builder, which amount they borrowed from the first mortgage of the property for the purpose, giving him, as further security, the building agreements. Of another portion of their property, for which they had paid £16,000, they did not make a single shilling of rent or profit during the whole of the 14 months’ of the Co’s existence. Yet were borrowing large sums, thousands of £, all this time to take up their acceptances; at the rate of 21% p.a.! Some of these bills entrusted to Hodges to get discounted, and of the produce of them nearly £1000 still unaccounted for. Since the commencement of the liquidation Hodges has become bankrupt, little chance of the amount ever being repaid. Two of these acceptances for £1000 each were handed for discount to a firm in whose hands there was an overdue promissory note for £1,500 of the Hill Pottery Co., some of the directors of which Co. were also directors of the General Estates Co. The acceptances and promissory notes respectively bore the endorsement of the several persons who were directors of both cos., and on this ground the discounters claimed the right to deduct the £1,500, the amount of the overdue note, von den £2,000, the amount of the acceptances, and sent a cheque for the balance only. Liquidators hope to compel these persons to restore the £1,500, with interest. That question stands for decision of the Court next term.

Two of the original directors retired soon after the formation of the Co; 4 others have since retired and become bankrupts; the projector is a bankrupt, and the managing director has compounded with his creditors; the bankers have obtained judgement against the Co. for £10,000; the mortgagees are in possession of the various properties; debts and liab. about £100,000; assets, whether anything or nothing, problematical. Main asset seems to be the uncalled capital, the whole of which the Master of the Rolls has ordered to be called up, and the value of that may be judged by fact that call of £2 p. share in 1866 realised the sum of £110 only. Much litigation has been, will be more in the affairs of the Co. Most of solvent shareholders sold out when they saw what Co. they were in. But they were caught. Most of the shares they sold were bought by Hodges, the projector, to keep up the price of the shares in the market. When the winding up order came, discovered that, though Hodges had bought the shares and had them duly transferred to him, he had never registered the transfers. The names of the former holders therefore still upon the register of shareholders, daher transferred to the official list of contributories. Have their remedy against Hodges, but Hodges bankrupt. Such things impossible, if shares fully paid up and issued „to bearer“.

### Annual Average Minimum Discountrates of B.o.E. since 1856.

1856: £5. 19s. 6d. 1857: £6. 13s. 5d. 1858: £3. 4s. 3d. 1859: £2. s.14 d.10. 1860: £4. 3s. 10d. 1861: 5l. 4s. 10d. 1862: £2. 10s. 7d. 1863 £4. 8s. 5d. 1864: £7. 7s. 0. 1865 £4. 15s. 5d. 1866: £6. 16s. 8d. 1867: £2. 10s. 9d.

### National Debt. (1868)

On 31. March 1868: funded debt £741,190,328 und unfunded debt £7,911,100. Endlich die terminable annuities, by which the nation is paying off principal as well as interest. The £26,425,000, the present annual charge for the debt other than unfunded, consists to the extent now of about £4,000,000 a year of these terminable annuities. On 31 March, 1868, annuities expiring in 1885 amounted to £2,883,990; the life annuities sold by the Gvt. and still payable amounted to £973,548, and the annuities for terms of years £53,795; the Red Sea Telegraph Co’s annuity, expiring in 1908, is £36,000; and there are tontine and other life annuities amounting to £28,552. The total is £3,975,885 a year, equal if capitalised to nearly £48,000,000 of debt. This makes the capital of the debt £797,000,000.

### U. Kingd. Bullion movement 1867.

Total Value of gold and silver bullion and specie imported into U. Kingdom, 1867: £23,821,047, wovon £15,800,159 gold und £8,020,888 silver.

## August 29. 1868.

### Railway finance. für 1866 (Board of Trade Return.)

 Ordinary (without priority of claim on Revenue.) Dec. 31. 1865. £219,598,196 Incr. in 1866: £8,674,433. Total: £228,245,629 Preference. Dec. 31. 1865 £124,263,475 Incr. in 1866: £10,197,623. Total: £134,455,098. Debenture Stock (Funded Debt) Dec. 31. 1865 £13,795,375 Incr. in 1866: £310,219. Total: £.14,105,594 Debenture Loans. (Terminable Debt payable at fixed periods) Dec. 31. ’65 £97,821,097 Incr. 1866: £7,244,766 Total: £.105,065,863 Grand Total £481,872,184.
Traffic.
Gross Revenue for the year:
1865 1866.
Receipts from all sources £35,800,113 £38,164,354
Working Expenses (Steamboat, Canal and harbour expenses excluded) 17,149,073 £18,811,673
Net Revenue £18,651,040 £19,352,681

Addition to Capital in 1866: Ordinary Stock £8,644,433. Preference: £.10,191,623. Debenture Stock: 310,219. Termin. Dbt. Loans: 7,244,766. Total: £26,394,041

Da 261/4 Mill. capital spent in 1866, while total net revenue from railways only 191/4 mill. £, the business was a losing concern, i.e. nach dieser officiellen Rechnung.

## 5 September. 1868.

### Grand Trunk Railway of Canada. Meeting of shareholders on 27 August. ’68.

Th. Baring M.P. in chair, so der grosse Watkin angeblich Krankheits halber abwesend. Die Directoren (Watkin, Baring, Hodgson) widersetzen sich dem Wunsch der Railway shareholders gedruckte Register aller shareholders zu haben (so daß sie sich untereinander verständigen können.) Die shareholders überstimmen unanimously these signori directors welche die masters spielen wollen. Bei dieser Gelegenheit bemerkt, daß Watkin, der chairman, 40£ p. Woche Salair bezieht (sehr viel bei dem precairen unpaying Stand der Railway); daß dieser selbe Watkin had the management of 5 or 6 other Cos., for which he received salaries amounting to £5,000 or £6,000 a year (für jede). Another shareholder said: „It was notorious that all the officials of the Co. of Canada were connected with other Cos. whose interests were antagonistic to those of the Grand Trunk, and the result was that the proprietors of the Grand Trunk got nothing.“

## 12. September 1868.

### The South African Gold Fields. The Colony of Natal.

Close to the colony of Natal, upon the territory of a chief friendly to England, who desires to place it under English gvt. The gold found in reefs of quartz, for 100ds of miles.

### Wheat Importations of 1868.

Wheat Importations of July ’68 below those of July ’67. Yet the total arrivals for the first 7 months of 1868 were 17% in excess of those of the same period 1867. Of the aggregate quantity of 20,706,791 cwt, Russia contributed 26%, U. St. 22%, Germany 16%, Turkey 12%, Egypt 12%, Illyria 4%, Chili 3%, Denmark 1%, Canada 1%, and other countries 3%. The supply from Russia and Germany was considerably less than that of 1867, but great increase from the U. States.

## September 19. 1868.

### Cotton

At the close of August ’68 „Middling Orleans“, p. lb., 111/4d., „Uplands“ 11d, „Middling Mobile“ 111/8d. At this time last year prices several pence higher for the same articles. Still the minimum nearly double that of period before the American war. At commencement of August ’68, owing to reduced stocks, there was a fair demand and trifling advance in prices, but there were heavy imports, and price of cotton fell again. [»]Towards the close of the month, however, there was a positive advance in value.« Dieß alles small movements. Question, ob cotton must fall definitely much lower? Dieß probable. The quantity of American cotton grown since last war seems to have exceeded all anticipation, and it is mentioned in Mssrs. Leech, Harrison, and Forwood’s circular that Brazilian cotton has been bought as a substitute for American, while East Indian, of which there is now a fair selection, it is gradually assuming a leading position, and will have in a great measure to supply the place of American until the new crop is available. The stock of cotton in this country and at sea is somewhat smaller now than it was , and consequently for the present existing prices may be supported, aber nicht für Dauer mit den neu geöffneten sources of supply.

### Land in Australia. (cultivated)

Land under cultivation in the Australian colonies, according to last returns, 2,500,000 acres, live stock: 600,000 horses, 4,000,000 cattle, 38,500,000 sheep, 400,000 pigs, total of more than 43 Millions head of stock.

### Foreign Trade of U. Kingdom for first half years ’68 ’67 und 66.

Imports: 1866 £139,377,961. 1867: £126,558,561. 1868: £128,533,367.

Exports. 1866: £92,857,830. 1867.: £87,613,484. 1868: £84,601,157.

