Das Kapital III — Kap. 31

Kap. 31

Verwandlung von Geld in Leihkapital: die technischen Akkumulationen

The reader arrives carrying a distinction already won: money piling up in loanable form is not the same thing as capital at work, and a low rate of interest after a crisis expresses paralysis rather than health. Two questions were left hanging — how far the two accumulations coincide, and what separates money that is merely money from money that becomes loan capital. Here the transformation's two cases are settled, the surplus of loan capital is dated to two phases of the cycle, and banking's technical growth is shown producing loan capital with no production behind it; the money market's own vocabulary, and the chain of credits running out of the countryside, follow.

Wir sind noch immer nicht zu Ende mit der Frage, wieweit die Akkumulation des Kapitals in Form von leihbarem Geldkapital zusammenfällt mit der wirklichen Akkumulation, der Erweiterung des Reproduktionsprozesses.

how far loan capital coincides

We are still not finished with the question: how far does the accumulation of capital in the form of loanable money capital coincide with genuine accumulation, with the widening of the reproduction process?

Die Verwandlung von Geld in leihbares Geldkapital ist eine viel einfachere Geschichte als die Verwandlung von Geld in produktives Kapital. Aber wir haben hier zweierlei zu unterscheiden:

the easier half of the question

Turning money into loanable money capital is a far simpler business than turning money into productive capital. But here we have to keep two things apart:

1. die bloße Verwandlung von Geld in Leihkapital;

case one: money becomes loan capital

first, money simply being turned into loan capital;

2. die Verwandlung von Kapital oder Revenue in Geld, das in Leihkapital verwandelt wird.

case two: capital or revenue

second, capital or revenue being turned into money, and that money then being turned into loan capital.

Es ist bloß der letztere Punkt, der eine, mit der wirklichen Akkumulation des industriellen Kapitals zusammenhängende, positive Akkumulation des Leihkapitals einschließen kann.

only case two can accumulate

Only the second of these can carry a positive accumulation of loan capital, one bound up with the genuine accumulation of industrial capital.

Wir haben bereits gesehn, daß eine Anhäufung, eine Überreichlichkeit von Leihkapital stattfinden kann, die nur insofern mit der produktiven Akkumulation zusammenhängt, als sie im umgekehrten Verhältnis dazu steht. Dies ist in zwei Phasen des industriellen Zyklus der Fall, nämlich erstens zur Zeit, wo das industrielle Kapital, in den beiden Formen des produktiven und des Warenkapitals, kontrahiert ist, also am Beginn des Zyklus nach der Krise; und zweitens zur Zeit, wo die Besserung beginnt, aber der kommerzielle Kredit den Bankkredit noch wenig in Anspruch nimmt. Im ersten Fall erscheint das Geldkapital, das früher in Produktion und Handel angewandt war, als unbeschäftigtes Leihkapital; im zweiten Fall erscheint es in steigendem Maß angewandt, aber zu sehr niedrigem Zinsfuß, weil jetzt der industrielle und kommerzielle Kapitalist dem Geldkapitalisten die Bedingungen vorschreibt. Der Überfluß an Leihkapital drückt im ersten Fall eine Stagnation des industriellen Kapitals aus und im zweiten relative Unabhängigkeit des kommerziellen Kredits vom Bankkredit, beruhend auf Flüssigkeit des Rückstroms, kurzen Kreditterminen und vorwiegendem Arbeiten mit eignem Kapital. Die Spekulanten, die auf fremdes Kreditkapital rechnen, sind noch nicht ins Feld gerückt; die Leute, die mit eignem Kapital arbeiten, sind noch weit entfernt von annähernd reinen Kreditoperationen. In der ersteren Phase ist der Überfluß an Leihkapital das gerade Gegenteil vom Ausdruck der wirklichen Akkumulation. In der zweiten Phase fällt er zusammen mit erneuter Expansion des Reproduktionsprozesses, begleitet sie, ist aber nicht Ursache davon. Der Überfluß an Leihkapital nimmt schon ab, ist nur noch relativ im Verhältnis zur Nachfrage. In beiden Fällen wird die Ausdehnung des wirklichen Akkumulationsprozesses dadurch gefördert, weil der niedrige Zins, der im ersten Fall mit niedrigen Preisen, im zweiten mit langsam steigenden Preisen zusammenfällt, den Teil des Profits vergrößert, der sich in Unternehmergewinn verwandelt. Noch mehr findet dies statt beim Steigen des Zinses auf seinen Durchschnitt während der Höhe der Prosperitätszeit, wo er zwar gewachsen ist, aber nicht im Verhältnis zum Profit.

two phases of the cycle

We have already seen that loan capital can pile up, can become over-abundant, and that this relates to productive accumulation only by standing in inverse proportion to it. It happens in two phases of the industrial cycle. First, when industrial capital — in both its forms, productive capital and commodity capital — has contracted, that is, at the start of the cycle, after the crisis. Second, when the improvement begins but commercial credit still makes little call on bank credit. In the first case, the money capital that was formerly at work in production and trade shows up as loan capital lying idle; in the second, it appears to be at work on an increasing scale, but at a very low rate of interest, because now it is the industrial and commercial capitalist who lays down the terms to the money capitalist. In the first case the surplus of loan capital expresses a stagnation of industrial capital; in the second, the relative independence of commercial credit from bank credit — an independence resting on the fluidity of the returns, on short credit terms, and on business being done predominantly with one's own capital. The speculators who count on credit capital belonging to other people have not yet come onto the scene; the people working with their own capital are still far from anything like pure credit operations. In the earlier phase, the surplus of loan capital is the exact opposite of an expression of real accumulation. In the second phase it coincides with a renewed expansion of the reproduction process: it accompanies that expansion, but is not its cause. The surplus of loan capital is already shrinking, and is now only relative — relative to the demand. In both cases the expansion of the real accumulation process is helped along, because the low rate of interest — which in the first case goes together with low prices and in the second with slowly rising prices — enlarges the part of the profit that turns into profit of enterprise. This happens still more when interest rises to its average level at the height of the boom: it has grown, yes, but not in proportion to profit.

Wir haben andrerseits gesehn, daß eine Akkumulation des Leihkapitals stattfinden kann, ohne alle wirkliche Akkumulation, durch bloß technische Mittel, wie Ausdehnung und Konzentration des Bankwesens, Ersparung der Zirkulationsreserve oder auch der Reservefonds von Zahlungsmitteln der Privaten, die dadurch immer für kurze Zeiten in Leihkapital verwandelt werden. Obgleich dies Leihkapital, was daher auch schwebendes Kapital (floating capital) genannt wird, stets nur für kurze Perioden die Form von Leihkapital behält (wie ja auch nur für kurze Perioden diskontiert werden soll), so fließt es beständig zu und ab. Zieht der eine es weg, so bringt der andre es hin. Die Masse des leihbaren Geldkapitals (wir sprechen hier überhaupt nicht von Anleihen auf Jahre, sondern nur von kurzlebigen gegen Wechsel und Depot) wächst so in der Tat ganz unabhängig von der wirklichen Akkumulation.

technical accumulation, independent of real

On the other side we have seen that loan capital can accumulate with no real accumulation at all, through purely technical means: the expansion and concentration of the banking system, savings on the circulation reserve, or savings on private people's reserve funds of means of payment, which are thereby turned into loan capital for short stretches at a time. This loan capital — which is why it is also called floating capital — never holds the form of loan capital for more than short periods (just as it is only meant to be discounted for short periods); all the same, it flows in and out constantly. If one person draws it out, another brings it in. So the mass of loanable money capital — and here we are not speaking at all of loans for years, only of short-lived loans against bills of exchange and deposits — really does grow quite independently of real accumulation.

B.C. 1857, Frage 501. "Was verstehn Sie unter floating capital?" (Herr Weguelin, Gouverneur der Bank von England:) "Es ist Kapital, verwendbar für Geldanleihen auf kurze Zeit ... (502). Noten der Bank von England ... der Provinzialbanken, und der Betrag des im Land vorhandnen Geldes." {Frage:} "Es scheint nicht, nach den dem Ausschuß vorliegenden Ausweisen, daß, wenn Sie unter floating capital die aktive Zirkulation" {nämlich der Noten der Bank von England} "verstehn, in dieser aktiven Zirkulation irgendwelche sehr bedeutende Schwankung vorkommt?" (Es ist aber ein sehr großer Unterschied, durch wen die aktive Zirkulation vorgeschossen ist, ob durch den Geldverleiher oder durch den reproduktiven Kapitalisten selbst. - Antwort Weguelins:) "Ich schließe in das floating capital die Reserven der Bankiers ein, in denen bedeutende Schwankung ist."

Weguelin on floating capital

Bank Committee, 1857, question 501. Asked what he understands by 'floating capital', Mr Weguelin, Governor of the Bank of England, answers that it is capital that can be applied to money loans for short periods ... (502) Bank of England notes ... those of the provincial banks, and the amount of money present in the country. The question is then put to him: judging by the returns before the Committee, it does not appear that, if by floating capital he means the active circulation (that is, of the Bank of England's notes), there is any very great variation in that active circulation. (It makes a very great difference, though, who it is that advances the active circulation: the money-lender, or the reproductive capitalist himself.) Weguelin's answer: he includes in floating capital the reserves of the bankers, and it is in those that there is considerable fluctuation.

