Articles by Marx & Engels in Neue Rheinische Zeitung
Source: MECW Volume 9, p. 3;
Written: Written on March 6, 1849;
First published: in the Neue Rheinische Zeitung No. 299, March 7, 1849
Cologne, March 6. An Englishman is never more unhappy than when he does not know what to do with his money. Therein lies the secret of all grandiose speculations, all profit-making enterprises, but it is also the secret of all bankruptcies, all financial crises and commercial depressions.
In 1840, 1841 and subsequent years, it was the new Asian markets, besides the customary commerce with the European continent, which claimed a special share of English export trade. Manufacturers and exporters had every reason to greet Sir Henry Pottinger  on the Manchester stock exchange with loud cheers. But the good times quickly passed. Canton, Bombay and Calcutta soon overflowed with unsalable goods, and capital, which no longer found any outlet in that direction, for a change once more sought application inside the country; it was poured into railway construction and so opened up a field for speculation in which the latter was soon rampant to a quite unprecedented extent.
According to a conservative estimate, the total sum invested in the enterprises could be put at 600 million and it would perhaps have gone still higher if the failure of the potato harvest in England, Ireland and many regions of the Continent, and further the high price of cotton, and as a result of both the reduced sale of manufactured goods, as well as, finally, the excessive railway speculation, had not caused the Bank of England on October 16, 1845 to raise the bank rate by one-half per cent.
In view of the superstitious fear in which the Britisher holds the omnipotence of his bank, this slight rise in the bank rate or, in other words, this lack of confidence on the part of the bank directors, at once affected the existing level of activity, so that a general mood of dejection set in, and the apparent prosperity was immediately followed by the restriction of credit and numerous bankruptcies. Consequently one of those great commercial crises, like those of 1825 and 1836, would have immediately developed if the repeal of the Corn Laws  that followed soon afterwards had not suddenly come to the aid of the falling confidence, and once more stimulated the spirits of the entrepreneurs.
For the commercial world expected so much from the immediate consequences of this great measure that it found it easy to forget about the tribulations which had just overtaken it. The settlement of the Oregon conflict which promised a continuation of the hitherto extremely flourishing trade with America, and the British victories in the Punjab  which ensured peace in Hindustan, played their part, of course, in a revival of spirits. And although the bad harvest of 1845 was followed by a similar one in 1846, although everywhere the reserves of former times had to be drawn upon and a credit for business purposes involved paying 12-15 per cent, despite all this, all the spinning mills of Lancashire and Yorkshire were set in continual motion as though crop failures, railway speculations and glutted markets had now suddenly become mere trifles which could be coped with in a trice.
This happy state of affairs, however, was not destined to last long, for whereas in September 1847 Dr. Bowring at the Brussels Free Trade Congress was still expounding with such highly comical eloquence the marvellous consequences of the repeal of the Corn Laws, it was already noticed in London that even the "all-powerful measures of Sir Robert Peel" were no longer able to save the country from the catastrophe which had so long been feared. One had to submit to fate and the London firms which, like Read Irving and Co., owned landed property worth almost one million pounds on Mauritius, were the first to start a series of bankruptcies—because of the shattered state of affairs in that part of the English colonies—they collapsed, taking with them in their fall numerous smaller East-Indian and West-Indian firms.
At the same time the big wigs of the factory districts realised that they had been mistaken about the consequences of the repeal of the Corn Laws. Business with all parts of the world was at a standstill and panic spread simultaneously in the City of London and in the stock exchanges of Liverpool, Manchester, Leeds etc.
Consequently, the crisis of October 1845, which had been delayed by various events, finally broke out in September 1847. Confidence was at an end. Courage had run out. The Bank of England abandoned the banks inside the country; these banks withheld credit from traders and manufacturers. Bankers and exporters restricted their business with the Continent, the continental trader, in his turn, put pressure on the manufacturer who owed him money; the manufacturer, of course, reimbursed himself at the expense of the wholesaler, and the latter fell back on the boutiquier. Each one of them hit out at the others and gradually the distress due to the trade crisis affected the whole world, from the giants of the City of London down to the smallest German shopkeeper.
This was before February 24, 1848! England experienced the worst days in the last four months of 1847. There was a clean sweep of the railway speculators; between August 10 and October 15, twenty of the leading London firms trading in colonial merchandise, with a capital of £5 million, and paying dividends of about 50 per cent, went bankrupt; and in the factory districts the distress reached its peak when in Manchester on November 15, only 78 out of 175 spinning mills were working full-time, and 11,000 workers were out of work.
So ended the year 1847. It was reserved for the Continent to experience during 1848 the after-effects of this English crisis—after-effects that on this occasion were, of course, all the more perceptible because the political transformations did not exactly help to make good the consequences of this extraordinary English occurrence.
We now come to the most interesting moment in the recent history of commerce, namely, the influence which the revolutions had on commercial activity.
