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The letter fetched a record price as it was the only piece of written correspondence from the ship. It was written on three sides of pages and was penned down by Adolphe Saafeld to his wife.
An unidentified British museum bought the letter, which has yet to formally announce its purchase. The letter was auctioned by Henry Aldridge and Son auctioneers in Devizes, Wiltshire.
The letter was written five days before the ship sank on 15th April, taking 1,517 lives with it, and gives an insight into life on the maiden voyage of the Titanic.
"The content is superb. It gives a real first person perspective of what life was like on-board, through the eyes of a first-class passenger, right down to the food, the size of the cabin and the decoration," said Andrew Aldridge from the auction house.
Another item of the sale was a set of keys to the ship's binocular box, belonging to an officer who was transferred from the Titanic at the last minute. If the sailor had the keys, it could have saved Titanic from sinking.
A set of photographs relating to the Titanic, her passengers and crew were sold to various collectors for more than 100,000 pounds.
One picture, of Rosa Abbott, who was pulled from the water after the ship sank, fetched 35,000 pounds and was bought by a private collector.