Review, May-October 1850

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The political activity of the last six months has been essentially different from that which preceded it. The revolutionary party has everywhere been driven from the field, and the victors — the various fractions of the bourgeoisie in France, the various princes in Germany — are squabbling over the fruits of their victory. The quarrel is being conducted with a great deal of noise; and it might seem inevitable that there will be an open rupture, and that a decision can only be reached by force of arms. Yet the swords are doomed to remain in their sheaths, and the indeterminacy of the situation will be repeatedly concealed behind peace treaties, while ever new preparations are made for a phoney war.

Let us first consider the basic reality underlying this superficial turbulence.

The years 1843-5 were years of industrial and commercial prosperity, a necessary sequel to the almost uninterrupted industrial depression of 1837-42. As is always the case, prosperity very rapidly encouraged speculation. Speculation regularly occurs in periods when overproduction is already in full swing. It provides overproduction with temporary market outlets, while for this very reason precipitating the outbreak of the crisis and increasing its force. The crisis itself first breaks out in the area of speculation; only later does it hit production. What appears to the superficial observer to be the cause of the crisis is not overproduction but excess speculation, but this is itself only a symptom of overproduction. The subsequent disruption of production does not appear as a consequence of its own previous exuberance but merely as a setback caused by the collapse of speculation. However, as we cannot at this moment give a complete history of the post-1845 crisis, we shall enumerate only the most significant of these symptoms of overproduction.

In the years of prosperity from 1843 to 1845, speculation was concentrated principally in railways, where it was based upon a real demand, in corn, as a result of the price rise of 1845 and the potato blight, in cotton, following the bad crop of 1846, and in the East Indian and Chinese trade, where it followed hard on the heels of the opening up of the Chinese market by England.

The extension of the English railway system had already begun in 1844 but did not get fully under way until 1845, In this year alone the number of bills presented for the formation of railway companies amounted to 1,035. In February 1846, even after countless of these projects had been abandoned, the money to be deposited with the government for the remainder still amounted to the enormous sum of 514 million and even in 1847 the total amount of the payments called up in England was over £42 million of which over £36 million was for English railways, and £5 1/2 million for foreign ones. The heyday of this speculation was the summer and autumn of 1845. Stock prices rose continuously, and the speculators' profits soon sucked all social classes into the whirlpool. Dukes and earls competed with merchants and manufacturers for the lucrative honour of sitting on the boards of directors of the various companies; members of the House of Commons, the legal profession and the clergy were also represented in large numbers. Anyone who had saved a penny, anyone who had the least credit at his disposal, speculated in railway stocks. The number of railway journals rose from three to twenty. The large daily papers often each earned £14,000 per week from railway advertisements and prospectuses. Not enough engineers could be found, and they were paid enormous salaries. Printers, lithographers, bookbinders, paper-merchants and others, who were mobilized to produce prospectuses, plans, maps, etc; furnishing manufacturers who fitted out the mushrooming offices of the countless railway boards and provisional committees — all were paid splendid sums. On the basis of the actual extension of the English and continental railway system and the speculation which accompanied it, there gradually arose in this period a superstructure of fraud reminiscent of the time of Law and the South Sea Company. Hundreds of companies were promoted without the least chance of success, companies whose promoters themselves never intended any real execution of the schemes, companies whose sole reason for existence was the directors' consumption of the funds deposited and the fraudulent profits obtained from the sale of stocks.

In October 1848 a reaction ensued, soon becoming a total panic. Even before February 1848, when deposits had to be paid to the government, the most unsound projects had gone bankrupt. la April 1846 the setback had already begun to affect the continental stock markets; in Paris, Hamburg, Frankfurt and Amsterdam there were compulsory sales at considerably reduced prices, which resulted in the bankruptcy of bankers and brokers. The railway crisis lasted into the autumn of 1848, prolonged by the successive bankruptcies of less unsound schemes as they were gradually affected by the general pressure and as demands for payment were made. This crisis was also aggravated by developments in other areas of speculation, and in commerce and industry; the prices of the older, better-established stocks were gradually forced down, until in October 1848 they reached their lowest level.

In August 1845 public attention first turned to the potato blight, which appeared not only in England and Ireland hut also on the Continent — the first symptom that the roots of existing society were rotten. At the same time reports were received which no longer left people in any doubt about the huge loss in the corn harvest that had already been expected. These two factors caused corn prices to rise considerably on all European markets. In Ireland total famine broke out, obliging the English government to give the province a loan of £8 million — exactly £1 for each Irishman. In France, where the calamity was increased by the floods, which caused about £4 million worth of damage, the crop failure was of the utmost gravity. It was no less so in Holland and Belgium. The crop failure of 1845 was followed by an even worse one in 1846, and the potato blight appeared again too, although this time it was not as widespread. Speculation in corn thus had a real basis; it flourished all the more since the rich harvests of 1842-4 had long held it back almost completely. From 1845 to 1847 more corn was imported than ever before. Corn prices rose continuously until spring 1847, when, because of the changing news from various countries about the coming harvest, and because of the measures taken by various governments (the opening of ports to the free import of corn, etc.), a period of fluctuation began. Finally in May 1847 prices reached their highest point. In this month the average price of a quarter of wheat in England rose as high as 102s. 6d. and on single days as high as 115s. and 124s. But considerably more favourable reports soon came in about the weather and the growing crops; prices fell, and in the middle of July the average price stood at only 74s. Unfavourable weather drove prices up again somewhat, until finally, in the middle of August, it was certain that the 1847 harvest would produce an above average yield. The fall in prices could now no longer be stopped; supplies to England increased beyond all expectation, and on 18 September the average price had fallen to 49s. 6d. In the course of sixteen weeks, therefore, the average price had varied by no less than 53s.

During this whole period, not only had the railway crisis continued but, on top of all this, the whole credit system collapsed at the very moment when the corn prices were at their highest, in April and May 1847, and the money market was completely ruined. The corn speculators nevertheless held out through the fall in prices until 2 August. On this day the Bank raised its lowest discount rate to 5 per cent and, for all bills of exchange over more than two months, to 6 per cent. Immediately a series of most spectacular bankruptcies ensued on the Corn Exchange, headed by that of Mr Robinson, Governor of the Bank of England. In London alone, eight great corn merchants went bankrupt, their total liabilities amounting to more than £1 1/2 million. The provincial corn exchanges were totally paralysed; bankruptcies followed one after another at a similar rate, especially in Liverpool. Corresponding bankruptcies took place sooner or later on the Continent according to the distance from London. However, by 18 September, when the price of corn fell to its lowest point, the corn crisis can be regarded as being over in England.

We now come to the commercial crisis proper, the monetary crisis. In the first four months of 1847 the general state of trade and industry still seemed to be satisfactory, with the exception of iron production and the cotton industry. Iron production, given an enormous boost by the railway bubble of 1845, suffered proportionately as this outlet for the excess supply of iron contracted. The cotton industry, the main branch of industry for the East Indian and Chinese markets, had been overproducing for these markets as early as 1845, and very soon a relative recession began. The bad cotton crop of 1846, the rise in prices for both raw material and finished commodity, and the consequent reduction in consumption, all increased pressure on the industry. In the first few months of 1847 production was cut back considerably throughout Lancashire, and the cotton workers were hit by the crisis.

