A letter from Neal Cassady to Jack Kerouac, which inspired the spontaneous style of On the Road and was described by Kerouac as “enough to make Melville, Twain … I dunno who, spin in their graves”, is to go up for auction later this month for the second time in less than two years.

Cassady wrote the 40-page letter to Kerouac on 17 December 1950. Running to 13,000 words, Cassady later admitted that it was written in three days, high on Benzedrine. Kerouac, in a 1968 interview with the Paris Review, said that his friend’s missive was the inspiration for the style of his most famous work, On the Road. “I got the idea for the spontaneous style of On the Road from seeing how good old Neal Cassady wrote his letters to me, all first person, fast, mad, confessional, completely serious, all detailed, with real names in his case, however (being letters),” said Kerouac.

Cassady’s letter to Kerouac, with additions, corrections and deletions in pencil and pen. Photograph: © Cathy Sylvia Cassady, Jami Cassady and John Cassady. Christie’s Images Ltd. 2016.

Kerouac called the letter “a whole short novel” that was “the greatest piece of writing I ever saw, better’n anybody in America”, superior to most of the acknowledged greats of US literature. He told the Paris Review that he lent it to Allen Ginsberg, who subsequently lent it to a friend that Kerouac believed had lost it over the side of his California houseboat.

In fact, the letter was safe in the files of the Golden Goose Press, where it was discovered by Jean Spinosa in 2012, more than 60 years after it was written. The letter was put up for auction in 2014, but the auction was cancelled after both Kerouac and Cassady’s estates claimed ownership. Now an “amicable settlement” has been reached, Jami Cassady told the San Francisco Chronicle, and Christie’s will auction the letter for an estimate of $400,000 (£273,000) to $600,000 (£410,000) on 16 June, following a preview tour moving from Seattle to New York between 31 May and 15 June. Cassady also told the San Francisco paper that her family, which owns copyright in the letter, will publish it at a later date.

I thought it ranked among the best things ever written in America … almost as good as the unbelievably good Dostoevsky Jack Kerouac

The letter, only a fragment of which has previously been published, is a “compelling, unaffected and discursive account of Cassady’s frenetic love life in 1946”, said Christie’s, including “an acrobatic escape through a bathroom window” when he and his lover were surprised by her aunt. In his response to Cassady on 27 December, Kerouac wrote: “I thought it ranked among the best things ever written in America … it was almost as good as the unbelievably good ‘Notes from the Underground’ of Dostoevsky … You gather together all the best styles … of Joyce, Céline, Dosy [sic] … and utilise them in the muscular rush of your own narrative style & excitement. I say truly, no Dreiser, no Wolfe has come close to it; Melville was never truer.”

Christie’s said that the letter had an “incendiary effect” on Kerouac. “It immediately became the catalyst for Kerouac’s critical breakthrough as a writer, transfiguring his approach to the material stored in his memory and recorded in his journals,” said the auction house. “Cassady left his mark on a generation of writers through the power of this one letter … its rawness and speed focused this strain of postwar American thought, drew together an immediacy of life and living with a new intellectualism, fused existentialism with the coming of pop, the prosaic with the elegiac. And it did so by influencing the masters of the movement without the benefit of having its own critical appreciation.”