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• Prefatory Note to Volumes Iii and Iv
• Pamphlets and Papers Written For Publication 1809–1811
• Note On the Bullion Essays
• The Price of Gold Three Contributions to the Morning Chronicle1809
• The Price of Gold 1
• [first Reply to ‘a Friend to Bank-notes’] to the Editor of the Morning Chronicle.1
• [second Reply to ‘a Friend to Bank-notes’] to the Editor of the Morning Chronicle.1
• [appendix to ‘the Price of Gold’
• [a Reply By Trower]
• [a Further Reply By Ricardo]1
• The High Price of Bullion 1810– 11
• Three Letters to the Morning Chronicle On the Bullion Report 1810
• [three Letters On the Bullion Report] Report of the Bullion Committee1to Theeditor of the Morning Chronicle.
• [on Sir John Sinclair’s ‘observations’] Bullion Report1to Theeditor of the Morning Chronicle.
• [on Mr Randle Jackson’s Speech] Bullion Report1to Theeditor of the Morning Chronicle.
• Reply to Mr. Bosanquet’s ‘practical Observations On the Report of the Bullion Committee’, 1811
• Chapter I: Preliminary Observations.—mr. Bosanquet’s Objections to the Conclusions of the Bullion Committee Briefly Stated.
• Chapter II: Mr. Bosanquet’s Alleged Facts, Drawn From the History of the State of Exchange, Considered.
• Chapter III: Mr. Bosanquet’s Alleged Facts, In Supposed Refutation of the Conclusion That a Rise In the Market Price of Bullion Above the Mint Price Proves a Depreciation of the Currency, Considered.
• Chapter IV: Mr. Bosanquet’s Objections to the Statement, That the Balance of Payments Has Been In Favour of Great Britain, Examined.
• Chapter V: Mr. Bosanquet’s Argument to Prove That the Bank of England Hasnotthe Power of Forcing the Circulation of Bank Notes—considered.
• Chapter VI: Observations On the Principles of Seignorage.
• Chapter VII: Mr. Bosanquet’s Objections to the Proposition, That the Circulation of the Bank of England Regulates That of the Country Banks, Considered.
• Chapter VIII: Mr. Bosanquet’s Opinion—that Years of Scarcity and Taxes Have Been the Sole Cause of the Rise of Prices, Excessive Circulation No Cause—considered.
• Chapter IX: Mr. Bosanquet’s Opinion, That Evil Would Result From the Resumption of Cash Payments—considered.
• Appendix
• Notes On Bentham’s ‘sur Les Prix’ 1810– 1811
• Notes On the Bullion Report and Evidence 1810
• (a): [notes On the Report of the Bullion Committee]
• (b): [rough Notes On the First Part of the Minutes of Evidence]
• (c): [notes On the Minutes of Evidence] Minutes of Evidence
• Notes On Trotter’s ‘principles of Currency and Exchanges’ 1810
• Observations On Trower’s Notes On Trotter 1811
• Observations On Vansittart’s Propositions Respecting Money, Bullion and Exchanges 1811
• Appendix

OBSERVATIONS ON TROWER’S NOTES ON TROTTER
1811

NOTE ON ‘OBSERVATIONS ON TROWER’S NOTES ON TROTTER’

Trower, like Ricardo, had written a commentary on Trotter’s pamphlet. This commentary, extending to forty pages of MS, is headed ‘Notes and Observations on a Pamphlet entitled The Principles of Currency and Exchanges...(Anonymous) by Coutts Trotter Esqr.’ and is dated ‘February 1811’. It is in reply to this paper that Ricardo wrote the Observations here printed.