On 15 April 1847 the Bank of England raised its lowest discount rate for short-term bills to 5 per cent, and set a limit to the total amount of discountable bills irrespective of the character of the drawee houses. It also made a peremptory announcement to its customers that, contrary to previous practice, it would no longer renew advances made when these fell due, but would demand repayment. Two days later the publication of its weekly balance sheet showed that the reserves of the Banking Department had dropped to £2 1/2 million. The Bank had therefore taken the above measures to stop the drain of gold from its vaults and to replenish its cash reserves.

The drain of gold and silver from the Bank had various causes. Rising consumption and the considerably higher prices of almost all articles required added means of circulation, particularly gold and silver for retail trade. Further, the continuous payment of installments for railway construction, which in April alone amounted to £4,314,000, had led to a mass withdrawal of deposits from the Bank. That part of the money called up which was intended for foreign railways, flowed directly abroad. The considerable excess import of sugar, coffee and other colonial produce (consumption and prices having risen even more as a result of speculation), of cotton (following the speculative purchases made since it had become clear that the crop would be scarce), and, in particular, of corn (as a result of repeated harvest failures), had to be paid for mostly in ready cash or bullion, and in this way, too, a considerable amount of gold and silver flowed abroad. This drain of precious metals from England, it may be added, continued until the end of August, despite the Bank's measures mentioned above.

The Bank's decisions, and the news of the low level of its reserves, immediately produced pressure on the money market and a panic throughout English commerce matched in intensity only by that of 1845. In the last week of April and the first four days of May almost all credit transactions were paralysed. However no unusual bankruptcies occurred; trading houses kept their heads above water with enormous interest payments and by the forced sale of supplies, government stocks, etc. at ruinous prices. A whole series of well-established firms saved themselves in this way during the first act of the crisis only by paving the way for their subsequent collapse. But the fact that the first and most threatening danger had been overcome contributed to the raising of confidence; after 5 May pressure on the money market noticeably eased, and towards the end of May the alarm was more or less over.

A few months later, however, at the beginning of August, the bankruptcies mentioned above occurred in the corn trade. Lasting until September, they were hardly over when the general commercial crisis broke out with concentrated force, particularly in the East Indian, West Indian and Mauritian trade. The crisis broke simultaneously in London, Liverpool, Manchester and Glasgow. During September twenty concerns were ruined in London alone, their total liabilities amounting to between £9 and £10 million. 'There were uprootings of commercial dynasties in England not less striking than the fall of those political houses of which we have lately heard so much,' said Disraeli on 30 August 1848 in the House of Commons. The epidemic of bankruptcies in the East Indian trade raged incessantly until the end of the year and was resumed in the first months of 1848 when news arrived of the bankruptcy of the corresponding concerns in Calcutta, Bombay, Madras and Mauritius.

This series of bankruptcies, unprecedented in the history of commerce, was caused by general over-speculation and the resulting excess import of colonial produce. The prices of this produce, which had been kept at an artificially high level for a long time, dropped somewhat before the panic in April 1847, but were subject to a general and steep drop only after this panic, when the whole credit system collapsed and one house after the other was forced to sell on a mass scale. This fall was so considerable, particularly from June and July until November, that even the oldest and most reputable concerns were ruined.

The bankruptcies in September were still limited exclusively to actual merchant houses. On 1 October the Bank raised its lowest discount rate for short-term bills to 5 1/2 per cent, and declared at the same time that it would henceforth make no more advances against government stocks of any kind. The joint stock banks and private bankers were now no longer able to withstand the pressure. The Royal Bank of Liverpool, the Liverpool Banking Company, the North and South Wales Bank, the Newcastle Union Joint Stock Bank and others were ruined, one after the other, within a few days. At the same time declarations of insolvency were issued by a large number of smaller private bankers throughout the English provinces.

A considerable number of stockjobbers, stockbrokers, billbrokers, shipping agents, tea and cotton brokers, iron manufacturers and iron merchants, cotton and wool spinners, calico printers, etc. in Liverpool, Manchester, Oldham, Halifax, Glasgow and elsewhere went bankrupt following the general suspension of payments by the banks which characterized the month of October. According to Mr Tooke, these bankruptcies were without precedent in the history of English commerce, both in their number and in the amount of capital involved, and the crisis far exceeded that of 1825. The crisis reached its peak between 22 and 25 October, when all commercial transactions had come to a standstill. A deputation from the City then brought about a suspension of the Bank Act of 1844, which had been the fruit of the deceased Sir Robert Peel's sagacity. With this suspension, the division of the Bank of England into two completely independent departments with separate cash reserves instantly came to an end; another few days of the old arrangement and the Banking Department would have been forced into bankruptcy while £6 million in gold lay stored in the Issue Department.

As early as October the crisis caused the first setback on the Continent. Serious bankruptcies occurred simultaneously in Brussels, Hamburg, Bremen, Elberfeld, Genoa, Livorno, Courtrai, St Petersburg, Lisbon and Venice. While the crisis eased in England, it increased in intensity on the Continent, affecting places hitherto untouched. During the worst period, the exchange rate was favourable for England, and from November on England continuously attracted imports of gold and silver, not only from Russia and the Continent, but also from America. The immediate result was that as the money market eased in England, it tightened in the rest of the commercial world and the crisis grew. Thus the number of bankruptcies outside England rose in November; equally important bankruptcies now occurred in New York, Rotterdam, Amsterdam, Le Havre, Bayonne, Antwerp, Mons, Trieste, Madrid and Stockholm. In December the crisis broke in Marseilles and Algiers and took on a new severity in Germany.

We have now arrived at the point where the February revolution broke out in France. If one looks at the list of bankruptcies which Mr D. M. Evans appends to his Commercial Crisis of 1847-8 (London, 1848), one finds that in England not a single concern of any importance was ruined as a result of this revolution. The only bankruptcies connected with it occurred in stock-jobbing, as a result of the sudden devaluation of all government stocks on the Continent. There were, of course, similar stock-jobbing bankruptcies in Amsterdam, Hamburg, etc. English consols fell by 6 per cent, whereas they had fallen by 3 per cent after the July revolution. Thus, as far as stock-jobbers were concerned, the February republic was only twice as dangerous as the July monarchy.

The panic which broke out in Paris after February, and swept across the whole Continent together with the revolution, was very similar in the course it took to the London panic of April 1847. Credit disappeared suddenly and business transactions came almost to a standstill; in Paris, Brussels and Amsterdam everyone hurried to the bank to change notes for gold. On the whole, however, very few bankruptcies ensued outside the field of stockjobbing, and it cannot easily be proved that these few cases were necessarily the result of the February revolution. The suspensions of payment by the Paris brokers, most only temporary, were only partly connected with stockjobbing; some were precautionary measures, by no means caused by insolvency, the rest were attributable to pure chicanery, aimed at making difficulties for the Provisional Government in order to force concessions from it. As far as the banking and commercial bankruptcies in other parts of the Continent were concerned it is impossible to determine to what extent they resulted from the duration and gradual spread of the commercial crisis, how far the situation at the time was used by already unsound firms to make a judicious exit, and how far they were really the result of losses caused by the panic atmosphere of the revolution. At any rate, it is certain that the commercial crisis contributed far more to the revolution of 1848 than the revolution to the commercial crisis. Between March and May England enjoyed direct advantages from the revolution, which supplied her with a great deal of continental capital. From this moment on the crisis can be regarded as over in England; there was an improvement in all branches of business and the new industrial cycle began with a decided movement towards prosperity. How little the continental revolution held back the industrial and commercial boom in England can be seen from the fact that the amount of cotton manufactured here rose from 475 million lb. in 1847 to 713 million lb. in 1848.