D.h. also, bedeutende Schwankung findet statt in dem Teil der Depositen, den die Bankiers nicht wieder verliehen haben, sondern der als ihre Reserve, großenteils aber auch als die Reserve der Bank von England figuriert, bei der sie deponiert sind. Zuletzt sagt derselbe Herr: floating capital sei - bullion, d.h. Barren und Hartgeld. (503.) Es ist überhaupt wundervoll, wie in diesem Kreditkauderwelsch des Geldmarkts alle Kategorien der politischen Ökonomie einen andern Sinn und eine andre Form erhalten. Floating capital ist dort der Ausdruck für circulating capital, was natürlich etwas ganz andres ist, und money ist capital, und bullion ist capital, und Banknoten sind circulation, und Kapital ist a commodity <eine Ware> , und Schulden sind commodities, und fixed capital ist Geld, das in schwer verkäuflichen Papieren angelegt ist!

the money market's credit gibberish

That is to say, the considerable fluctuation is in the part of the deposits that the bankers have not lent out again — the part figuring as their own reserve, and to a large extent also as the reserve of the Bank of England, with which it is deposited. Finally the same gentleman says that floating capital is bullion, that is, bars and coin. (503.) It is quite wonderful how, in this credit gibberish of the money market, every category of political economy takes on a different meaning and a different form. Floating capital there stands for circulating capital, which of course is something completely different; and there, money passes for capital, bullion passes for capital, banknotes pass for circulation, capital is a commodity, debts are commodities, and fixed capital is money sunk in paper that is hard to sell!

"Die Aktienbanken von London ... haben ihre Depositen vermehrt von 8.850.774 Pfd.St. in 1847 auf 43.100.724 Pfd.St. in 1857 ... Die dem Ausschuß vorgelegten Nachweise und Aussagen lassen schließen, daß von diesem ungeheuren Betrage ein großer Teil aus Quellen abgeleitet ist, die früher für diesen Zweck nicht benutzbar waren; und daß die Gewohnheit, eine Rechnung beim Bankier zu eröffnen und Geld bei ihm zu deponieren, sich ausgedehnt hat auf zahlreiche Quellen, die früher für diesen Zweck nicht benutzbar waren; und daß die Gewohnheit, Rechnung beim Bankier zu eröffnen und Geld bei ihm zu deponieren. sich ausgebreitet hat auf zahlreiche Klassen, die früher ihr Kapital (!) nicht in dieser Weise anlegten. Herr Rodwell, Präsident der Assoziation der Provinzial-Privatbanken" {im Unterschied von Aktienbanken} "und delegiert von ihr, um vor dem Ausschuß auszusagen, gibt an, daß in der Gegend von Ipswich diese Gewohnheit neuerdings sich ums Vierfache vermehrt hat unter den Pächtern und Kleinhändlern jenes Bezirkes; daß fast alle Pächter, selbst die nur 50 Pfd.St. jährliche Pacht zahlen, jetzt bei Banken Depositen halten. Die Masse dieser Depositen findet natürlich ihren Weg zur Verwendung im Geschäft und gravitiert namentlich nach London, dem Zentrum der kommerziellen Tätigkeit, wo sie zunächst Verwendung findet im Wechseldiskonto und in andren Vorschüssen an die Kunden der Londoner Bankiers. Ein großer Teil jedoch, wofür die Bankiers selbst keine unmittelbare Nachfrage haben, geht in die Hände der bill-brokers, die den Bankiers dagegen Handelswechsel geben, welche sie schon einmal für Leute in London und in den Provinzen diskontiert haben." (B.C. 1858, p. [V, Absatz Nr.] 8.)

the 1858 return: deposits swell

The joint-stock banks of London, the return tells us, have increased their deposits from £8,850,774 in 1847 to £43,100,724 in 1857. The evidence and statements laid before the Committee allow the inference that a large part of this enormous sum has been drawn from sources that were not formerly usable for this purpose, and that the habit of opening an account with a banker and depositing money with him has spread to numerous classes who formerly did not lay out their capital (!) in this way. Mr Rodwell, president of the Association of Private Country Bankers (as distinct from the joint-stock banks) and its delegate to give evidence, states that in the district around Ipswich this habit has lately grown four-fold among the farmers and small traders there; that almost every farmer, even one paying only £50 a year in rent, now keeps deposits with a bank. The mass of these deposits naturally finds its way into the uses of business, and gravitates in particular to London, the centre of commercial activity, where it is first employed in the discount of bills and in other advances to the London bankers' customers. A large part of it, however, for which the bankers themselves have no immediate demand, passes into the hands of the bill-brokers, who give the bankers in return commercial bills that they have already discounted once for people in London and in the provinces. (Bank Committee, 1858, p. V, para. 8.)

Indem der Bankier auf die Wechsel, die der bill-broker bereits einmal diskontiert hat, diesem bill-broker Vorschüsse macht, rediskontiert er sie tatsächlich noch einmal; aber in Wirklichkeit sind sehr viele dieser Wechsel bereits vom bill-broker rediskontiert worden, und mit demselben Geld, womit der Bankier die Wechsel des bill-brokers rediskontiert, rediskontiert dieser neue Wechsel. Wozu dies führt:

rediscounting: one coin, many bills

When the banker advances money to the bill-broker against bills the broker has already discounted once, he is in fact rediscounting them a second time; but in reality very many of these bills have already been rediscounted by the broker, and with the very money the banker uses to rediscount the broker's bills, the broker rediscounts new ones. And where that leads:

"Ausgedehnte fiktive Kredite sind geschaffen worden durch Akkommodationswechsel und Blankokredite, was sehr erleichtert wurde durch das Verfahren der provinziellen Aktienbarken, die solche Wechsel diskontierten und sie dann bei bill-brokers im Londoner Markt rediskontieren ließen, und zwar allein auf den Kredit der Bank hin, ohne Rücksicht auf die sonstige Qualität der Wechsel." (l.c.[p. XXI, Absatz Nr. 54].)

the return on fictitious credits

Extensive fictitious credits, the return states, have been created by accommodation bills and blank credits — greatly facilitated by the practice of the provincial joint-stock banks, which discounted such bills and then had them rediscounted with the bill-brokers in the London market, on the credit of the bank alone, and without regard to the quality of the bills otherwise. (ibid., p. XXI, para. 54.)

Über dies Rediskontieren und über den Vorschub, die diese bloß technische Vermehrung des leihbaren Geldkapitals bei Kreditschwindeleien leistet, ist folgende Stelle aus dem "Economist" interessant:

The Economist on rediscounting

On this rediscounting, and on the help that this purely technical increase of loanable money capital gives to credit swindles, the following passage from The Economist is interesting:

