I have been for two or three days at Tunbridge Wells, and have been
agreeably surprised to-day on my arrival in London, to hear of the great
events which are taking place in France in consequence of the great
victory obtained by the Duke of Wellington and his brave army over
Bonaparte. With the deposition of Bonaparte I hope there may be no other
obstacles to peace, and that we may at length be rewarded for the blood
and treasure which we have expended with a long period of
tranquil[l]ity, which I have no doubt will also prove a long period of
prosperity. I think with Mr. Whitbread[106] that great credit is due to
ministers for the energy which they have displayed in the prosecution of
this contest. Having determined on war, their preparations have been on
such a scale as to give from the commencement the best hopes of success,
and we appear at last to have adopted the wise policy of making one
grand effort in preference to a series of puny efforts, each just
sufficient to keep the contest alive without making the least advance to
its ultimate object.
The effect on the price of Omnium has been no more than what might have
been expected. I am sorry that you have not profited by the rise. As for
myself, I have all my stock, by which I mean I have all my money[,]
invested in Stock; and this is as great an advantage as ever I expect or
wish to make by a rise. I have been a considerable gainer by the
loan[107]; in the first place by replacing the stock which I had sold
before the contract with the minister [_sic_] at a much lower price,
secondly by a moderate gain on such part of the loan as I ventured to
take over and above my stock. This portion I sold at a premium of from 3
to 5 per cent., and I have every reason to be well contented. Perhaps no
loan was ever more generally profitable to the Stock Exchange.
Now for a little of our old subject. It appears to me that there are two
causes which may cause a rise of prices, one the depreciation of money,
the other the difficulty of producing. The latter can in no case be
advantageous to a society. It is always a sign of prosperity but never
the cause of it. Depreciation of money may be beneficial, because it
generally favours that class who are disposed to accumulate, but I
should say that it augmented riches by diminishing happiness, that it
was advantageous only by occasioning a great pressure on the labouring
classes and on those who lived on fixed incomes. You and I concur in
this opinion, for you say you are convinced that there are unobserved
advantages attending the high price of corn and labour 'when not arising
solely from difficulty of production,' [by] which I think you imply that
no such advantages attend high prices if attended with difficulty of
production.
This opinion is, however, a little at variance with that which you have
long been supporting, for you have said that the high price of corn and
labour in this country at this time was an advantage, although it is
universally allowed that that high price is mainly owing to difficulty
of production. The farmers and shopkeepers may suffer very general
distress from a sudden and general fall of prices; but I hold that this
would be no criterion by which to judge of the general or permanent
prosperity of a country.
The accounts in which I am at present engaged will I fear keep me in
London till the very latter end of July. I shall very much regret if you
quit Bath without my seeing you. I quite depended on having a visit from
you at Gatcomb this year, and I yet hope that it may be accomplished. I
shall certainly leave London the very earliest day possible.
The price of labour in America appears to me enormously high as compared
with the price of wheat; but we should not fail to remember how very low
the exchangeable value of wheat is there, and how much of it must be
given for the manufactured necessaries and comforts of life....
Ever truly yours,
DAVID RICARDO.