The tables of English export trade provide us with the best illustration of this because, in view of the dominant position of England in world trade, the contents of these tables are nothing but an expression in figures of the political and commercial situation or, more correctly, the expression in figures of the ability to pay of the various nations.
Therefore, when we see that exports in April 1848 fell by £1,467,117, and in May by £1,122,009, and that total exports in 1847 amounted to £51,005,798, and in 1848 to only £46,407,939, conclusions very unfavourable to the revolutions could, it is true, be drawn from this and such an idea could be arrived at all the more easily because exports in January and February 1848, i.e. immediately before the outbreak of revolution, were actually £294,763 higher than in 1847.
Nevertheless, such a view would be completely erroneous. Because, firstly, the increased exports in January and February, i.e. precisely in the two months separating the peak of the crisis from the revolution, are easily explained by the fact that the Americans, in return for their enormous deliveries of grain to England at that time, took more British manufactured goods than ever before and thus at least for a short while prevented the falling off that would otherwise have arisen. But, in addition, English trade history provides most striking proof that exports do not diminish immediately after a crisis, but only when sufficient time has passed for the crisis to spread also to the Continent.
The increased export of the first two months of 1848, therefore, should by no means mislead us, and we can turn without misgivings to a consideration of the total decline during the whole year.
This decline, as we have already mentioned, compared with 1847 amounted to £4,597,859—certainly a considerable decrease, which in the hands of the reactionaries, who behave in politics like yapping curs and in trade like old women, became an argument against the revolution, one that is only too effectively used towards the uninformed.
But there is nothing easier than to refute the fallacious assertions of the party of reaction, for one has only to look up the tables of exports for the past 30 years to demonstrate that the decrease in exports in 1848, brought about by the combined influence of a trade crisis and a revolution, bears no comparison with the decline in exports of previous years.
After the trade crisis of 1825, in which year total exports amounted to £38,870,851, exports dropped to £31,536,724 in 1826. Thus there was a decrease of £7,334,127. After the crisis of 1836, when exports amounted to £53,368,572, exports dropped to £42,070,744 in 1837. The decrease, therefore, was £11,297,828. Nothing can be more striking than that!
Hence after two trade crises, which, it is true, were caused exclusively by the over-production of manufactured goods but in their extent cannot at all be compared with the crisis just ended, the drop in exports was double that of 1848, a year which was preceded by a glut in the Asian markets, two bad harvests, and speculation on a scale never seen before in the world, and a year when every corner of old Europe was shaken by revolutions!
In truth, trade got off easily in 1848! The revolutions contributed to the fact that now and then trade stagnated, that sales became difficult and dangerous, and that many persons collapsed under the burden of their obligations. During the past year, however, under Louis Philippe, the same difficulties would have been met with in Paris in discounting a miserable 20,000 or 30,000 francs as under the republic. In Southern Germany, on the Rhine, in Hamburg and in Berlin, with or without the revolution we would have had our bankruptcies; and business in Italy would have been depressed just as much under Plus as under the heroes of Milan, Rome and Palermo. 
It is just as ludicrous, therefore, to ascribe the revival of trade to the temporary victories of the counter-revolution. The French are not paying 25 per cent more for wool at the London wool auctions because some of Louis Philippe's Ministers are again in power,—no, they are having to pay more because they need the wool, and they need more of it, their demand is growing, precisely because in the last years of Louis Philippe's rule it had greatly decreased. Such a fluctuation of demand can be observed throughout the history of commerce.
And the English are once more working a full day in all the mines, foundries, spinning mills, and in all their ports, not because a certain Prince Windischgrätz orders the summary shooting of the Viennese people,—no, they are at work because the markets of Canton, New York and St. Petersburg wish to be supplied with manufactures, because California is opening up a new market which the speculators regard as inexhaustible, because the bad harvests of 1845 and 1846 were followed by two good harvests in 1847 and 1848, because the English have given up railway speculation, because money has returned to its customary channels, and the English will go on working...until there is a new trade crisis.
Above all, we must not forget that it was by no means the monarchical countries that in recent years were the chief source of employment for English industry. The country which has almost continuously placed the most colossal orders for English goods and whose demand at the present time, too, is able to empty the markets of Manchester, Leeds, Halifax, Nottingham, Rochdale, and all the great emporia of modern industry, and which can enliven the ocean with its ships—is a republican country, the United States of North America. And it is just now that these states are prospering most of all, when all the monarchical states of the world are collapsing.
If, however, in the recent period a few branches of German industry have to some extent improved their position, they owe it solely to the English period of prosperity. From the whole of the history of commerce the Germans should know that they have no commercial history of their own, that they have to suffer for English crises, while in periods of over-production in England, a minute percentage is all that falls to their lot. But they have nothing to thank their Christian-Germanic governments for except accelerated bankruptcy.