In England this renewed prosperity developed visibly during 1848, 1849 and 1850. For the eight months January-August, England's total exports amounted to £31,633,214 in 1848; £39,263,322 in 1849 and £43,851,568 in 1850. In addition to this considerable improvement, manifest in all branches of business with the exception of iron production, rich harvests were gathered everywhere during these three years. The average price of wheat in 1848-50 was 36s. per quarter in England, 32s. in France. This period of prosperity is characterized by the fact that three major outlets for speculation were blocked. Railway production had been reduced to the slow development of a normal branch of industry, corn offered no opportunities due to a series of good harvests, and, as a result of the revolution, government stocks had lost the reliable character without which large speculative transactions in securities are not possible. During every period of prosperity capital accumulates. On the one hand increased production generates new capital; on the other, capital which was available but idle during the crisis is released from its inactivity and unloaded onto the market. With the lack of speculative outlets this additional capital was forced during these years to flow into actual industry, thus increasing production even more rapidly. How apparent this is in England, without anyone being able to explain it, is demonstrated by this naive statement in the Economist of 19 October 1850:

It is remarked that the present prosperity differs from that of former periods within recollection, in all of which there was some baseless speculation exciting hopes that were destined not to be realized. At one time it was foreign mines, at another more railways than could be conveniently made in half a century. Even when such speculations were well founded, they contemplated a realization of income, from raising metals or creating new conveniences, at the end of a considerable period, and awarded no immediate reward. But at present our prosperity is founded on the production of things immediately useful, and that go into consumption nearly as fast as they are brought to market, returning to the producers a fair remuneration and stimulating more production.

Cotton manufacturing, the dominant branch of industry, provides the most striking proof of the extent to which industrial production has increased in 1848 and 1849. The United States cotton crop of 1849 produced a higher yield than in any previous year, amounting to 2 3/4 million bales, or about 1,200 million lb. The expansion of the cotton industry has kept pace with this increase in imports to such an extent that at the end of 1849 stocks were lower than ever before, even after the years of the crop failures. In 1849 over 775 million lb. of cotton were spun, as against 721 million lb. in 1845, the year of the greatest prosperity hitherto. The expansion of the cotton industry is further shown by the great rise in cotton prices (55 per cent) resulting from a relatively minor loss in the 1850 crop. At least the same progress can be seen in all other branches, such as the spinning and weaving of silk, shoddy and linen. Exports in these industries have risen so considerably, particularly in 1850, that they have produced a large increase in the total export figures for the first eight months of this year (£12 million above the corresponding figure for 1848, £4 million above that for 1849), even though in 1850 the 294 export of cotton products has dropped noticeably as a result of the bad cotton crop. In spite of the considerable increase in wool prices, which seems to have been caused by speculation in 1849, but which has now levelled out, the woollen industry has expanded continuously, and new looms are continually being brought into operation. The export of linen textiles in 1844, the highest previously, amounted to 91 million yards, at a value of over £2,800,000, while in 1849 it reached 107 million yards at a value of over £3,000,000.

Another proof of the growth of English industry is the continuously rising consumption of basic colonial produce, particularly coffee, sugar and tea, at continuously rising prices — at least for the first two articles. This increase in consumption is a direct result of the expansion of industry; the more so, as the exceptional market situation created since 1845 by the extraordinary railway investments has long since been reduced to its normal scale, and as the low corn prices of the last few years have not allowed any increase in consumption in the agricultural areas.

In the last few months the broad expansion of the cotton industry has led to renewed attempts to saturate the East Indian and Chinese markets. But the quantity of old stocks still awaiting sale in these areas soon again obstructed these attempts. At the same time, in view of the rising consumption of raw materials and colonial produce, an attempt was made to speculate in these commodities, but a stop was very quickly put to this by the temporary increase in imports, and by the memory of the wounds sustained in 1847, which are still too fresh.

Industrial prosperity will be further increased by the recent opening up of the Dutch colonies, by the impending establishment of trading routes across the Pacific Ocean (to which we shall return) and by the great industrial exhibition of 1851. This exhibition was announced by the English bourgeoisie already in 1849, with the most impressive cold-bloodedness, at a time when the whole Continent was still dreaming of revolution. For this exhibition they have summoned all their vassals from France to China to a great examination, in which they are to demonstrate how they have been using their time; and even the omnipotent Tsar of Russia feels obliged to order his subjects to appear in large numbers at this great examination. This great world congress of products and producers is quite different in its significance from the absolutist Congresses of Bregenz and Warsaw, which have caused our narrow-minded continental democrats so much sweat; different also from the European democratic congresses which the various provisional governments in partibus infidelium repeatedly project for the salvation of the world. This exhibition is a striking proof of the concentrated power with which modern large-scale industry is everywhere demolishing national barriers and increasingly blurring local peculiarities of production, society and national character among all peoples. By putting on show the massed resources of modern industry in a small concentrated space, just at a time when modern bourgeois society is being undermined from all sides, it is also displaying materials which have been produced, and are still being produced day after day in these turbulent times, for the construction of a new society. With this exhibition, the bourgeoisie of the world has erected in the modern Rome its Pantheon, where, with self-satisfied pride, it exhibits the gods which it has made for itself. It thus gives a practical proof of the fact that the 'impotence and vexation of the citizen', which German ideologists preach about year in year out, is only these gentlemen's own impotent failure to understand the modern movement, and their own vexation at this impotence. The bourgeoisie is celebrating this, its greatest festival, at a moment when the collapse of its social order in all its splendour is imminent, a collapse which will demonstrate more forcefully than ever how the forces which it has created have outgrown its control. In a future exhibition the bourgeoisie will perhaps no longer figure as the owners of these productive forces but only as their ciceroni.

The loss of the cotton crop has been spreading general alarm among the bourgeoisie since the beginning of the year, just as the potato blight did in 1845 and 1846. This alarm has increased considerably since it became clear that the cotton crop of 1851, too, will not turn out to be mach richer than that of 1850. The loss, which would have been insignificant in earlier periods, now represents a very serious threat to the present expansion of the cotton industry, and it has already impeded production considerably. The bourgeoisie, having scarcely recovered from the shattering discovery that one of the central pillars of its social order — the potato — was endangered, now sees the second pillar — cotton — threatened. If just a moderate loss in one year's cotton crop and the prospect of a second has been enough to excite serious alarm amidst the rejoicing over prosperity, a few consecutive years in which the cotton crop really does fail are bound to reduce the whole of civilized society to a temporary state of barbarism. The golden age and the iron age are long past; it was reserved for the nineteenth century, with its intelligence, world markets and colossal productive resources, to usher in the cotton age. At the same time, the English bourgeoisie has felt more forcefully than ever the power which the United States exercises over it, as a result of its hitherto unbroken monopoly of cotton production. It has immediately applied itself to the task of breaking this monopoly. Not only in the East Indies, but also in Natal, the northern region of Australia and all parts of the world where climate and conditions allow cotton to be grown, it is to be encouraged in every way. At the same time, that section of the English bourgeoisie kindly disposed towards the Negro has made the following discovery. "That the prosperity of Manchester is dependent on the treatment of slaves in Texas, Alabama and Louisiana is as curious as it is alarming.' (Economist, 21 September 1850). That the decisive branch of English industry is based upon the existence of slavery in the southern states of the American union, that a Negro revolt in these areas could ruin the whole system of production as it exists today is, of course, an extremely depressing fact for the people who spent £20 million for the people who spent £20 million a few years ago on Negro emancipation in their own colonies. However, this fact leads to the only realistic solution of the slave question, which has recently again been the cause of such long and violent debate in the American Congress. American cotton production is based on slavery. As soon as the industry reaches a point where it cannot tolerate the United States' cotton monopoly any longer, cotton will be successfully mass-produced in other countries, and it is hardly possible to achieve this anywhere today except with free workers. But as soon as the free labour of other countries can deliver sufficient supplies of cotton to industry more cheaply than the slave labour of the United States, then American slavery will be broken together with the American cotton monopoly and the slaves will be emancipated, because they will have become useless as slaves. Wage labour will be abolished in Europe in just the same way, as soon as it becomes not only unnecessary for production, but in fact a hindrance to it.

