Manchester, 15 November 1857 

Dear Marx, 

I’m sorry about your waiting for me last Monday—I didn’t 
arrive at Euston Square until after 6, THANKs TO BAD ARRANGEMENTS OF 
THE Railway Company in Brighton, and travelled on to Manchester the 
same evening. 

I’m in good health and everyone, even Heckscher, is surprised 
that I should have recovered so well. My memory is still poor, the 
DULLNESS persists to some extent, and alcohol no longer agrees with 
me. My last sore is healing up beautifully, a process which riding 
and a reduction of work at the office cannot fail to help; as to the 
latter I have agreed with our factory to put myself on short TIME, 

You should have ‘Cannon’*” for certain by next Friday’s post. It 
can’t be done before that and will amount to about 10 full sheets. 
The rest of C ought to follow shortly; most of it is trifling stuff 
which can be done quickly with the books I have here. 

As soon as I can see daylight in my financial affairs (now in 
great confusion) I shall send you some money. 

This time the crisis is developing in rather a curious way. For 
almost a year now, speculative share dealings in France and 
Germany have been in a state of what might be described as 
pre-crisis; only now, with the collapse of the main speculative 
share dealings in New York, has everything come to a head. As 
always, of course, the Yankees have been doing their swindling 
with foreign capital, but the really remarkable thing is that this 
time the capital has come predominantly from the Continent. The 
bureaucrats and rentiers in Germany, who have been eagerly 
buying up everything provided it was American, will be well and 
truly bled. Because of the above-mentioned pre-crisis and the few 
direct points of contact between continental and American 
stock-exchange swindles, the destructive repercussions of the latter 
are not immediately making themselves felt. But they soon will. 

Speculation has affected not only shares but all raw materials 
and colonial produce, hence also all manufactured goods where 
the cost of the raw material is still strongly reflected in the price; 
hence the closer they are to the raw material and the dearer the 
raw material, the more they are affected. Yarns more than grey 

goods, the latter more than printed or coloured goods, silk goods 
more than cotton goods. Here, we have had a pre-crisis in silk 
since August; approximately 20 manufactures have failed for an 
amount I would hesitate to put at less than £200,000 and of which 
only 35% to 40% at the most will be recovered. We are in for 
£6,000, which makes my share £300!!! or, taking the most 
optimistic view, £180 after payment of dividends. In_ these 
circumstances I shall probably have to come to a new agreement 
with my old man. That is by the way. The crisis in silk continues. 
The failure of Bennoch, Twentyman & Rigg (competitors of 
Blank’s) has caught 5 silk ribbon manufacturers in Coventry to the 
tune of £100,000, the biggest sum being £40,000 and the smallest 
£6,000. In addition T. S. Reed & Co. of Derby, important silk 
spinners, doublers and manufacturers, became insolvent im- 
mediately after, and in consequence of, Bennoch’s failure. In 
Glasgow a whole crowd of small and medium firms, besides those 
mentioned in the papers, have come a cropper without eliciting 
the least comment or inquiry. Whether the Maison Ernst Dronke 
is among them I don’t know. Maybe he didn’t have the sense to 
take advantage of the moment to make an honourable exit. 

The enclosed chart,* which I have prepared from official 
printed reports supplied by our broker, will show you how the 
cotton market has fared this year. Whenever the horizontal black line 
passes between two of the eighths this means that the price was 
midway between, or ‘/isth, thus e.g. between 7 3ied and 7'/od 
means 77/isd. 

As far as industrial production itself is concerned, America’s 
excess stocks would seem to be mainly in the west; from all I hear, 
stocks of manufactured goods in the eastern ports are very low. 
But that these are already a drug ON THE MARKET is borne out by the 
return of entire shipments from New York to Liverpool. 37, of the 
local spinners are making for stock and only '/4 at the most have 
orders on their books. Short time pretty well general. A very active 
yarn commission house here, which 3 weeks ago had contracts 
worth £45,000, now has only £3,000 worth, so quickly have the 
_ spinners been able to deliver, despite short Time. 

The peculiarly favourable advices from Madras and Bombay 
(sales with profit, which has not been the case since 1847) have 
revived the Indian trade. Everyone who possibly can is rushing 
into it. To the annoyance of the other commission houses, 
S. Mendel, Indian agent, has the whole of his big warehouse lit up 

a See this volume, p. 205. 

until 10 o'clock every night and sends out stuff for all he’s worth. 
No doubt hundreds of spinners and weavers are shipping goods 
there on consignment. So we have a reserve crisis up our sleeve 
there in case this first impact proves incapable of overturning the 
old muck.?” 