The Exports to Foreign Countries for the first half years: 1866: £66,990,170. 1867: £64,685,265. 1868: £60,851,539. To the Un. States: 1866: £15,228,220. 1867: £11,951,179. 1868: £10,540,940. To British Possessions 1866: £25,867,660. 1867: £22,928,219. 1868: £23,749,618.

## 26. September. 1868.

### B. o. England. Its capital.

Its capital £14,553,000; it is not banking capital, but permanently invested at a low rate of interest in loans to Gvt. The „Rest“ undivided Profits, which never allowed (nach langjähriger custom) by the Directors to fall below 3 Mill. £. St. Nicht im Kapital eingeschlossen die Buildings der Bank in London (the Bank stands upon about 3 acres of the most valuable land in the City of London), wohl aber die branch establishments in den Provinzen.

## October 3. 1868.

### The Board of Trade Returns.

#### A.) Exports

For month August 1868

£16,427,597 being £679,328 more than in July (’68) und £1,777,000 more than the average of the 5 months ending mit July.

Total Exports des Jahrs to end of August 1868: £116,777,023, being £4,279,890 or 31/2% less than for the corresponding months of 1867, und £8,488,797 below the total of the 8 months of 1866.

Cotton Manufactures, 371/2% of the grand total of our export trade: Important decline in the value of piece goods of all kinds for first 8 months of 1868, compared mit the same period 1867. End August 1868: (8 months) £32,268,723 against £35,312,134 (1867) reduction of £3,043,411, or 81/2% on the value. But as to Quantities exported: yards 1,900,260,705 shipped to end August 1868, against 1,789,176,406 yards same time 1867, increase of 61/4%. More in quantity, less in value. Difference against us apparently equal to 143/4%. But much of this difference explained by difference in price of material. Z.B. „Middling“ uplands average quotation for this sort at Liverpool von 1st Jan. to 31 August 1868 was: 10.364 d. p. lb against 12.157d. p. lb same period last year. Reduction exactly 143/4%.

Exports of Cotton Yarn: for 8. months end. August. ’68: 114,202,513 lbs, value £9,846,037; increase of 8,484,358 lbs in quantity, and also of £56,995, or 1/2% in value. Daraus folgt daß spinners of cotton yarn only have had – owing to augmented shipments of this article – the advantage over the manufacturers who weave the yarn into piece goods.

Export of woollen cloths etc, during the 8 months, considerable falling off, compared to 1867. Reduction in value: £1,224,164, being 32%, whilst the decline in quantity is only 24%.

 Shipments of manufactures of worsted and wool and other mixtures moderate augmentation on the whole. dtto of Woollen and Worsted Yarns increase over 14%. Dto Linen Yarns and Linen Piece goods decrease of about 10% in value. Dto Iron and unwrought steel decline of about 10% in value. Dto Thrown Silk advanced von £326,128 to £716,999.
So improvements of a few other articles, but not of large totals. Altogether Export of increased quantities at a reduction in values.

#### B. Imports. (to end of July. Computed real value. Quantities to end August.)

Imports for July 1868: £21,487,632, being £859,075 more than June ’68 und Increase of £1,224,000 on the average of 5 months ending June 1868.

dtto £2,271,789 in excess of imports July, 1867 und £846,068 over July 1866.

Total Imports for 7 months ending July 1868: £.132,283,806, Increase of £3,347,906 gegen same period 1867 und Decrease of £11,260,953 period of 1866. In 1866 the figures much affected by high price of raw cotton.

Imports of Wheat for first 7 months ending July 1868: £15,320,539, being £2,928,440 more than same period 1867.

Quantities of Wheat for August 1868: Improved harvest prospects have checked imports from all parts, and only 2,012,374 cwts were received against 3,287,469 cwts August, reduction of nearly 40%.

Imports of Cotton to end of July 1868: £34,407,467 against £35,769,400 same time 1867.

Dtto Quantity received to end August 1868: Cwts 7,500,221 against 7,391,680 in 1867.

Dtto Quantity Receipts in August 1868: Diminution of 231,000 cwts or 23% against August 1867, falling off chiefly in supplies from British India and Un. States.

## October 10, 1868.

### Influence of Commercial Depression on Railway Revenues.

Depends from what source Revenue of Railway prinicipally depends. 1) Passenger and Mails. Passenger traffic least prejudiced during commercial stagnation. 2) Merchandise and live stock diminished, but to less degree than minerals. 3) Minerals: most affected. This shown by the following list ⦗a railway being described as belonging to one or other class, je nach Proportion worin one of the 3 descriptions prevail in its traffic⦘ of Dividends first Half years 1868 und ’67. Only exception Lancashire und Yorkshire; wo Verbessrung in Folge von spezifischen Umständen, besonders better management. (Sieh den Comparison folgende Seite):|

45
A) Passenger Lines.
Dividend: First Half Year.
1868 1867
South Western 4%. p.a. 33/4%. p.a.
South Eastern 21/4 2
Metropolitan 7 (durch faule means in both years) 7
Brighton shows improvement.
B) Passenger and Merchandise Lines.
London and North Western 51/4%. p.a. 51/4 p.a
Grt. Northern 2 4 1/4 41/2
North British Stationary
Great Eastern shows Improvement.
Grt. Western 11/4% p.a. 11/4 p.ct. p.a.
C) Merchandise Lines.
Lancashire and Yorkshire 63/4 P.C. p.a. 61/2 p.c. p.a.
Midland 5 51/2
D) Merchandise and Mineral Lines.
North Eastern (Berwick) 41/2 p.c. p.a 5% p.a.
Sheffield nil 1
Caledonian 11/2 51/4
Glasgow and Southwestern 41/2 51/2
E) Mineral Lines.
North Staffordshire 21/2 p.ct. p.a 3 P.C. p.a
Monmouthshire 4 5

A much greater falling off has occurred in these 2 last lines. When compared mit 1866 it will be seen that much of the depression experienced in 1867.

### London, Chatham, and Dover Railway und Landed Property.

That line one [of] those Southern lines which have doubled and quadrupled the value of property in the districts they have passed through, and nearly or quite ruined themsels. landlord extorts £150, where he previously asked £.50.

### The Wool Trade. (Windeler et Bowes. Circular 8 Oct. 68)

Improvement in sales of October. Must have beneficial effect upon trade in interior up to the opening of next sales, on or after 19. November [.] Demand for manufactured goods for export continues limited. So lange not to be expected – as this continues – higher quotations of wool. But we think prices have passed the lowest price point. For the November sales 56,400 bales are here or afloat; further arrivals, chiefly Capes, zusammen mit 35 or 40,000 Bales, held back or withdrawn from last series, will bring total quantity to come forward to nearly 110,000 bales, about same as the corresponding series 1867. Well conditioned, staply wools will be scarce as the selection of Australian includes much of the excessively faulty wool, found unsaleable during August. Capes will form the chief feature, and a large proportion again extra scoured. These lately in better demand. The proportion of medium clothing wool will be large.

## October 17. 1868.

### Royal Bank of Liverpool. Keeping things in dark to make Matters Pleasant. (failure Oct. 1867)

On 24. Jan. ’67 declared dividend of 8%, and reported to shareholders that whole of capital und reserved fund of £75,000 intact. In Oct. ’67, 9 months later, whole of capital and reserve fund lost u.s.w. Harmood Banner, one of the most eminent accountants in Liverpool, tried to hush up, in order to „avoid publicity“. 12 months ago shareholders appointed Comm. of Investigation. At length, Mr. Watson, chairman of that committee, determined to present report; no sooner commenced reading it than interrupted by Banner. (in shareholders meeting convoked to hear the report.) Protested in name of liquidators. Warned them, the revelations in the report would be prejudicial to their interests etc; they might drive several creditors into Bankruptcy Court (während durch Stillschweigen diese Kerls andre beschwindeln und dadurch die Co. zahlen können); in consequence might have to pay other call of £5 p. share. Horsfall M.P. (one of the shareholders) told Banner: „Yes; it is your policy to keep things in the dark, and you have raised yourself to eminence by it; but it will not do in concerns like this.“

## October 24. 1868.

### The Merchant’s Co. (lim.) and the Criminal charge against the directors.

1865 Co. formed to take over the business of Mssrs. Lane, Hankey et Co under the name of the Merchants Co. (lim.) The Prospectus issued in November 1865 with Richard Stuart Lane, Horace Edward Chapman, and Frederick John Helbert Helbert, the partners in the old firm, as directors. The partners undertook to liquidate all the debts and liabilities of the firm. They were to receive £62,500 in debentures and paid up shares of the Co. for the goodwill of the business only; they guaranteed to the shareholders 10% upon the paid up capital for a certain number of years. Total amount of capital paid upon the shares £45,000. In October, 1866, after about 10 months’ existence, the Co. stopped payment. Mssrs Lane, Hankey, et Co. had received from the Co. debentures for £25,000, and shares with £15 per share paid to the amount of £37,500, being the amount to be paid for the goodwill. On 22. August, 1866, a couple of months before the Co. stopped payment, the partners filed a deed of inspection under the Bankruptcy Act, for the winding up of their affairs. The debts of the partnership, as |46 then sworn by the partners, were:

 Debts of Lane, Hankey, et Co. £.282,498 Debts of R. J. Lane 69,315 Do. F. J. Helbert Helbert 13,735 Do. H. E. Chapman 6,245 Total £371,793.

