London 3 Oktober 2 November 1868 My dear Sir,

I was not yet able to discover in a mountain of manuscripts, the State Paper referring to the Czar’s title. I hope to get at it in a few days. Meanwhile, allow me some remarks on Peel’s Act of 1844 Der Bank Charter Act von 1844 („An Act to regulate the issue of bank notes, and for giving to the governor and company of the Bank of England certain privileges for a limitied period. 7 and 8 Victoria, Cap. 22.“), nach dem damaligen Premierminister Robert Peel (auf dessen Intitiative das Gesetz entstand) auch „Peel’s Act“ genannt, legte die Kompetenzen der Bank of England fest und reorganisierte diese. Er hatte eine strikte Begrenzung des Geldumlaufs zum Ziel. In wirtschaftlichen Krisen, 1847, 1857 und 1866, wurde das Gesetz suspendiert, da sich die Deckungsvorschriften als zu eng erwiesen. Das hieß konkret: Durch den Peel’s Act wurde die Bank in eine Abteilung für die Notenausgabe, das Issue-Department, und in eine solche für die eigentlichen Bankgeschäfte, das Banking-Department, getrennt. Alle Ausgaben von Banknoten, die nicht durch Gold gedeckt waren, wurden auf 14 Millionen Pfund Sterling begrenzt. Die Menge der im Umlauf befindlichen Banknoten hing jedoch entgegen dem Bankgesetz von 1844 in der Realität nicht vom Deckungsfond ab, sondern von der Nachfrage in der Zirkulationssphäre. Während der Wirtschaftskrisen 1847, 1857 und 1866 musste die englische Regierung das Gesetz von 1844 zeitweilig ausser Kraft setzen und die Summe der nicht durch Gold gedeckten Banknoten erhöhen. – Marx stützt sich auf Angaben der Wochenschrift „The Money Market Review“ für 1866, die er in seinem Exzerptheft „London. 1868“ exzerpierte (MEGAdigital Bd. IV/19. S. 187-204, 208-221 und 223-244 und MEGA2 I/21, Erl. 101.4–5. S. 1376)., and its working in 1866.

1) Gladstone’s letter , of 11 May 1866 To the Governor and Deputy-Governor of the Bank of England. [Gez.:] Russell. W. E. Gladstone. Downing-street, 11th May, 1866. In: The Times. London. Nr. 25497, 14. Mai 1866. S. 9, Sp. 6. – Die betreffenden Stellen des vorliegenden Briefes veröffentlichte Collet Dobson Collet in der Londoner „Diplomatic Review“: Karl Marx: How Mr. Gladstone’s Bank Letter of 1866 procured a loan of six millions for Russia. In: The Diplomatic Review. London. Nr. 12, 2. Dezember 1868. S. 187/188. (MEGA2 I/21. S. 101-103.) , suspended the Act on the following conditions:

Firstly: that the minimum rate of discount be raised to 10%;

Secondly: that if the Bank overstepped the legal limitation of its note issue, the profits of such overissue should be transferred from the Bank to the Government.

Consequently, the Bank raised its minimum rate of discount to 10% (which means 15 to 20% for the common run of merchants and manufacturers), but did not infringe the letter of the Act in regard to the note issue. As I told you, they collected in the evening notes from their banking friends and other connexions in the City, to reissue them in the morning. They infringed, however, the spirit of the Act by allowing, under the Government letter, the Reserve to dwindle down to zero, and that reserve, according to the contrivances of the Act of 1844, forms the only available assets of the Bank as against the liabilities of its banking department.

Gladstone’s letter, therefore, suspended Peel’s Act in such a way as to perpetuate and even artificially exaggerate its worst effects. Neither C. Lewis’s letter of 1857 In der Wirtschaftskrise 1857 erfolgte die zweite Suspension des Bank Charter Act von 1844. Siehe: Downing-street, Nov. 12. [Gez.:] Palmerston. G. C. Lewis. In: The Times. London. Nr. 22837, 13. November 1857. S. 6, Sp. 5., nor Russell’s letter of 1847 Downing-street, Oct. 25, 1847. [Gez.:] John Russell. Chas. Wood. In: The Times. London. Nr. 19690, 26. Oktober 1847. S. 4, Sp. 6; Karl Marx: Das Kapital. Bd. 3. Hamburg 1894. In: MEGA2 II/15. S. 495/496 und 548 und auch MEGA2 I/21. S. 1376. Erl. 101.22.)., lay open to the same censure.

The Bank maintained the 10% minimum rate of discount for more than 3 months. This rate was regarded by Europe as a danger signal.

