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PROPOSED RESOLUTIONS - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 5 Speeches and Evidence [1819]

Edition used:

The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 5 Speeches and Evidence 1815-1823.

Part of: The Works and Correspondence of David Ricardo, 11 vols (Sraffa ed.)

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PROPOSED RESOLUTIONS

1st. true2d. —not true3d:

Descriptive of the distressed state of the Agricultural part of the country;—the effects of the altered state of the Currency on the general amount of Taxation; and the relative situation of the Public Creditor and the Public, under such altered state of the Currency.

True, but by what caused.What suffering would there have been had there been no taxes.

1.—THAT the Select Committee appointed last Session to inquire into the petitions complaining of the distressed state of the Agriculture of the United Kingdom, reported, That it was with deep regret they had to commence their Report by stating, that in their judgment the complaints of the petitioners were founded in fact, and that at the price of corn, at that time, the returns to the occupiers of arable farms, after allowing for the interest of their investments, were by no means adequate to the charges and outgoings; and that a considerable portion thereof must have, therefore, been paid out of their capitals:— That the price of grain having experienced a still further depression, viz. from 55s. 6d. per quarter of wheat to 45s.; and all other grain and all other articles having undergone a similar or greater decline, the insufficiency of the receipts of the farmers to cover their charges must be proportionably increased, which is further confirmed by the numerous petitions on the table of the House, representing in the strongest terms their aggravated and excessive distress; and that in consequence thereof, the labourers in many districts are destitute of employment and the consequent means to purchase food, and have broken out into acts of violence and aggression, and for which the lives of some have been forfeited under sanction of the law.

Is it possible justly to ascribe the distress in Ireland to any thing connected with the currency.

2.—That it appears by the papers relating to the state of Ireland, laid before this House by His Majesty’s command, that serious disturbances had broken out in that country, of which the demand and collection of rents had been, on the part of the insurgents, the alleged causes; and subsequent information has been received, that the labourers in agriculture, from a partial failure in the crop of potatoes, together with a total want of employment, and consequent means to purchase other food, are in the most calamitous and deplorable situation; and that many have died from the want of nourishment, whilst the price of provisions still continues so low, as not to afford to the occupiers of land the means of defraying the various charges to which they are subject.

No such words in the Report.not true

3.—That in the same Report of the Select Committee of last Session, it is stated, “that the measures “taken for the restoration of the currency have con“tributed to lower the price of grain and other com“modities generally, and consequently to cause a “severe pressure upon the industry of the country, and “not only to have occasioned a proportion of the fall “of prices here, but to have produced a similar, “though not equal, effect in other countries; and, in a “degree, to have deranged the markets of every part “of the civilized world.”—That in proportion as all commodities, whether the produce of the soil, manufactures or commerce, have experienced a depression of their money value; so must the proprietors have suffered a direct injury; and whatever may be the degree, it is impossible that the commercial and manufacturing classes of the community can long continue to prosper, whilst the cultivators of the soil are rapidly sinking into ruin and decay, and the labourers suffering in consequence of the want of their usual employment.

Not before 1800An important admission.14. 6. 8—10 p.c.4. 11. 2. or 15 p.c. depreciation.—13° bushels1797 to 1816 8 bushels ⅞ bushel

4.—That soon after the passing of the Act of 1797, by which the Bank of England was restricted from paying its notes in specie, the antient metallic standard of value having been thus departed from, the currency of the country, composed of bank notes, became depreciated, which depreciation was evinced, and may be estimated by the amount of bank paper money above 3l. 17s. 10 d. necessary to purchase anounce of gold; and which fluctuating from that sum to 5l. 11s. was, on the average of eighteen years to 1816, 4l. 10s. 10d. thence to 1819, 4l. 1s. and the last 10 years of the war, 4l. 16s. 1d. That this depreciation may be further and more accurately estimated by the price of commodities, particularly of wheat, at different periods, by which it will also appear, that the value of gold was reduced by the issue of paper, which became its nearly exclusive substitute; that the price of wheat, according to the Eton College tables, upon the average of 150 years prior to the commencement of the late war, whether calculated in periods of 10 or 50 years, had not exceeded 46s. per quarter, and an ounce of gold would consequently, during all that time, exchange for 13 bushels and a half; that from 1797 to 1816, the average price of wheat fluctuated from 50s. to 125s. per quarter, the average of the last eight years of the war being 101s. 9 d. and the average of the whole period 81s. 10d. and an ounce of gold would therefore only exchange for 8 bushels seven eighths; that the price of grain thus became, in its nominal or money value, nearly double its amount at any former period; the rent of land and commodities acquired a similar additional value, and consequently all possessors of fixed incomes sustained an injury to the extent of such alteration.

