Nothing could be more unlucky than our missing each other as we did this
year. I should think there would be no obstacle to our leaving town a
little earlier next year, when I hope we shall at length have the
pleasure of seeing Mrs. Malthus and you at Gatcomb.
It is the general remark in our part of the country that a finer season
was never remembered. The rain, of which we have certainly had a
deficiency, has generally come at night, and the days which have
followed have been beautiful. The temptation to enjoy it has been so
great that I have been incessantly out with some one or other of my
friends who have been staying with me, either riding or walking, which
makes such inroads on my time that I find I have much less leisure here
for reading and study than I have in London. Before I came here I often
saw Mr. Grenfell[108], who is very warm on the subject of the Bank and
the advantageous bargains which it has always made with government, as
well for the management of the national debt, the composition which it
has hitherto paid for stamps, as for the compensation which government
has received in the way of loan for enormous average deposits left with
the Bank. I am quite of his opinion, and indeed I go much further; I
think the Bank an unnecessary establishment, getting rich by those
profits which fairly belong to the public. I cannot help considering the
issuing of paper money as a privilege which belongs exclusively to the
State; I regard it as a sort of seignorage, and I am convinced, if the
principles of currency were rightly understood, that commissioners might
be appointed, independent of all ministerial control, who should be the
sole issuers of paper money,--by which I think a profit of from two to
three millions might be secured to the public, at the same time that we
should be protected from the abuses of the country banks, who are the
cause of much mischief all over the kingdom. These commissioners should
also have the management of the public debt, and should act as bankers
to all the different public departments. They might invest the eleven
millions which is the average of public deposits in Exchequer Bills, a
part of which might be sold whenever occasion required. This of course
(at least all of it) could not be effected till the expiration of the
Bank Charter in 1833; but it is never too soon to give due consideration
to important principles, which might be recognized, though not yet acted
on. In looking over the papers which have from time to time been laid
before Parliament, I think it might clearly be proved that the profits
of the bank have been enormous. I should think they must have a hoard
nearly equal to their capital. By their charter they are bound to make
an annual division of their profits and to lay a statement of their
accounts before the proprietors; but they appear to set all law at
defiance. I always enjoy any attack upon the Bank, and [if I] had
sufficient courage I would be a party to it.
Though I have been thinking on this subject lately, I am not less
interested about our old subject, of the advantages or disadvantages of
high prices for raw produce. If I agreed with Mr. Torrens that such high
prices were accompanied with a rise in the prices of commodities, and,
if I thought that such rise would not preclude the usual exchanges with
foreign countries, I should of course agree with you that with such
general high prices we should command a greater quantity of foreign
commodities in exchange for a given quantity of ours; but I cannot admit
in the first place that commodities would rise because corn rose[109];
and, secondly, if they did so rise there are but very few which we could
sell in equal quantity at the advanced price to foreigners; and, if we
sold less to them, we could buy less of them, and thus would our
general commerce suffer. I can see great advantages attending low
general prices but none in high prices. On this subject we are not
likely to agree. I hope you are diligently employed and that early in
the year we shall see something new from your pen. I have some curiosity
to see a pamphlet just advertised[110], in the title page of which your
name is mentioned.
Ever yours,
DAVID RICARDO.
... Have you seen Monsieur Say's [Catec]hisme d'Economie Politique? He
has softened but not [expung]ed the objectionable definitions.
NOTE.--Correspondence between Ricardo and J. B. Say is given in the
'Oeuvres Diverses' of the latter, published after his death
(Guillaumin, 1848), with notes by Ch. Comte, Daire, and Horace Say.
