MARX, Karl (1818-1883). Three autograph letters signed ('Karl Marx' and once 'K. Marx') to Collet Dobson Collet, London, 2-19 November 1868, in English, together 10½ pages, 8vo (180 x 114mm), on bifolia, on paper with blind stamped emblem of eggs in a nest (minor soiling at folds, letter of 19 November with lower half of last page cut away, including concluding lines of postscript), one envelope, postmarked 20 November 1868 (soiled).
ON THE RUSSIAN THREAT TO THE BANK OF ENGLAND. In three letters of substantial politico-economic analysis, Marx exposes the vulnerability of the Bank of England to a premeditated attack by the Russian government. In the first letter, he considers the suspension of Peel's 1844 Bank Charter Act by Gladstone in his letter of 11 May 1866, which created '[t]he most morbid sense of distrust in English solvency', which was then raised to a panic by the 4th Earl of Clarendon's declaration that English industry and commerce were bankrupt. There ensued 'a "run", not of the Cockney upon the Bank, but "a run (for money) of Europe upon England', which struck down the London market for foreign investments, but provided the most 'facile' environment for foreign loans, chiefly to the benefit of two Russian government loans, amounting to £10 million: 'Russia was, in 1866, as she is now, almost breaking down under financial difficulties which, consequent upon the agricultural revolution she undergoes, have assumed a most formidable aspect', and yet the Act 'puts England, the richest country in the world, literally at the mercy of the Muscovite government, the most bankrupt government in Europe'. Marx goes on to posit a situation in which Russia might exploit the next such crisis through the threat of the withdrawal of a substantial deposit with the Bank of England.
Marx's second letter expands on a number of points, including the 'pretext' of the Russian loans being 'Railway Loans' (asserting that the railways in question are chiefly for military movements, and that the money is in any case usually transferred to other ends), and the mechanism by which a hypothetical Russian loan could have brought down the Bank of England, noting that the Bank requires the physical presence of the Government ministers in order to suspend Peel's Act: 'The 1866 Crisis exceptionally took place in the spring; commercial panics usually occur in autumn, when Parliament is not sitting'; Marx also analyses the peculiar contribution of the Times in stirring up alarm over the financial crisis. Marx's third letter transcribes a series of extracts from the Money Market Review relating to the Russian loan, and concludes with a postscript referring to 'a little pamphlet by Gerstenberg, a German Jew and London Stockbroker ... The marginal exclamations I am not responsible for. They belong to my eccentric friend, Mr. [Sigismund] Borkheim, wine merchant in the City. He believes that Gerstenberg acts under the secret instructions of the Barings'.
Marx refers gleefully to the present texts in a letter to Engels of 14 November 1868: 'I have put a new bee in the bonnet of the Urqhuartites (since Collet invited me and my family to visit him last Sunday week [8 November]: I had not seen him personally for years) ... namely that Peel's Bank Act of 1844 makes it possible for the Russian Government, under certain conjunctions of the money-market, to force the Bank of England into bankruptcy'. (3)