Wheat 10 years ending1735—1.15.21745—1.12.11755—1.13.21795—2.14.3Rental annihilatedPaying off debt.

5.—That the average price of wheat between the years 1797 and 1819 having been, therefore, in that currency about 80s. per quarter, existing leases were formed according thereto; that the average price since 1819 has been 55s. 6d. and last year and this, about 50s.; that, upon the supposition of rent being estimated at one fourth, or two eighths of the gross produce, it is evident, at the price of 50s. being a reduction of three eighths, that so much of the money value of the gross produce is annihilated, as constitutes the present entire rental of the kingdom, and likewise so much of the receipts of the occupier as amount to one eighth; that the tenant is, therefore, liable to utter ruin if held to his engagement, or the landlord to the loss of his income, subject, at the same time, to the payment of all charges and settlements increased in their amount in the ratio of the increased nominal or money price of grain and other commodities; and in case of mortgage to the extent of half the value, at that period, a reduction of rent in proportion to the fall in the money price of produce, places the mortgagee in full possession of the estate.

—doubled.—That war increased taxes, very true, but what is the inference were they increased to the injury of a particular class

6.—That, from the year 1797 to 1816, the country was, with short intervals, engaged in a war of unprecedented expense; the taxes were quadrupled, as well as county and parochial assessments, and a heavy public debt created: That this period was at the same time distinguished by extraordinary efforts of national industry, applied to its agriculture, manufactures and commerce, by a facility and extension of credit in all those branches, giving more immediate activity to capital, and a consequent extent and complication of money engagements beyond all former precedent: That the national debt, which on the 5th of January 1793, was 227,989,148l. at an annual charge of 8,911,050l. progressively increased to the amount of 795,312,767l. of capital of various denominations, on the 5th of January 1822, at an annual charge, inclusive of terminable and life annuities, of 30,015,785l.; and the total of taxes, which on the 5th of January 1793, amounted to 17,656,418l. 11s. 3d. progressively increased, till in the year 1815, it amounted to 78,431,489l.: That, subsequent to the war, it has been reduced; and the total on the 5th of January 1822, was 60,671,025l.

Why calculate this in money at any other rate than£3. 17. 10½£4. 10. 10.1

7.—That this taxation has acquired an additional weight by the Act of 1819, and the measures preparatory thereto, the degree of which can in part be ascertained by a comparison of the price of gold, but more justly by the money price of commodities, by which the real value of all payments must be determined: That the equivalent in gold to 60,671,025l. was, in the former period, 13,358,934 ozs.; and, in the present, 15,657,246 ozs.; or in current money of the former period, 71,109,992l.; and that taxation is therefore further and unjustly increased, as paid in gold, 2,298,312 ozs. or 10,438,067l. in money.

8. —That the average price of wheat of the former period having been 81s. 10d. per quarter, the equivalent of the taxes in wheat was 14,228,155 quarters; and the price, since 1819, having been on an average 55s. 6d. the equivalent at that price is 21,863,720 quarters; or, in money, 89,459,050l. and the increase of taxation paid in wheat is consequently 7,035,565 quarters, equal to 28,787,233l.

9. —That it appears from various evidence, given in successive Committees appointed to consider the petitions of the agriculturists, that the wages of labour of an able husbandman, did, during the former period, amount to 15 or 16s. per week; and that, at 15s. the labour of 5,000,000 of persons for 15 weeks, was then equivalent to the discharge of the present taxes: That the price of labour being now reduced to about 9s. per week, the labour of 27 weeks of the same number of persons is now necessary; and which, at 15s. per week, amounts to 101,150,000l.; and that taxation paid in labour is consequently increased to the amount of 40,468,175l.