J. B. Say (born 1767) was the son of a Lyons merchant, of Huguenot
origin. When a boy, he was sent with his brother Horace to learn
business in London, where he was struck, amongst other things, by
the fact that his Croydon landlord built up one of the two windows
of his lodgings to escape window tax. Having gained familiarity with
the English language and English ways he returned to France in 1789
and entered the employment of a Life Insurance Company, the manager
of which (Claviere) lent him a copy of the 'Wealth of Nations,' not
yet translated into French. The reading of it made him an economist
for life, as it did for Ricardo ten years later. After serving in
the revolutionary army in 1792, he left commerce for journalism. His
chief book, Le Traite de l'Economie Politique, appeared in 1803. Too
independent to please Napoleon, he was forced to quit his new
profession for his old; and his commercial travelling landed him
eventually at Geneva, where he made the acquaintance of Necker,
Madame de Stael, and Benjamin Constant. He came back to France (to
Auchy, Pas de Calais) to spin cotton, retiring with a moderate
fortune in 1813. After the Peace he was sent by Government to report
on the economical condition of England. He was cordially received
by Ricardo, Bentham, and other economists; and on his return to
Paris narrated with pride to his audiences at the Conservatoire des
Arts et Metiers that the Glasgow professors had made him sit in the
chair of Adam Smith. After an active life of teaching and writing,
he died in Paris, 15th November, 1832.
Ricardo writes to him from Gatcomb Park on 18th Aug., 1815, thanking
him for the copy of the (first edition of the) 'Catechisme de
l'Economie Politique,' which he had just sent. Though complimenting
him highly on the work, he thinks that Say has not, even yet, with
sufficient clearness distinguished Value from Utility. No doubt to
have value a commodity must be _useful_, but it is the _difficulty_
of its production that is the sole measure of its value. 'The
wealthiest man is he who has most values, and who is able, by giving
them in exchange, to procure himself not the things which he himself
and everybody else regard as the most desirable, and which can be
had at a low price, but the things that are difficult to produce and
consequently dear. A man is rich not by the moderation of his
desires, but by the quantity of commodities that he possesses.' Say
has also, in Ricardo's opinion, forgotten sometimes that the growth
of the capital of a manufacturer cannot be safely estimated in money
if we do not allow for the change in the value of money. Ricardo
concludes: 'The pleasure which I take in reading and studying good
works on political economy has not diminished since I saw you. I
should devote all my time to the discussion of points which seem to
me to need further elucidation, if I had any talent for composition.
However, I have ventured to publish the pamphlet[111] which I sent
you, and I should be glad to know your opinion on the doctrine which
I maintain in it in relation to the rent of land and the rate of
profits, in opposition to Mr. Malthus. I learn from Mr. Mill that
several persons in this country do not understand me because I have
not explained my views at sufficient length; and he is trying to
induce me to undertake an explanation of them from the beginning and
at greater length; but I fear that the undertaking is beyond my
powers.' (Oeuvres Diverses de Say, pp. 409-11. Ricardo wrote in
English, but in this and the other cases the editors give only the
French.)
Say's answer follows (pp. 411-13), 2nd Dec., 1815: 'Nous nous
occupons heureusement vous et moi de choses de tous les temps
plutot que de celles du moment actuel, qui ne sont pas gaies, malgre
les fetes que l'on donne pour faire croire aux peuples qu'ils sont
heureux.' Going to the subject of value, he says he did _not_ say
Utility was the measure of Value, but 'the value that men attach to
a thing is the measure of the utility they find in it;' moreover he
had not maintained the Stoical doctrine, 'the fewer wants, the
greater wealth,' but had simply said that a man is the richer if all
the things he wants (whatever they be) are cheap instead of dear,
and would be richest of all if he had abundance of everything
without any cost at all. He allows that Ricardo is right in regard
to the growth of the manufacturer's capital, and promises to
introduce the qualification suggested by Ricardo in his next
edition. In the controversy between Malthus and Ricardo he finds it
difficult to take a side, for he cannot for his part exclude from
the question of profits 'the talent and industrial capacity of the
man who brings out the resources of a land or a capital;' the profit
inherent merely in land or in capital seems to him unimportant in
comparison with the profit due to the source described. But he says
he is too timid to insist on his opinion, and will wait for
Ricardo's full explanations in the larger work. 'How I envy your
lot, to study political economy in your beautiful retreat of Gatcomb
Park! I shall never forget the too short moments I passed there, nor
the charms of your conversation.'