I am exceedingly obliged to you for the trouble which you have taken in
looking over the papers which I sent you, and for the remarks which you
have made upon them. Notwithstanding your flattering encouragement I
think I shall not have sufficient confidence again to address the
public;--the object which I had in view is completely attained,--the
public attention has been awakened, and the discussion is now in the
most able hands. I regret, however, that you cannot bring yourself to
subscribe to my doctrine respecting the exchange being influenced by no
other causes but by the relation which the amount of currency bears to
the uses for which it is required in the different nations of the
earth. This may proceed from your interpreting my proposition somewhat
too rigidly. I wish to prove that if nations truly understood their own
interest they would never export money from one country to another but
on account of comparative redundancy. I assume indeed that nations in
their commercial transactions are so alive to their advantage and
profit, particularly in the present improved state of the division of
employments and abundance of capital, that in point of fact money never
does move but when it is advantageous both to the country which sends
and the country that receives that it should do so. The first point to
be considered is, what is the interest of countries in the case
supposed? The second what is their practice? Now it is obvious that I
need not be greatly solicitous about this latter point; it is sufficient
for my purpose if I can clearly demonstrate that the interest of the
public is as I have stated it[46]. It would be no answer to me to say
that men were ignorant of the best and cheapest mode of conducting their
business and paying their debts, because that is a question of fact not
of science, and might be urged against almost every proposition in
Political Economy. It rests with you therefore to prove that a case can
exist where it may become the _interest_ of a nation to pay a debt by
the transmission of money rather than in any other mode, when money is
not the cheapest exportable commodity,--when money (taking into account
all expenses which may attend the exportation of different commodities
as well as money) will not purchase more goods abroad than it will at
home. You appear to me to have repeatedly admitted that it is the
relative prices of commodities which regulates their exportation. Is it
not then as certain that money will go to that country where the major
part of goods are cheap, as that goods will go to any other country
where the major part are dear? I say the major part, because if the
cheapness of one half of the exportable commodities be balanced by the
dearness of the other half, in both countries, it is obvious that the
commerce of such countries will be confined to the exchange of goods
only. When you say that money will go abroad to pay a debt or a subsidy,
or to buy corn, although it be not superabundant, but at the same time
admit that [it] will speedily return and be exchanged for goods, you
ap[pear to me] to concede all for which I contend, namely, that [it
will] be the _interest_ of both countries, when money is not
superabundant in the one owing the debt, that the expense of exporting
the money should be spared, because it will be followed by another
useless expense,--sending it back again.
If in any country there exists a dearness of importable commodities and
no corresponding cheapness of exportable commodities, money in such
country is above its natural level and must infallibly be exported in
payment of the dear commodities,--but what does this state of things
indicate but an excess of currency, and it may surely be correctly said
that money is exported to restore the level not to destroy it. I ought
to apologise for again troubling you with my opinions, but you have
drawn me into it. I shall be happy to renew our conversation on these
disputed points as soon as you can make it convenient to visit us in
London, and I trust it will not be long before Mrs. Malthus and you will
favour us with your company. On some future day I shall have great
pleasure in again visiting you at Hertford.
I am, dear Sir,
Yours very truly,
DAVID RICARDO.