He calls attention to the fact that James Mill and other capitalistic economists had long before recommended that land rent should be paid to the State so as to serve as a substitute for taxes, and that he, himself, had advocated it in the Manifesto of 1847--among _transitional measures_.
Marx says that he and Engels "inserted this appropriation of ground rent by the State among many other demands," which, as also stated in the Manifesto, "are self-contradictory and must be such of _necessity_." He explains what he means by this in the same letter.

In the very year of the Manifesto he had written (in his book against Proudhon) that this measure was "a frank statement of the hatred felt by the industrial capitalist for the landowner, who seems to him to be a useless, unnecessary member in the organism of Capitalist society." Marx demanded "the abolition of property in land, and the application of all land rents to public purposes," _not because this is in any sense the smallest installment of Socialism, but because it is a progressive capitalistic measure_.

While it strengthens capitalism by removing "a useless, unnecessary member," and by placing it "on a still larger foundation than it has at the present," it also matures it and makes it ready for Socialism--ready, that is to say, as soon as _the working people capture the government and turn the capitalists out, but not a day sooner_.[92] Until that time even the most grandiose reform is merely "a Socialistically-fringed attempt to save the rule of capitalism." Other "transitional measures" mentioned by Marx and Engels in 1847, some of which had already been taken up as "Socialistically-fringed attempts to save the rule of capitalism" even before their death were:-- The heavily graduated income tax.
The abolition of inheritance.
A government bank with an exclusive monopoly.
A partial nationalization of factories.
(No doubt, the part they would select would be that operated by the trusts.) Government cultivation of waste lands.
Here we have a program closely resembling that of "State capitalism." It omits the important labor legislation for increasing efficiency, since this was unprofitable under competitive and extra-governmental capitalism, and in Marx's time had not yet appeared; _e.g._ the minimum wage, a shorter working day, and workingmen's insurance.

As Marx and Engels mention, however, the substitution of industrial education for child labor (one of the most important and typical of these reforms), they would surely have included other measures of the same order, had they been practicable and under discussion at the time.
There can be little doubt that Marx and Engels, in this early pronunciamento, were purposely ambiguous in their language.

For example, they demand "the extension of factories and instruments of production owned by the state." This is plainly a conservatively capitalistic or a revolutionary Socialist measure entirely according to the degree to which, and the hands by which, it is carried out--and the same is evidently true of the appropriation of land rent and the abolition of inheritance.