10. —That it appears by a comparison of the official and declared value of exports of British commodities, that in the year 1814, the declared value of the exports was 47,859,388l. and the official value 36,120,733l. being 32 per cent. of the declared above the official value; and that in 1821, the quantity in official value amounted to 40,194,893l. and the declared value to 35,826,083l. being 11 per cent of the official above the declared, making a total decline in value of 43½ per cent, and the general price currents exhibit a similar decline: That the total amount of taxation in commodities, is therefore equivalent to 87,003,397l. of the former period, and the increased taxation paid in commodities to 26,331,572l.

Report allows the depreciation−+read this

11.—That the further reduction of wheat from 55s. 6d. to 45s. and other agricultural produce, together with any further decline in the money wages of labour, and price of commodities, additionally increases the burden of taxation, as well as all other charges, both public and private, upon the property and industry of the country to an extent proportionate to such further reduction;—and that as wheat never exceeded, upon the average, the present rate in the old money standard, it must be expected that it will on an average there remain, unless enhanced by scarcity; and that the price of commodities, and wages of labour will continue at the money value they now bear, or be further reduced.

What effects? why those which have been enumerated.

12.—Thatsuch effects could not by possibility have been in the contemplation of the legislature, still less of the people of England, at the time of the passing the Act of 1819:—That its destructive consequences are now visible—that individuals held to their contract, either have been or must be ruined; an unexampled revolution of property follow, and the burthens of taxation become absolutely intolerable.

154 millions paid for Sinking fund.

13.—That by the Parliamentary Paper, No. 145, of the present Session, columns 1 and 2, it appears, that from the 5th of January 1798, to the 5th of January 1816, the sum of 459,630,826l. of money, including bills funded, was paid into the Treasury on account of loans, for which an annual charge for interest and annuities was created of 23,860,020l. which sum converted into a three per cent capital, is equal to 795,334,000l.

OutrageousUndue gain! Why undue? When land rose was that an undue gain?

14.—That the average price of gold having been during that period 90s. 10d. the equivalent in gold to the money so lent and capital created, was 101,203,117 ozs.; and the 3 per cent stock being now at 80, the said capital is equal to 140,095,550 ozs. of gold, at the before-mentioned average price of 90s. 10d. and that at the present price of gold of 77s. 6d. to 163,407,306 ozs.: the difference, being 23,311,836 ozs. constitutes an undue gain to the public creditor, at the expense of the public, equal in money to 110,974,694l.

£301,892,228.

15.—That the average price of wheat having been during the above period 81s. 10d. the equivalent in wheat to the money so lent was 112,333,400 quarters; and the price of 3 per cent stock being now 80, and wheat at the same average, the equivalent would now be 155,533,185 quarters; but at 55s. 6d. the average price since 1819, it is equal to 229,285,478 quarters, or in money, 938,159,330l. being an increased gain of 73,782,215 quarters by the alteration of the currency, or in money 301,892,228l.

Annual charge not 23 but 13 mill.Is this true? Yes, on the supposition that the loans were made in the same medium.

16.—That the annual charge of 23,860,020l. created in the period above stated, was equal to 5,253,502 ozs. and is equal to 6,127,174 ozs. being an increase of 874,192 ozs. or 3,403,886l.: That the above annual charge in wheat was equal to 5,831,370 quarters; is, at the average since 1819, equal to 8,600,000 quarters, or in money 35,196,666l. being an increased gain of 2,799,000 quarters, or in money of 11,328,311l. and that by comparison with commodities and labour, in the proportion of difference of their money value in those two periods, an equally undue advantage to the public creditor is proved to have been given at the charge of the public.

Here is an admission.¼ of a century 1809. £4.—.8.