### Joint Stock Cos. Parliam. Return on 31st May 1868.

 1863: registered 790 Cos., with nominal capital at £139,988,242 1864 997 Cos, with nom. capital 237,437,084 1865 1,0333 1,033 Cos 205,391,818 1866 762 76,824,823 1867 479 31,444,982 1868 von 1st Jan. bis 31 May 203 registered mit £13,896,182 Unlimited Cos. 9.

Objects – Rede von denen zwischen 1st Jan. bis 31 May 1868 [–] so various as possible. Z.B. 1) supplies Colyton mit gas, 2) Poole and Cherbourg Steam Packet Co., 3) Eastbourn Eastbourne Baths and Laundry Co., 4) Liverpool Merchant Tailors’ Co, and so forth. N. 1 (Colyton gas) had at date of last return 19 shareholders, who had taken 73 shares out of £300 created, and yet Co. returned as „still in operation“. N. 2 (Poole and Cherb. Steam Packet) originally 108 subscribers, for 800 shares, representing £4,000 capital, at the last return only 131 shareholders, who had paid upon their shares £1,275. This concern do. described as „still in operation“. N. 3 (Eastbourne Baths etc), described as „having no place of business“, aber nominal capital of £10,000 in 1000 shares. This Co. supposed to be „still in operation“, but „no return“ as to number of shareholders, calls received, calls made, shares taken. N. 4 (Merchant Tailors’ Co) is being „wound up“, which means, we suppose, that it is no Co. at all. Von den 393 (in 1868) 4 are being termed as „wound up“, 5 as „in operation“, 341 Cos. supposed to be „still in operation“. Of the 9 „unlimited“ no account. Hence seem to stand on no better footing than the unlimited.

### Seignorage on Coin.

In all the mints of the world except England. In Paris mint 2%, Australian mint 7,5 on large parcels, and 10% on small ones; in the Indian mints 1%. In English mint (London) nominally gold is coined free, aber practice of restricting tenders of gold to £10,000 tends to fix a duty of 11/2d. p. oz. – i.e., the difference between coin gold £3. 17s. 101/2d. per oz., und the price paid by the B.o.E. for gold bullion, £3. 17s. 9d. which is equal to 0.16%.

### Conversion of Iron into Steel.

Several years since Bessemer carried to successful issue the pneumatic process which bears his name for the manufacture of steel from pig iron. His process demands iron of the first brand, as is unequal to the conversion of iron of inferior quality, charged with impurities of phosphorus and sulphur in large quantities.

Thus, until very recently, no marketable steel has been produced from Cleveland or Northamptonshire pig. Now process patented by Heaton, of the Langley Mill, in the Erewash valley, by which inferior iron made into first class steel, thus utilising for the higher purposes of manufacture vast deposits of ore hitherto condemned to the lowest rank. The process is chemical not mechanical, great economy of time and labour appears thus secured. Nitrate of soda is the agent employed. Tensile and resisting strength of steel manufactured by this method. Saving in cost of production said to be several £ a ton.|

## October 31. 1868.

### The Money Market.

Impression of soon rising money value. Recently increase in the number of good bills offering. Partly due to improvement in Iron Trade, which has imparted more cheerful feeling in other equally important branches of business. Foreign and Colonial Loans lately subscribed, having provided an outlet for some portion of the surplus capital, are gradually, if slowly, affecting the money market. There is a decided pause in the Continental demand for English bills, and the movements occurred during the last fortnight in the rates of exchange on France and elsewhere are causing an export of gold from this side, despite the enormous accumulation of the precious metals held by the Bank o. France.

At the turn of each quarter, owing to the payment of dividends and salaries, some large reductions in the reserve and bullion generally take place.

Total coin et bullion Total Reserve of Notes und Coin Proportion p. Cent of Reserve to Liabil. of Bk. Dept. Bank Rate.
Jan. 23. 1867. £18,892,000 £10,973,000 431/8 31/2
April 24. 1867 19,337,000 11,212,000 451/2 3
July 24. 1867 22,772,000 13,769,000 53 21/2
October 30. 1867 22,697,000 13,043,000 517/8 2
Jan. 22. 1868 22,201,000 13,332,000 501/8 2
April 22. 1868 20,527,000 11,587,000 461/4 2
July 22. 1868 20,077,000 12,586,000 487/8 2
Octer. 28. 1868 19,845,000 10,669,000 431/8 2

Vergleich Oct. 28. ’68 mit 23. Jan. ’67, increase of £953,00[0] in total coin and bullion und Decrease of £304,000 in reserve of notes and coin; but on comparing the Reserve mit Liab. des Bank Department – which chiefly guides directors in fixing rate of discount – the relative strength exactly the same. Yet Bankrate of Discount in Jan. ’67: 31/2% und in Oct. 28 only 2%. Culminating point, or strongest position of the Bank, 25 Sept. 1867, when Reserve of the Bk. Dpt. 575/8% of its liabilities. Since then the total coin and bullion, and the reserve of notes and coin have diminished £4,603,000 und £5,371,000 respectively. Verhältniß von Reserve to banking liab. now 141/2% less strong than on 25. Sept. 1867. Vgl. this week’s return mit that of 22 July ’68, coin und bullion have diminished £2,232,000 und Reserve of notes und coin £1,917,000, while Reserve, in proportion to liab., is 431/8% against 487/8%, difference of 53/4%. When the reserve sinks below 33% or 1/3 of its Liabilities, the Bank usually raises its rate of discount.

### Manufacture of Iron and Steel. Heaton’s Process  Zusatz von Marx. Schließen (Patents).

For many years positive, though scarcely recognized contest, in progress between mechanical and chemical improvements in this department. Half a century ago mechanical progress was represented by the invention of puddling, and its details. Almost simultaneously the discoveries of new metals by the great chemists of the last generation suggested combinations with the ores of iron by which the product was improved. Voltaic and galvanic electricity were resorted to upon theories that had science, if not success, to recommend their trial.

The wrought iron produced by the process in presence of Prof. Miller bore a rupturing strain of 23 tons per □ inch and an elongation of 1/4 of its length; and the tilted steel bore a tensile strain of 42 tons per □ inch and an elongation of 1/12 of its length; while the appearances of the fractures were uniformly fibrous. Some hard tools have been made of the steel and also of the iron, the tests of which were very severe, but which they bore with perfect success.

By superseding puddling, great saving effected in labour and cost of plant; by the power it gives of using crude iron from the ores richest in impurities, manufacture can be carried on in situations where otherwise it would be impossible. Superior article at cheaper price. Wichtig für railway, shipowners, armour plated navy etc[.] The cost of the converters and the means for carrying out the process absolutely inconsiderable in relation to the results obtained.

### The Premium of gold at New York. (Circular of H. Clews et Co. of New York. d.d. October 14.)

Tendency of gold premium strongly downwards, the price this week having touched 1371/8 against 1441/2 at date of our latest advices. Absorption of the large amount of bonds sent abroad 2 and 3 months ago – being contrary to general expectation, and having settled an adverse trade balance threatening to call for a heavy export of gold in addition to our previous unprecedented shipments – has revived the old reliance upon shipment of bonds for the settlement of adverse foreign balances. This unexpected foreign demand for bonds, together with the present upward tendency of quotations abroad, induces expectation that the large amount of interest payable to European bondholders on November 1 will be, to a large extent, covered by remittances |48 of bonds, which alleviates another source of misgivings as to the adjustment of our foreign balances. Hence vigorous reaction from the late upward speculation (nämlich auf Steigen des Prämium on gold). Dazu prospect of unusually liberal shipments of wheat and corn to Europe late in the season is also steadily making itself felt.

