London, 10 April 1879 

My dear Sir, 

When I received your letter of February (and at the same time 
the valuable prints, which have come to my hands like the others 
you mention *”) my wife had fallen so ill that the doctors doubted 
whether she was likely to survive the attack, and meanwhile my 
own state of health underwent some serious shocks. (In point of 
fact, since, consequent upon the state of things in Germany and 
Austria, I was precluded from paying my annual visit to Karlsbad,” 
I have never enjoyed a comparative state of ease.) Under these 
circumstances which have only improved a very short time since, I 
could not study the papers sent me. In the meantime I had sent 
you a letter’? by a German on the way to St Petersburg, limiting 
myself to an acknowledgement of your letter and recommending 
the bearer, but, to my great astonishment, he reappeared 
yesterday here and told me that, consequent upon some incidents, 
he had not got farther than Berlin and renounced altogether 
visiting Petersburg. 

4 Freiheit - > See this volume, p. 312. 

And now, primo, I am obliged to tell you (cela est tout a fait 
confidentiel*) that I have been informed from Germany, my second 
volume” could not be published so long as the present régime was 
maintained in its present severity. This news, considering the 
status quo, did not surprise me, and, I must confess, was far from 
annoying me—for these reasons *”: 

Firstly: I should under no circumstances have published the 
second volume before the present English industrial crisis had 
reached its climax. The phenomena are this time singular, in 
many respects different from what they were in the past, and 
this—quite apart from other modifying circumstances—is easily 
accounted for by the fact that never before the English crisis was 
preceded by tremendous and now already 5 years lasting crisis in 
the Unites States, South America, Germany, Austria, etc. 

It is therefore necessary to watch the present course of things 
until their maturity before you can ‘consume’ them ‘productively’, 
I mean ‘theoretically’. 

One of the singular aspects of the present state is this: There 
have, as you know, been crashes of banks in Scotland and in some 
of the English counties, principally the Western (of Cornwall and 
Wales) ones. Still the real centre of the money-market—not only of 
the United Kingdom, but of the world— London has till now been 
little affected. On the contrary, save a few exceptions, the 
immense joint-stock bank companies, like the Bank of England, 
have as yet only profited of the general prostration. And what this 
prostration is, you may judge from the utter despair of the 
English commercial and industrial philistine of seeing ever better 
times again! I have not seen the like, I have never witnessed a 
similar moral dislocation although I was in London in 1857 and 
1866 *”*! 

There is no doubt, one of the circumstances favourable to the 
London money-market is the state of the Bank of France, which, 
since the recent development of the intercourse between the two 
countries, has become a succursale* to the Bank of England. The 
Bank of France keeps an immense amount of bullion, the 
convertibility of its banknotes being not yet re-established, and at 
the signal of any perturbation of the London stock-exchange 
French money flows in to buy securities momentarily depreciated. 
If, during last autumn, the French money had been suddenly 
withdrawn, the Bank of England would certainly have had refuge 

a this is in strict confidence - > of Capital - © branch 

475 and 

to its last remedy in extremis, the suspension of the Bank Act, 
in that case we would have had the monetary crash. 

On the other hand, the quiet way in which the restauration of 
cash payments was effected in the United States, has removed all 
strain from that corner upon the resources of the Bank of 
England. But what till now mainly contributed to prevent an 
explosion within the London money-market, is the apparently 
quiet state of the banks of Lancashire and the other industrial 
districts (saving the mining districts of the West), though it is sure 
and ascertained, that these banks have not only invested great part 
of their resources in discounting of bills of, and advances upon, 
unprofitable transactions of the manufacturers, but have, as f.i. at 
Oldham, sunk a great part of their capital in the foundation of 
new fabrics. At the same time stocks, mainly of cotton produce, 
are daily accumulating not only in Asia (India principally) whither 
they are sent on consignment, but at Manchester, etc., etc. How 
this state of things could pass away without a general crash among 
the manufacturers, and, consequently, among the local banks, 
reacting directly upon the London money-market—is difficult to 
foresee. 

Meanwhile strikes and disturbance are general. 

I remark en passant that during the past year—so bad for all 
other business—the railways have been flourishing, but this was 
only due to extraordinary circumstances, like the Paris exhibi- 
tion,’ etc. In truth, the railways keep up an appearance of 
prosperity, by accumulating debts, increasing from day to day 
their capital account. 

However the course of this crisis may develop itself—although 
most important to observe in its details for the student of 
capitalistic production and the professional théoricien—it will pass 
over, like its predecessors, and initiate a new ‘industrial cycle’ with 
all its diversified phases of prosperity, etc. 

But under the cover of this ‘apparently’ solid English society, 
there lurks another crisis— the agricultural one which will work 
great and serious changes in its social structure. I shall recur to 
this subject on another occasion.* It would lead me too far at 
present. 

Secondly: The bulk of materials I have received not only from 
Russia, but from the United States, etc., make it pleasant for me to 
have a ‘pretext’ of continuing my studies, instead of winding them 
up finally for the public. 

4 See Marx’ letter to Danielson of 12 December 1880 (present edition, Vol. 46). 

Thirdly: My medical adviser* has warned me to shorten 
considerably my ‘working-day’ if I were not desirous to relapse 
into the state of 1874 and the following years where I got giddy 
and unable to proceed after a few hours of serious application. 

In regard to your most remarkable letter I shall confine myself 
to a few observations. 

