“In 1847 England paid at least £9 million gold to foreign countries for imported foodstuffs. Of this amount £7½ million came from the Bank of England and 1½ million from other sources (p. 245). — Morris, Governor of the Bank of England:
"The public stocks in the country and canal and railway shares had already by the 23rd of October 1847 been depreciated in the aggregate to the amount of £114,752,225" (p. 312).
Again Morris, when questioned by Lord G. Bentinck:
"Are you not aware that all property invested in stocks and produce of every description was depreciated in the same way; that raw cotton, raw silk and unmanufactured wool were sent to the continent at the same depreciated price... and that sugar, coffee and tea were sacrificed as at forced sales?”” (p 416)
But, there are further similarities between 1847 and 2008. In 2008, although some British bankers were stripped of their gongs, and others took early retirement, with multi-million pound pensions and pay-offs, the fact was that ultimately the banks, and their shareholders, were rescued from their reckless behaviour by the state and the taxpayer. In some countries, that also took the form of economically illiterate policies of austerity that further unnecessarily tanked economies, just as the 1844 Bank Act had done. But, in the aftermath, the measures taken have boosted bank profits, for the benefit of the shareholders, and the huge bonuses to the top executives have returned.
In 1847 it was similar. There were those who still believed that it would not have been preferable to prevent the panic by using the Bank of England's huge reserves, and Marx quotes the parliamentary inquiries, which showed the extent to which, during this process, the dividends paid to the Bank of England rose.
“Disraeli questions Mr. W. Cotton, a Director and former Governor of the Bank of England: "What was the rate of dividend paid to the Bank proprietors in 1844? — It was 7 per cent for the year." — "What is the dividend ... for 1847? — Nine per cent." — "Does the Bank pay the income tax for its proprietors in this year? — It does." — "Did it do so in 1844? — It did not."— "Then this Bank Act" (of 1844) "has worked very well for the proprietors?... The result is, that since the passing of the Act, the dividend to the proprietors has been raised from 7 per cent to 9 per cent, and the income tax, that previously to the Act was paid by the proprietors, is now paid by the Bank? — It is so." (Nos. 4356-61.)” (p 416-7)
The way this purely financial crisis then impacts the real economy was again the same in 1847 and 2008.
“Mr. Pease, a country banker, had the following to say concerning hoarding in banks during the crisis of 1847:
"4605. As the Bank was obliged still to raise its rate of interest, every one seemed apprehensive; country bankers increased the amount of bullion in their hands, and increased their reserve of notes, and many of us who were in the habit of keeping, perhaps, a few hundred pounds of gold and bank-notes, immediately laid up thousands in our desks and drawers, as there was an uncertainty about discounts, and about our bills being current in the market, a general hoarding ensued."
A member of the Committee remarks:
"4691. Then, whatever may have been the cause during the last 12 years, the result has been rather in favour of the Jew and money-dealer, than the productive classes generally."” (p 417)
And Marx quotes Tooke again to this same effect that in Warwickshire and Staffordshire, many manufacturers declined orders because the cost of discounting the bills of exchange would have absorbed all their potential profit in interest.
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