17.—That all public creditors prior to 1798, and others subsequent, have suffered in proportion to the depreciation that followed their respective loans; that they are therefore entitled, in strict justice, to be paid in money, of value equal to that of those periods, and be indemnified for the diminished value of their income during the interval: That many of those creditors having probably in such a length of time, sold their stock and purchased property, have since undergone another and more fatal injury, by the restoration of the old currency, and consequent diminution of the value of their property so bought; —on the other hand, those who lent their money when the currency was depreciated below the average of the whole period, gained a further undue advantage than is shown by the foregoing statements; and the depreciation was at its greatest extent during the latter years of the war, when the largest proportion of money was lent, and capital created; in addition to which the public have, upon very advantageous terms to the stockholder, redeemed a larger capital debt than existed prior to 1797.

18. —That under all these circumstances, it is evidently and indispensably necessary to take into immediate consideration the destructive effects that have arisen out of the alterations made in the currency, by the Acts of 1797 and 1819, as well respecting the enormous public burthens created and so augmented by the Act of 1815, as the revolution of property in the vast and complicated intercourse of individuals throughout this country occasioned thereby; in order that, by a final arrangement of the currency, as equitable to all parties as circumstances will admit, or by a reduction of taxation equal to the advance occasioned by the Act of 1819, together with the establishment of some principle for the adjustment of private contracts, justice may, as far as possible, be administered to all, and the country saved from a revolution of property, and also from a pressure of taxation beyond the ability of the people to sustain.

[The speech is printed below for the first time from the original transcript in Ricardo’s handwriting, which has been found in the Mill-Ricardo papers. It is four times as long as the corresponding report in Hansard. It must have been written on 11 July, since early on the following day Ricardo left on his Continental Tour.1The transcript is unfinished and the conclusion, as indicated below, is here taken from Hansard.]

The first Resolution having been put,

Mr. Ricardo said that if he failed to expose all the errors and fallacies in the Resolution which the honble. gent had submitted to the attention of the House it would be from his inability to give clearness to his thoughts and not because they did not contain errors and fallacies, for he had seldom seen so many contained in so small a compass. The honble. gent. appeared to think if he could shew that prices had undergone a considerable variation during the last 8 years that such alteration must necessarily be imputable to the act of 1819 for restoring the ancient standard of our money. He appeared to think that there was not, nor could be, any other cause for the variation of prices and that it was sufficient to shew that there had been a considerable fall in the prices of various commodities to justify him in proposing a revision of the standard of our currency with the express view of raising such prices. Even according to the Honble. le gentleman’s principles he was bound not only to shew that prices had fallen but that they had fallen in consequence of the measures which had been pursued to give us the benefits of a fixed standard. He had forgotten that at all times we had been liable to fluctuations of prices when we had not meddled with our standard, and what proof did the honble. gent offer that the present fall of prices might not be imputable to some of those general causes which operate on the value of commodities. Because the fund holder received the value of 13½ bushels of corn now for every sum of £3. 17. 10½ in which his dividend was paid, and had only received 7½ bushels for the same sum formerly was it to be inferred that the currency had varied in that proportion? If the argument were good for this country it was valid also for every other, but what would the honle gent. say if it were now proposed in the legislature of France to alter the standard of the currency because a given number of francs received by the public creditor would now purchase 50 or 100 pct. more of wheat than it would purchase in former years. He Mr. Ricardo would follow the honble. gentleman thro’ all his resolutions and he would with the indulgence of the House advert to them in their order. With respect to the distressed state of those connected with the agriculture of the country and which was stated in the first resolution there was no difference of opinion; unhappily it was too well established that such distress existed, but what they differed about was the cause of such distress—the honble. gentleman imputed the whole of it to the alteration in the value of the currency, whereas he and those who agreed with him without denying this as one cause of the distress mainly attributed it to the abundance of the quantity of produce. Corn might fall from various causes, from abundance, from improvements in agriculture which would lower the cost of production, from a deficient supply of the precious metals from the mines,—these were causes which might operate generally in all countries but they never had yet been made the foundation of a proposal for altering the standard of a currency. It must be remembered that the altering the standard of the currency could not affect the agriculturists as a class if they had no taxes to pay. The alteration might be beneficial or injurious to tenants during the continuance of their leases, contracted when money was of a different value, but in the same proportion would it be injurious or beneficial to the landlord with whom such agreements were made, and therefore the whole together would be as rich and no richer than before. This would be the case if we were an untaxed people but that not being the case the raising of the value of money was injurious to this class in proportion as the increased value augmented the taxation of the country. This effect however was general and not partial, and would operate on all classes alike. In his character of a payer of taxes it would operate on the stockholder equally as on all other classes. If then great as our taxation was we deducted the increased amount paid by the Stockholder, the increased amount paid by Merchants, Manufacturers and the possessors of all other property he left it to the house to determine whether the increased amount of taxation which fell upon the agriculture of the country in consequence of any probable alteration in the value of money was adequate to account for the very general distress of that class—to him it appeared impossible that such great effects could follow from such an inadequate cause, but the whole was explained on the supposition of a too abundant quantity of agricultural produce.