If the new cycle of industrial development which began in 1848 takes the same course as that of 1843-7, the crisis will break out in 1852. As a symptom that the excess speculation which is caused by overproduction, and which precedes each crisis, will not be long in coming, we can quote the fact that the discount rate of the Bank of England has not risen above 3 per cent for two years. But when the Bank of England keeps its interest rates down in times of prosperity, the other money dealers have to reduce their rates even more, just as in times of crisis when the Bank raises the rate considerably, they have to raise their rates above the Bank's. The additional capital which, as we have seen above, is always unloaded onto the bond market in times of prosperity, is enough by itself to force down the interest rate, as a result of the laws of competition; but the interest rate is reduced to a much larger extent by the enormous expansion of credit produced by general prosperity, which lowers the demand for capital. In these periods a government is in a position to reduce the interest rate on its funded debts, and the landowner is able to renew his mortgage on more favourable terms. The capitalists with investments in loan capital thus see their income reduced by a third or more, at a time when the income of all other classes is rising. The longer this situation lasts, the more they will be under pressure to look for more profitable capital investments. Overproduction gives rise to numerous new projects, and the success of a few of them is sufficient to attract a whole mass of capital in the same direction, until gradually the bubble becomes general. But, as we have seen, speculation has at this point of time only two outlets; cotton growing and the new world market routes created by the development of California and Australia. It is evident that this time the scope for speculation will assume far greater dimensions than in any earlier period of prosperity.

Let us take a look at the situation in the English agricultural districts. The general pressure produced by the repeal of the Corn Laws and the simultaneous rich harvests has here become chronic, although it has been alleviated somewhat by the considerable increase in consumption caused by prosperity. In addition, with low corn prices the agricultural workers at least are in s relatively better position, although the improvement in England has been more limited than in other countries, where land parcelling is the rule. Under these circumstances the agitation of the Protectionists for the reimposition of corn duties continues in the agricultural areas, although less shrilly and overtly than before. It is evident that this agitation will remain quite insignificant so long as the relatively tolerable position of the agricultural workers continues. But as soon as the crisis breaks, with repercussions in the farming areas, the agricultural depression on the land will provoke considerable unrest. The industrial and commercial crisis will then coincide with the agricultural crisis for the first time, and in all issues which give rise to conflict between town and country, manufacturers and landowners, the two parties will be supported by two great armies: the manufacturers by the mass of the industrial workers, and the landowners by the mass of the agricultural workers.

We now come to the United States of America. The crisis of 1836, which broke out there first and raged most violently, lasted almost without interruption until 1842 and led to a complete transformation of the American credit system. The commerce of the United States recovered on this more solid foundation, if at first very slowly, until from 1842 to 1845 prosperity significantly increased there, too. The rise in prices and the revolution in Europe only brought benefits for America. From 1845 to 1847 it profited from the enormous export of grain and from the 1846 rise in cotton prices. In 1849 it produced the largest cotton crop to date, and in 1850 it made about $20 million from the loss in the cotton crop, which coincided with the new boom in the European cotton industry. The revolutions of 1848 caused a large-scale flow of European capital to the United States, which arrived partly with the immigrants themselves and was partly attributable to European investments in American treasury bonds. This increase in demand for American bonds has forced up their price to such an extent that recently in New York speculators have been seizing on them quite feverishly. Thus, despite all assertions to the contrary in the reactionary bourgeois press, we still maintain that the only form of state to enjoy the confidence of our European capitalists is the bourgeois republic. There is only one expression of bourgeois confidence in any form of state: its quotation on the stock exchange.

However, the prosperity of the United States increased even more for other reasons. The populated area, the home market of the North American union, extended with surprising rapidity in two directions. The population increase, due both to reproduction within America and to the continuing increase in immigration, led to the settlement of whole states and territories. Wisconsin and Iowa were comparatively densely populated within a few years, and there was a significant increase in immigrants to all states in the upper Mississippi region. The exploitation of the mines on Lake Superior and the rising grain production in the whole area around the Great Lakes produced a new boom in commerce and shipping on this system of great inland waterways, which will expand further as a result of an act passed during the last session of Congress, by which trade with Canada and Nova Scotia has been greatly facilitated. While the northwestern states have thus gained a new importance, Oregon has been colonized within a few years, Texas and New Mexico annexed and California conquered. The discovery of the Californian gold mines has set the cap on American prosperity. In the second number of this Revue — before any other European journal — we drew attention to the importance of this discovery and its necessary consequences for the whole of world trade. This importance does not lie in the increased supply of gold from the newly discovered mines, although this increase in the means of exchange was bound to have consequences for commerce in general. It lies rather in the spur given to investment on the world market by the mineral wealth of California, in the activity into which the whole west coast of America and the eastern coast of Asia has been plunged, in the new market outlets created in California and in all the other countries affected by California. Even taken by itself the Californian market is very important; a year ago there were 100,000 people there; now there are at least 300,000 people, who are producing almost nothing but gold, and who are exchanging this gold for their basic living requirements from foreign markets. But the Californian market itself is unimportant compared to the continual expansion of all the markets on the Pacific coast, compared to the striking increase in trade with Chile and Peru, western Mexico and the Sandwich Islands, and compared to the traffic which has suddenly arisen between Asia, Australia and California. Because of California, completely new international routes have become necessary, routes which will inevitably soon surpass all others in importance. The main trading route to the Pacific Ocean — which has really only now been opened up, and which will become the most important ocean in the world — will, from now on, go across the Isthmus of Panama. The establishment of links across the Isthmus by highways, railways and canals is now the most urgent requirement of world trade and has already been tackled in places. The railway from Chagres to Panama is already being built. An American company is having the river basin of San Juan del Norte surveyed with a view to connecting the two oceans, first of all by an overland route and then by a canal. Other routes — across the Isthmus of Darien, the Atrato route in New Granada, across the Isthmus of Tehuantepec — are being discussed in English and American journals. The ignorance in the whole civilized world about the conditions of the terrain in Central America, which has now suddenly been exposed, makes it impossible to determine which route is the most advantageous for a great canal; according to the little information available, the Atrato route and the way across Panama seem to offer the best opportunities. The rapid expansion of the ocean steamer lines has become equally urgent, in order to connect up with the lines of communication across the Isthmus. Steamers are already sailing between Southampton and Chagres, New York and Chagres, Valparaiso, Lima, Panama, Acapulco and San Francisco; but these few lines, with their small number of steamers, are by no means adequate. The increase in steamer lines between Europe and Chagres becomes daily more urgent, and the growing traffic between Asia, Australia and America requires great new steamship lines from Panama and San Francisco to Canton, Singapore, Sydney, New Zealand and the most important station in the Pacific, the Sandwich Islands. Of all the areas in the Pacific Australia and New Zealand in particular have expanded most, as a result of both the rapid progress of colonization and the influence of California, and they do not want to be divided from the civilized world a moment longer by a four to six-month sea voyage. The total population of the Australian colonies (excluding New Zealand) rose from 170,676 in 1839 to 333,764 in 1848; that is, it increased in nine years by 95 1/2 per cent. England itself cannot leave these colonies without steamship links; and the government is negotiating at this moment for a line connecting with the Indian overland post. Whether this line comes about or not, the sheer necessity of a steamship connection with America, and particularly California, where 3,500 people from Australia emigrated to last year, will itself produce a solution. It may be said that the world has only become round since the necessity has arisen for this global steam shipping.