[OBSERVATIONS ON TROWER’S NOTES ON TROTTER]

What does Mr. Trotter mean by saying that it may be more advantageous to discharge a foreign debt by the exportation of a dear than of a cheap article;—by the exportation of gold which is dearer than by commodities which are cheaper here than abroad?1 This is evidently impossible;— it implies a contradiction and needs no argument to prove its absurdity. If he means that the exportation of all other commodities will be attended with so much expense as to make it more advantageous to export gold,—then gold cannot be said to be dearer here than abroad because it is under all circumstances the cheapest exportable commodity. When we say that gold is dearer here than abroad and that commodities are not, we must include the expences attending their transportation to the foreign market, otherwise they are not fair subjects of comparison. If Mr. Trotter means that nothing but gold will be accepted in payment of our debt notwithstanding its relative price,—then there is an end of all comparison between gold and other things,—we have contracted to pay gold and nothing but gold will absolve us from our engagements. But it is not with Trotter’s; it is with Mr. Trower’s observations that I have now to deal.

He observes that if it could be admitted that a foreign merchant would import gold at a loss, it would follow [“]that merchants were bartering two commodities on one of which they both lose (this one I suppose is bullion) [;] their profits then, he says, must be taken out of the other article. The seller must add to the price of the article (of wheat for example) the loss sustained upon the bullion he receives in payment; the buyer must afterwards add to the price of the article (wheat) over and above his profit the loss he sustains upon the bullion in which he pays for it.[”]1 In the first place this is not a fair answer to Mr. Trotter,—he supposes a debt already contracted and which can only be discharged by money;—his argument has no reference to any new contract which may take place between the exporter of wheat from the continent and the exporter of bullion or of money from England, and in which contract the consideration of the value of these articles must necessarily enter. His case is this, an importer of wheat into England has engaged to pay a sum of money, a certain weight of bullion, and the time is arrived at which his creditor will accept of nothing else.

Secondly, if we admit that the argument is fairly applied, we are not told on whose account the transaction took place; was it on account of the foreign or of the English merchant? We are led to suppose indeed that it is on account of both, and that they have both an interest in the value of bullion because they are both to add to the price of the wheat to compensate them for the loss on the Bullion,—one of them is to do so because bullion is cheap and the other because bullion is dear. If it be said that the importation of the wheat into England is on account of the English merchant only, then the transaction was complete as far as regarded the foreign merchant at the moment he sold the wheat. He bought it in France for a sum of French currency and sold it for a sum of French currency which was to be paid him either by means of a bill of exchange or by the actual transit of bullion of an equal value,—he has therefore no other interest but to take care to receive his payment, and his profit if any should attach to it. It is probable that he might have only been an agent and have no other interest but his commission for his trouble. If then the transaction be on account of the English merchant what possible inducement will he have to import the wheat if the bullion which he has engaged to give in return for it, be dearer in England than in France, that is to say if he cannot sell it for more money than he has purchased it for.

If he can do so, does it not prove that bullion is cheaper in England than in France? that with the commodity wheat more bullion may be bought in England than in France? As far as those commodities are concerned, what greater evidence can we possess of bullion being dearer in France than in England? Is it a satisfactory answer to say, no; it is the wheat that is dearer in England;—dearer for what? why, for bullion. This I conceive is but another way of saying that bullion is cheaper in England and dearer in France. How are we to distinguish then whether the profit has been obtained by the sale of the money or by the purchase of the wheat, seeing that they precisely express the same thing?

In the supposed case then, of the exportation of bullion, notwithstanding its being dearer in the exporting country, in return for wheat, the fact that wheat is cheaper in the importing country is necessarily involved;—how then can there be any remedy against the disadvantage of exporting bullion by raising the price of the wheat? It is saying, because wheat is cheaper here than abroad,—I will add to the quantity by importing more and will at the same time increase its price. The same argument may be used if the whole transaction were on account of the foreign merchant.

[1 ]See Principles of Currency and Exchanges, 1810, pp. 44–7.

[1 ]This passage is quoted from Trower’s Notes on Trotter. As a result of Ricardo’s criticism Trower crossed it out in his MS and replaced it with a new version.