I have written to Mr. Thornton[52] to request him to meet you at dinner,
at my house, on any day most convenient to him, after Saturday and
before Thursday, but I have not had his answer in time for this day's
post. I will send you a line at the King of Clubs. I shall only ask Mr.
Sharp to meet us. Will you not stay with us whilst you are in town? I
assure you it would be quite convenient, and it would afford me great
pleasure. If Mrs. Malthus accompany you it will be still more agreeable,
and I am desired by Mrs. Ricardo to add her solicitations to my own.
On many points connected with our old question we are I believe
agreed,--though there is yet some difference between us. I have not
lately given it so much consideration as you have,--and I always regret
that I do not put down in writing, for I have a very treacherous memory,
the chief points of difference that occur in our discussions. I cannot
help thinking that there is no unfavourable exchange which may not be
corrected by a diminution in the amount of the currency, and I consider
this to afford a proof that the currency must be redundant for a time at
least. Whilst the exchange is unfavourable it is always accompanied,
though not always caused, by an excess of currency. With best respects
to Mrs. Malthus,
I am, my dear Sir,
Yours most truly,
DAVID RICARDO.
... As I was about leaving the city I received Mr. Thornton's answer. He
is engaged on Wednesday and Thursday, and has fixed on Monday for our
meeting, but he wishes us to meet at his house as there is to be a
debate in the House of Lords on the Bullion question, and he is not sure
that his presence may not be necessary in the Commons. I will settle
this point with him, and if you do not hear from me I shall expect you
at my house on Monday, if you do not agree to come on Saturday evening.
NOTE.--Thomas Tooke, in his 'History of Prices and of the State
of the Circulation from 1839 to 1847' (publ. 1848)[53], refers to
this dispute between Ricardo and Malthus, on the relation of the
currency to the balance of trade, and quotes long extracts from
the article of Malthus in the Edinburgh Review, where (as in this
correspondence[54]) Malthus maintains that the precious metals are
continually used in payments made by one country to another even if,
till that moment, the currencies of both have been at their usual
level. The view of Ricardo is that nothing but the state of the
currency can influence the foreign exchanges. As late as 1840
statesmen clung to the idea that the Directors of the Bank of
England could only operate on the exchanges by increasing or
diminishing the circulation[55]. Tooke (followed later by Newmarch,
hardly a less authority) sides with Malthus, and thinks that
Ricardo's reply to him, in the Appendix to the Tract on Bullion, is
'little more than a repetition in varied forms of expression,
according to the phraseology peculiar to the theory in question, of
the axiom that gold will not be exported unless it is cheaper than
another commodity, assuming consequently the fact to have been that
all commodities were at that time dearer in this country than they
were abroad, and relatively to gold;'--whereas it appears[56] that
between 1809 and 1811 the bulk of commodities were at a far higher
price (measured in gold) on the Continent than in England; the
'continental system' had forced vast stores of goods to lie
unsaleable in England for want of physical ability, on the part of
the merchants of them, to land them on the Continent, though they
did their best to smuggle them by way of Heligoland or Turkey into
Germany and the door of Portugal was ajar. Coffee was unsaleable in
England at 6_d._ the pound, and at the same time it was fetching
4_s._ or 5_s._ on the Continent. Napoleon used to look at the
English price current, and, if he found gold dear and coffee cheap
in England, he was satisfied that his Berlin and Milan decrees were
well carried out, while the English saw only another proof that the
Bank was extending its issues overmuch. Tooke and Malthus agreed
that the difference between the market price and the mint price of
gold bullion was the full measure of the depreciation of the
currency; but the 'ultra-bullionists' would not stop there. Tooke,
like Ricardo on another occasion (see Letter XLII), had to 'write a
book to convince' them, namely his 'Thoughts and Details on the High
and Low Prices of the last Thirty years,' (1823).