"Während vieler Jahre akkumulierte sich das Kapital" (nämlich das leihbare Geldkapital) "in einigen Distrikten des Landes rascher, als es angewandt werden konnte, während in andren die Mittel seiner Anlage rascher wuchsen als das Kapital selbst. Während so die Bankiers in den Ackerbaudistrikten keine Gelegenheit fanden, ihre Depositen profitlich und sicher in ihrer eignen Gegend anzulegen, hatten diejenigen in den Industriebezirken und den Handelsstädten mehr Nachfrage nach Kapital, als sie liefern konnten. Die Wirkung dieser verschiednen Lagen in den verschiednen Distrikten hat in den letzten Jahren zur Entstehung und reißend schnellen Ausdehnung einer neuen, in der Verteilung des Kapitals beschäftigten Klasse von Häusern geführt, die, obgleich gewöhnlich bill-brokers genannt, in Wirklichkeit Bankiers auf dem allergrößten Maßstabe sind. Das Geschäft dieser Häuser ist, für bestimmt abgemachte Perioden und zu bestimmt abgemachten Zinsen das Surpluskapital zu übernehmen von den Banken der Distrikte, wo es nicht verwandt werden konnte, ebenso wie die zeitweis brachliegenden Mittel von Aktiengesellschaften und großen kaufmännischen Häusern, und dies Geld vorzuschießen, zu höherem Zinsfuß, an die Banken der Distrikte, wo Kapital mehr gefragt wird; in der Regel durch Rediskontieren der Wechsel von ihren Kunden... So wurde Lombardstreet das große Zentrum, wo die Übertragung von brachliegendem Kapital erfolgt von einem Teil des Landes, wo es nicht nützlich verwandt werden kann, zu einem andern, wo Nachfrage darnach; und dies sowohl für die verschiednen Landesteile, wie auch für ähnlich gestellte Individuen. Ursprünglich waren diese Geschäfte fast ausschließlich beschränkt auf Borgen und auf Leihen gegen bankmäßiges Unterpfand. Aber im Verhältnis, wie das Kapital des Landes rasch anwuchs und durch Errichtung von Banken immer mehr ökonomisiert wurde, wurden die Fonds zur Verfügung dieser Diskontohäuser so groß, daß sie dazu übergingen, Vorschüsse zu machen, zuerst auf dock warrants (Lagerscheine auf Waren in den Docks) und dann auch auf Ladescheine, die noch gar nicht angekommene Produkte repräsentierten, obgleich manchmal, wenn nicht regelmäßig, schon Wechsel darauf auf den Warenmakler gezogen waren. Diese Praxis änderte bald den ganzen Charakter des englischen Geschäfts. Die so in Lombardstreet gebotnen Erleichterungen gaben den Warenmaklern in Mincing Lane eine sehr verstärkte Stellung; diese gaben ihrerseits wieder den ganzen Vorteil den importierenden Kaufleuten; diese letzteren nahmen so sehr teil daran, daß, wahrend 25 Jahre vorher Kreditnahme auf seine Ladescheine oder selbst seine dock warrants den Kredit eines Kaufmanns ruiniert hätte, in den letzten Jahren diese Praxis so allgemein wurde, daß man sie als die Regel betrachten kann, und nicht mehr, wie vor 25 Jahren, als seltne Ausnahme. Ja, dies System ist so weit ausgedehnt worden, daß große Summen in Lombardstreet aufgenommen worden sind auf Wechsel, gezogen gegen die noch wachsende Ernte entlegner Kolonien. Die Folge solcher Erleichterungen war, daß die Importkaufleute ihre auswärtigen Geschäfte erweiterten und ihr schwebendes (floating) Kapital, womit ihr Geschäft bisher geführt worden, festlegten in der verwerflichsten aller Anlagen, in Kolonialplantagen, worüber sie wenig oder gar keine Kontrolle ausüben konnten. So sehn wir die direkte Verkettung der Kredite. Das Kapital des Landes, das in unsern Ackerbaudistrikten angesammelt, wird in kleinen Beträgen als Depositen in Landbanken niedergelegt und zur Verwendung in Lombardstreet zentralisiert. Aber nutzbar gemacht worden ist es erstens zur Ausdehnung des Geschäfts in unsern Bergwerks- und Industriebezirken vermittelst Rediskontieren von Wechseln an dortige Banken; sodann aber auch zur Gewährung größrer Erleichterungen an Importeure auswärtiger Produkte durch Vorschüsse auf dock warrants und Ladescheine, wodurch das 'legitime' Kaufmannskapital von Häusern im auswärtigen und Kolonialgeschäft freigesetzt und so zu den verwerflichsten Anlagearten in überseeischen Plantagen verwandt werden konnte." ("Economist", 1847, p. 1334.)

The Economist's chain of credit

For many years, capital — that is, loanable money capital — accumulated in some districts of the country faster than it could be put to use, while in others the means of employing it grew faster than the capital itself. So while the bankers in the farming districts found no way of placing their deposits profitably and safely in their own district, those in the industrial districts and the commercial towns had more demand for capital than they could supply. The effect of these different situations in the different districts has been, in recent years, the rise and very rapid expansion of a new class of houses dealing in the distribution of capital: usually called bill-brokers, they are in reality bankers on the very largest scale.

The business of these houses is to take over, for agreed periods and at agreed rates of interest, the surplus capital of the banks in those districts where it could not be used, as well as the temporarily idle funds of joint-stock companies and large commercial houses, and to advance this money at a higher rate of interest to the banks in those districts where capital is more in demand — as a rule by rediscounting the bills they have taken from their customers... In this way Lombard Street became the great centre where idle capital is transferred from one part of the country, where it cannot be usefully employed, to another where there is demand for it; and this both between the different parts of the country and between similarly placed individuals.

At first these dealings were almost exclusively confined to borrowing and lending against banking security. But as the country's capital grew rapidly, and was economized more and more by the founding of banks, the funds at the disposal of these discount houses became so large that they went on to make advances — first on dock warrants (storage notes for goods in the docks), and then also on bills of lading representing produce that had not even arrived, although sometimes, if not regularly, bills had already been drawn on the commodity broker against it. This practice soon changed the whole character of English business. The facilities offered in Lombard Street gave the commodity brokers in Mincing Lane a much stronger position; they in turn passed the whole advantage on to the importing merchants, and these made such use of it that, whereas 25 years earlier borrowing against one's bills of lading or even one's dock warrants would have ruined a merchant's credit, in recent years the practice has become so general that it can be regarded as the rule, and no longer, as 25 years before, as a rare exception. Indeed the system has been carried so far that large sums have been raised in Lombard Street on bills drawn against the still growing harvests of distant colonies.

What these facilities led to was that the importing merchants extended their foreign business and locked up their floating capital — the capital with which their business had been conducted up to then — in the most objectionable of all investments, colonial plantations, over which they had little or no control. So we see the direct interlinking of credits. The capital of the country, accumulated in our farming districts, is laid down in small amounts as deposits in country banks and centralized in Lombard Street for use. But it has been made useful, first, for expanding business in our mining and industrial districts, by rediscounting bills to the banks there; and then also for granting greater facilities to importers of foreign produce, by advances on dock warrants and bills of lading, which set free the 'legitimate' mercantile capital of houses in foreign and colonial trade and allowed it to be put into the most objectionable of all investments, overseas plantations. (The Economist, 1847, p. 1334.)

Es ist dies die "schöne" Verschlingung der Kredite. Der ländliche Depositor bildet sich ein, nur bei seinem Bankier zu deponieren, und bildet sich ferner ein, daß, wenn der Bankier ausleiht, dies an diesem bekannte Privatpersonen geschieht. Er hat nicht die entfernteste Ahnung, daß dieser Bankier sein Depositum zur Verfügung eines Londoner bill-brokers stellt, über dessen Operationen sie beide nicht die geringste Kontrolle haben.

the depositor's illusion

That is the 'fine' interweaving of credits. The rural depositor imagines he is depositing only with his own banker, and further imagines that when the banker lends, it goes to private individuals the banker knows. He has not the remotest idea that this banker puts his deposit at the disposal of a London bill-broker, over whose operations neither of them has the slightest control.

Wie große öffentliche Unternehmungen, z. B. Eisenbahnbau, momentan das Leihkapital vermehren können, indem die eingezahlten Beträge bis zu ihrer wirklichen Verwendung immer während einer gewissen Zeit in den Händen der Banken disponibel bleiben, haben wir bereits gesehn.

public works swell loan capital

We have already seen how large public undertakings, railway building for instance, can temporarily increase loan capital, in that the sums paid in remain available in the banks' hands for a certain time, until they are actually used.

__________

Kap. 31

Die Masse des Leihkapitals gegen die Quantität der Zirkulation

Behind us stands the growth of the loan fund independent of real accumulation: banking concentration, economized reserves, deposits drawn to the money market — real as a form, no proof that production has grown. How big is that fund, and against what is its size read? Carried in is the assumption that it is simply the country's money, so that the rate of interest might be read off the note issue. What gets settled: the loan fund is a magnitude of its own kind, different from the circulating money and different again from industrial capital lent as goods, while the sum lent must still have done its work in purchases and payments. What measures real accumulation is another matter.

Die Masse des Leihkapitals ist übrigens durchaus verschieden von der Quantität der Zirkulation. Unter Quantität der Zirkulation verstehn wir hier die Summe aller in einem Lande befindlichen, zirkulierenden Banknoten und alles Hartgeldes, inkl. der Barren von Edelmetallen. Ein Teil dieser Quantität bildet die ihrer Größe nach stets wechselnde Reserve der Banken.

loan capital versus the circulation

The mass of loan capital, moreover, is quite a different thing from the quantity of circulation. By the quantity of circulation we mean here all the banknotes circulating in a country together with all its metal money, bars of precious metal included. One part of that total makes up the banks' reserve, and that part is always changing in size.

"Am 12. Nov. 1857" (dem Datum der Suspension des Bankakts von 1844) "betrug die Gesamtreserve der Bank von England, alle Zweigbanken einbegriffen, nur 580. 751 Pfd.St.; die Summe der Depositen betrug gleichzeitig 22 1/2 Millionen Pfd.St., wovon nahe an 6 1/2 Millionen den Londoner Bankiers gehörten." (B.A. 1858, p. LVII.)

the 1857 reserve and deposits

On 12 November 1857 — the day the Bank Act of 1844 was suspended — the whole reserve of the Bank of England, its branch banks included, came to only £580,751; deposits at the same time came to 22 1/2 million pounds, and close to 6 1/2 million of that belonged to the London bankers. (Bank Acts, 1858, p. LVII.)