## November 7. 1868.

### Money Market.

Trade so bad with stagnant money market that revival in demand und even increase in Bankrate now welcome as a signal of relief. Discount Houses acting at present with great caution, and refuse to take long paper at anything like the rates current a week ago. Preference given to short bills, the rates for which have been less affected during the week than those for bills having 4 or 6 months to run. Evidence of increased demand for money besonders reduction at B.o.E. of £1,298,000 in the Private Deposits.

Exports of British and Irish Produce.
1866 1867 1868
For Month September £16,671,078 £16,145,584 £16,927,000
Excess of £782,000 über Sept. 67 und £256,162 über September 1866.
Total Exports für 9 mths. end. Sept. £133,704,000, being Less £3,498,000 than 1867 und £8,232,000 1866.

The Exports of Sept. 1868 exceeded the average of the 5 previous months by £1,856,000, or 121/2%; and each of the last 3 months gives a fair increase on the preceding month.

Imports. Computed Real Value.
1866 1867 1868
For month August £22,480,009 20,748,046 20,278,000
Total Imports for 8 months end. August. £152,562,000
Increase on same period 1867 of £2,878,000
Decrease on same pd. 1866 of £13,463,000,
the chief fluctuations being in cotton and wheat.

Receipts of Wheat only for 12 months end. August 31, 1868: cwts 36,333,087 or 8,384,559 qrs – increase on the preceding 12 months of 263/4%. For September 1868 (first month des neuen Herbstjahrs. Von 1 Sept. bis August 31 immer) decrease in the imports 353/4 on same time 1867.

It is unfortunate that this trade should be rendered more risky and hazardous by the intervention of a class of mere speculators, who, coming between the merchant and manufacturer, have not a true or legitimate interest in its welfare or stability … the class of transactions so often observed in Liverpool … are not improperly described as gambling. Erhöhen und vermehren obviously die Preis fluctuations. … The high prices of the last 5 or 6 years have restricted the sales of goods in every market, and been the means of adding to the number of mixtures, composed of cotton and other fibres, which will for the future compete largely with mere cotton goods.

The cotton circulars of October contained the completed statistics of the American crops for the season 1867–68, taken from recent New York papers.

 1867–1868 bales 2,577,000 Increase over 10% compared mit 1866–67. 1866–1867 2,329,000 1865–1866 2,329,000 but hierin included a quantity belonging to 1861–65, of which no records were taken. 1868–1869 Estimates vary from 2,500,000 to 2,700,000 bales.
Present state. (Circular of Leech, Harrison, and Forwood.)
October 31. 1868. Bales. Oct. 31. 1867. Bales
Stocks in Liverpool, London, Havre. 628,875 against 809,489
At Sea for these ports. American 29,000 21,000
East Indian etc 289,513 191,750
Total Stock in hand and at Sea 947,388 1,022,239

These figures shown trifle against this year, but are not sufficient to warrant the difference shown in the quotations, which are „Middling“ Orleans 111/4d. p. lb Oct. 68 against 9d. p. lb Oct. 67 und „Fair“ Dhollera 81/4d. (Oct. 68) gegen 65/8d. (Oct. 67) American cotton may be considered statistically of strong position, since 2/3 of the deficiency in the Liverpool stocks of that description. The supplies, however, known to be on the way, not only of American, but other hands, larger than at this date last year. Moreover, the accounts given in the Manchester trade circulars of gloomy character; resort to „short time“ spoken of as inevitable.|

49

It is significant that the spasmodic upward movements in cotton so frequently of late have had no effect and received no response or encouragement in the markets for manufactured cloth, either in this country or abroad. In fact, the Manchester quotations for cotton goods, despite an advance of about 25% on the raw material as compared with 1867, are now (as stated by Mssrs. G. Fraser, Son, and Co.) unchanged, or only nominally dearer than those ruling 12 months ago, so that the whole difference is practically lost by the trade.

### Cotton. Liverpool Market. Nov. 6. (’68)

Rise of 1/8 to 3/8d. p. lb. Sales of week 121,500 bales, davon 26,500 taken on speculation, 26,750 for Exportation. Imports 40,000 bales. Miserably unsatisfactory accounts from East. On 28 Oct., with Exchange 1s. 115/8d., prices from Bombay for an 8–4lb. Shirting net home only 9s. 2d. p. piece, and from Calcutta 8s. 9d. p. piece, showing a loss on the present unrenumerative rates.

### Winding up Companies in Chancery.

The Official Judicial Statistics for 1867 show 110 orders were brought into the chambers of the Masters of the Rolls and Vice Chancellors for winding up Cos. List of contributories were proposed, from which 357 names were excluded; 9,343 persons were included in the lists. Calls were ordered in the year amounting to £4,497,831. Dividends were ordered to be paid to £7,310,339. The calls made in 1866 were £1,810,834.

## November 14. 1868.

### The Council of Foreign Bondholders.

Austria has taxed foreign debt 16%, Italy 8%.

In the last few years we have entered into extensive loan operations with Mahommedan nations, which have got over their objection to the principle of borrowing abroad. Turkey and Egypt now pay millions a year in interest; Morocco has given a mortgage upon her resources; and Tunis has already become insolvent. In this respect the East has profited by the instructions of the West, and we have been almost startled at the rapidity with which a debt has been scored up. Peru deals in loans with vast sinking funds. New Granada gives land to those who themselves never will or can occupy on one acre. Russia grants a State guarantee to lines mortgaged as security. State after State issues loans below par with the varied inducements that appertain to drawings.

In the cause of time many circumstances indispose the issuing houses to act in favour of the holders of a loan. Many recent loans have been issued on Commission. The issuing firms are in such cases to be regarded rather as having for clients the Governments on whose account they act than the public whom they invite to subscribe. Other houses frequently act as the official agents of the loan-contracting Gvts. In fact, the relations commonly established between the issuing houses and the Gvt. for which a loan is made may be looked upon as leading to arrangements under which forbearance in case of difficulty is inevitable.

### Heaton’s Direct Process for Nitrate Steel.

Heaton of Langley Mills, near Nottingham. His operation, based upon true chemical and metallurgical principles, calculated to supersede , whilst the poorer ones cannot be made available at all. Practical man daher gegen die Sache, theils überhaupt against improvements as innovations of no practical use, theils speziell wegen der „Disturbance of establishments in which fortunes are invested“. Daher die Intriguen (der Bessermeriten) gegen Heaton. Ein Contemporary – „Engineering“ (of 7 Nov. 1868) macht daher allerlei lausige Bedenken. The crude steel produced by the use of nitrate of soda is described as of extremely crude quality, containing hardly more than 97% of pure iron, and nearly 2% of carbon.

Falsch. The crude steel contained a good deal less than 2% of carbon; and, when it was converted into steel iron, less than 1% of carbon. „Engineering“ has omitted to state what amount of sulphur was removed by the process, while, if any phosphorus was left in the crude steel, it was obviously not such as to injure the quality. „Engineering“ next says that phosphorus and sulphur are removed in puddling steel, and that the puddling process is cheaper than the use of nitrate. Statement incorrect. Besides, the great waste of iron in puddling omitted from the calculations. The commoner ores, fullest of the impurities of sulphur and phosphorus, have not all their phosphorus and sulphur removed by puddling. They cannot be removed by mechanical operations only.

Only the purest ores are available for the Bessemer process. The Heaton supersedes puddling altogether, thus supersedes much expensive labour, utilizes the poorest ores, deprives them of their impurities more effectually than manualwork, with little or no waste of metal in the operation. Another allegation is that nitrate steel is not more uniform in quality than puddled steel. But it is uniform; puddled steel extremely inequal in quality, taking large quantities. With respect to the proportion of slag to the yield of crude steel, Prof. Miller calculated that the maximum could not have exceeded 23% of the weight of the molten metal experimented upon, so that the 12.6% of iron in the slag could not be more than 3% of the iron operated on. Mr. Heaton has since ascertained by direct experiment that the quantity of slag produced is but 1/3 of the amount estimated by Dr. Miller as the possible maximum; but, then, Heaton no longer uses an admixture of lime. The percentage of iron lost in conversion does not, therefore, exceed 1%.

