[London,] 25 December 1857
D ear Frederick,
Since our first task now is to get a clear idea of conditions in 
France, I have been re-examining all my extracts on F rench
a See this volume, pp. 225-27.

229
commerce , industry  and  crises  and reached certain conclusions which I 
shall briefly oudine for you:
1. English, North European and American crises have never 
directly given rise in France to a ‘French crisis’; rather the effects 
have been entirely passive—chronic d is tress , lim it ation  o f  product io n , 
stagnat io n  o f  trade , and general  uneasiness . The reason: France has a 
favourable balance of trade with the United States, the Hanseat ic  
towns, England, Denmark. With Sweden and Norway the balance 
is unfavourable, but this is more than offset by Hamburg. 
Consequently  these crises can never generate a d
r a
i n  o
f  b
u
llio
n  from 
France and hence will not create aproperly  s o -called  monetary  pan ic  
there. If the Bank, notwithstanding, increases the bank rate, as has 
happened this time, it does so merely to prevent the capitalists 
from placing their money more advantageously in those countries. 
But so long as the export  o f  bullion  is the inevitable consequence, 
not of the balance of trade but simply of the avarice of the 
prof it mongers, it can, as Bonaparte has now once more demonstrated, be stopped by the gendarmerie. If the country with the 
favourable balance of trade has not granted long-term credits or
A CCUM ULATED  PRODUCE FOR THE  EXPO RT T O  THE  C EN T RES OF THE  C R ISE S---- and  b o th
are  repugnant  to  th e  PEDLAR-likea n a tu r e  ofyour  French  manu fa c turer  and  merchant — it w ill have  to endure  lo sse s, etc., butnotan  
acute c risis. Lou is  P h ilip p e , to o , w as m isle d  b y  th eapparent  good  
fo rtune  w ith  w h ich  France  emerges  fr o m  th e first pha se  ofa 
general  crisis . In  h is in auguraladdress  b e fo r e  th e  Chambers  o n  th e 
eve  o f  th e  February  re v o lu tio n , h e  congra tu la te d  ‘la belle France’
UPON T H IS PRIV ILEGE.
2. Admitting all this, the first phase of the crisis has already 
affected French  in dustry  and commerce  more seriously than on any 
similar occasion in the past.
3 . In France the first effect of the crisis— agreeable  t o  the  nature  
o f  the  crapaudsl—is the timorous curtailment of expend it ure  and 
business . Hence an accumulation of money in the Bank of France 
coinciding with a huge drop in the circulation of bank  d is counts . 
Hence—owing to the circumstance that crises always happen in 
the autumn and that every French government fears political 
disturbances at the year’s end should the bank rate be high at the 
settlement  of accounts — reduction of the bank rate in December. 
In December 1847 Louis Philippe ordered the Bank to reduce the 
bank rate to 4%.
a Marx used the word ‘pedlarmassig’ here, formed of the English word ‘pedlar’ and 
the German ‘massig’ meaning ‘after the fashion of’.

230
4. The greater availability of capital in commerce  and industry 
simultaneously gives rise to greater buoyancy  on the Bourse. This 
has been the case under Boustrapa40 to an even greater extent 
than under Louis Philippe because he compelled the Bank by the 
Decree of 1852 to make advanceson  r a il way  secur it ie s  and fondsa 
and Crédit foncier papiers, to rediscount the speculative 
bills  
discounted by the Comptoir National d’escompte,255 and likewise 
to make him a further advance on the 
secur it ie s  on which 
that institution had made advances already. Hence, e.g. the high 
price of French r a il way  shares and bonds although the rece ip t s  of 
the French railways since the outbreak of the crises in England 
have fallen disproportionately more than those over here. E.g. 
Orleans Railway 
rece ip t s dropped by 24% between 29 October 
and 26 November and subsequently even further. Nevertheless 
on 22 December Orleans Railway was quoted at 1,355 whereas 
on 29 October it was at 2,985.b It also emerges from the monthly  
retort  of the Bank  o f  France  for December that, while d is counts  in 
December have dropped by 94,236,520 frs compared with October and 49,955,500 compared with November, 
advanceson  r a ii,  
waysecur it ie s  have risen.c
5. The French crisis proper does not break out until the general  
c r is is  has attained a certain level in Holland, Belgium, the 
Zollverein,256 Italy (including Trieste), the Levant and Russia 
(Odessa), because in these countries the balance of trade is 
distinctly unfavourable to France; hence the direct effect of pressure  
is monetary  pan ic  in France. Once it has hit France, it recoils on 
those countries d’une manière vraiment admirable,d With Switzerland, 
France is on the same footing as the United States with England. 
The short-term balance of trade is consistently in France’s favour. 
But since France is substantially in debt to Switzerland, the latter is 
always apt heav il y  t o  draw  upon  i t  in times of crisis.
6. When the French crisis proper breaks out, it will play the 
very devil both with the secur it y  market  and the secur it y  of that 
market, the State. (This will also tell  upon  England, which a t  the
a stocks - b See ‘Bourse du Jeudi 26 novembre 1857’, Le Moniteur universel, 
No. 331, 27 November 1857; ‘Bourse du Mardi 22 décembre 1857’, LeM oniteur 
universel, No. 357, 23 December 1857; ‘Bourse du Jeudi 29 octobre 1857’, Le M oniteur 
universel, No. 303, 30 October 1857. In these sources the figure 2,985 refers to the 
shares of the Bank of France. The corresponding figure for Orleans Railways is 1,300, 
which bears out Marx’s argument on the buoyancy of railway stock. - c ‘Situation de la 
banque de France et de ses succursales’, LeM oniteur universel, Nos. 282, 317, 345, 
9 October, 13 November, 11 December 1857. - d in truly grand style