ENGELS TO MARX“? 


IN LONDON 
Manchester, 27 August 1867 
Dear Moor, 


Enclosed two schedules for machinery, which will make the 
matter fully clear to you. The rule is that part of the original sum 
is written off each year, usually 7'/:%, but to simplify the 
calculation I have kept to 10%, which is not excessive for many 
machines either. Thus, e.g., 


1860 1 Jan. Purchases 2.0.0.0... ce eeceeessseerssceseeseeeeeneeesnnesenaes £ 1,000 
1861 1 Jan. Written off 10% .....cceccccccscccceeessessenncseeeeseeeeeenss ” 100 
£ 900 

New purchase ........:ccccccccesceseeeeeeseeeereneeeneeseneees i) 200 

1,100 

1862 1 Jan. Written off 10% £1,200 (£1,000+ £200) ........ s 120 
£ 980 

NeW Purchase ........:cceeccescccesceeeeeseeaeeereneeererees - 200 

f£ 1,180 

1863 1 Jan. Written off 10% £1,000+£200+ £200 7, 140 
EUG: SiSesasenn ds deed cle iickedes hd secbensedi gv osseus esses shosmecons ce rary 0404 


In schedule No. 1 I am now assuming that the manufacturer 
puts his [money] out af interest for writing-off purposes; on the 
day when he has to replace the old machinery with new, he has 
not £1,000 but £1,252-11s. Schedule No. 2 assumes that he puts 
the money straight into new machinery, each year. As is shown in 
the last column giving the value of the total purchases as it stands 
on the last day of the 10 years, it is true that the value of his 
machinery then does not exceed £1,000 (and he cannot have 
more, as he has, after all, only invested the value of what has been 
worn out, and the total value of the machinery cannot thus grow 
by the process), but he has extended his factory from year to year, 
and as an average over the 11 years he has employed machinery 
which cost £1,449 in investment, in other words, he has produced 
and earned substantially more than with the original £1,000. Let 
us assume he is a spinner and every £ represents one spindle 
together with the roving-frame; in that case, he has on average 


a The original has: £1,020. 


245, Engels to Marx. 27 August 1867 41} 


spun with 1,449 spindles instead of 1,000, and, after the original 
spindles have ended their useful lives, he begins the new period 
on 1 January 1866 with 1,357 spindles that he has purchased in 
the meantime,to which is added a further 236 from the writing off 
as per 1865, which makes 1,593 spindles. The money advanced 
for writing off has thus enabled him to increase his machinery by 
60% and without putting a rartuine of his actual profit into the new 
investment. 

Repairs have been disregarded in both schedules. At 10% 
write-off, the machine should cover its own repair costs, 1.e., the 
latter should be included. Nor do they affect the issue, as they are 
either included in the 10%, or else they prolong the useful life of 
the machine in proportion, which amounts to the same thing. 

I hope schedule No. 2 will be sufficiently clear to you; if not, 
just write, I have a copy of it here. 


In_ haste. 
Your 


F. E. 


I. The manufacturer invests the renewal-fund at 5% interest 


1856 on Jan.1 machinery purchased for £ 1,000 
1857 Jan. 1 :10% written off for wear and tear......... £ 100 
1858 ” 110% ” ~ [ OP eet iak sshd Buti! £ 100 
Interest on £100 oo eee eee ctteee Pe 5 se 105 
; £ 205 
1859 ” 1 Interest on £205 £ 10-58. 
10% written off oo... ccccceessseeereeene ” 100 ”  110-5s. 
£ 315-5s. 
1860 ” | 1 Intereston £315-5s. 0... eeeetteees £ 15-15s. 
10% written off vo. eee 7” 100 ” 115-15s. 
£ 431 
1861 ” 1 Interest on £431 oo eeeseeeeeeeeeeees £ 21-11s. 
10% written OFF ooo. ceeeeesesceecceeeeees ” 100 ” 121-11s. 
£ 552-11s. 
1862 ” 1 Interest on £552-11S. ...cceecseeeeeee £ 27-13s. 
10% written Off ..........eccecececeeseeeseeeseeeee ” 100 £ 127-13s. 
£ 680-As. 
1863.” 1 Interest on £680-4S. oo... ccecceeeetteeees £ 34 
10% written Off oo... ceccceseeeeneeeteereeeeees ” 100 ”" 134 


£ 814-4s. 


412 


1864 


1865 


1866 


1856 


1857 


1858 


1859 


1860 


1861 


1862 


1863 


ment 
on Jan. 1 machinery 
purchased £ 1,000 
Jan. 1 10% written off 
and reinvested £ 100 
Jan. 1 10% write-off £ 1,000 £ 100 
» 100” 10 ” 110 
£ 210 
Jan. 1 10% write-off £ 1,000 £ 100 
*» 210” 21 =” 121 
£ 331 
Jan. 1 10% write-off £ 1,000 £ 100 
” 331” 33 ” 133 
£ 464 
Jan. 1 10% write-off £ 1,000 £ 100 
” 464” 46 £ 146 
£ 610 
Jan. 1 10% write-off £ 1,000 £ 100 
” 610” 61 ” 161 
£ 771 
Jan. 1 10% write-off £ 1,000 £ 100 


245. Engels to Marx. 27 August 1867 


Interest on £8 14-48. «0... ceeceeeeeeetees £ 40-14s. 
10% written Off oo... ceeecccceseeeseeteeneeeee * 100 
Interest on £954-185. ....c.ceeccesseeseeeeseees £ 42-15s. 
10% written off * 100 
Interest on £1,097-13s. ....ceccccesceeeseeeees £ 54-18s. 


10% written off 


Total after 10 years ......ccccecceeceeseesneennesnerneestvenneees 


” 140-14s. 
£ 954-18s. 
£ 142-15s. 
£ 1,097-13s. 
” 154-18s. 


£1,252-11s. 


or on January 1, 1866: instead of the £1,000 in worn-out 


machinery, £1,252-11s. in ready cash. 


II. The renewal-fund is reinvested in machinery each year 


reinvest- wear and value on 


2 TT" TT" ATT 


£ 948 


50% 


30% 


tear % Jan. l, 


1866 

100% £  - 
90% £ 10 
” 22 
” 36 
60% " 53 
” 73 
40% ” 97 
” 424