The general appearance of the Exchange here was truly 
delightful last week. The fellows are utterly infuriated by my 
sudden and inexplicable onset of high spirits. Inpeep, the Exchange 
is the one place where my current pvuLtNess is transformed into 
resilience and souncinc, On top of that my predictions are, of 
course, always gloomy, which makes the asses doubly furious. On 
Thursday the situation was at its most dismal, on Friday the 
gentlemen were mulling over the possible effects of the suspension 
of the Bank Act! and, with cotton rising another Id., word went 
round that the worst was over. By yesterday, however, the most 
delectable pesponpency again prevailed; all the hosannas had been so 
much hot air and, since hardly anyone wanted to buy, the market 
here remained as bad as ever. 

What promises this crisis a brilliant future is the immediate 
necessity of suspending the Bank Act at the first impact. The direct 
effect of this will be to land the Bank itself in Queer Street. In 
1847 it was still possible to let things drag on as they had done 
since 1845, and not to resort to this measure until the very last 
and grimmest moment. 

The extension and prolongation of the crisis are also assured. 
The combination of short Time and the silk crisis, which latter has 
already deprived the vast mass of the silk (HAND-Loom) weavers of 
their livelihood, will of itself suffice to ruin the HOME TRADE 
completely this winter-—up till the end of October it was still 
doing well. The American crisis is playing havoc with the Barmen 
and Elberfeld smallware manufacturers, the Elberfeld, Krefeld and 
Lyons silk manufacturers and the German, French and Belgian 
cloth manufacturers. The smallware MANUFACTURERS of Barmen are 
suffering particularly also due to Bennoch and Twentyman, while 
Draper, Pietroni & Co. are causing difficulties in Italy, especially 
Milan, the Duchies,* Bologna, etc. 

Unless cotton comes down to 6d per pound even a momentary 
revival of the cotton industry here is out of the question. And at 
present it is still as high as 7 to 7'/4d. From this you will see how 
remote here is the prospect of any change in the state of affairs. 
Nevertheless a momentary change in the spring is possible and, 

4 Tuscany, Parma and Modena 

indeed, probable. Not that this will mean ‘good business’, but 
rather that business can again be done so that the machinery of 
trade keeps turning and doesn’t rust up. Never before has any 
crisis exhausted itself so rapidly and abruptly, and this one, 
coming after 10 years of prosperity and speculation, is least apt to 
do so. Nor is there another Australia or California to come to the 
rescue, while China will be in the doldrums for the next 20 
years.”**? However the violence of this initial blow shows what 
colossal dimensions the thing is assuming. And in view of the 
recent enormous output of gold and the correspondingly vast 
expansion of industry, it could not be otherwise. 

We can only hope that this ‘improvement’ in the crisis from the 
acute to the chronic stage sets in before a second and really 
decisive blow falls. A period of chronic pressure is needed to get 
the people’s blood up. The proletariat will then fight better, with 
better connaissance de cause* and in greater unison, just as a cavalry 
attack succeeds much better if the horses have to cover the first 
500 paces at the trot before arriving within charging distance of 
the enemy. I shouldn’t care for anything to happen prematurely 
before Europe as a whole has been affected; the subsequent 
struggle would be harder, more tedious and fluctuating. Even May 
or June would be somewhat too early. The long period of 
prosperity is bound to have made the masses damned lethargic. 
However, sight drafts for a revolution will now be presented to us 
by our friends Kinkel & Co. for payment; that is to be expected, 
but NEVER mind, we shall honour them soon enough, as these 
gentlemen will see. 

It’s capital that you should be collecting material on this crisis. I 
am sending you another 2 Guardians today. You shall have it 
regularly, and the Examiner and Times too now and again. I shall 
also advise you as frequently as possible of everything I learn so 
that we have a good srock oF Facts. 

I must say I feel just as you do. When the bubble burst in New 
York I grew very restless in Jersey and in the midst of this GENERAL 
pownsREAK I fell tremendously cheerful. The bourgeois filth of the 
last seven years has undoubtedly clung to me to some extent; now 
it will be washed away and I shall become a changed man. 
Physically, the crisis will do me as much good as a bathe in the sea; 
I can sense it already. In 1848 we were saying: Now our time is 
coming, and so IN A CERTAIN SENSE it was, but this time it is coming 
properly; now it’s a case of do or die. This will at once give a more 

4 knowledge of what they are doing 

practical slant to my military studies. I shall apply myself without 
delay to the existing organisation and elementary tactics of the 
Prussian, Austrian, Bavarian and French armies, and apart from 
that confine my activities to riding, i.e. fox-hunting, which is the 
best school of all. 

My kindest regards to your wife and children. They, too, will be 
in high spirits despite your bad luck. Day and night I worry over 
my inability to get you out of it. 

Your 
F. E. 

In Failsworth, 4 miles from here, a manufacturer by the name 
of Liddle was yesterday hanged in effigy optima forma* while a 
weaver dressed as a parson read the surat service. In place of the 
words “May THE Lorp HAVE MERCY UPON YOUR SOUL’ he read: ‘May THE Lorp 
BLAST YOUR SOUL’.— Now Is THE TIME FoR Jones, if only he knows how to 
make use of it.