Then „Engineering“ speeks of the cost of Nitrate of soda. In certain countries its supply boundless. Merchants and shipowners are not the men to neglect an article for which there will be good demand. If dear, only temporary. Its cost; cost, besised besides, fully compensated by the smaller |50 capital required in the first instance by way of plant und die suppression of a most costly and painful labour, out of which most of the difficulties of ironmasters with their men have arisen, and in the use of the impurest ores. Heaton’s processes are an advance in iron and steel manufacture, equal in interest to puddling process and Bessemer’s process.

### Cotton Trade. (Circular of Stokes, Mc Haffie et Co)

At this period last year (1867) there was a far larger margin between price of cloth and cotton than now exists, and yet cotton fell 15 to 20% before the end of the year.

### Invention patented by W. T. Read, Old Broad street, City, for the better application of bisulphite of lime in brewing Trade.

This stuff used now largely in brewing trade to control fermentation and prevent acidity etc. Saves large amount of labour (Read’s process) performs so process, till now clumsy, perfectly. Our annual exports of beer and ale now nearly 2 Mill. £. St.

### East India Irrigation and Canal Co.

Arrangements made between its directors und Secretary of State for India (subject to confirmation at a meeting of shareholders) wodurch the Co’s undertaking in Orissa to be surrendered to Gvt. in consideration of sum in cash equal to the whole paidup capital and 5% interest thereon (so that each shareholder will receive 1£ Premium on 20£ paid upon each share) and also £50,000 to cover compensation to the managing body and officers.

## November 21. 1868.

### Money Market. Rise in Bankrate of Discount.

From 2%, fixed on 25 July 1867, raised to 21/2% on 19 Nov. 1867. Anlaß dazu: The unprecedented withdrawal of 1 Million £ in gold for shipment to Russia.

A 2% Rate has now existed at 3 different Periods:

 1st Period. von April 22, 1852 to January 6, 1853 37 weeks 2nd Period. July 24, 1862 to October 30, 1862 14 weeks 3rd Period. July 25, 1867 to Nov. 19, 1868 69 weeks, 5 × that of ’62 und almost 2 × that of 1852.

This 2% rate (25 Jul. 1867 – 19 Nov. 1868) has lasted longer than any other Bankrate since Act of 1844:

 2% for 69 weeks ending Nov. 19, 1868 21/2 P.Ct. 58 weeks Oct. 16, 1845 21/2 P.Ct. 57 do. Dec. 26, 1850 3 do. 55 do. Nov. 22, 1849 3 do. 53 do. Jan. 1, 1852

The higher the rate is carried and the longer it it is maintained in that position, the surer reaction to the other extreme, and the longer it must prevail:

 Prior to 1847 a higher point than 6% never known. Crisis of 1847: 8% for 4 weeks. Followed by continued decline until 22 Nov. 1849, when 21/2%; in force for 57 weeks. Crisis of 1857: 10% for 61/2 weeks, then gradual reduction to on 9 Decemb. 1858 to 21/2%; which lasted only 20 weeks. Crisis of 1866: 10% for nearly 14 weeks, reduced to 3% in less than 6 months, und 2% within a year, lasting for 69 weeks.

Vergleichen wir Bank o. England mit Bank o. France this week, so finden wir:

 Decrease of coin and bullion £1,002,191 Increase in Discounts and Loans 556,817 Decrease in active circulation 447,215
Es ist hier Increase des Verleihns von Kapital und Decrease in active Circulation; Notes withdrawn for gold for Export.

 Decrease of coin and bullion £449,494 Issue: £46,506,627 Decrease in bills discounted 13,423 do. 18,627,382 Increase in Notes in Circulation (Issued 54,170,814): 246,216 Hier also mit Decr. of Capital loan und Decr. of Bullion, Increase in Note Circulation.

Die Increase der Notes in Circulation der B.o.F. trotz Decrease of Bullion und Decrease des Discount Business, erklärt durch Decrease of Private Deposits und Treasury Balance, as seen by:

 Private Deposits. Summe: 12,952,484 Decrease: 467,684 Treasury Balance: do. 6,971,087 Decr. 142,610|

### U. Kingd. National Income and its Resources.

 Tobacco (40 mill. lb unmanufactured Imported) nearly 61/2 mill. £ Sugar. Refined and unrefined (The Grocers’ Duty) u. stuffs worin sugar ingredient 5,765,501£ St. Unter diesen Zucker Artikeln „glucose or vegetable syrup“ £2,722. Almond Paste: (40 lbs imported) 0. Dried cherries. 3£ only. 2 pound of comfits for children, paid 0. Marmelade: 5£. Preserved Plums: £4. Ridiculous customs, do not defray their cost of collection. Tea and coffee (raw and roasted) chicory (raw or kiln dried) Cocoa and its husks and shells, and its paste or chocolate £3,359,590. Spirits and articles containing spirits (spirits sweetened, unsweetened, but mixed, chloroform, collodion, ether und varnish containing alcohol) £4,301,620 (Chloroform only £70, ether 54l., collodion £8,  Kommentar von Marx. Schließen ridiculous customs) Corn and grain £883,941 „Dried Fruits“ including currants, figs, plums, prunes, raisins £421,740 Importations of malt and its products with their substitutes £3,709 Gold and Silver Plate £4,250 Playing Cards £376 All customs in year ending March 31, 1868 £22,808,140 do do 1867 22,355,859 do do 1866 21,356,723
 Duty on chicory somewhat over £21,000, aber auf: Duties on  The Money Market Review: spirituous Schließen spiritual drinks. (inclusive customs) From Foreign Spirits £4,301,620 Wines 1,500,000 Malt 6,575,263 Home made spirits 11,346,181 Brewers’ licences 357,000 Maltsters’ do. 15,884 Dealers. do. 1,000,000 Total £25,095,948 If we add 61/2 Mill. £. from Tobacco, 331/2 Mill. l. derived from drinking und smoking. Railway Duty. „5% on sums received for conveyance of passengers“ £485,136 Stage Carriage Duty of 1 farthing for each mile travelled £35,857. Hackney Carriage Duty of 7s. p. week, or 6s. p. week if not used on Sundays £103,153 Licences to makers of playing cards £16 do. to sellers of same £1,066. Licence to kill game £150,949 Licences on dogs upwards of £400,000
 Stamps on deeds etc £1,620,426 do. On Probate of wills and letters of administration £1,771,832 do. On Legacy and Succession to Real Estates £2,894,380 The income from the succession to real estate still utterly disproportioned to that derived from legacies of personal estate, and returns of these duties still mixed up and confounded with the legacy duty in order to conceal that disproportion. Total of stamp duties £9,737,573.
 Landtax (other tax under the cover of which landowners escape payment of their fair quota) £1,106,695 Inhabited House Tax £1,068,984, almost as much as land tax. Income Tax £6,287,079 2) Property and Income Tax under Schedule A (lands, tenements etc) £125,070,065 3) Income Tax under Schedule D (trades, professions etc) Both are rated alike at 5d. in £. £158,052,628.
 Excise £21,323,848 [Stamps] 9,737,573 [Taxes] 9,752,561 £40,813,983 Bemerkung von Marx. Schließen (turnover.)|52 Inland Revenue: £40,813,983 Customs: 22,808,140 Post Office: 4,558,962 Total: £68,181,085.