The second resolution of the Honble. gentleman referred to the distress in Ireland and he actually ascribed the famine which prevailed in that country to the alteration in the value of the currency. Could the honble. gent. seriously argue that the failure in the potatoe crop which he himself did not deny, to an altered value of currency? But says the honb.le. gentn. the people are dying for want of food in Ireland, and the farmers are said to be suffering from superabundance. In these two propositions the honble. gentn. thinks there is a manifest contradiction, but he Mr. R. could not agree with him in thinking so. Where was the contradiction in supposing it possible that in a country where wages were regulated mainly by the price of potatoes the people should be suffering the greatest distress if the potatoe crop failed and their wages were inadequate to purchase the dearer commodity corn? From whence was the money to come to enable them to purchase the grain however abundant it might [be]1 if its price still far exceeded that of potatoes. He Mr. Ricardo should not think it absurd or contradictory to maintain that in such a country as England where the food of the people was corn, there might be an abundance of that grain and such low prices as not to afford a remuneration to the grower, and yet that the people might be in distress and not able for want of employment to buy it, but in Ireland the case was much stronger, and in that country there could be no doubt there might be a glut of corn, and a starving people. So much for the second resolution.

The third resolution of the Honble. gentn. was founded on something which he said appeared in the report of the Agricultural committee, and he had marked it by inverted commas, which naturally led those who read it to conclude that the passage was an extract from the Report. A few words in the passage to which he was referring were written in Italics in order as it appeared to give them greater force; after speaking of the effects of the altered value of currency on the price of grain and other commodities the words in italics were these, “and consequently to cause a severe pressure upon the industry of the country”. He Mr. Ricardo was sure the honblb. gent would not knowingly make any misstatement and therefore he concluded it was the mistake of some one who had assisted him in drawing up these resolutions. It appeared that there were no words in the Report which answered to the quotation in this resolution—to much of it the spirit of the Report was at variance and in no part could he find any words which could justify even the inference of the words emphatically written in Italics. Mr. Ricardo here read a passage from the Agricultural Report. But he Mr. R had another observation to make on this resolution[;] it said “That in proportion as all commodities, whether the produce of the soil, manufactures or commerce, have experienced a depression of their money value, so must the proprietors have suffered a direct injury.” In this proposition he could not agree. It is not in proportion to the fall in the money value of commodities that the parties alluded to would be injured, but in proportion as the taxation which they may be called upon to pay shall be really increased by the rise in the value of money. Nothing can in itself be a matter of greater indifference to a producer of commodities than their money prices provided every thing alters at the same time and in the same proportion, and therefore the inference which the honble. gentn. draws and which he would have this house also draw is wholly without foundation.