Die Variationen des Zinsfußes (abgesehn von den in längern Perioden erfolgenden oder von dem Unterschied des Zinsfußes in verschiednen Ländern; die erstern sind bedingt durch Variationen in der allgemeinen Profitrate, die zweiten durch Differenzen in den Profitraten und in der Entwicklung des Kredits) hängen ab vom Angebot des Leihkapitals (alle andern Umstände, Stand des Vertrauens etc. gleichgesetzt), d.h. des Kapitals, das in Form von Geld, Hartgeld und Noten, verliehen wird; im Unterschied zum industriellen Kapital, das als solches, in Warenform, vermittelst des kommerziellen Kredits, unter den reproduktiven Agenten selbst verliehen wird.

what the interest rate follows

Variations in the rate of interest depend on the supply of loan capital — and here we leave aside the variations that come about over longer periods, and the differences between the rates of interest in different countries; the first are conditioned by variations in the general rate of profit, the second by differences in profit rates and in the development of credit. That supply is the capital lent in the form of money, in metal and in notes, with all other circumstances, the state of confidence and so on, taken as equal. It is a different supply from industrial capital, which is lent as such, in commodity form, through commercial credit among the reproductive agents themselves.

Aber dennoch ist die Masse dieses leihbaren Geldkapitals verschieden und unabhängig von der Masse des zirkulierenden Geldes.

the loan fund stands apart

But even so, the mass of this loanable money capital is different from the mass of circulating money, and independent of it.

Wenn 20 Pfd.St. z.B. fünfmal per Tag verliehen würden, so würde ein Geldkapital von 100 Pfd.St. verliehen, und dies würde zugleich einschließen, daß diese 20 Pfd.St. außerdem wenigstens viermal als Kauf- oder Zahlungsmittel fungiert hätten; denn wäre es ohne Vermittlung von Kauf und Zahlung, so daß es nicht wenigstens viermal die verwandelte Form von Kapital (Ware, darunter auch Arbeitskraft eingeschlossen) vorgestellt hätte, würde es nicht ein Kapital von 100 Pfd.St., sondern nur fünf Forderungen auf je 20 Pfd.St. konstituieren.

five claims or a capital?

Suppose £20 were lent out five times in a day. A money capital of £100 would then be lent — and that would also mean that this same £20 had acted at least four times as means of purchase or payment. For if it went without any purchase or payment in between, so that it had not stood for the transformed form of capital (commodities, labour-power among them) at least four times, it would not amount to a capital of £100, but only to five claims of £20 each.

In Ländern von entwickeltem Kredit können wir annehmen, daß alles zur Verleihung disponible Geldkapital in der Form von Depositen bei Banken und Geldverleihern existiert. Dies gilt wenigstens für das Geschäft im ganzen und großen. Zudem wird in guten Geschäftszeiten, ehe die eigentliche Spekulation losgelassen wird, bei leichtem Kredit und wachsendem Vertrauen der größte Teil der Zirkulationsfunktionen durch einfache Kreditübertragung erledigt, ohne Dazwischenkunft von Metall- oder papiernem Geld.

big deposits on easy credit

In countries where credit is developed, we may assume that all money capital available for lending exists in the form of deposits with banks and money-lenders. That at least holds for business as a whole, on the large scale. Beyond that, in good times, before speculation proper is let loose, when credit is easy and confidence is growing, the greater part of the work of circulation is settled by a simple credit transfer, with no metal or paper money stepping in between.

Die bloße Möglichkeit großer Depositenbeträge, bei relativ geringem Quantum von Zirkulationsmitteln, hängt einzig ab:

two conditions for big deposits

The bare possibility of large deposit sums, while the quantity of means of circulation is relatively small, depends entirely on:

1. von der Anzahl der Käufe und Zahlungen, die dasselbe Geldstück verrichtet;

first: one coin, many payments

(1) how many purchases and payments the same piece of money carries out;

2. der Anzahl seiner Rückwanderungen, worin es als Depositum zu den Banken zurückkehrt, so daß seine wiederholte Funktion als Kauf- und Zahlungsmittel vermittelt ist durch seine erneuerte Verwandlung in Depositum. Z.B. ein Kleinhändler deponiere wöchentlich beim Bankier 100 Pfd.St. in Geld; der Bankier zahlt damit einen Teil des Depositums des Fabrikanten aus; dieser zahlt es weg an die Arbeiter; diese zahlen damit beim Kleinhändler, der es aufs neue bei der Bank deponiert. Die vom Kleinhändler deponierten 100 Pfd.St. haben also gedient, erstens ein Depositum des Fabrikanten auszuzahlen, zweitens die Arbeiter zu zahlen, drittens den Kleinhändler selbst zu zahlen, viertens einen ferneren Teil des Geldkapitals desselben Kleinhändlers zu deponieren; denn am Schluß von 20 Wochen, wenn er selbst nicht gegen dies Geld zu ziehn hätte, hätte er so mit denselben 100 Pfd.St. 2.000 Pfd.St. beim Bankier deponiert.

second: the same coin returns

(2) how many times it comes back — how often it returns to the banks as a deposit — so that its repeated work as means of purchase and payment goes through its renewed transformation into a deposit. Take a retail trader who deposits £100 in money with his banker every week. The banker pays out part of a manufacturer's deposit with it; the manufacturer pays it out to the workers; the workers pay the retail trader with it; and he deposits it with the bank again. So the £100 the retail trader deposited has served: first, to pay out a deposit of the manufacturer's; second, to pay the workers; third, to pay the retail trader himself; and fourth, to deposit a further part of that same retail trader's money capital. For at the end of twenty weeks, if he had had nothing of his own to draw against this money, he would have deposited £2,000 in the bank with the same £100.

Wie weit dies Geldkapital unbeschäftigt ist, zeigt sich nur im Ab- und Zufluß der Reservefonds der Banken. Daher schließt Herr Weguelin, 1857 Gouverneur der Bank von England, daß das Gold in der Bank von England das "einzige" Reservekapital ist:

Gold as the only reserve

How far this money capital sits unused can be seen only from what flows in and out of the banks' reserve funds. That is why Mr Weguelin — Governor of the Bank of England in 1857 — concluded that the Bank of England's gold is the 'only' reserve capital:

1258. "Nach meiner Ansicht wird die Diskontrate tatsächlich bestimmt durch den Belauf des unbeschäftigten Kapitals, das im Land vorhanden ist. Der Betrag des unbeschäftigten Kapitals wird repräsentiert durch die Reserve der Bank von England, die tatsächlich eine Goldreserve ist. Wenn also das Gold abfließt, so vermindert dies den Betrag des unbeschäftigten Kapitals im Lande und steigert deshalb den Wert des noch übrigen Teils." - 1364. [Newmarch:] "Die Goldreserve der Bank von England ist in Wahrheit die Zentralreserve oder der Barschatz, auf Grundlage wovon das ganze Geschäft des Landes bewirkt wird ... Es ist dieser Schatz oder dies Reservoir, worauf die Wirkung der auswärtigen Wechselkurse immer fällt." ("Report on Bank Acts", 1857.)

Weguelin and Newmarch on gold

1258. 'In my view, the rate of discount is in fact determined by the amount of unemployed capital that is present in the country. The amount of unemployed capital is represented by the reserve of the Bank of England, which is in fact a reserve of gold. So when the gold flows away, that reduces the amount of unemployed capital in the country, and therefore raises the value of the part that remains.' — 1364. [Newmarch:] 'The gold reserve of the Bank of England is in truth the central reserve, or the hoard of coin, on the basis of which the whole business of the country is carried on ... It is on this hoard, or this reservoir, that the effect of the foreign exchanges always falls.' (Report on Bank Acts, 1857.)

Für die Akkumulation des wirklichen, d.h. produktiven und Warenkapitals gibt einen Maßstab die Statistik der Ausfuhr und Einfuhr. Und da zeigt sich stets, daß für die in zehnjährigen Zyklen sich bewegende Entwicklungsperiode der englischen Industrie (1815-1870) jedesmal das Maximum der letzten Prosperitätszeit vor der Krise als Minimum der nächstfolgenden Prosperitätszeit wieder erscheint, um dann zu einem weit höheren neuen Maximum zu steigen.

the measure: exports and imports

A measure of the accumulation of real capital, that is, of productive and commodity capital, is given by the statistics of exports and imports. And there it always shows that for the period over which English industry moved in ten-year cycles (1815–1870), the peak of the last prosperity before a crisis turns up again each time as the low point of the prosperity that follows next, and then rises to a far higher new peak.