### The East India Irrigation and Canal Co.

The Indian Gvt. has been forced by public opinion to give a great expansion to the practice of irrigation. As a rule better that the Gvt. should be the direct seller of the water, because it can adapt the price to the charge made for the land in such modes that the cultivator will be obliged to take the water. It was clumsy contrivance that Cos. with unguaranteed capital should first sell the water to the Gvt., and then the Gvt. to the cultivator. In the event of a failure of crops from want of irrigation, the Gvt. thus escaped its responsibilities. The Gvt. policy not always consistent in the matter of the Orissa works. At their commencement, and for some time afterwards, the Co. received the cooperation of the Gvt., which was cordially rendered. But, whether from the growth of conviction that irrigation ought to be the sole work of the Gvt., or from the feelings excited in consequence of the failures in the crops having produced famine, this cooperation began to be given in a perfunctory way, and at the present time it cannot be calculated upon. The East India Irrigation Co. has a right to complain of this change. But, on the other hand, the Gvt. complain of the delay which has occurred in the execution of some of the works undertaken by the Co., and forming part of their whole scheme; because, after all, the ultimate responsibility of disaster from the state of crops falls upon the executive. Before matters arrived to this point the directors reported to the proprietors that the completion of the several sections of the Orissa works would cost £1,500,000. But early in the present month the chief Engineer in India reported that £420,000 must be added to this estimate. The capital of the Co. being £1,000,000, it follows that £920,000 more required before the works undertaken can be completed. Though an area of acres 700,000 would be irrigated by this expenditure, the works could not be completed without the money, and, meanwhile, the call for their completion is urgent, under a sort of pressure impossible to resist. The directors applied to the shareholders to supply new capital, but subscriptions little more than £70,000, the payment of which extended over 4 years, while the balance of unexpended capital in England had been reduced to £33,000. Demonstrated by this fact that further share capital not to be raised.

### The Board of Trade Returns and the Trade of the Country. Sept. ’68.

The Board of Trade Returns show improvement in September ’68, as compared with same month ’67 and ’66, but the great bulk of our export trade, consisting chiefly of the staples of Lancashire, is not only not flourishing, but the reverse. It has been so ever since the great fall in values, since the termination of the American war. There has no been no continued healthy trade with our Eastern markets since the Indian mutiny. The profits realised during the American war were spasmodic and unnatural, and the immense fortunes then accumulated, have since all been more than lost, and have been succeeded in Lancashire by a period of reverses unknown even during the cotton famine. Estimating all the charges upon shipments to our Eastern markets upon the most economical scale, and they are favoured by the low rates of freights now ruling, the prices obtainable at all the ports show a considerable loss of shipments now made, and there is no experience to show that the present is a less favourable time for ventures than any previous time of this year.

The present position of manufacturers is almost ruinous, as a profit upon production is rendered impossible from the high rates current for the raw material; and so hopeless seems the prospect of relief by a real improvement in the demand that shorttime working is universally admitted to be the only means of bettering their condition, an alternative never necessary in ordinary times, and only resorted to at the last extremity.

Question: If the trade is an unsound one, why are the returns not only kept up, but increased? The answer is: Chiefly for financial purposes. There being no healthy demand for consumption, the new and increased exports are for the purpose of providing for previous engagements falling due. A good portion of the trade is also contributed by producers, who, being unable to find a market for the whole of their production, and being too poor to hold, consign the remainder, upon which they are accommodated with partial advances through the commission agent or intermediate man, who knows that someone must suffer, and provides on the contingency not falling upon himself.|

### Import of Corn.

The Board of Trade now add to their usual monthly return a table showing the quantity of corn and wheat flower imported into the U. Kingdom between harvest and harvest, viz. in the 12 months, from 1st September to 31st August.

 Import in 12 months ending 31st August 1866 equal to qrs 16,365,738: = (62,881,908 cwts.) 31st August 1867 qrs 16,423,923 = (63,186,726 cwts.) 31 August 1868 qrs 16,904,737 = (66,241,042 cwts)
 31 August 1868 thus constituted. 36,333,087 cwts of wheat = 8,384,559 qrs. 3,149,815 cwts of wheat flower = 908,601 qrs. 5,583,086 cwts of barley = 1,563,264 qrs. 8,584,365 cwts of oats = 3,121,587 qrs. 999,118 cwts of peas = 222,026 qrs. 2,289,655 cwts of beans = 534,253 qrs. 9,301,916 cwts of Indian corn = 2,170,447 qrs.
 Year ending 31 August 1866: 24,926,789 cwts = 5,752,336 qrs. 31 August 1867: 28,658,336 cwts = 6,613,541 qrs. 31 August 1868: 36,333,087 cwts = 8,384,559 qrs.

### The Foreign Settlements on the London Stock Exchange.

Twice a month a settlement of the previous fortnight is made upon the Stock Exchange. On those days securities to the nominal value of at least 40 millions are handed about. „Handed about“ is indeed to too mild a term to describe the treatment to which, in the pressure of an „account“, the property represented by foreign bonds is subjected. The whole settlement has to be „got through“ before half past 2 in the afternoon. By Stock Exchange law a buyer is bound to pay for all bonds delivered to him up to that time, and when the half-hour has struck the seller can make no further claim for payment during the day.

„The enormous increase in the number of foreign loans recently negotiated or introduced in this country, and the small denomination of the bonds into which it is the modern practice to divide them, have multiplied the inconvenience and risk attending the present mode of settlement to so great an extent that it is believed no time should be lost in devising an adequate remedy. At present, after the clerks have reduced the account as much as possible in the limited space they have at their disposal, the balances remaining open are settled by delivery from A to B, from B to C, and so on, till the ultimate buyer is reached, so that the same bond frequently passes through 30, 40, or even 50 hands. To prove that this is no exaggeration we have only to look in busy times at the names on the back of a ticket in Consols, or in any of the principal Railways. These will be found frequently with 50 names on them. One result is that transactions, which could probably be adjusted by the passing of cheques to the amount of perhaps 2 or 3 millions £, involve now settlements to the average amount of 13 millions, as the figures of the Clearing House show. This value of 13 millions, however, represents but a portion of the total values passed under the present system; each of the leading jobbers’ office is, in itself, a small clearing house; a large delivery of Turks, f.e., made to him on the one hand, might and is often compensated, by a counter delivery of Italians on the other side. It is impossible to arrive at the amount of stock actually passed on the settling day, but the experience of the writer’s own office shows that the nominal amount of stock passed exceed exceeds, by 3 or 4 ×, the cash balances adjusted.“

The hurry and confusion which attach to this system are therefore due to the fact that all bargains are adjusted between each actual buyer and seller, although the same bonds may have changed ownership many times during the „account“. Common sense would suggest that this cumberous plan might be obviated, as is done in the transfer of registered securities, by placing the original seller and the ultimate buyer in immediate communication. But in the Stock Exchange, as in all other businesses, the credit of individuals differs largely, and the broker who deals readily with one firm in £100,000 stock might be chary of dealing with others in £100. Brokers who transact large operations naturally object, therefore, to forego the security they have in dealing with first class firms, and do not care to accept payment instead from individuals of whose standing they are ignorant. This difficulty might be avoided by adopting the ordinary course of procedure in bill transactions – viz, rendering each endorser personally liable. Such rule once established, the first broker on the Stock Exchange could have no objection to accept the „name“ or „ticket“ of any member, knowing that in case of default of the ultimate buyer, he would have immediate redress from the parties to whom he originally sold, and with whose endorsements he accepted the ticket.|

## 28 November 1868.

### The recent Advance in the Money Market.

Quarter ending Septem. 27, 1865. Quarter ending Sept. 30, 1868. Qr. endg. Nov. 25, 1868.
Public Deposits £5,968,000 £3,948,000 £5,428,000
Private Deposits 14,652,000 20,529,000 18,103,000
Private Securities 21,577,000 16,671,000 16,662,000
Gvt. Securities 10,389,000 14,252,000 15,075,000
Reserve of Notes et Coin 7,309,000 12,062,000 10,013,000
Proportion P.Ct. of Reserve to Banking Liabil. 341/2 481/4 411/2
Total Coin and Bullion 14,571,000 21,396,000 18,257,000
Active Circulation 21,912,000 24,334,000 23,243,000

## 5 December 1868.

### East India Irrigation and Canal Co.

Auf meeting der shareholders (London, 28 Nov. ’68) sale of the transfer of the Orissa undertaking to the Indian Gvt. beschlossen (cf. p. 52)

### Money Market. Fresh rise in the Bank Discount Rate von 21/2 to 3%. (Dec. 3. 1868)

Stets, after a lengthened period of monetary ease, the first movement upwards, particularly when limited to 1/2%, is insufficient.

1852–53 … 37 weeks of 2% followed by 21/2, which, as at this time, lasted only for a fortnight, when advance to 3%.

1862 … after 14 weeks of 2% the directors of the Bank moved to 3% at once

1859 1857: Reaction in the value after 10% carried the minimum down to 21/2%, for 5 months: then 31/2%, for 1 week; then 41/2%

1866, at beginning, after 27 weeks of 21/2%, rise to 3%, followed in 12 days by further movement to 3 4%.

