Manchester, 7 December 1857 

Dear Marx, 

Last week, what with prices eternally fluctuating and stocks 
building up, I was forced by the crisis to do a great deal of 
quill-pushing and so couldn’t write to you but only send you 
Guardians. 

In your last there’s a suicHT mistake. You say that if ‘the price of 
corn, sugar, etc., is currently being maintained it is because their 
owners are discounting the bills drawn on them for the same 
instead of selling the commodities’.* They, as the drawees, cannot 
discount the bills; all they have to do with bills is accept them and 
pay them when they fall due. The Hotpers of commodities can only 
protect themselves against forced selling by obtaining advances on 
the commodities. Under the circumstances this will be difficult, and 
in any case the amount of these advances will be reduced by the 
tremendous fall in the price of commodities (35% in the case of 
sugar!) and the certain knowledge that, as soon as some degree of 
forced selling becomes unavoidable, the value of the commodities 
will fall still further. So whereas the Hoipers formerly received 
advances amounting to */; or */; of the higher value of the 
commodities, they will now receive at most "le of the reduced value, 
i.e. about half the previously obtainable advance. This will 
inevitably precipitate the crash. But there is also a possibility that 
the Mincing Lane and Mark Lane rave” will continue a little longer 
in a slow decline before a few major bankruptcies occur. And 
come they will, as surely as in Liverpool and other ports. The 
amounts being lost on sugar, coffee, cotton, hides, dye-stuffs, silk, 
etc., etc., are colossal. The whole lot of the 1857 cotton crop, 
estimated at 3 mill. bales (will be 31/4), is now worth £15,000,000 
less than in September. One of the houses here has in transit 
35,000 sacks of coffee on each of which there will be a loss of £1. 
The loss on Indian cotton is just as great—33%. As the bills 

a See this volume, p. 208. - > Mincing Lane—a street in London, centre of wholesale 
trade in colonial goods; Mark Lane—a street in London where the Corn Exchange is 
situated. 

drawn in respect of these goods fall due, bankruptcies cannot fail to 
occur. 

The big American house which, after 2 days of negotiation with 
the Bank of England, recently obtained a million-pound advance, 
thereby saving its skin, belonged to Mr Peabody, the 4tH Jury 
ANNIVERSARY DINNER man. *“° Latterly even Suse & Sibeth, the soundest 
of houses and the only people besides Frühling & Goschen whose 
bills continued to be negotiable in India after 1847 without a bill 
of lading as guarantee, have allegedly been compelled to appeal to 
the Bank for help. This firm, S. & S., are the greatest skinflints 
and so easily scared that they'd rather do no business at all than 
run any kind of risk. 

Here things still look much as they did before. Some 8 to 10 
days ago Indian and Levantine buyers suddenly appeared in the 
market, procured what they wanted at the lowest prices and thus 
helped some manufacturers heavily overstocked with cotton, yarn 
and cloth out of the worst of their predicament. Since Tuesday 
(Nov. 4th?*) everything has been quiet again. As for the 
manufacturers their expenses go on, SHORT time AND FULL TIME, Coal 
and lubricants, etc., etc., remain just as before, and only waces 
have been reduced by ls to '/o. Moreover, nothing is being sold, 
most of OUF SPINNERS AND MANUFACTURERS are getting very short of 
FLOATING CAPITAL and many of them are rotten to the core. 8 to 9 of 
the smaller ones have already come a cropper in the past few days, 
but that is only the first sign that the crisis has caught up with this 
class. Today I heard that the Cookes, who own the huge factory in 
Oxford Road (Oxford Road Twist Company), have sold their 
HUNTERS, FOXHOUNDS, GREYHOUNDS, e€tc., etc., and that one of them has 
dismissed his servants and left his palace, which is now To BE LET. 
They haven’t gone bust yet, but will undoubtedly be in for it soon. 
Another fortnight, and the dance will really be in full swing here. 

Sewell’s and Neck’s failure will have serious repercussions in 
Norway, which has not been affected hitherto. 

Things in Hamburg look splendid. Ulberg and Cramer (Swe- 
den), whose debts when they failed amounted to 12,000,000 banco 
marks (of which 7 mill. were bills on themselves!), had a capital of 
not more than 300,000 marks!! A whole lot of chaps have got into 
hot water simply for want of sufficient cash when a single bill fell 
due, although they might have had in their desks a hundred times 
that amount in currently worthless bills. Never has panic assumed 
so perfect and classic a form as in Hamburg just now. Everything is 

a (Nov. 4th?) added by Marx 

110. Engels to Marx: 7 December 1857 213 

worthless, utterly worthless, save for silver and gold. Last week also 
saw the failure of Christ. Matth. Schréder, a very old and wealthy 
house. J. H. Schréder & Co., London (his brother), telegraphed 
saying that if 2 million banco marks would be enough, he would 
send the equivalent in silver. Came the reply: 3 millions or 
nothing. He couldn’t spare the 3 millions and Christian Matthias 
crashed.**”? We have debtors in Hamburg and have no idea 
whether they still exist or whether they’ve gone bust. In Hamburg 
the whole imbroglio is the result of the most colossal kite-flying 
operations that have ever been seen. They were at their most 
outrageous in the dealings between Hamburg, London, 
Copenhagen and Stockholm. Then, with the American crash and 
the fall in the price of goods, the whole business came to light 
and, for the moment, Hamburg is done for commercially. The 
German industrialists, especially those in Berlin, Saxony and 
Silesia, will be very hard hit. 

Cotton is now 6°%/isd for mmpuNc and will no doubt soon come 
down to 6d. But the mills here will only be able to go on full time 
again provided increased production does not promptly force the 
price above 6d. Yet that is what would immediately happen just 
now. 

Among our local philistines the crisis has induced a strong 
desire for the bottle. No one can bear to stay at home alone with 
his cares and his family. The clubs are livening up and the 
consumption of Liquor is rising sharply. The worse of a jam a chap 
is in, the more frenzied his efforts to cheer himself up. And then, 
the morning after, what more striking example of remorse, both 
alcoholic and moral! 

This week I shall again apply myself to the Cyclopaedia and do 
as many of the C articles as possible. Just now I can’t work much 
or for very long at a stretch, but I'll do what I can. 

Warmest regards to your wife and children. 

Your 
F. E. 

Lupus is also involved in the crisis—but it will be his luck: his 
Samson has gone bankrupt, so his mornings are free.