Karl Marx

Economic Sketches

["Die Presse" No. 308, November 9, 1861]

London, November 3, 1861

At this moment, general politics does not exist in England. The interest of the country is absorbed in the French financial, trade and agricultural crisis, in the British industrial crisis, the cotton distress and the American question.

Among discerning circles here, there was never any illusion that the accommodation-bill jobbery of the Bank of France with a few large houses on both sides of the Channel was a palliative of the feeblest sort. All that could be achieved and has been achieved by it was a momentary diminution of the gold outflow to England. The repeated attempts of the Bank of France to recruit metallic auxiliaries in Petersburg, Hamburg and Berlin damage its credit without filling its coffers. The raising of the rate of interest on treasury bonds in order to maintain their quotation, and the necessity of obtaining a postponement of payments for Victor Emmanuel’s new Italian loan – both are regarded here as alarming symptoms of the French financial malady. Moreover, it is known that at this moment two projects are contending for precedence in the Tuileries. The thoroughbred Bonapartists, headed by Persigny and Péreire (of the Crédit mobilier), want to subject the Bank of France completely to the government power, degrade it to a mere bureau of the Ministry of Finance, and use the institution thus transformed as an assignat factory.

It is known that this principle originally underlay the organisation of the Crédit mobilier. The less adventurous party, represented by Fould and other renegades from the time of Louis-Philippe, proposes

a
new national loan,
which, according to some, is to amount to 400 million francs, according to others to 700 million. The Times, in a leading article of today, probably mirrors the view of the City when it says that France is totally paralysed by its economic crisis and deprived of its European influence. However, The Times and the City are mistaken. If the December power succeeds in surviving the winter without great internal storms, it will blow the war trumpet in the spring. The internal distress would not be healed by this, only deadened.

In an earlier letter I pointed out that the cotton swindle in Liverpool during the last weeks is quite reminiscent of the maddest times of the railway mania of 1845. Dentists, surgeons, lawyers, cooks, widows, workers, clerks and lords, actors and clergymen, soldiers and tailors, newspaper writers and lodging-house keepers, men and women – all speculated in cotton. Quite small quantities of 1 to 4 bales were bought, sold and resold. Larger quantities remained for months in the same warehouse, although they changed owners twenty times. Whoever had bought cotton at 10 o’clock, sold it again at 11 o’clock at an advance of 1/2 penny per pound. Thus, the same cotton often circulated through various hands six times in ten hours. This week, however, a kind of standstill occurred, and for no other rational reason than that the pound of cotton (namely, middling Orleans cotton) had reached the height of 1 shilling, because 12 pence make 1 shilling and thus are a round number. Thus, everyone had resolved to strike as soon as this maximum was reached. Hence a sudden increase of supply and consequently a reaction. As soon as the Englishman has familiarised himself with the possibility that a pound of cotton can rise above one shilling, the St. Vitus’s dance will return still madder.

The last official monthly report of the Board of Trade <Ministry of Trade and Communications> on British exports and imports has in no wise cleared the gloomy mood. The exports table covers the nine-month period from January to September 1861. It shows, compared to the same period of the year 1860, a deficit of approximately 8 million pounds sterling. Of this, 5,671,730 pounds sterling alone fall on exports to the United States, while the rest is distributed over British North America <Canada>, East India, Australia, Turkey and Germany. Only

Italy shows an increase. Thus, for example, the export of British cotton goods to Sardinia, Tuscany, Naples and Sicily rose from £756,892 for the year 1860 to £1,204,287 for the year 1861; the export of British cotton yarn from £348,158 to £538,373; the export of iron from £120,867 to £160,912, etc. These figures are not without weight in the scales of British sympathy for Italian freedom.

While the export trade of Great Britain has thus fallen by nearly 8 million pounds sterling, its import trade has risen in an even larger proportion, a circumstance which in no wise facilitates the balancing of accounts. This growth of imports stems principally from the increase in wheat imports. Whereas in the first eight months of 1860 the value of imported wheat amounted to only £6,796,131, during the same period this year it runs up to £13,431,487.

The most remarkable phenomenon which the imports table reveals is the rapid increase of French imports, which now already reach the height of nearly 18 million pounds sterling (annually), while English exports to France are not much larger than those to Holland, for instance. Continental politicians have hitherto overlooked this entirely new phenomenon of modern commercial history. It proves that the economic dependence of France on England is perhaps six times as great as the economic dependence of England on France, if, namely, one not only looks at the figures of the English export and import tables, but also compares them with the French export and import tables. It then emerges that England has now become the principal export market for France, while France has remained a quite secondary export market for England. Hence, despite all chauvinism and all Waterloo rodomontades, the anxious dread of a conflict with “perfidious Albion.”

Finally, one more important fact emerges from the latest English export and import tables. While English exports to the United States fell by more than 25 per cent in the first nine months of this year compared to the same period of the year 1860, the port of New York alone, during the first eight months of this year, increased its exports to England by 6 million pounds sterling. The export of American gold to England had almost ceased during this period, while now, conversely, for weeks gold has been flowing from England to New York. It is

in fact England and France whose harvest failures cover the North American deficit, while the Morrill Tariff and the economy inseparable from a civil war have simultaneously decimated the consumption of English and French manufactures in North America. And now compare these statistical facts with the jeremiads of The Times about the financial ruin of North America!