This imminent expansion in steam shipping will be increased further by the opening up of the Dutch colonies already mentioned and by the increase in screw steamers, with which — as is becoming increasingly clear — emigrants can be transported more rapidly, relatively cheaper and more profitably than with sailing ships. Apart from the screw steamers which already sail from Glasgow and Liverpool to New York, new ones are to be employed on this line and a shipping line is to be established between Rotterdam and New York. How universal is the present tendency for capital to flow into oceanic steam shipping is proved by the continuous increase in the number of steamers competing between Liverpool and New York, the establishment of entirely new lines from England to the Cape and from New York to Le Havre, and a whole series of similar schemes which are being hawked around New York.

With the investment of capital in oceanic steam shipping and the building of canals across the American isthmus the ground has already been laid for excess speculation in this area. The centre of this speculation is necessarily New York, which receives the great mass of Californian gold. It has already taken control of the main trade with California and in general performs the same function for the whole of America as London does for Europe. New York is already the centre of all transatlantic steam shipping. All the Pacific steam ships belong to New York companies, and almost all new projects in this branch of industry start in New York. Speculation in foreign steamship lines has already begun in these, and the Nicaragua Company, which was launched in New York, similarly represents the beginning of speculation in the isthmus canals. Overspeculation will soon develop, and even though English capital is flowing en masse into all such undertakings, even though the London Stock Exchange will be inundated with all sorts of similar schemes, New York will still remain the centre of the whole bubble, this time as in 1836, and will be the first to experience its collapse. Innumerable schemes will be ruined, but as with the English railway system in 1845, at least the outline of a universal shipping system will this time emerge from this over-speculation. No matter how many companies go bankrupt, the steamships — which are doubling the Atlantic traffic, opening up the Pacific, connecting up Australia, New Zealand, Singapore and China with America and are reducing the journey around the world to four months — the steamships will remain.

The prosperity in England and America soon made itself felt on the European continent. As early as summer 1849 the factories in Germany, particularly in the Rhine province, were quite busy again, and since the end of 1849 there has been a general recovery of business. This renewed prosperity, which our German bourgeois naively attribute to the restoration of stability and order, is based in reality only upon the renewed prosperity in England and upon the increased demand for industrial products on the American and tropical markets. In 1850 industry and trade have recovered even further. Just as in England, there has been a temporary surplus of capital and an extraordinary easing of the money market, and the reports of the Frankfurt and Leipzig autumn fairs have reportedly been extremely satisfactory for the bourgeoisie taking part. The troubles in Schleswig-Holstein and Electoral Hesse, the quarrels within the Prussian Union and the threatening notes exchanged between Austria and Prussia have not been able to hold back the development of all these symptoms of prosperity for a moment, as even the Economist noted, with mocking cockney smugness...

We now turn to the political events of the last six months.

In England periods of economic prosperity are always periods of political prosperity for Whiggery — aptly embodied in the person of the smallest man in the kingdom, Lord John Russell. The ministry brings before Parliament little pettifogging reforms which it knows will fail to pass the House of Lords, or which it itself withdraws at the end of the session under the pretext of lack of time. The lack of time is always induced by the previous excess of boredom and empty talk, which the Speaker only brings to an end as late as possible, with the remark that there is no question before the House. At such times the struggle between Free Traders and Protectionists degenerates into pure humbug. The majority of the Free Traders are too preoccupied with the material exploitation of free trade to have the time or inclination to fight further for its logical political extensions; faced with the boom in urban industry, the Protectionists resort to burlesque, jeremiads and threats. The parties continue the struggle merely for propriety's sake, in order not to forget each other's existence. Before the last session the industrial bourgeoisie created a huge fuss about financial reform; in Parliament itself they confined themselves to theoretical expostulations. Before the session, Mr Cobden repeated his declaration of war on the tsar on the occasion of the Russian loan, and he almost ran short of sarcasm, so much did he heap upon the great pauper of St Petersburg. Six months later he was reduced to taking part in the scandalous Peace Congress farce, whose only outcome was that an Ojibway Indian handed a pipe of peace to Herr Jaup — to the great horror of Herr Haynau on the platform — and that the Yankee temperance swindler, Elihu Burrit, went to Schleswig-Holstein and Copenhagen in order to assure the governments concerned of his good intentions. As if the whole Schleswig-Holstein war could ever take a serious turn so long as Herr van Gagern takes part in it and Herr Venedey does not!

The great political issue of the past session was actually the Greek debate. All the forces of absolutist reaction on the Continent had formed a coalition with the English Tories to overthrow Palmerston. Louis Napoleon had even recalled the French ambassador from London, as much to flatter Tsar Nicholas as French national pride. The whole French National Assembly fanatically applauded this bold break with the traditional English alliance. The affair gave Mr Palmerston the opportunity to present himself in the Commons as the champion of civil liberty throughout Europe; he received a majority of forty-six votes, and the result of the coalition, which was as impotent as it was silly, was the non-renewal of the Aliens Bill. If in his demonstration over Greece and his speeches in Parliament Palmerston confronted European reactionaries as a bourgeois liberal, the English people used the presence of Herr Haynau in London to give a striking demonstration of its foreign policy.

While Austria's military representative was chased through the streets of London by the people, Prussia, in the person of its diplomatic representative, suffered a misfortune equally appropriate to its position. It will be recalled how the most ridiculous figure in England, the garrulous man of letters Lord Brougham, ejected the man of letters Bunsen from the gallery of the House of Lords on account of his tactless and offensive behaviour — to the general accompaniment of laughter from all the ladies present. Herr Bunsen, in the spirit of the great power which he represents, calmly put up with this humiliation. He will simply not leave the country, whatever happens to him. He is tied to England by all his private interests; he will continue to exploit his diplomatic post in order to speculate in English religion, to find a place for his sons in the Church of England and for his daughters on one of the social rungs of the English gentry.