2) The most morbid sense of distrust in English solvency having thus been created by Gladstone, out comes Clarendon , the man of the Paris conferenceAuf dem Pariser Kongreß 1856 wurde von den Vertretern Frankreichs, Englands, Österreichs, Sardiniens, Preußens sowie der Türkei einerseits und Rußlands andererseits am 30. März 1856 der Pariser Friedensvertrag unterzeichnet und damit der Krimkrieg (1853-1856) zum Abschluß gebracht. Clarendon, der die englische Kongreßdelegation leitete, gelang es angesichts der englisch-französischen Gegensätze und der merklichen Annäherung zwischen Frankreich und Rußland nicht, die Pläne der englischen Diplomatie in vollem Maße zu verwirklichen., with an explanatory letter, published in the Times , to the English embassies on the ContinentSiehe Foreign Office. May 12. [Gez.:] Clarendon. In: The Times. London. Nr. 25504, 22. Mai 1866. S. 6, Sp. 6.. He told the continent in so many words that the Bank of England was not bankrupt (although it was really so, according to the Act of 1844), but that, to a certain degree, English industry and commerce were so. The immediate effect of this letter was a “run”, not of the Cockney upon the Bank, but “a run (for money) of Europe upon England.”Die von Marx zitierte Formulierung („a run upon England“) stammte von dem konservativen Abgeordneten Sir Stafford Northcote, der im House of Commons am 31. Juli 1866 die Forderung des Liberalen Sir Edward William Watkin nach einer Kommission zur Untersuchung der britischen Kreditpolitik ablehnte. (House of Commons, Tuesday, July 31. In: The Times. London. Nr. 25565, 1. August 1866. S. 6, Sp. 1; Watkins Rede ebenda, S. 5, Sp. 2–5.) (Siehe MEGA2 I/21. S. 1376) Marx übernahm die Angaben des Artikels „Currency and Banking. (Watkihn’s Motion. 31 July)” in der Zeitschrift „The Money Market Review“. Nr. 322, 4. August 1866. S. 131/132, den er in seinem Exzerptheft „London. 1868“exzerpierte (MEGAdigital Bd. IV/19. S. 203/204).. (That expression was used at the time by Mr. Watkins in the House of Commons.) Such a thing was quite unheard of in the annals of English commercial history. Gold was shipped from London to France, while, simultaneously, the ban official minimum rate of discount was 10% in London and 3½ to 3% at Paris. This proves that the withdrawal of gold was no regular ‘commercial’ transaction. It was simply the effect of Clarendon’s letter.

3) The 10% minimum rate of discount having thus been kept up for more than 3 months, there followed the inevitable reaction. From 10% the minimum rate receded by quick steps to 2%, which is still the official bankrateSiehe Sir Edward William Watkin in seiner Rede im House of Commons am 31. Juli 1866; sowie Money-Market & City Intelligence. In: The Times. London. Nr. 25579, 17. August 1866. S. 5, Sp. 1/2.. Meanwhile all English securities, railway shares, bankshares, mining shares, every sort of home investment was had become ext utterly depreciated and was anxiously shunned. Even the consols declined. (On one day, during the Panic, the Bank declined making advances upon Consols!) Then the hour had struck for Foreign Investments. Foreign Government Loans were contracted, and are still being contracted, under the most facile conditions on the London market. At their head stood a Russian Loan for 6 Mill. L. St. Siehe Marx an Collet, 19.11.1868 und Erl. This Russian loan which, a few months ago, had miserably broken down at the Paris bBourse, was now hailed as a godsend on the London stockexchange. Last week only Russia has again come out with a new loan for 4 mill. l. St.Marx bezog sich wahrscheinlich auf eine Meldung, die die „Times“ am 28. Oktober 1868 veröffentlichte. Darin hieß es, daß „already another loan to the amount of 4,000,000l. is understood to be ready for introduction“. (Money-Market & City Intelligence. In: The Times. London. Nr. 26267, 28. Oktober 1868. S. 7, Sp. 1.) Siehe auch (MEGA2 I/21. S. 1377/1378.) Russia was, in 1866, as she is now, almost breaking down under financial difficulties which, consequent upon the agricultural revolutionÜber den mit der Bauernbefreiung in Rußland einhergehenden sozialen Wandel siehe Engels an Marx, 2.7.1868, S. L. Borkheim an Engels, 27.7.1868 und 4.11.1868, Marx an Engels, 7.11.1868. (Siehe auch MEGA2 I/21. S. 1378. Erl. 102.34–35.) she undergoes, have assumed a most formidable aspect.

This, however, is the least thing Peel’s Act does for Russia—to keep the English money market open for her. That act puts England, the richest country in the world, literally at the mercy of the Moscovite government, the most bankrupt government in Europe.

Suppose the Russian government had had lodged, in the name of a private firm, German or Greek, 1 to 1½ mill. l. St., on the beginning of May 1866, in the banking department of the Bank of England. By the sudden and unexpected withdrawal of that sum, she might have forced the banking department to stop payment at once, although there were more than 13 mill. l. St. of gold in the issue department. The bankruptcy of the B. o. Engld might then have been enforced by a telegram from St. Petersburgh.

What Russia was not prepared for in 1866, she may make ready to do—if Peel’s Act be not repealed—in 1875 or 1876.

Yours sincerelyKarl Marx