Karl Marx 
The commercial crisis in Britain (Draft) 

[B9] The English commercial crisis the forerunning symptoms of which 
were long before chronicled in the New York Tribune, is a fact loudly 
proclaimed by the highest authorities in this matter—the annual circulars 
of [the] British Chambers of commerce and the first-rate commercial 
establishments. There are besides extensive bankruptcies, short time run- 
ning mills, and stinted tables of export which speak to the same effect. 
According to the latest official "Accounts relating to Trade and Navi- 
gation", the declared Value of enumerated articles in the month ended 
December 5 was: 

1852 1853 1854 

£. £. £. 

6,033,030 7,628,760 5,771,772 
Decrease in 1854 261,258 1,856,988 

We cannot be astonished at the professional freetraders of Great Britain 

endeavouring to show that this present crisis, instead of flowing from the 15 

natural working of the modern English system and altogether correspon- 
ding to the crisis experienced in periodical intervals almost since the end 
of the 18th century, on the contrary, proceed from accidental and excep- 
tional circumstances. According to the tenets of their school, commercial 

crises were out of the question since the cornlaws became abrogated and 20 

freetrade principles accepted by the legislature of their country. Now they 
have got not only high cornprices notwithstanding an abundant harvest, 
but also a commercial crisis with California and an Australia added to 
the markets of the world and pouring forth their golden streams. If their 

panacea was to be put to the test, it could not be expected to happen 25 

under circumstances more favourable than those which will for ever sig- 
nalize the period from 1849-54 in the history of trade and commerce. 
The war is now to be made the scape-goat of freetrade, as in 1848 was the 

Karl Marx: The commercial crisis in Britain. Draft. Seite 38 der Exzerpte zur 
Geschichte Spaniens und aus: The Economist. 

The commercial crisis in Britain (Draft) 

Revolution. They cannot deny that to a certain measure the oriental war 
has delayed the revulsion by acting as a check on the spirit of reckless 
enterprise and moving off part of the surplus capital to the foreign loans 
contracted by most of the European powers; that some trades like the 
iron trade, leather trade, wool trade etc received some support from the 
extraordinary demand the war created for them, and lastly that as to 
shipping, the woad trade etc, where exaggerated notions of the effects of 
the war fostered overspeculation on both sides of the Atlantic, but a 
particular outlet was given to the already ruling and universal tendency 
10 of overtrading. Their principal argument amounts to this that the war 
has produced high prices for all sorts of grain and that the high prices of 
provisions have engendered the crisis. Now it must be recollected that the 
average cornprices ruled higher in 1853 than in 1854. If then the high 
cornprices are not to account for the unprecedented prosperity of 1853, 
15 they can as little account for the revulsion of 1854. 1836 was a year of a 
commercial revulsion notwithstanding its low cornprices. 1824, as well as 
1853, were years of exceptional prosperity, notwithstanding their high 
prices for all sorts of provisions. The truth is that although high corn- 
prices may cripple the commercial and industrial prosperity by contrac- 
20 ting the home market, the home market in a country like Great Britain, 
will never turn the balance unless all foreign markets be already hope- 
lessly overstocked. High cornprices must, therefore, in such a country 
aggravate and prolong the revulsion, which, however, they are unable to 
create. Besides, it cannot be forgotten that conforming to the true doc- 
25 trine of the Manchester school high cornprices, if produced instead of by 
the regular course of nature, by the working of protection, prohibitive 
laws and sliding-scales, lose their fatal influence altogether and may even 
work advantageously by doing good to the farmers. As the two very 
deficient harvests of 1852 and 1853 were natural events, the free-traders 
30 turn round upon the year 1854 and affirm that the oriental war, working 
like a protective duty, produced high cornprices notwithstanding a plen- 
tiful harvest. Putting then aside the general influence of cornprices upon 
industry, the question arises as to the influence of the present war upon 

Nn 

cornprices. 

35 The Russian importation of wheat and flour constitutes about 14% of 
the entire importation of the United Kingdom, and the whole importa- 
tions forming but about 20% of its aggregate consumption, Russia does 
afford very little more than 242% of the whole. According to the latest 
official returns, which do not extend over the first 9 months of 1853, the 

40 entire imports of wheat were 3,770,921 qrs, of which 773,507 qrs were 
from Russia, and 209,000 qrs from Wallachia and Moldavia. Of flour the 

Karl Marx 

entire imports were 3,800,746 cwts, of which 64 cwts were from Russia, 
and none from Wallachia and Moldavia. During the corresponding 
months of 1854, the importation of wheat from Russian ports direct was 
505,000 qrs against 773,507 in 1853 and 118,000 qrs from the Danubian 
principalities against 209,000 in the previous year; being a deficiency of 5 
359,507 qrs. If it be considered that the harvest of 1854 was a superior 
and that of 1853 a very bad one, nobody will affirm that such a deficien- 
cy could exert any great influence on prices. We see on the contrary from 
the returns in the Gazette of the weekly scales in the English markets of 
home-grown wheat—these returns representing but a small portion of the 10 
entire sales of the whole country /[40]/ that in the months of October and 
November 1854 1,109,148 qrs were sold against 758,061 in the corre- 
sponding months of 1853, making more than up for the whole deficiency 
caused by the Russian war. /[39]/ Let us remark en passant that had the 
English cabinet not caused large stores of wheat to rot in the granaries of 15 
the principalities by stupidly blockading the Sulina mouth of the Danu- 
be, the war with Russia would not have stinted the importation of wheat 
even to the small amount it has done. ||[40]| [From] the London imports of 
foreign flour % being delivered by the United States, it must be avowed 
that the United States supplies [xxxxx] in the last quarter of 1854 worked 20 
more extensively on prices than the Russian war. 

