[Manchester,] 10 January 1865 

Dear Rudolf, 

My view of the American war’ is this: the South is gradually 
becoming exhausted and cannot replace its armies. The North has 
not yet mobilised the half of its resources. The South is limited to 
defence, so much so in fact that counter-attacks such as, e.g., 
Longstreet undertook in the Shenandoah Valley, are now a thing 
of the past. Hood attempted yet another one, but, in so doing, 
revealed his own impotence and decided the whole campaign at 
one stroke.*© The North is superior to its Southern opponents at 
all points and, furthermore, has Sherman’s 40,000 men at its 
disposal who can go wheresoever they please, everywhere destroy- 
ing the South’s forces, communications, resources and supplies 
deep in the South’s own territory.” Charleston is certain to fall in 
4-6 weeks at the latest, once Sherman has encircled it on Jand.*’ 
The South has but one army left, that at Richmond.*° That will 
assuredly be quite decisively beaten in the present year, and with 
that the defence of the South by armies will be at an end. A 
guernilla war, brigandry, etc., may then ensue and will probably do 
so into next year. 

If the South arms its Negroes, that will be so much the better 
for the North. However, they will take good care not to. At the 
last moment, if at all. The Negroes are not so stupid as to allow 
themselves to be massacred for the whip that flays their backs. 

There will certainly still be moments when things look better for 
the South than they do now, but we have seen that happen too 
often before, and I shall not be deceived by that. Such moments 
are merely a respite. 

I do not believe we shall get cotton from America; but I do 
believe we shall see a temporary fall. Cotton is at present so 
subject to speculation that prices are affected by every vicissitude 
of public opinion. There are, moreover, 500,000 bales in 
Liverpool, and the people here do have a tendency to fly to 
extremes immediately and shout: the South is done for, is bound 
to surrender in 14 days, etc.—a rise is thereby inconceivable. We 
shall be at the mercy of whatever news we receive, though always 
with the proviso that we know the stock in Liverpool to be double 
what it was last year. I also believe we shall see the year 1865 close 
below present prices, as we must expect more cotton from all 
parts. 

Your 

Friedrich