After the reaction during the first 6 months of 1865, the advance from 3 to 31/2% was succeeded in a week by 4%.

The fact is, that no sooner is the monetary „screw“ turned, than merchants and others under engagements become still more anxious, as a matter of caution, to place themselves in funds. Hence the upward movement receives a further temporary impetus. Ferner: At this time of the year, the tendency of the rates of discount at the present period of the year is always almost towards firmness. Some of the banks help the market up by following the very absurd practice of restricting advances in order to show large reserves in their forthcoming reports. Customers also assist the movement by seeking discounts for the mere purpose of increasing their balances at the close of the year.

### Financial Affairs (U. States) (Circular of H. Clews et Co. New York)

Our produce exports continue to fall below those of last year, while our current imports exceed those of that period (1867). The importers have to a very unusual extent deferred their payments, so that remittances for the next few weeks must be heavy, and the more so as 12 Mill. $to 14 Mill.$ have to be remitted against the coupons of foreign bondholders. Our foreign merchants are extensively „short“ in gold, having sold in anticipation of a decline to follow the elections and the active forwarding of the cotton crop. Advices from Europe indicate the probability of higher rates of interest at the Banks of England and France; which would check the demand for our securities abroad, and tend to attract gold in that direction. It may be owing to that tendency that so few of our bonds are going out in return for the November coupons.

## 12 December 1868.

### Bessemer versus Heaton.

Bessemer attacks Heaton in Money Article of Times of 2nd Dec. On 5 Dec. testing at Kirkaldy’s, when half inch bars of steel made from N. 4 Middlesborough pig stood an average of strain of 53 tons to the ⁮□ inch.

## 19 December 1868.

### Shareholders.  Zusatz von Marx. Schließen (Frauds of Directors in voluntary „Windings’ up“.[)]

During the last 3 or 4 years shareholders in Railway and other Jt. Stock Cos. robbed and defrauded to extent of many Mill. £. St. In a great number of cases the robberies and frauds unequivocal and indubitable. The fleeced victims have been able to discern, in the light of subsequent events, how the frauds were perpetrated and who were the perpetrators. They have not only known how much they have lost, but also who has got it. They have seen many of the persons by whom |55 they have been defrauded suddenly becoming rich, and madly rushing into all sorts of questionable speculations … The money thus transferred from the unfortunate class of shareholders to the more fortunate class of promoters and directors, has been so transferred in too many instances by fraud and falsehood, by deceit and misrepresentation, and the means by which the fraudulent transfer has been effected are equally well known. But where are the laws that define the crimes and award the punishment? where the prosecutors who should enforce the laws? … With regard to the numerous frauds upon Jt. Stock Co. Shareholders which the events of the last 3 years have brought to light, and which involved many 100ds of delinquents, only some 3 or 4 prosecutions have taken place, and only 3 or 4 of the culprits have been convicted, while of those convicted two were speedily released from further deserved punishment by the Queen’s Pardon. Even her Majesty, who never dreams of pardoning a thief or burglar, or common swindler, is made to seem to sympathise with the sufferings of culprits whose crime is swindling and defrauding 100ds or 1000ds of hapless shareholders.

Individual shareholders standing alone are but individual units – helpless and defenceless, as regards any combination that may be formed against them. Promoters and directors know this; and, knowing it, combine together to take advantage of it – and invariably succeed. The Joint Stock Co. shareholder is essentially a selfish animal. … The number of Cos. now undergoing the process of winding up, under the fostering but fatal care of the Court of Chancery – many of the liquidations being in the hands of the very persons who originated the Cos. and conducted them to ruin – imperatively requires that some means should be devised for protecting the unfortunate shareholders against calls and demands which, in too many instances, are both unreasonable and unlawful. In many cases where Cos. are winding up under compulsory orders, the proceedings are being procrastinated and the costs of winding up increased to an enormous and ruinous extent. In other cases which are being wound up „voluntarily“, … frauds of the most outrageous and unmitigated character are being perpetrated by quondam directors, who are now officiating as liquidators. In one recent case, property of the value of £5,000 has been sold and disposed of by the liquidator for £150. In other cases frauds of a similar or varied kind are being perpetrated, without question or hinderance, simply because individual shareholders feel themselves powerless to act alone, or can only act alone at great cost and risk, and have no means of acting in combination with their fellow sufferers. An organised combination of shareholders for their mutual protection now intended. ⦗Meeting deßwegen, Resolutions etc⦘

### The Railway Returns of the Board of Trade. (Published end 1868)

Umfaßt 18 Jahre.

Number of miles in Operation.
Double Line. Single Line. Total
1849 5,034 998 6,032
1867 7,844 6,403 14,247
Increase in 19 years 2,810 5,405 8,215
1849 1867. Increase in 19 years. Average yearly Investment of fresh Capital
Capital paid up £229,747,797 £502,262,887 £272,515,108 £14,290,000
Average Cost p. Mile of Rail in operation: £.38,088 35,113 showing apparent decrease of £2,975 p. mile; not accurate, as the capital paid up at both periods was applied more or less to unproductive works und proportion of single line larger at the close of 19 years’ period.
Traffic Receipts from all sources: £11,806,498 £39,479,999 Incr. of £27,673,501 or Average Increase of £1,456,400 per Annum.
Gross Revenue per Mile £1,957 £2,770 Increase of £813 p. mile. Gross Revenue p. mile 411/2% higher in 1867 than in 1849, with a gradual but uniform improvement every year.|
56
1852 (Erst von diesem Jahr number of miles run by trains returned by Board of Trade) 1853 1856 1867.
Average Receipt per train mile 5s. 2d. 5s. 5d. 5s. 111/4d. 5s. 33/4d.
Notwithstanding, therefore, the increase of 411/2 pct. in the receipt per mile in the 19 years. years, there was for 16 years rather a decrease in the receipt per train mile. In other words, the diminished receipt per train mile, by contrast with the largely increased receipt per mile, indicates conclusively that more work was done for the money earned; and herein consists another reason for the comparative depression of British railway Property. Railways have run too many trains and have done too much work for the return in money. Worn out with competition, and with unnecessary expenditure upon too frequent and badly filled trains.
1860 1867
Working Expenses; Average Rate on Receipts 47% 50%
Cost of working has undergone no diminution relatively to the traffic receipt but has rather increased.

### Heaton’s Iron and Steel.

As one of the points of opposition, asserted that the strength of the iron and steel produced may prove inferior to those produced by other processes, such as Bessemer’s. Facts most decisively contradict this. (d.h. the recent experiments.)

Heaton’s process uses the poorest ores, Bessemer’s only the richest ones. The majority of the ores in the iron bearing districts are poor – that is, the they contain phosphorus and sulphur in abundance; and neither puddling nor any mechanical process yet discovered can remove these deteriorating ingredients. The admission of atmospheric air is powerless against them; otherwise Bessemer would have been able to extend his process indefinitely. Chemistry alone supplies the means of neutralising and removing them. 8 Advantages of Heatons system: It deals with cheapest raw material; it produces steel direct from pig iron; the plant is inexpensive; the cost of maintenance of the plant is insignificant; the waste of material in conversion is almost nil; puddling is dispensed with; the process of conversion is simple, rapid and, certain; the results are remarkable for their uniformity. No preceding invention connected with the manufacture has offered such a combination of advantages. … Will strongly tend to revolutionise the iron manufacture.

### Collieries in U. Kingd. Insurance.

Existirt bis jezt keine Insurance gegen Collieries’ Accidents. Capital in Collieries 100–150 Mill. £. St. mit net income of £30,000,000, besides giving wages to upwards of 300,000 men.

Times 21. Dec. 1866 Mr. Lonsdale Bradley made propositions, as to Insurance. Hat für Jahre diesen Gegenstand verfolgt. Apparent difficulty to discover a sufficient average against loss, so as to ascertain the exact risks of the Assurers. Prosecuting his inquiries during long period, and carefully examining all the conditions that lead to loss of life and property in coal mines, he ascertained that such a recurrence of accidents prevailed as indicated the operation of a law uniform in its action when spread over a long period. Though apparently capricious and irregular, colliery accidents, when examined over a long period, are found subject to averages exactly as vital [as] statistics are; and, assured of this, they certainly ought to be provided against in the same way. Bradley further discovered, that from all causes there are annually not less than 900 accidents involving the loss of life, and that about 1000 colliers are killed every year. With great labour, but within very small limits of error, the costs of accidents from explosions, fires, fall of roofs, inundations, and breaking of machinery, have also been ascertained. In 1865 there were 3,268 collieries in U. Kingd., employing 307,542 miners, who produced 98,150,587 tons of coal, valued at the pit’s mouth, at £24,537,646. Small premium upon either of these large quantities would be sufficient to produce an income to defray the costs of accidents to property, and to support the widows and children of the miners killed until in situation to provide for themselves. … In collieries, the supervision exercised by an Insurance Co. would be an addition to the means of providing against accidents.