The death of Sir Robert Peel has contributed considerably to the accelerated disintegration of the old parties. The party which had formed his main support since 1845, the so-called Peelites, has subsequently disintegrated. Since his death Peel himself has been apotheosized in the most exaggerated fashion by almost all parties as England's greatest statesman. One thing at least distinguished him from the European 'statesmen' — he was no mere careerist. Beyond this, the statesmanship of this son of the bourgeoisie who rose to be leader of the aristocracy consisted in the view that there is today only one real aristocracy: the bourgeoisie. In the light of this belief he continually used his leadership of the landed aristocracy to wring concessions from it for the bourgeoisie. This became evident in the question of Catholic emancipation and the reform of the police, by means of which he increased the bourgeoisie's political power; in the Bank Acts of 1818 and 1844, which strengthened the financial aristocracy; in the tariff reform of 1842 and the free trade legislation of 1846, with which the aristocracy was nothing short of sacrificed to the industrial bourgeoisie. The second supporting pillar of the aristocracy, the 'Iron Duke', the hero of Waterloo, stood faithfully beside the cotton knight Peel, a disappointed Don Quixote. Since 1845 Peel had been treated as a traitor by the Tory party. His power over the House of Commons was based upon the extraordinary plausibility of his eloquence. If one reads his most famous speeches, one finds that they consist of a massive accumulation of commonplaces, skillfully interspersed with s large amount of statistical data. Almost all the towns in England want to erect a monument to the man who repealed the Corn Laws. A Chartist journal has remarked, referring to the police trained by Peel in 1829: 'What do we want with these monuments to Peel? Every police officer in England and Ireland is a living monument to Peel.

The most recent event to cause a controversy in England is the elevation of Mr Wiseman to the position of Cardinal Archbishop of Westminster and the Pope's division of England into thirteen Catholic dioceses. This step taken by the Vicar of Christ, which has been a great surprise for the Church of England, proves once again the illusions to which European reactionaries are subject; as if, after the victories which they have recently won in the service of the bourgeoisie, the restoration of the whole feudal, absolutist order, with all its religious trappings, must now automatically follow. In England Catholicism has its few supporters in the two extremes of society, the aristocracy and the lumpenproletariat. The lumpenproletariat, the mob, which is either Irish or of Irish ancestry, is Catholic by descent. The aristocracy conducted its fashionable flirtation with Puseyism until conversion to Catholicism finally began to become the fashion. At a time when the English aristocracy was being forced in the course of its struggle with the advancing bourgeoisie to flaunt evermore brazenly the religious ideologues of the aristocracy, the orthodox theologians of the High Church were also being forced in their struggle with the theologians of the bourgeois dissenters to recognize more and more the logical consequences of their semi-Catholic dogma and ritual. Indeed the conversion of individual reactionary Anglicans to the original Church, with its monopoly on grace, inevitably also increased in frequency. These insignificant phenomena produced in the minds of the English Catholic clergy the most sanguine hopes for the imminent conversion of all England. The new papal bull which once again treated England as a Roman province, and which was intended to give a new impetus to this trend towards conversion, is now producing the opposite effect. The Puseyites, suddenly confronted with the serious consequences of their medieval dabbling, are recoiling in horror, and the Puseyite Bishop of London has lost no time in issuing a declaration in which he recants all his errors and declares a war to the death on the Pope. The whole comedy is of interest to the bourgeoisie only in so far as it presents them with an opportunity for new attacks on the High Church and its universities. The commission which is to report on the state of the universities will give rise to furious debates in the next session. The mass of the people is naturally not interested, and is neither for nor against Cardinal Wiseman. With the present dearth of news the papers are presented with welcome material for long articles and vehement diatribes against Pius IX. The Times even demands that the government should incite an insurrection in the Papal States and unleash Mazzini and the Italian refugees against the Pope to punish his interference. The Globe, Palmerston's press organ, drew an extremely witty parallel between the papal bull and Mazzini's latest manifesto. The Pope, it says, claims spiritual supremacy over England and names bishops in partibus infidelium. Here in London an Italian government sits in partibus infidelium, headed by the anti-pope, Mr Mazzini. The supremacy which Mr Mazzini does not only claim but actually exercises in the Papal States is at the moment equally of a purely spiritual nature. Like the papal bulls, Mazzini's manifestoes are also purely religious in content. They preach a religion, they make an appeal to faith, they bear the motto: Dio ed il popolo, God and the people. We wonder whether there is any difference between the claims made by each, other than that — in contrast to the Pope — Mr Mazzini at least represents the religion of the majority of the people to whom he speaks — for there is scarcely any religion in Italy any longer except that of Dio ed il popolo. Moreover, Mazzini has used this opportunity to go a step further. In London, together with the other members of the Italian National Committee he has floated a loan of 10 million francs — approved by the Roman Constituent Assembly — in the form of shares of 100 francs each and, what is more, for the sole purpose of buying weapons and war materials. It cannot be denied that this loan has more chance of succeeding than the abortive voluntary loan of the Austrian government in Lombardy.

England recently delivered Rome and Austria a really serious blow by its trade agreement with Piedmont-Sardinia. This treaty destroys the Austrian scheme for an Italian customs union and secures a considerable area of operation for English trade and the policies of the English bourgeoisie in northern Italy.

The existing organization of the Chartist party is also disintegrating. Those petty bourgeois who are still in the party, allied with the labour aristocracy, form a purely democratic tendency, whose programme is limited to the People's Charter and a few other petty-bourgeois reforms. The mass of the workers living in really proletarian conditions belong to the revolutionary Chartist tendency. At the bead of the first group is Feargus O'Connor; at the head of the second, Julian Harney and Ernest Jones. Old O'Connor, an Irish squire and supposedly a descendant of the old kings of Munster, is, in spite of his ancestry and his political standpoint, a genuine representative of Old England. He is essentially conservative, and feels a highly determined hatred not only for industrial progress but also for the revolution. His ideals are patriarchal and petty-bourgeois through and through. He unites in his person an inexhaustible number of contradictions, which find their fulfillment and harmony in a certain blunt common sense, and which enable him year in year out to write his interminable weekly letters in the Northern Star, each successive letter always in open conflict with the previous one. For this very reason O'Connor claims to be the most consistent man in Great Britain and to have prophesied everything that has happened during the last twenty years. His shoulders, his roaring voice, his great pugilistic skill, with which he is said to have defended Nottingham Market against 20,000 people — all this is an essential part of the representative of Old England. It is clear that a man like O'Connor is bound to be a great obstacle in a revolutionary movement; but such people serve a useful purpose, in that the many old, ingrained prejudices which they embody and propagate disappear with them — with the result that the movement, once it has rid itself of these people, can free itself from these prejudices once and for all. O'Connor will come to grief in the movement; but for that reason he will possess an even stronger claim to the title of 'a martyr in a good cause', like Lamartine and Marrast.

The main point of conflict between the two Chartist tendencies is the land question. O'Connor and his followers want to use the Charter to settle part of the working-class on smallholdings, and eventually to make smallholding property universal in England. It is well known how he failed in his attempt to establish smallholding property on a small scale through a joint-stock company. The tendency of every bourgeois revolution to destroy large-scale landed property might make this division into smallholdings appear to the English workers for a while as something very revolutionary, although it is regularly accompanied by the unfailing tendency of small property to become concentrated and to meet with economic ruin in the face of large-scale agriculture. The revolutionary Chartist tendency opposes this demand for division of the land with a demand for the confiscation of all landed property. The land is not to be distributed but to remain national property.

Despite this split and the emergence of more extreme demands, the Chartists, remembering the circumstances under which the Corn Laws were repealed, still suspect that in the next crisis they will once again have to form an alliance with the industrial bourgeoisie, the Financial Reformers, and that they will have to help them defeat their enemies, forcing concessions from them in return. This will certainly be the position of the Chartists in the next crisis. The actual revolutionary movement in England can only begin when the Charter has been won, just as the June battle in France was possible only when the republic had been won...