Der wirkliche oder deklarierte Wert der ausgeführten Produkte von Großbritannien und Irland im Prosperitätsjahr 1824 war 40.396.300 Pfd.St. Der Betrag der Ausfuhr fällt dann mit der Krisis von 1825 unter diese Summe und schwankt zwischen 35 und 39 Millionen jährlich. Mit der wiederkehrenden Prosperität 1834 steigt er über das frühere höchste Niveau auf 41.649.191 Pfd.St. und erreicht 1836 das neue Maximum von 53.368.571 Pfd.St. Mit 1837 fällt er wieder auf 42 Millionen, so daß das neue Minimum bereits höher steht als das alte Maximum, und schwankt dann zwischen 50 und 53 Millionen. Die Rückkehr der Prosperität hebt den Ausfuhrbetrag 1844 auf 58 1/2 Millionen, wo das Maximum von 1836 schon wieder weit übertroffen ist. 1845 erreicht er 60.111.082 Pfd.St.; fällt dann auf über 57 Millionen 1846, 1847 beinahe 59 Millionen, 1848 beinahe 53 Millionen, steigt 1849 auf 63 1/2 Millionen, 1853 beinahe 99 Millionen, 1854 97 Millionen, 1855 94 1/2 Millionen, 1856 beinahe 116 Millionen und erreicht das Maximum 1857 mit 122 Millionen. Er fällt 1858 auf 116 Millionen, steigt aber schon 1859 auf 130 Millionen, 1860 beinahe 136 Millionen, 1861 nur 125 Millionen (hier wieder das neue Minimum höher als das frühere Maximum), 1863 146 1/2 Millionen.

each peak, the next floor

In the prosperous year 1824, the real or declared value of the products exported by Great Britain and Ireland was £40,396,300. With the crisis of 1825, exports fall below that sum and swing between 35 and 39 million a year. With the returning prosperity of 1834 they rise above the earlier highest level, to £41,649,191, and in 1836 reach a new maximum of £53,368,571. In 1837 they fall again to 42 million, so that the new low already stands higher than the old peak, and then swing between 50 and 53 million.

The return of prosperity lifts the export figure in 1844 to 58 1/2 million, well past the maximum of 1836. In 1845 it reaches £60,111,082; falls again to a little over 57 million in 1846, almost 59 million in 1847, almost 53 million in 1848; rises in 1849 to 65 1/2 million, in 1853 to almost 99 million, 1854 to 97 million, 1855 to 94 1/2 million, 1856 to almost 116 million, and reaches its maximum in 1857 at 122 million. In 1858 it falls to 116 million, but is already up again in 1859 at 130 million, in 1860 at almost 136 million, in 1861 at only 125 million (here once more the new low is higher than the earlier peak), and in 1863 at 146 1/2 million.

Dasselbe könnte natürlich auch nachgewiesen werden für die Einfuhr, die die Ausdehnung des Markts zeigt; hier haben wir es nur mit der Stufenleiter der Produktion zu tun. {Dies gilt für England selbstverständlich nur für die Zeit des tatsächlichen industriellen Monopols; es gilt aber überhaupt für die Gesamtheit der Länder mit moderner großer Industrie, solange der Weltmarkt sich noch expandiert. - F. E.}

Imports show the market widening

The same could naturally be demonstrated for imports as well, since it is imports that show the market expanding. Here we are dealing only with the scale of production. (For England, of course, this applies only during the period of its actual industrial monopoly; but it applies in general to every country with modern large-scale industry, so long as the world market keeps expanding. — F. E.)

Kap. 31

Verwandlung von Kapital oder Revenue in Geld: die Akkumulation der verleihenden Klasse

The reader arrives with a demonstration that one sum can be lent several times over in a day, and with figures showing how far real accumulation has run. What gets settled is the lending class itself: whether its enrichment is a production of its own, and where the money that feeds the loan fund comes from. The lenders' gain turns out to be a transfer out of surplus-value already extracted; their accumulation rides on the credit system as an offshoot of real accumulation; and revenue merely waiting in money form becomes loan capital.

Wir betrachten hier die Akkumulation des Geldkapitals, soweit sie nicht Ausdruck ist entweder einer Stockung im Fluß des kommerziellen Kredits oder aber einer Ökonomisierung, sei es des wirklich umlaufenden Mittels, sei es des Reservekapitals der in der Reproduktion beschäftigten Agenten.

the scope: two cases excluded

What we are looking at here is the accumulation of money capital — and only in so far as it does not express a stall in the flow of commercial credit, or a saving on the medium actually in circulation, or on the reserve capital held by those taking part in reproduction.

Außer diesen beiden Fällen kann Akkumulation von Geldkapital entstehn durch außergewöhnlichen Goldzufluß, wie 1852 und 1853 infolge der australischen und kalifornischen neuen Goldminen. Solches Gold wurde in der Bank von England deponiert. Die Depositoren nahmen Noten dagegen, die sie nicht wieder direkt bei Bankiers deponierten. Dadurch wurde das zirkulierende Mittel außergewöhnlich vermehrt. (Aussage von Weguelin, B. C. 1857, Nr. 1329.) Die Bank suchte diese Depositen zu verwerten durch Erniedrigung des Diskontos auf 2%. Die in der Bank aufgehäufte Goldmasse stieg während sechs Monaten von 1853 auf 22-23 Mill.

exception: the 1852-53 gold influx

Besides these two cases, money capital can also pile up through an exceptional inflow of gold, as in 1852 and 1853, after the new gold mines in Australia and California. That gold was deposited in the Bank of England. The depositors took notes against it, and did not put those notes straight back on deposit with bankers. That swelled the circulating medium far beyond the usual. (Weguelin's evidence, B. A. 1857, no. 1329.) The Bank tried to put these deposits to work by cutting its discount rate to 2 per cent. Over six months of 1853 the pile of gold in the Bank rose to some £22-£23 million.

Die Akkumulation aller Geld verleihenden Kapitalisten geschieht selbstredend stets unmittelbar in der Geldform, während wir gesehn haben, daß die wirkliche Akkumulation der industriellen Kapitalisten in der Regel durch Vermehrung der Elemente des reproduktiven Kapitals selbst sich vollzieht. Die Entwicklung des Kreditwesens und die ungeheure Konzentration des Geld verleihenden Geschäfts in den Händen großer Banken muß also an und für sich schon die Akkumulation des leihbaren Kapitals beschleunigen als eine von der wirklichen Akkumulation verschiedne Form. Diese rasche Entwicklung des Leihkapitals ist daher ein Resultat der wirklichen Akkumulation, denn sie ist die Folge der Entwicklung des Reproduktionsprozesses, und der Profit, der die Akkumulationsquelle dieser Geldkapitalisten bildet, ist nur ein Abzug von dem Mehrwert, den die Reproduktiven herausschlagen (zugleich Aneignung eines Teils des Zinses von fremden Ersparungen). Das Leihkapital akkumuliert auf Kosten zugleich der Industriellen und Kommerziellen. Wir haben gesehn, wie in den ungünstigen Phasen des industriellen Zyklus der Zinsfuß so hoch steigen kann, daß er für einzelne, besonders nachteilig gestellte Geschäftszweige den Profit zeitweilig ganz verschlingt. Gleichzeitig fallen die Preise der Staatseffekten und andren Wertpapiere. Dies ist der Moment, wo die Geldkapitalisten diese entwerteten Papiere massenhaft aufkaufen, die in den spätern Phasen bald wieder auf und über ihre normale Höhe steigen. Dann werden sie losgeschlagen und so ein Teil des Geldkapitals des Publikums angeeignet. Der Teil, der nicht losgeschlagen wird, wirft höhere Zinsen ab, weil unter dem Preis gekauft. Allen Profit aber, den die Geldkapitalisten machen und den sie in Kapital rückverwandeln, verwandeln sie zunächst in leihbares Geldkapital. Die Akkumulation des letzteren, als unterschieden von der wirklichen Akkumulation, obgleich deren Sprößling, folgt also schon, wenn wir nur die Geldkapitalisten, Bankiers etc. selbst betrachten, als Akkumulation dieser besonderen Klasse von Kapitalisten. Und sie muß wachsen mit jeder Ausdehnung des Kreditwesens, wie es die wirkliche Erweiterung des Reproduktionsprozesses begleitet.

distinct from real accumulation, its offshoot

Money-lending capitalists plainly accumulate straight in the money form, whereas we have seen that the real accumulation of industrial capitalists as a rule takes place by adding to the elements of reproductive capital itself. So the growth of the credit system, and the huge concentration of the money-lending business in the hands of big banks, must by itself already speed up the accumulation of loanable capital — as a form that is different from real accumulation. This rapid growth of loan capital is therefore a result of real accumulation, since it follows from the development of the reproduction process; and the profit that is the source of accumulation for these money capitalists is only a deduction from the surplus-value that those engaged in reproduction extract (and at the same time an appropriation of part of the interest on other people's savings). The accumulation of loan capital comes at the cost of the industrial and the commercial capitalists alike.

We have seen how, in the bad phases of the industrial cycle, the rate of interest can climb so high that for particular branches — especially those badly placed — it temporarily swallows up the profit completely. At the same time, government paper and other securities fall in price. That is the moment when the money capitalists buy up these devalued securities in bulk, since in the later phases they soon rise back to their normal level and above it. They then sell them off, and in this way take over part of the public's money capital. The part they keep yields a higher interest, because it was bought below its price.

But all the profit the money capitalists make, and turn back into capital, they first turn into loanable money capital. So the accumulation of that loanable capital — distinct from real accumulation even though it is the offshoot of it — already follows if we look at the money capitalists, bankers and so on themselves: it is the accumulation of this particular class of capitalists. And it must grow with every extension of the credit system, as that extension accompanies the real expansion of the reproduction process.