It so happens that this time the greatest literary authority of English 
freetrade, the London Economist, quite untrue to his traditions, and in 
open contradiction to the Manchester school, not only avows that "the 
war had little or no connection with the high price of grain", but also 25 
that the "prosperity of 1853" was "convulsive"; that "in 1853 there was a 
fever which has left to 1854 some of the debility consequent on disease", 
and that "whether war had come or not, a commercial revulsion was at 
hand." 

If it be asked, how to explain the high cornprices in Great Britain in 30 
the face of an abundant harvest, it will be remembered that more than 
once, during the course of 1853, the fact was pointed at in the Tribune of 
the freetrade delusions causing the greatest possible irregularities and 
errors to take place in the operations of the British corntrade, depressing 
prices in the summer months below their natural level when their advance 35 
alone would have secured the necessary supplies and sufficient orders 
for future purchases. Thus it happened that the imports in the months of 
July, August, September, and October 1854 reached but 750,000 qrs, 
against 2,132,000 qrs in the same months of 1853. Besides, it can hardly 
be doubted that consequent upon the repeal of the cornlaws such large 40 
tracts of arable land have been transformed into pasture, as to make even 

The commercial crisis in Britain (Draft) 

an abundant harvest under the new regime relatively defective. "Conse- 
quently", to quote the circular of the Hull Chamber of Commerce "the 
United Kingdom commences the year 1855 with very small stocks of 
foreign wheat, and with prices almost as high as in the beginning of 1854, 

5 whilst depending almost entirely on its own farmers’ supplies until 
spring." 

The reason of the English commercial revulsion of 1854, which is likely 
not to assume its true dimensions till the spring of 1855, is contained in 
the following few arithmetical characters: The exports of British produce 

10 and manufactures reached in 1853 about 98,000,000 £., while in 1846 the 
value of British produce exported was but 57,786,000 I. From those 
98,000,000 £. of 1853 Australia which in 1842 had taken off less than 
1,000,000, and in 1850 about 3,000,000, absorbed nearly 15,000,000 1., 
while the United States consumed in 1842 only 3,582,000 I. and in 1850 

15 not yet 15,000,000 I. of British exports. The necessary reaction, then, 
upon the English trade, of the American crisis and of the hopelessly 
glutted Australian markets needs no further explanation. In 1837 the 
American crisis was at the heels of the English crisis of 1836, while this 
time the English crisis succeeds the American one; but in both instances 

20 the crisis may be traced to the same source—the fatal working of the 
English industrial system which leads to overproduction in Great Britain 
and overspeculation in all other countries. The Australian and the United 
States markets so far from forming exceptions to the present state of the 
market of the world, are only the highest expressions of its general con- 

25 dition. "We have the fact staring us in the face of glutted foreign markets 
and unprofitable returns, with few exceptions," exclaims a Manchester 
circular relating to the cotton trade. "Most of the foreign markets", says 
a circular relating to the silk trade "usual vents for our surplus manu- 
facture, have been groaning under the effects of overtrading." "Produc- 

30 tion was enormously increased", we are told by an account of the Brad- 
ford Worsted trade "and the goods for a time found an outlet in foreign 
markets. ... much irregular business has been done in reckless consign- 
ments of goods abroad, and we need scarcely remark that the results 
generally have been of the most unsatisfactory character." And so on 

35 through most all the commercial circulars. The Levant market, conse- 
quent upon the apprehensions arising from the Oriental war, was the 
only one which had not been overdone. Therefore, two months since, 
Lancashire set about retrieving what had been neglected in that zone, and 
at this very moment Constantinople is also "groaning" under the over- 

40 whelming masses of British produce. Thus was the revolution in Spain 
and the consequent ascendancy of the contraband made use of to provide 

Karl Marx 

the Peninsula with cotton. China is the only country where political 
events can be pretended to have exerted a perceptible influence on the 
development of the commercial revulsion. "The hopes entertained about 

a gradual increase in our export trade whith China", say Messrs. Kayzer 
and Co. of Manchester, "have been almost entirely dispelled, and the 5 
rebellion spreading at present in that country at first considered as fa- 
vourable to foreign intercourse, seems now to be organized for ||[41]] the 
depredation of the country and the total ruin of trade. The export trade 
to China, which once was expe[cted to increase] greatly, has almost en- 
tirely ceased." Our readers will remember that when the Chinese révolu- 10 
tion first assumed anyfthing like serious dimensions,] we predicted the 
disastrous effects the English export trade has now, in fact derived from 
it. 

While denying all connection between the war and a commercial crisis 
the symptoms of which had become apparent before the war was thought 15 
of, we are of course aware that the war may dangerously aggravate the 
severe ordeal Great Britain will now have to pass through. The contin- 
uance of the war is tantamount to an increase of taxation, and increased 
taxes are certainly no remedy for diminished incomes. On the other hand |