In Germany the political events of the last six months are epitomized in the spectacle of Prussia duping the liberals and Austria duping Prussia.

In 1849 Prussia's hegemony in Germany seemed to be the issue, in 1850 the division of power between Austria and Prussia. In 1851 all that is still in question is the form in which Prussia submits to Austria and returns as a repentant sinner to the bosom of the completely restored Federal Diet. The 'little Germany' which the king of Prussia hoped to obtain in compensation for his unfortunate imperial procession through Berlin on 21 March 1848 has transformed itself into 'little Prussia'. Prussia has had to bear every humiliation patiently, and has disappeared from the ranks of the great powers. The perfidious narrowness of its policies has again reduced even the modest dream of the Union to nothing. It falsely ascribed to the Union a liberal character and thus duped the wise men of the Gotha party with constitutional phantasmagoria which were never seriously meant; yet Prussia had become so bourgeois as a result of its whole industrial development, its permanent deficit and its national debt that, twist and turn as it might, it fell even more irredeemably a victim of constitutionalism. While the wise men of Gotha finally discovered how shamefully Prussia had dealt with their dignity and prudence, while even Gagern and Bruggeman finally turned their backs in noble outrage on a government which played such outrageous games with the freedom and unity of the fatherland, Prussia was having just as little joy in the chickens which it had gathered under its protective wings in the shape of the petty princes. Only in their moment of direst distress and defencelessness had they delivered themselves into the claws of the Prussian eagle — claws eager for annexation — and they had to pay dearly for the return of their subjects to their old obedience to the state as a result of Prussian intervention, threats and demonstrations. They had to pay with oppressive military treaties, expensive billeting and the prospect of being mediatised by the Union constitution. But Prussia itself had seen to it that they were to escape this new predicament. Prussia had restored the rule of the forces of reaction everywhere and the more these forces reestablished themselves the more the petty princes deserted Prussia to throw themselves into the arms of Austria. Now that they could again rule as they had done before March, absolutist Austria was closer to totem than a power whose ability to be absolutist was no greater than its desire to be liberal Furthermore, Austrian policy did not lead to the mediatisation of small states but, on the contrary, to their protection as integral components of the Federal Diet which was to be revived. Thus Prussia watched as Saxony, which a few months earlier had been saved by Prussian troops, deserted her, as did Hanover and Electoral Hesse. Now Baden has followed the rest despite its Prussian garrison. Prussia can see quite clearly from events in the two Hesses that its support of the reactionary forces in Mecklenburg, Hamburg and Dessau was not to its own but to Austria's advantage. Thus the unsuccessful German kaiser has come to realize that he is indeed living in an age of perfidy. But even though he must now stand by while his right arm, the Union', is taken from him, the fact is that this arm had already withered away some time before. Thus Austria has already brought the whole of southern Germany under its hegemony and even in north Germany the most important states oppose Prussia.

Austria had finally made such progress that, supported by Russia, it was able to oppose Prussia openly. It did this over two issues: Schleswig-Holstein and Electoral Hesse.

In Schleswig-Holstein 'Germany's sword' has concluded a genuine Prussian separate peace and delivered its allies up to the hands of the hostile superior force. England, Russia and France decided to put an end to the independence of the duchies and recorded this intention in a treaty which Austria also signed. Austria and the other governments, in accordance with the London Treaty, have argued in the restored Federal Diet for a Federal intervention in Holstein in favour of Denmark. Meanwhile Prussia has sought to continue its policy of procrastination by urging the parties to submit to a Federal court of arbitration, which is not yet defined nor in existence and which has been rejected by most of the major governments. It has achieved nothing with all its maneuvering other than that the major powers have come to suspect it of revolutionary machinations and that it has received a series of threatening notes, which will soon mar its pleasure in an 'independent' foreign policy. The people of Schleswig-Holstein will soon have their father and sovereign restored to them. A people which allows itself to be governed by Hen Beseler and Herr Reventlow, despite having the whole army on its side, shows that it still needs the Danish whip for its upbringing.

The movement in Electoral Hesse gives us an inimitable example of what an 'uprising' in a small German state can lead to. The virtuous bourgeois resistance to the double-dealer, Hassenpflug, had produced everything that could be demanded of such a spectacle. The Chamber was unanimous, the country was unanimous, the civil servants and the army were on the side of the citizens; all opposing forces had been removed, the demand 'Out with the prince' had been fulfilled spontaneously, the double-dealer Hassenpflug had disappeared with his whole ministry; everything was going smoothly, all parties kept strictly within the bounds of the law, all excesses were avoided and the opposition had achieved the finest victory in the annals without lifting a finger. And now that the bourgeoisie had all the power in their hands, now that their Committee of Estates met not the least resistance anywhere, now they were for the first time really needed. Now they saw that, instead of Electoral troops, foreign troops were standing at their borders, ready to march in to put an end to this splendid show of bourgeois power within twenty-four hours. Only now did the helplessness and disgrace begin. Whereas earlier the bourgeoisie had not been able to retreat, now they were not able to advance. The refusal to pay taxes in Electoral Hesse proves more strikingly than any earlier event how all clashes within small states end in pure farce. They only result in foreign intervention, and the conflict is brought to an end not only by the removal of the prince but also of the constitution. It proves how ludicrous all these momentous struggles are, in which the petty bourgeoisie of the petty states seeks with patriotic loyalty to save every little achievement left over from the March days from its inevitable destruction.

In Electoral Hesse, in a state of the Union which had to be torn away from the Prussian embrace, Austria was involved in s direct confrontation with its rival It was Austria who more or less incited the Elector into his attack on the constitution and then placed him under the protection of the Federal Diet. In order to add weight to this protective relationship, to use the business in Electoral Hesse to break Prussian resistance to Austrian hegemony, and to coerce Prussia into rejoining the Federal Diet, Austrian and south German troops have now been marshalled in Franconia and Bohemia Prussia is also mobilizing its forces. The newspapers are bursting with reports of marches and countermarches by the army corps. All this noise will lead to nothing, just like the quarrel between the French party of Order and Bonaparte. Neither the king of Prussia nor the emperor of Austria is his own master — only the Russian Tsar is. At the Tsar's command rebellious Prussia will finally give way without a drop of blood being spilt. The parties will meet peacefully seated in the Federal Diet, without any interruption in the petty jealousy which exists between them, in their conflict with their subjects, or in their vexation at Russian supremacy.

We now come to the abstract country, the European nation, the nation of the exiles. We shall not mention the individual groups of exiles, the Germans, French, Hungarians, etc; their haute politique is limited to pure chronique scandaleuse. But Europe and the people as a whole have recently been given a provisional government in the form of the European Central Committee, consisting of Joseph Mazzini, Ledru-Rollin, Albert Danu (the Pole) and — Arnold Ruge, who modestly justifies his presence by writing 'member of the Frankfurt National Assembly' after his name. Although it is impossible to say which democratic council has called these four evangelists to office, their manifesto undeniably contains the creed of the broad mass of the exiles and summarizes in fitting form the intellectual achievements which this mass owes to the recent revolution.

The manifesto begins with a pompous enumeration of the strengths of democracy.

What does democracy lack for the achievement of its victory?... Organization... We have sects but no church, incomplete and contradictory philosophies but no religion, no collective belief which can assemble the believers under a single sign and harmonize their work... The day on which we find ourselves all united, marching together under the eyes of the best among us... will be the eve of the struggle. On this day we shall have counted our numbers, we shall know who we are, we shall be conscious of our power.