Steht der Zinsfuß niedrig, so fällt diese Entwertung des Geldkapitals hauptsächlich auf die Depositoren, nicht auf die Banken. Vor der Entwicklung der Aktienbanken lagen in England 3/4 aller Depositen bei den Banken unverzinst. Wo jetzt Zins dafür gezahlt wird, beträgt dieser mindestens 1% weniger als der Tageszinsfuß.

who bears the loss in value

When the rate of interest is low, this loss of value in money capital falls mainly on the depositors, not on the banks. Before joint-stock banking developed, three-quarters of all deposits in England lay in the banks earning no interest at all. Where interest is paid for them now, it is at least 1 per cent below the market rate.

Was die Geldakkumulation der übrigen Klassen von Kapitalisten anbetrifft, so sehn wir ab von dem Teil, der in zinstragenden Papieren angelegt wird und in dieser Form akkumuliert. Wir betrachten bloß den Teil, der als leihbares Geldkapital auf den Markt geworfen wird.

setting interest-bearing paper aside

As for the accumulation of money by the other classes of capitalists, we leave aside the part that is invested in interest-bearing paper and accumulates in that form. We look only at the part that is thrown on the market as loanable money capital.

Wir haben hier erstens den Teil des Profits, der nicht als Revenue verausgabt, sondern zur Akkumulation bestimmt wird, wofür aber die industriellen Kapitalisten zunächst keine Verwendung in ihrem eignen Geschäft haben. Unmittelbar existiert dieser Profit im Warenkapital, von dessen Wert er einen Teil ausmacht, und wird mit diesem in Geld realisiert. Wird er nun nicht (wir sehn zunächst vom Kaufmann ab, von dem wir besonders sprechen werden) rückverwandelt in die Produktionselemente des Warenkapitals, so muß es eine Zeitlang in Form des Geldes verharren. Diese Masse steigt mit der Masse des Kapitals selbst, auch bei abnehmender Profitrate. Der Teil, der als Revenue verausgabt werden soll, wird nach und nach verzehrt, bildet aber in der Zwischenzeit als Depositum Leihkapital beim Bankier. Also selbst das Wachsen des als Revenue verausgabten Teils des Profits drückt sich aus in einer allmählichen, sich beständig wiederholenden Akkumulation von Leihkapital. Und ebenso der andre Teil, der zur Akkumulation bestimmt ist. Mit Entwicklung des Kreditwesens und seiner Organisation drückt sich also selbst das Steigen der Revenue, d.h. der Konsumtion der industriellen und kommerziellen Kapitalisten aus als Akkumulation von Leihkapital. Und dies gilt von allen Revenuen, soweit sie nach und nach verzehrt werden, also von Grundrente, Arbeitslohn in seinen höhern Formen, Einnahme der unproduktiven Klassen etc. Sie alle nehmen für eine gewisse Zeit die Form der Geldrevenue an und sind daher verwandelbar in Depositen und damit in Leihkapital. Es gilt von aller Revenue, ob zur Konsumtion oder zur Akkumulation bestimmt, sobald sie in irgendwelcher Geldform existiert, daß sie ein in Geld verwandelter Wertteil des Warenkapitals ist und daher Ausdruck und Resultat der wirklichen Akkumulation, aber nicht das produktive Kapital selbst. Wenn ein Spinner sein Garn ausgetauscht hat gegen Baumwolle, den Teil aber, der Revenue bildet, gegen Geld, so ist das wirkliche Dasein seines industriellen Kapitals das Garn, das in die Hand des Webers oder auch etwa des Privatkonsumenten übergegangen, und zwar ist das Garn das Dasein - sei es für Reproduktion, sei es für Konsumtion - sowohl des Kapitalwerts wie des Mehrwerts, der in ihm steckt. Die Größe des in Geld verwandelten Mehrwerts hängt ab von der Größe des im Garn steckenden Mehrwerts. Sobald es aber in Geld verwandelt, ist dies Geld nur das Wertdasein dieses Mehrwerts. Und als solches wird es Moment des Leibkapitals. Dazu ist nichts nötig, als daß es sich in Depositum verwandelt, wenn nicht schon durch seinen Eigner selbst ausgeliehn. Um in produktives Kapital rückverwandelt zu werden, muß es dagegen schon eine bestimmte Minimalgrenze erreicht haben.

profit awaiting use becomes loan capital

Take first the part of the profit that is not spent as revenue but set aside for accumulation, and for which the industrial capitalists have no use yet in their own business. This profit exists to begin with in commodity capital, as part of its value, and is realized in money together with it. If it is not turned back into the elements of production of that commodity capital — we leave the merchant aside for now, since he gets a section of his own later — then it has to stay in the money form for a while. Its size grows with the size of the capital itself, even when the rate of profit is falling. The part to be spent as revenue is gradually consumed, but in the meantime it forms loan capital as a deposit with the banker. So even the growth of the part of profit that is spent as revenue finds expression in a gradual, constantly repeated accumulation of loan capital. And the same goes for the other part, the one meant for accumulation.

With the development of the credit system and its organization, the rise in revenue — that is, in the consumption of the industrial and commercial capitalists — likewise finds expression as an accumulation of loan capital. And this holds of every kind of revenue, in so far as it is consumed only gradually: ground-rent, the higher forms of salary, the incomes of the unproductive classes, and so on. All of them take the form of money revenue for a time, and can therefore be converted into deposits, and so into loan capital. It holds of all revenue, whether meant for consumption or meant for accumulation, that as soon as it exists in any money form at all it is a portion of value of the commodity capital that has been turned into money, and hence the expression and result of real accumulation — but not productive capital itself.

If a spinner has exchanged his yarn for cotton, except the part that forms his revenue, which he exchanged for money, then the real existence of his industrial capital is the yarn that has passed into the hands of the weaver, or perhaps of a private consumer; and that yarn, whether it serves for reproduction or for consumption, is the existence of both the capital value and the surplus-value contained in it. How large the surplus-value turned into money is depends on how large the surplus-value contained in the yarn is. But once it is turned into money, this money is only the value-existence of that surplus-value. And as such it becomes an element of loan capital. Nothing more is needed for that than its turning into a deposit, unless its owner has already lent it out. To be turned back into productive capital, on the other hand, it must first have grown to a certain minimum size.

Kap. 31

Transformation of Money into Loan Capital: The Technical Accumulations

We have still not finished with the question of how far the accumulation of capital in the form of money capital for loan coincides with genuine accumulation, the expansion of the reproduction process.

how far loan capital coincides

The transformation of money into money capital for loan is a far simpler matter than the transformation of money into productive capital. But we must distinguish here between two different things:

the easier half of the question

Turning money into loanable money capital is a far simpler business than turning money into productive capital. But here we have to keep two things apart:

(1) the mere transformation of money into loan capital;

case one: money becomes loan capital

first, money simply being turned into loan capital;

(2) the transformation of capital or revenue into money that is transformed into loan capital.

case two: capital or revenue

second, capital or revenue being turned into money, and that money then being turned into loan capital.

It is only the latter point which is related to the genuine accumulation of industrial capital, and only this can involve a positive accumulation of capital for loan.

only case two can accumulate

Only the second of these can carry a positive accumulation of loan capital, one bound up with the genuine accumulation of industrial capital.

We have already seen how a pile-up or over-abundance of loan capital, which is related to productive accumulation only by standing in inverse proportion to it, can arise. This is the case in two phases of the industrial cycle, firstly at the time when industrial capital in the two forms of productive capital and commodity capital has contracted, i.e. at the beginning of the cycle after the crisis; and secondly at the time when improvement sets in but commercial credit still has little need for bank credit. In the first case the money capital that was formerly applied to production and trade appears as unoccupied loan capital; in the second case it is applied on an increasing scale but at a very low rate of interest, since it is now the industrial and commercial capitalists who set terms to the money capitalist. The surplus of loan capital expresses in the first case the stagnation of industrial capital, and in the second case the relative independence of commercial credit from bank credit, resting on the fluidity of returns, short terms of credit and operations predominantly conducted with one’s own capital. The speculators who rely on the credit capital of others have not yet appeared on the scene; while people who operate with their own capital are still far removed from anything like pure credit operations. In the first phase, the surplus of loan capital expresses the exact opposite of genuine accumulation. In the second phase it coincides with the renewed expansion of the reproduction process: it accompanies it without causing it. The surplus of loan capital is already on the decline and is still only relative to the demand. In both cases the expansion of the accumulation process proper is promoted, because the low rate of interest, which coincides in the first case with low prices, and in the second case with slowly rising prices, increases the portion of the profit that is transformed into profit of enterprise. This is all the more so when interest rises to its average level during the height of the prosperity period; although it has risen, it has not done so in relation to profit. We have seen on the other hand how an accumulation of loan capital may take place without any genuine accumulation, by purely technical means such as the expansion and concentration of the banking system, saving on the circulation reserve or even on private individuals’ reserve funds or means of payment, which are in this way transformed into loan capital for short periods. Although this loan capital, which is therefore known also as floating capital, only ever receives the form of loan capital for short periods (and thus should only be used for short-term discounting), it is constantly flowing back and forth. If one person withdraws it, someone else puts it in. The amount of money capital for loan (and here we are not referring at all to loans for several years, but simply to short-term loans against bills of exchange and deposits) thus actually grows quite independently of genuine accumulation. Bank Committee, 1857. Question 501. ‘What do you mean by “floating capital”?’ - (Answer of Mr Weguelin, Governor of the Bank of England:) ‘It is capital applicable to loans of money for short periods ... (502) The Bank of England notes .... the country banks’ circulation, and the amount of coin which is in the country.’ — (Question:) ‘It does not appear from the returns before the Committee, if by floating capital you mean the active circulation’ (of the notes of the Bank of England), ‘that there is any very great variation in the active circulation?’ (Though it is a very major distinction as to who it is that advances the active circulation, the money-lender or the reproductive capitalist himself. Weguelin’s answer:) ‘I include in floating capital the reserves of the bankers, in which there is a considerable fluctuation.’