The railways sprang first up as the ‘couronnement de l’oeuvre’” in 
those countries where modern industry was most developed, England, 
United States, Belgium, France, etc. I call them the ‘couronnement 
de l’oeuvre’ not only in the sense, that they were at last (together 
with steamships for oceanic intercourse and the telegraphs) the 
means of communication adequate to the modern means of 
production, but also in so far as they were the basis of immense 
joint-stock companies, forming at the same time a new starting 
point for all other sorts of joint-stock companies, to commence by 
banking companies. They gave in one word an impetus never 
before suspected to the concentration of capital and also to the 
accelerated and immensely enlarged cosmopolitan activity of loanable 
capital, thus embracing the whole world in a network of financial 
swindling and mutual indebtedness, the capitalistic form of ‘interna- 
tional’ brotherhood. 

On the other hand, the appearance of the railway system in the 
leading states of capitalism allowed, and even forced, states where 
capitalism was confined to a few summits of society, to suddenly 
create and enlarge their capitalistic superstructure in dimensions 
altogether disproportionate to the bulk of the social body carrying 
on the great work of production in the traditional modes. There 
is, therefore, not the least doubt that in those states the railway 
creation has accelerated the social and political disintegration, as in 
the more advanced states it hastened the final development, and 
therefore the final change, of capitalistic production. In all states, 
except England, the governments enriched and fostered the 
railway companies at the expense of the public Exchequer. In the 
United States they received as a present a great part of the public 
land, not only the land necessary for the construction of the lines, 
but many miles of land along both sides [of] the lines, covered 
with forests, etc. They became so the greatest landlords, the small 
immigrating farmers preferring of course lands so situated as to 
ensure their produce ready means of transport. 

The system inaugurated in France by Louis Philippe, of handing 
over the railways to a small band of financial aristocrats, endowing 

a George Allen - > consummation of business 

them with long terms of possession, guaranteeing the interest out 
of the public pocket, etc., etc., was pushed to the utmost limit by 
Louis Bonaparte whose régime, in fact, was essentially based upon 
the traffic in railway concessions, to some of which he was so kind 
as to make presents of canals, etc. 

But in Austria, and Italy above all,the railways were a new 
source of unbearable state indebtedness and grinding of the 
masses. 

Generally, the railways gave of course an immense impulse to 
the development of Foreign Commerce, but this commerce in 
countries which export principally raw produce increased the 
misery of the masses. Not only that the new indebtedness, 
contracted by the governments on account of the railways, 
increased the bulk of imposts weighing upon them, but from the 
moment every local production could be converted into cosmopoli- 
tan gold, many articles formerly cheap, because invendible to a great 
degree, such as fruit, wine, fish, deer, etc., became dear and were 
withdrawn from the consumption of the people, while, on the 
other hand, the production itself, I mean the special sort of produce, 
was changed according to its greater or minor suitableness for 
exportation, while formerly it was principally adapted to its 
consumption in loco. Thus f.i. in Schleswig-Holstein agricultural 
land was converted into pasture, because the export of cattle was 
more profitable, but, at the same time, the agricultural population 
was driven away. All these changes [were] very useful indeed for 
the great landed proprietor, the usurer, the merchant, the 
railways, the bankers and so forth, but very dismal for the real 
producer! 

It is, to conclude by this my letter (since the time for putting it 
to post draws nearer and nearer), impossible to find real analogies 
between the United States and Russia. In the former the expenses 
of the government diminish daily and its public debt is quickly and 
yearly reduced; in the latter public bankruptcy is a goal more and 
more appearing to become unavoidable. The former has freed 
itself (although in a most infamous way, for the advantage of the 
creditors and at the expense of the menu peuple*) of its 
paper-money, the latter has no more flourishing fabric than that 
of paper-money. In the former the concentration of capital and 
the gradual expropriation of the masses is not only the vehicle, but 
also the natural offspring (though artificially accelerated by the 
Civil War) of an unprecedented rapid industrial development, 

4a common people 

25%: 

agricultural progress, etc.; the latter reminds you rather of the 
times of Louis XIV and Louis XV, where the financial, commer- 
cial, industrial superstructure, or rather the fagade of the social 
edifice, looked (although they had a much more solid foundation 
than in Russia) like a satire upon the stagnant state of the bulk of 
production (the agricultural one) and the famine of the producers. 
The United States have at present much overtaken England in the 
rapidity of economical progress, though they lag still behind in the 
extent of acquired wealth, but at the same time the masses are 
quicker, and have greater political means in their hands, to resent 
the form of a progress accomplished at their expense. I need not 
prolong the antitheses. 

Apropos. Which do you consider the best Russian work on 
credit and banking? 

Mr Kaufman was so kind as to send me his book on ‘theory and 
practice of banking’, but I was rather astonished that my former 
intelligent critic in the Petersburger Messager de l’Europe*” had 
converted himself into a sort of Pindar of modern Stock-Exchange 
swindling. Besides, considered merely—and I expect generally 
nothing else of books of this kind—from Fachstandpunkt,’ it is far 
from original in its details. The best part in it is the polemics 
against paper-money. 

It is said that certain foreign bankers with whom a certain 
government desired to contract new loans, have asked as a 
guarantee—a constitution. I am far from believing this, because 
their modern method of doing the business was, till now at least, 
and could be, very indifferent as to forms of government. 

Yours truly, 
A. Williams‘