Why has the revolution not yet succeeded? Because the organization of revolutionary power has been weak. This is the first decree of the exiles' provisional government.

This state of affairs is to be remedied by the organization of an army of believers, and the founding of a religion.

But to achieve this two great obstacles must be surmounted, two great errors overcome: the exaggeration of the rights of individuality, the narrow-minded exclusiveness of theory... We must not say T: we must learn to say 'we'...those who follow their individual susceptibilities refuse to make the small sacrifices demanded by organization and discipline and deny the total body of beliefs which they preach, as a result of the habits of the past... Exclusiveness in theory is the negation of our basic dogma He who says, 'I have discovered a political truth,' and who makes the acceptance of his system into a condition of acceptance into the fraternal association, disavows the people — the only progressive interpreter of the world law — merely in order to assert his own ego. He who maintains that be is able today to discover a definitive solution to the problems which activate the m by means of the isolated labour of his intellect, however powerful it may be, condemns himself to the error of incompleteness by abandoning one of the eternal sources of truth: the collective intuition of the people in action. The definitive solution is the of our victory... Far the most part our systems can be nothing but a dissection of corpses, a discovery of evil and an analysis of death, incapable of perceiving or comprehending life. Life is the people in movement, the instinct of the masses raised to an extraordinary power by common contact, by the prophetic feeling of great things to be achieved, by spontaneous, sudden, electric association in the street. It is action, exciting to their highest pitch all the latent powers of hope, devotion, love and enthusiasm which are now dormant, revealing man in the unity of his nature, in the full vigour of his potency. The handshake of a worker at one of those historic moments which begin an epoch will teach us more about the organization of the future than can be taught today by the cold and heartless labour of reason or by knowledge of the illustrious dead of the last two millennia of the old society.

So, in the end, all this highfalutin nonsense amounts to the highly vulgar and philistine view that the revolution failed because of the jealous ambition of the individual leaders, and because of the conflicting opinions of the various popular teachers.

The struggles of the different classes and fractions of classes with one another, which in their development through specific phases is precisely what constitutes the revolution, are, for our evangelists, only the unhappy consequence of divergent systems. However, the divergent systems are in reality the result of the existence of class struggles. It becomes clear even from this that the authors of the manifesto deny the existence of the class struggle. Under the pretext of fighting the doctrinaire they dispense with all specific realities of the situation, all specific partisan views. They forbid the individual classes to formulate their interests and demands in the face of other classes. They expect the classes to forget their conflicting interests and to reconcile themselves under the banner of something hollow and brazenly vague, which, in the guise of reconciling the interests of all parties, only conceals the domination by one party and its interests — the party of the bourgeoisie. After what these gentlemen must have experienced in France, Germany and Italy during the last two years it cannot even be said that the hypocrisy by means of which they wrap bourgeois interests in a Lamartinian rhetoric of brotherhood is unconscious. How much the gentlemen know about 'systems' is shown, moreover, by the fact that they imagine each of these systems to be merely a fragment of the wisdom compiled in the manifesto, and to be based solely on one of the rhetorical phrases assembled here: freedom, equality, etc. Their notions of social organization are highly striking: a riot in the street, a brawl, a shake of the hand, and that is that! For them the whole revolution consists merely in the overthrow of the existing governments; once this aim has been achieved, 'victory' will have been won. The movement, the development, the struggle then comes to an end, and under the aegis of the then ruling European Central Committee the golden age of the European Republic and the permanent rule of the nightcap can begin. Just as they hate development and struggle, these gentlemen hate thought, callous thought — as if any thinker, including Hegel and Ricardo, would ever have achieved that degree of callousness with which this mealy-mouthed swill is poured over the heads of the public. The people are not to worry about the morrow, they must empty their heads of ideas. When the great day of decision comes, they will be electrified by mere physical contact and the riddle of the future will be solved for the people by a miracle. This summons to empty-headedness is a direct attempt to swindle precisely those classes who are most oppressed. One member of the European Central Committee asks,

In saying this, do we mean that we are to march on without a banner; do we mean that we wish to inscribe a negation on our banner? Such a suspicion cannot be directed at us. As men of the people, who have been part of the struggle for many years, we do not for one moment consider leading them into an empty future.

On the contrary, to prove the fullness of their future these gentlemen present a record — worthy of Leporello himself — of eternal truths and achievements from the whole course of history. This record is put forward as the common ground of 'democracy' in our day and age and is summed up in the following edifying paternoster:

We believe in the progressive development of human ability and strength towards the moral law which has been imposed upon us. We believe in association as the only means to achieve this end. We believe that the interpretation of this moral law and the law of progress can be entrusted to the charge of neither a caste nor an individual, but to the people, enlightened by national education, led by those from its midst whom virtue and the people's genius show to be the best. We believe in the sacredness of both individuality and society, which should never exclude nor conflict with each other, but should harmonize for the betterment of all by all. We believe in freedom, without which all human responsibility disappears; in equality, without which freedom is only an illusion; in brotherhood, without which freedom and equality would be means without an end; in association, without which brotherhood would be an unrealizable programme; in family. community, state and fatherland as equally progressive spheres which man must successively grow into, in the knowledge and application of freedom, equality, brotherhood and association. We believe in the sanctity of work and in property which arises from work as its symbol and fruit; we believe in the duty of society to provide the means for material work through credit and the means for mental work through education... to sum up, we believe in a social condition which has God and His law as its apex, and the people as its base...

So: progress — association — moral law — freedom — equality — brotherhood — association — family, community, state — sanctity of property — credit — education — God and the people — Dio e popolo. These phrases figure in all the manifestoes of the 1848 revolutions, from the French to the Wallachian, and it is precisely for that reason that they figure here as the common basis of the new revolution. In none of these revolutions was the sanctity of property, here sanctified as the product of work, forgotten. Eighty years before their time Adam Smith knew much better than our revolutionary pioneers the precise extent to which bourgeois property is 'the fruit and symbol of work'. As for the socialist concession that society shall grant everyone the material means for work through credit, every manufacturer is accustomed to give his worker credit for as much material as he can process in a week. The credit system is as widely extended nowadays as is compatible with the inviolability of property, and credit itself is after all only a form of bourgeois property.

Summarized, this gospel teaches a social order in which God forms the apex and the people — or, as is said later, humanity — the base. That is, they believe in society as it exists, in which, as is well known, God is at the apex and the mob at the base. Although Mazzini's creed, God and the people, Dio e popolo, may have a meaning in Italy, where the Pope is equated with God and the princes with the people, it is a bit much to offer this plagiarism of Johannes Ronge, the most insipid swill of the German pseudo-Enlightenment, as the key which will solve the riddle of the century. Furthermore, how easily the members of this school accustom themselves to the small sacrifices which organization and discipline demand, how willingly they give up the narrow exclusiveness of theory is demonstrated by our friend, Arnold Winkelried Ruge, who, to Leo's great joy, has this time been able to recognize the difference between divinity and humanity.

The manifesto ends with the words:

What is needed is a constitution for European democracy, and the foundation of a people's budget or exchequer. What is needed is the organization of an army of initiators.

In order to be one of the first initiators of the people's budget Ruge has turned to 'de demokratische Jantjes van Amsterdam' — the democratic citizens of Amsterdam — to explain to them their special vocation and duty to provide money. Holland is in distress!

London, 1 November 1850