two phases of the cycle

English joined this paragraph

technical accumulation, independent of real

English joined this paragraph

Weguelin on floating capital

This means, therefore, that a major fluctuation takes place in the portion of deposits which the bankers have not lent out again but which figures rather as their reserves, though a lot of it also figures as the reserve of the Bank of England, with which their reserves are deposited. The same gentleman finally says that floating capital may be bullion, including metal money (503). It is truly amazing how all the categories of political economy take on a new meaning and form in this credit gibberish of the money market. Floating capital here is the expression for circulating capital, which is of course something completely different, and money is capital, and bullion is capital, and banknotes are circulation, and capital is a commodity, and debts are commodities, and fixed capital is money invested in paper that is hard to sell!

the money market's credit gibberish

The joint-stock banks of London ... have increased their deposits from £8,850,774 in 1847 to £43,100,724 in 1857... The evidence given to your Committee leads to the inference that of this vast amount, a large part has been derived from sources not heretofore made available for this purpose; and that the practice of opening accounts and depositing money with bankers has extended to numerous classes who did not formerly employ their capital(!) in that way. It is stated by Mr Rodwell, the Chairman of the Association of the Private Country Bankers’ (distinguished from joint-stock banks), ‘and delegated by them to give evidence to your Committee, that in the neighbourhood of Ipswich this practice has lately increased four-fold among the farmers and shopkeepers of that district; that almost every farmer, even those paying only £50 per annum rent, now keeps deposits with bankers., The aggregate of these deposits of course finds its way to the employments of trade, and especially gravitates to London, the centre of commercial activity, where it is employed first in the discount of bills, or in other advances to the customers of the London bankers. That large portion, however, for which the bankers themselves have no immediate demand passes into the hands of the billbrokers, who give to the banker in return commercial bills already discounted by them for persons in London and in different parts of the country, as a security for the sum advanced by the banker’ (Bank Committee, 1858, p. [v, para.] 8).

the 1858 return: deposits swell

Since the banker makes advances to the billbroker on the bill that the broker has already once discounted, he actually rediscounts it; but in actual fact very many of these bills have already been rediscounted by the billbroker, and with the same money that the banker uses to rediscount the bills presented by the billbroker, the broker rediscounts new bills. This leads to the following situation: ‘Extensive fictitious credits have been created by means of accommodation bills, and open credits, great facilities for which have been afforded by the practice of joint-stock country banks discounting such bills, and rediscounting them with the billbrokers in the London market, upon the credit of the bank alone, without reference to the quality of the bills otherwise’ (ibid. [p. xxi, para. 54]).

rediscounting: one coin, many bills

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the return on fictitious credits

The following passage from The Economist sheds an interesting light on this rediscounting, and on the assistance that this purely technical increase in the money capital for loan provides for credit swindles:

The Economist on rediscounting

On this rediscounting, and on the help that this purely technical increase of loanable money capital gives to credit swindles, the following passage from The Economist is interesting:

For some years past capital’ (namely, loanable money-capital) has accumulated in some districts of the country more rapidly than it could be used, while, in others, the means of employing capital have increased more rapidly than the capital itself. While the bankers in the purely agricultural districts throughout the kingdom found no sufficient means of profitably and safely employing their deposits in their own districts, those in the large mercantile towns, and in the manufacturing and mining districts, have found a larger demand for capital than their own means could supply. The effect of this relative state of different districts has led, of late years, to the establishment and rapid extension of a new class of houses in the distribution of capital, who, though usually called billbrokers, are in reality bankers upon an immense scale. The business of these houses has been to receive, for such periods, and at such rates of interest as were agreed upon, the surplus-capital of bankers in those districts where it could not be employed, as well as the temporary unemployed moneys of public companies and extensive mercantile establishments, and advance them at higher rates of interest to bankers in those districts where capital was more in demand, generally by rediscounting the bills taken from their customers . . . and in this way Lombard Street has become the great centre in which the transfer of spare capital has been made from one part of the country, where it could not be profitably employed, to another, where a demand existed for it, as well as between individuals similarly circumstanced. At first these transactions were confined almost exclusively to borrowing and lending on banking securities. But as the capital of the country rapidly accumulated, and became more economized by the establishment of banks, the funds at the disposal of these “ discount houses” became so large that they were induced to make advances first on dock warrants of merchandise’ (storage bills on commodities in docks), ‘and next on bills of lading, representing produce not even arrived in this country, though sometimes, if not generally, secured by bills drawn by the merchant upon his broker. This practice rapidly changed the whole character of English commerce. The facilities thus afforded in Lombard Street gave extensive powers to the brokers in Mincing Lane, who on their part... offered the full advantage of them to the importing merchant; who so far took advantage of them, that, whereas twenty-five years ago, the fact that a merchant received advances on his bills of lading, or even his dock warrants, would have been fatal to his credit, the practice has become so common of late years that it may be said to be now the general rule, and not the rare exception, as it was twenty-five years ago. Nay, so much further has this system been carried, that large sums have been raised in Lombard Street on bills drawn against the forthcoming crops of distant colonies. The consequence of such facilities being thus granted to the importing merchants led them to extend their transactions abroad, and to invest their floating capital with which their business has hitherto been conducted, in the most objectionable of all fixed securities — foreign plantations — over which they could exercise little or no control. And thus we see the direct change of credit through which the capital of the country, collected in our rural districts, and in small amounts in the shape of deposits in country banks, and centres in Lombard Street for employment, has been, first, made available for the extending operations in our mining and manufacturing districts, by the rediscount of bills to banks in those localities; next, for granting greater facilities for the importation of foreign produce by advances upon dock warrants and bills of lading, and thus liberating the “legitimate” mercantile capital of houses engaged in foreign and colonial trade, and inducing to its most objectionable advances on foreign plantations’ (The Economist, 1847, p. 1334).

The Economist's chain of credit

That is the ‘nice’ way to devour credits. The rural depositor imagines he is simply depositing with his banker, and also imagines that when the banker makes loans it is to private individuals whom he knows. He does not have the remotest suspicion that the banker puts his deposit at the disposal of a London billbroker, over whose operations neither of them have the slightest control.

the depositor's illusion

We have already seen how major public undertakings, such as railway construction, can temporarily increase loan capital, in that the sums paid up always remain for a certain while in the hands of the banks and are at their disposal until they are actually spent.

public works swell loan capital

Kap. 31

The Mass of Loan Capital against the Quantity of Circulation

The volume of loan capital, moreover, is completely different from the quantity of circulation. By quantity of circulation, here, we mean the sum of all banknotes in circulation in a particular country, together with all metal money, including precious metal in the form of bullion. A part of this quantity forms the banks’ reserve and is constantly fluctuating in size. On November 12, 1857’ (the date of the suspension of the Bank Act of 1844), ‘the entire reserve of the Bank of England was only £580,751 (including London and all its branches); their deposits at the same time amounting to £22,500,000; of which near six and a half million belonged to London bankers’ (Bank Acts, 1858, p. lvii).

loan capital versus the circulation

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the 1857 reserve and deposits

Variations in the rate of interest (setting aside those taking place over longer periods, or the differences between interest rates in different countries; the first kind being conditioned by variations in the general rate of profit, and the second by differences in profit rates and in the development of credit) depend on the supply of loan capital (all other factors, the state of confidence, etc., taken as equal), i.e. of capital lent in the form of money, in metal or notes; as distinct from industrial capital that is lent as such, in the commodity form, by commercial credit among the reproductive agents themselves.

what the interest rate follows

But the volume of this loanable money capital is still different from and independent of the quantity of money in circulation.

the loan fund stands apart

But even so, the mass of this loanable money capital is different from the mass of circulating money, and independent of it.

If £20 is lent five times in the course of a day, a money capital of £100 is lent altogether, and this would equally mean that this £20 had functioned at least four times as means of purchase or payment; for if it were without the mediation of purchase and payment, so that it had not represented the transformed form of capital (commodities, including labour-power) at least four times, it would not constitute a capital of £100 but simply five claims of £20 each.

five claims or a capital?