### Cotton Trade. (Stokes, Mc Haffie, et Co.) (New York)

With every prospect of free receipts at the ports caused by present high prices, and with a visible supply of cotton, only about 71/2 P.Ct. below last year (1867), our prices are 45 P.Ct. above the same date in 1867.

### The Currency of Sovereigns and Half Sovereigns in India.

Notification of Financial Department, Simla, October 28, 1868: In modification of the notification of 23 Nov. 1864, vor und after this new notification, sovereigns and half sovereigns coined at any authorised royal mint in England and Australia of current weight shall be received in all Treasuries of British India and its dependencies in payment of sums due to the Gvt., as equivalent of 10 Rupees and 4 Annas, and 5 Rupees and 2 Annas, respectively. They shall, whenever available at any Gvt. treasury, be paid at the same rates to any persons willing to receive them in payment of claims against the Gvt. The gold pieces stated in Sect. 13 of Act 17 of 1835 will also henceforth be received as above according to the values stated in that Act. |

## Nachtrag zu November 14. 1868.

### The Troubles of Shareholders in Banking and other Jt. Stock Cos.

Mr. William White, a banker of 40 years standing, has published in one Manchester paper, about this subject. Nach ihm viele Banks „are buying their own shares to keep up the price, as case with .“

The banks which buy up their own shares will generally take care to have them registered in the name of nominees, so that the transaction may not appear upon the register.

Limited banks are required by law to exhibit at their head office a statement of their assets and liabilities according to a prescribed form „or as near thereto as circumstances will permit.“; and some avail themselves of this liberty to vary the form thus as to conceal the amount of their overdrawn accounts by blending them into one item with bills of exchange, or by merely stating the whole of their assets in one sum. In either case the real position of the bank not seen. Uniformity of accounts is as much required in other joint stock banks as in Railway Cos. Sir William Hutt’s bill would have given us this uniformity; but that Bill, instead of being supported by Board of Trade with all the weight of Government, was opposed by that Board, and consequently withdrawn.

The great vice of „Lancashire banking“, White says, „is making large advances to customers on overdrawn accounts, thereby locking up the capital of the bank banks, and jeopardising their very existence.“ And the auditing of some of the banks accounts seems to be equally lax and perilous. „I have now lying before me“, says White, „the reports of 2 banks, in one of which two of the directors have kindly audited their own accounts; whilst in the other case the balance sheet does not balance by a difference of nearly half a million. Yet in this latter case the auditors certified the balance-sheet as ‚examined and found correct. correct‘, and the report was received and adopted.[“] He also mentions two other bank reports „in which the rebate on bills on hand is deducted from the amount of such bills, instead of from profit and loss account.“ Such things could not occur in the midst of a great mercantile community like Lancashire, if the leading members of that community were prompt to expose and denounce them. Even White does not name the banks he denounces. The sickly and sentimental delicacy with which these things are regarded by mercantile men, otherwise men of probity and honour, is a great social evil.

## 26 December 1868.

### Overend, Gurney, et Co. Prosecution of the Directors for Conspiracy to defraud.

Times, Money Article, of 21 Dec. denounces the prosecutor. (Dr. Thom) Calls it „a party movement“, „an attack upon the individuals in whose entire good faith the belief in the City has been so repeatedly expressed and is still so strong“; says that the proceeding „will be viewed with a feeling of reprehensions“, and that in certain eventualities the authors of this proceeding must be prepared for „proportionate censure“.

### Cotton in U. St.

 1857 £38,243,248, at $50 per bale in gold. The war then stopped the production, but in next four Years Annual Average Value 1858 1859 1860 1865 £47,500,000 per bale in gold at$100 per bale. The planters are thus receiving more money for less cotton, while they have produced it a at less cost, so that, in point of fact, they are actual gainers by the war. 1866 1867 1868

### A City of Tents. (Town of Ballarat, Victoria)

18 years ago the spot on which stands the now daily growing City of Balarat Ballarat was literally a desert; 10 years ago a city of tents – a host of golddiggers then peopling the former solitude, housed under canvass canvas. Now a town of stately buildings, with a railway station that alone cost £40,000 £60,000. Theatre, Alfred Hall, churches, chapels, townhalls and other public buildings. It forms the centre of, perhaps, the most productive agricultural district in the colony of Victoria, and the very dust of its streets may be said to have at one time teemed with gold.

From underneath the soil of Ballarat gold to amount of £40,000,000 was extracted. From one little plot, a little over 600 yards in breadth, now situate in the very centre of the town, with several streets crossing it, £750,000 rewarded the diggers’ search. This is going on to the present day, only that shafts have taken the place of „holes“, and expensive machinery been substituted for the pick and washpan of the first explorers. The operations of the various Cos. which have worked on Ballarat ground have had the effect of distinctly marking out the track which the main lead of gold and its various tributaries have taken. In certain directions, indeed, the houses would have spread faster were it not for the almost certainty that gold lies beneath the surface, for which shafts must be sunk and machinery be erected before the space is encumbered with buildings. In a plot of ground on the western side of Ballarat, into which the very main stream of gold is found to run, dipping to a considerable depth, on which operations have been already commenced, it has |58 therefore been decided to mine on a scale hitherto not attempted in the colony of Victoria, so that the gold may be brought to the surface in the shortest possible time, and the ground revert to agricultural or building purpose. Land is too valuable close to Ballarat to be hampered with mining operations longer than is absolutely necessary. This undertaking will require larger instant outlay than the locality can well manage; very early in 1869 John Bull’s Packet will be applied to.

# [The Economist. Jahrgang 1868. Nachträge]

## Fires and Incendiarism. Economist. 11 January. 1868.

The evidence given before the Select Committee on Fire Protection startling. After carefully weighing the evidence presented to it, the committee reports that apparently 1/3 of the fires which occur in England are intentional. … There is such a competition for business among the various offices, that it is better worth their while to pay fraudulent claims than to alienate new insurers. „The sympathy of the jury, and of the Court, is always against the office“, says the Imperial Fire Assurance Office. – Insurance office which prosecute are supposed to do so with an eye to personal advantage – and that the verdict of guilty for which they strive, is in reality a verdict for the amount of the policy. … The assessor to the County Fire Office gives as a list of the classes with whom fires are most frequent: „small shopkeepers on the verge of bankruptcy; foreigners principally of the Hebrew Persuasion, Germans or Poles; the stock of these persons consists principally of dummies or imitation goods made of plaster of Paris; cheesemongers and chandler-shop keepers have half-tubs of butter, sides of bacon, bladders of lard, cheeses; grocers have loaves of sugar, chests of tea, and reams of paper; tobacconists have cigars in bundles; tailors and linendrapers, rolls of cloth made of straw, and parcels filled with sawdust; publicans, wine merchants, and perfumers, the contents of bottles are coloured water.“

The insurance offices remark that whenever one branch of trade is depressed, fires are sure to happen among their votaries.

## January 18. 1868.Mr. Fawcett on „Freetrade in Land.“

All free trade would do for him (the wealthy buyer of land) would be indefinitely to increase the security of his investment, by removing all difficulties about title; by enabling him to grant any kind of lease he pleased, whether wasteful or not; and by facilitating sale whenever he wanted his money, or part of his money, back again. … Land might be raised in price, doubtless would be, but the richest would get, just as in open market they get everything else. The poor might as well compete with them for coals. Even with perfect freetrade, the dealer always prefers „a large order“, and a visibly solvent customer … It is conceivable, that if the labourers desired the land energetically, a class of land pawnbrokers would spring up as in India and Southern France, who would buy for the labourers, and exact, in the form of interest on mortgages, an excessive rental from the cultivator … In Yorkshire agricultural labourers are greatly in advance of wages in the South, owing to the competition of other modes of livelihood.