99
Chapter 3
49
The monetary crisis referred to in the text, being a phase of every crisis, must be clearly
distinguished from that particular form of crisis, which also
is called a monetary crisis, but which may
be produced by itself as an independent phenomenon in such a way as to react only indirectly on
industry and commerce. The pivot of these crises is to be found in moneyed capital, and their sphere
of direct action is therefore the sphere of that capital, viz., banking, the stock exchange, and finance.
50
“The sudden reversion from a system of credit to a system of hard cash heaps theoretical fright on
top of the practical panic; and the dealers by whose agency circulation is affected, shudder before the
impenetrable mystery in which their own economic relations are involved” (Karl Marx, l.c., p. 126.)
“The poor stand still, because the rich have no money to employ them, though they have the same
land and hands to provide victuals and clothes, as ever they had; ...which is the true riches of a nation,
and not the money.” John Bellers, Proposals for Raising a College of Industry, London, 1696, p3.
51
he following shows how such times are exploited by the “amis du commerce.” “On one occasion
(1839) an old grasping banker (in the city) in his private room raised the lid of the desk he sat over,
and displayed to a friend rolls of bank-notes, saying with intense glee there were £600,000 of them,
they were held to make money tight, and would all be let out after three o’clock on the same day.”
(“The Theory of Exchanges. The Bank Charter Act of 1844.” Lond. 1864, p. 81). The Observer, a
semi-official government organ, contained the following paragraph on 24th April, 1864: “Some very
curious rumours are current of the means which have been resorted to in order to create a scarcity of
banknotes.... Questionable as it would seem, to suppose that any trick of the kind would be adopted,
the report has been so universal that it really deserves mention.”
52
“The amount of purchases or contracts entered upon during the course of any given day, will not
affect the quantity of money afloat on that particular day, but, in the vast majority of cases, will
resolve themselves into multifarious drafts upon the quantity of money which may be afloat at
subsequent dates more or less distant.... The bills granted or credits opened, to-day, need have no
resemblance whatever, either in quantity, amount or duration, to those granted or entered upon to-
morrow or next day, nay, many of today’s bills, and credits, when due, fall in with a mass of liabilities
whose origins traverse a range of antecedent dates altogether indefinite, bills at 12, 6, 3 months or 1
often aggregating together to swell the common liabilities of one particular day....” (“The Currency
Theory Reviewed; in a Letter to the Scottish People.” By a Banker in England. Edinburgh, 1845, pp.
29, 30 passim.)
53
As an example of how little ready money is required in true commercial operations, I give below a
statement by one of the largest London houses of its yearly receipts and payments. Its transactions
during the year 1856, extending to many millions of pounds sterling, are here reduced to the scale of
one million.
Receipts.
Payments.
Bankers’ and Merchants’
£533,596 Bills payable after
date
£302,674
Cheques on Bankers, &c.
payable on demand
357,715 Cheques on
London Bankers
663,672
Country Notes
9,627 Bank of England
Notes
22,743
Bank
of England Notes
68,554 Gold
9,427
Gold
28,089 Silver and Copper
1,484
100
Chapter 3
Silver and Copper
1,486
Post Office Orders
933
Total £1,000,000
Total £1,000,000
“Report from the Select Committee on the Bank Acts, July, 1858,” p.
lxxi.
.
54
“The course of trade being thus turned, from exchanging of goods for goods, or delivering and
taking, to selling and paying, all the bargains ... are now stated upon the foot of a Price in money.”
(“An Essay upon Publick Credit.” 3rd Ed. Lond., 1710, p. 8.)
55
“L’argent ... est devenu le bourreau de toutes choses.” Finance is the “alambic, qui a fait évaporer
une quantité effroyable de biens et de denrées pour faire ce fatal précis.” “L’argent déclare la guerre à
tout le genre humain.” [“Money ... has become the executioner of all things.” Finance is the “alembic
that evaporates a frightful quantity of goods and commodities in order to obtain this fatal extract.”
“Money [...] declares war [...] on the whole human race”] (Boisguillebert: “Dissertation sur la nature
des richesses, de l’argent et des tributs.” Edit. Daire. Economistes financiers. Paris, 1843, t. i., pp. 413,
419, 417.)
56
“On Whitsuntide, 1824,” says Mr. Craig before the Commons’ Committee of 1826, “there was such
an immense demand for notes upon
the banks of Edinburgh, that by 11 o’clock they had not a note left
in their custody. They sent round to all the different banks to borrow, but could not get them, and
many of the transactions were adjusted by slips of paper only; yet by three o’clock the whole of the
notes were returned into the banks from which they had issued! It was a mere transfer from hand to
hand. “Although the average effective circulation of bank-notes in Scotland is less than three millions
sterling, yet on certain pay days in the year, every single note in the possession of the bankers,
amounting in the whole to about £7,000,000, is called into activity. On these occasions the notes have
a single and specific function to perform, and so soon as they have performed it, they flow back into
the various banks from which they issued. (See John Fullarton, “Regulation of Currencies.” Lond.
1845, p. 86, note.) In explanation it should be stated, that in Scotland, at the date of Fullarton’s work,
notes and not cheques were used to withdraw deposits.
57
Note by the Institute of Marxism-Leninism in the Russian edition: Apparently a slip of the pen.
When writing
inverse the author evidently meant
direct.
58
To the question, “If there were occasion to raise 40 millions p. a., whether the same 6 millions
(gold) ... would suffice for such revolutions and circulations thereof, as trade
requires,” Petty replies in
his usual masterly manner, “I answer yes: for the expense being 40 millions, if the revolutions were in
such short circles, viz., weekly, as happens among poor artisans and labourers, who receive and pay
every Saturday, then 40/52 parts of 1 million of money would answer these ends, but if the circles be
quarterly, according to our custom of paying rent, and gathering taxes, then 10 millions were requisite.
Wherefore, supposing payments in general to be of a mixed circle between one week and 13, then add
10 millions to 40/52, the half of which will be 5½, so as if we have 5½ millions we have enough.”
(William Petty: “Political Anatomy of Ireland.” 1672, Edit.: Lond. 1691, pp. 13, 14.)
59
Hence the absurdity of every law prescribing that the banks of a country shall form reserves of that
precious metal alone which circulates at home. The “pleasant difficulties”
thus self-created by the
Bank of England, are well known. On the subject of the great epochs in the history of the changes in
the relative value of gold and silver, see Karl Marx, l.c., p. 136 sq. Sir Robert Peel, by his Bank Act of
1844, sought to tide over the difficulty, by allowing the Bank of England to issue notes against silver