In countries where credit is highly developed, we may assume that all money capital available for loan exists in the form of deposits with banks and money-lenders. This at least holds good for business as a whole. On top of this, in times of good business, before speculation properly so called gets going, the greater part of the circulatory functions will be performed, with credit easy and confidence growing, simply through a credit transfer, without the intervention of metal or paper money.

big deposits on easy credit

The very possibility that large sums will be deposited while the amount of means of circulation is relatively small depends entirely on: (1) the number of purchases and payments that the same piece of money performs;

two conditions for big deposits

The bare possibility of large deposit sums, while the quantity of means of circulation is relatively small, depends entirely on:

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first: one coin, many payments

(1) how many purchases and payments the same piece of money carries out;

(2) the number of return migrations in which it comes back to the banks as a deposit, so that its repeated function as means of purchase and payment is mediated by its renewed transformation into a deposit. A retail trader, for instance, may deposit £100 a week with his banker in money; the banker uses this to pay out a part of the manufacturer’s deposit; the latter pays this to his workers, and they use it to pay the retailer, who deposits it again with the bank. The £100 deposited by the retailer has thus to serve firstly to pay out a deposit of the manufacturer’s, secondly to pay the workers, thirdly to pay the retailer himself and fourthly to deposit a further part of the same retailer’s money capital; for at the end of twenty weeks, if he did not have to draw on this money himself, he would have deposited £2,000 in the bank, using the same £100.

second: the same coin returns

The extent to which this money capital is unoccupied is shown only in the ebb and flow of the banks’ reserve funds. This is why Mr Weguelin, Governor of the Bank of England in 1857, concludes that the gold in the Bank of England is the ‘only’ reserve capital:

Gold as the only reserve

‘1258. Practically, I think, the rate of discount is governed by the amount of unemployed capital which there is in the country. The amount of unemployed capital is represented by the reserve of the Bank of England, which is practically a reserve of bullion. When, therefore, the bullion is drawn upon, it diminishes the amount of unemployed capital in the country, and consequently raises the value of that which remains.’ — ‘1364. The reserve of bullion in the Bank of England is, in truth, the central reserve, or hoard of treasure, upon which the whole trade of the country is carried on ... And it is upon that hoard or reservoir that the action of the foreign exchanges always falls’ (Report on Bank Acts, 1857).

Weguelin and Newmarch on gold

One measure for the accumulation of genuine capital, i.e. productive and commodity capital, is provided by the statistics of exports and imports. And there it is constantly apparent that for the period over which English industry moved in ten-year cycles (1815-70), the maximum for the final period of prosperity before the crisis reappeared as the minimum for the period of prosperity that followed next, only to rise then to a new and much higher maximum.

the measure: exports and imports

The real or declared value of products exported from Great Britain and Ireland in the prosperous year of 1824 was £40,396,300. With the crisis of 1825, the volume of exports fell below this sum, and fluctuated between an annual total of £35 and £39 million. With the return of prosperity in 1834, it rose above the earlier peak to £41,649,191, and in 1836 reached a new maximum of £53,368,571. In 1837 it fell again to £42 million, so that the new minimum was already higher than the maximum of the previous cycle, and it subsequently fluctuated between £50 and £53 million. The return of prosperity raised the 1844 export total to £58 1/2 million, already exceeding the 1836 maximum by far. In 1845 the total for the year reached £60,111,082; it then fell back to somewhat over £57 million in 1846, almost £59 million in 1847, and almost £53 million in 1848, rising in 1849 to £65 1/2 million, in 1853 to almost £99 million, 1854 £97 million, 1855 £94 1/2 million, 1856 almost £116 million, and reaching a maximum in 1857 of £122 million. In 1858 it fell to £116 million, but had already risen in 1859 to £130 million, in 1860 to almost £136 million, in 1861 to only £125 million (here again the new minimum is higher than the previous cycle’s maximum), and in 1863 to £146 1/2 million.

each peak, the next floor

The same thing can of course also be shown for imports, which indicate the expansion of the market. Here we are concerned only with the scale of production. (This is of course true for England only for the period of its effective industrial monopoly; but it is true in general for the totality of countries with modern large-scale industry, as long as the world market is still expanding. — F. E.)

Imports show the market widening

Kap. 31

Capital or Revenue Transformed into Money: The Lending Class's Own Accumulation

Here we are considering the accumulation of money capital in so far as this does not express a stagnation in the flow of commercial credit, or saving either on the actual circulating medium or on the reserve capital of the agents engaged in reproduction.

the scope: two cases excluded

Leaving aside these two cases, accumulation of money capital may arise through an exceptional influx of gold, as happened in 1852 and 1853 as a result of the new gold mines in Australia and California. This gold was deposited in the Bank of England. The depositors accepted notes in return, which they did not directly deposit again with bankers. In this way, the circulating medium underwent an extraordinary increase. (Evidence of Weguelin, B. A. 1857, no. 1329.) The Bank tried to valorize these deposits by reducing its discount rate to 2 per cent. In the course of six months in 1853, the quantity of gold piled up in the Bank grew to some £22-£23 million.

exception: the 1852-53 gold influx

All money-lending capitalists obviously accumulate directly in the money form, while we have seen that real accumulation by industrial capitalists occurs as a rule through an increase in the elements of reproductive capital itself. The development of the credit system and the tremendous concentration of the money-lending business in the hands of big banks must therefore already accelerate in and of itself the accumulation of loanable capital, as a form separate from genuine accumulation. This rapid development of loan capital is therefore a result of the genuine accumulation, as an effect of the development of the reproduction process, and the profit that forms the source of accumulation for these money capitalists is simply a deduction from the surplus-value that the reproductive agents extract (as well as an appropriation of part of the interest on the savings of others). Loan capital accumulates at the expense of both the industrial and commercial capitalists. We have seen how, in the bad phases of the industrial cycle, the rate of interest may rise so high that it temporarily swallows up profits entirely for some branches of business, particularly those unfavourably located. At the same time, the prices of government paper and other securities fall. This is the moment when money capitalists buy up this devalued paper on a massive scale, as it will soon go up again in the later phases, and even rise above its normal level. They will then sell it off, thereby appropriating a part of the public’s money capital. Those securities that are not sold off yield a higher interest, since they were bought below their price. But all the profit which the money capitalists make, and which they turn back into capital, they transform first of all into money capital for loan. Thus we already have an accumulation of this money capital as distinct from the genuine accumulation — even if the accumulation of its off-shoot - when we simply consider the money capitalists, bankers, etc. themselves, as the accumulation of this particular class of capitalists. And this must grow with each extension of the credit system, as it accompanies the genuine expansion of the reproduction process.

distinct from real accumulation, its offshoot

If the rate of interest is low, this devaluation of money capital falls principally on the depositors and not on the banks. Before the development of joint-stock banking, three-quarters of all bank deposits in England did not receive any interest. And where interest is now paid, this is at least 1 per cent less than the market rate.

who bears the loss in value

As far as the monetary accumulation of the remaining classes of capitalist is concerned, we ignore here the part that is invested in interest-bearing paper and accumulates in this form. We shall simply consider the portion that is placed on the market as money capital for loan.

setting interest-bearing paper aside

Here we have firstly the section of profit that is not spent as revenue, being rather designed for accumulation, but which the industrial capitalists concerned do not have any immediate employment for in their own businesses. This profit exists first of all in commodity capital, making up a portion of its value, and is realized in money together with it. If it is not then transformed back into the commodity capital’s elements of production (we leave aside here for the time being the merchant, whom we shall deal with later more specifically), it must persist for a certain period in the money form. Its amount rises with the volume of the capital itself, even given a declining rate of profit. The part to be spent as revenue is gradually consumed, but in the meantime it constitutes loan capital as a deposit with the banker. And so even the growth of the part of the profit spent as revenue is expressed in a gradual and constantly repeated accumulation of loan capital. Similarly, too, the other part, which is designed for accumulation. With the development of the credit system and its organization, the rise in revenue, i.e. in the consumption of the industrial and commercial capitalists, is thus itself expressed as an accumulation of loan capital. And this holds good of all revenues, in so far as they are only gradually consumed — i.e. ground-rent, the higher forms of salary, the incomes of the unproductive classes, etc. All of these assume for a time the form of money revenue and can hence be converted into deposits and thereby into loan capital. It is true of all revenue, whether designed for consumption or for accumulation, that as soon as it exists in any kind of monetary form it is a portion of value of the commodity capital that is transformed into money, and is therefore the expression and result of genuine accumulation, though not productive capital itself. If a spinner has exchanged his yarn for cotton, save for the part that forms revenue and is exchanged for money, the actual existence of his industrial capital is the yarn that has passed into possession of the weaver, or perhaps even into that of the private consumer; and this yarn, moreover, whether it serves for reproduction or for consumption, is the existence of both capital value and of the surplus-value contained in it. The amount of surplus-value transformed into money depends on the amount of surplus-value contained in the yarn. But as soon as it is transformed into money, this money is simply the value existence of that surplus-value. And as such it becomes an element of loan capital. No more is needed for this than that it should be transformed into a deposit, if it has not already been lent out by its owner. To be transformed back into productive capital, on the other hand, it must already have reached a certain minimum limit.

profit awaiting use becomes loan capital