Economic Notes (Marx, 1861)

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First published in English in: Karl Marx and Frederick Engels, The Civil War in the United States, New York, 1937, London, 1937, pp. 88-91. p. 62

London, November 3

At the present moment general politics are non-existent in England. The interest of the country is absorbed in the French financial, commercial and agricultural crisis, the British industrial crisis, the dearth of cotton and the American question. Competent circles here are not for a moment deceived concerning the Bank of France’s bill-jobbing with a few big houses on both sides of the Channel being a palliative of the weakest sort.

All that could be achieved and has been achieved thereby was a momentary abatement of the drain of gold to England. The repeated attempts of the Bank of France to raise metallic auxiliary troops in Petersburg, Hamburg and Berlin damage its credit, without filling its coffers. The raising of the rate of interest on treasury bills, in order to keep them in currency, and the necessity of securing a remission of the payments for the new Italian loan from Victor Emmanuel—both are held here to be serious symptoms of French financial sickness. It is known, moreover, that at the present moment two projects contend in the Tuileries for precedence. The full-blooded Bonapartists, with Persigny and Péreire (of the Crédit Mobilier) at their head, want to make the Bank of France completely subject to governmental authority, to reduce it to a mere office of the Finance Ministry, and to use the institution, thus transformed, as an assignat factory.

It is known that this principle was originally at the bottom of the organisation of the Crédit Mobilier. The less adventurous party, represented by Fould and other renegades of Louis Philippe’s time, proposes a new national loan, which is to amount to 400 million francs, according to some; to 700 million, according to others. The Times, in a leading article today, probably reflects the view of the City when it states that France is completely paralysed by her economic crisis and robbed of her European influence.

Nevertheless, The Times and the City are wrong. Should the December power succeed in outlasting the winter without great internal storms, it will then blow the war trumpet in the spring. The internal distress will not thereby be remedied, but its voice will be drowned.

In an earlier letter I pointed out that the cotton swindle in Liverpool during the last few weeks fully reminds one of the maddest days of the railway mania of 1845. Dentists, surgeons, barristers, cooks, widows, workers, clerks and lords, comedians and clergymen, soldiers and tailors, journalists and persons letting apartments, man and wife, all speculated in cotton. Quite small quantities of from 1 to 4 bales were bought, sold and sold again. More considerable quantities lay for months in the same warehouse, although they changed owners twenty times. Whoever had bought cotton at 10 o’clock, sold it again at 11 o’clock with an addition of a halfpenny a pound. Thus the same cotton often circulated from hand to hand six times in ten hours. This week, however, there came a lull, and for no more rational reason than that a pound of cotton (namely, middling Orleans cotton) had risen to a shilling, that 12 pence make a shilling and are therefore a round figure. So everyone had purposed selling out, as soon as this maximum was reached. Hence sudden increase of the supply, and consequent reaction. As soon as the English make themselves conversant with the possibility that a pound of cotton can rise above a shilling, the St. Vitus’s dance will return more madly than ever.

The last official monthly report of the Board of Trade on British exports and imports has by no means dispelled the gloomy feeling. The export tables cover the nine months’ period from January to September 1861. In comparison with the same period of 1860, they show a falling-off of about £8,000,000. Of this, £5,671,730 fall to exports to the United States alone, whilst the remainder is distributed over British North America, the East Indies, Australia, Turkey and Germany. Only in Italy is an increase shown. Thus, for example, the export of British cotton commodities to Sardinia, Tuscany, Naples and Sicily has risen from £756,892 for the year 1860 to £1,204,287 for the year 1861; the export of British cotton yarn from £348,158 to £538,373; the export of iron from £120,867 to £160,912, etc. These figures are not without weight in the scale of British sympathy for Italian freedom.

Whilst the export trade of Great Britain has thus declined by nearly £8,000,000 her import trade has risen in still higher proportion, a circumstance that by no means facilitates the adjustment of the balance. This rise in imports stems, in particular, from the increase in wheat imports. Whereas for the first eight months of 1860 the value of the wheat imported amounted to only £6,796,131, for the same period of the present year it totals £13,431,487.

The most remarkable phenomenon revealed by the import tables is the rapid increase of French imports which have now attained a volume of nearly £18,000,000 (yearly), whilst English exports to France are not much bigger than, perhaps, those to Holland. Continental politicians have hitherto overlooked this entirely new phenomenon of modern commercial history. It proves that the economic dependence of France on England is, perhaps, six times as great as the economic dependence of England on France, if, that is, one not only considers the English export and import tables, but also compares them with the French export and import tables. It then follows that England has now become the principal export market for France, whereas France has remained a quite secondary export market for England. Hence, despite all chauvinism and all Waterloo rodomontade, the nervous dread of a conflict with “perfidious Albion”.

Finally, one more important fact emerges from the latest English export and import tables. Whilst in the first nine months of this year English exports to the United States declined by more than 65 per cent in comparison with the same period of 1860, the port of New York alone has increased its exports to England by £6,000,000 during the first eight months of the present year. During this period the export of American gold to England had almost ceased, while now, on the contrary, gold has been flowing for weeks from England to New York. It is in fact England and France whose crop failures cover the North American deficit, while the Morrill tariff and the economy inseparable from a civil war have simultaneously decimated the consumption of English and French manufactures in North America. And now one may compare these statistical facts with the jeremiads of The Times on the financial ruin of North America!