I now come to the 4th. Resolution which is an important one, because in it the honble. gent admits that gold is the standard of this country and that the depreciation of paper money is to be estimated “by the amount of such paper money above £3. 17. 10½ necessary to purchase an ounce of gold” a doctrine which I have always maintained but which is now very often in this house and out of it called in question. In this Resolution it is asserted that “soon after the passing of the act of 1797 by which the Bank of England was restricted from paying its notes in specie, the currency of the country became depreciated”. It is only essential to examine into the correctness of this statement because the honble. gentleman in his speech founds an important argument upon it. He was fully aware that to his proposal for altering the standard on account of the benefit which the fundholder of a recent date derived from the increase in the value of money it would be objected to him that the fundholder of 1797 had been a loser in consequence of having received his dividend in a depreciated medium for several years and if compensation was to be made to one party who was the payer of taxes so also should it be made to the old stockholder who had suffered so great an injury. How does the honble. gentn. answer this objection? by denying the justice of his claim? no he admits it but he represents it as so old that it has become antiquated—a strange answer this and I should think that if his claim be a just one the circumstance of its being of 25 years standing does not weaken it. It can never be too late to do justice, but the fact is not as this resolution represents it, the paper money of the country did not become depreciated immediately after the act of 1797—it only began to be depreciated in 1800 and the average depreciation from 1797 to 1809 did not exceed 2½ pct., as measured by the average price of gold £4. —. 8. If then there was any weight in this argument of time, I think I shew that in this case length of time cannot be pleaded and if justice is to be done to one party injured so must it also be to another. On the whole I am prepared to shew that the account between the payers of taxes and the Stockholder is pretty nearly balanced, and that in reality the country is now no more loaded with taxes than it would have been if we had never departed from our metallic standard, but had uniformly adhered to the system which we so regularly followed up to1797. But of this I shall have occasion to speak hereafter. I shall consider the real question to be this—Is the agricultural interest in a worse situation than it would have been if neither of the 2 acts that of 1797 and that of 1819 had never been passed. Did he not in fact gain as much by the effects of the first of these acts as he has lost by the subsequent one? To the solution of this question I shall pay attention before I sit down. In this 4th. Resolution I see it asserted that the price of gold on an average of 18 years was £4. 10. 10. I believe this to be incorrect and that the average was about £4. 5. or £4. 6.—After having admitted that the price of gold was the measure of the depreciation, the honble. gent, in this resolution, recurs to the price of corn as measuring the depreciation. The honb.l gent in his speech said that he hoped he should not be answered by any attempt to shew that he might have been a little inaccurate in his statements of the price of corn, as he knew there would be a difference in the result whether the price was estimated from the Eton tables or otherwise; he, Mr. R, could assure the honbl. gent that he had taken no pains to discover such inaccuracies because he considered the price of corn as having nothing to do with this question. Corn was not now nor never had been the standard of the money of this or any other country. If it were a better standard than that which we possessed it might be a good reason for adopting it in future but hitherto it had not been the standard but gold had and therefore we were bound to measure our payments by gold and by nothing else. As he Mr. R had already observed if the argument from the number of qrs. of corn paid the public creditor now as compared to former years were valid here, it was also valid in France, and therefore tho’ France had uniformly maintained a metallic standard she might now justly alter the standard and pay the public creditor with a smaller number of ounces of silver because they were now equivalent to a greater number of bushels of wheat. Surely the House would not listen to such an argument, nor give countenance to so dangerous a principle. If the agriculturist thought wheat the proper standard, why might not another man think sugar such, or indigo, or cloth. Why might he not say I formerly paid the public creditor with so many pounds of sugar or yards of cloth and now I am obliged to give a greater number. What security have we that these various commodities may not vary in different directions some of them rising others falling. In such case by what rule should we determine to adopt one in preference to the other? But is the honble. gentleman prepared to go through with the standard which he himself proposes? I believe that the stockholder might safely close with the proposal if such were made to him. The average price of wheat for 30 years ending in 1755 was £1. 13. 4, but since 1755 the public creditor has not received within 50 pct. of the quantity of wheat to which he would have been entitled if wheat had been the standard. If the Honble. gentleman[’s] argument be a good one why should not the fundholder have made up to him the value of the amount of corn of which he has been defrauded since 1755 together with compound interest on the same. If corn is to be the measure now so ought it always to have been since the contraction of the public debt and if the honble. gentleman is not willing to admit this he should shew why he would have corn the standard when it is against the Stockholder and in favor of the agriculturists, and why he rejects the same measure when it is in favor of the Stockholder and disadvantageous to the landed interest.

Mr. Ricardo said that the 5th. Resolution also contained a fallacy because it supposed that from the circumstance of the fall in the price of corn and other produce being equal to that amount which formerly constituted rent, that therefore there could not by possibility be any rent at the present moment. This would indeed be true if all the charges of production as well as taxes were to remain at the same money value as before. But could this be the case? Was it possible to believe that with so immense a fall in the value of corn, the cost of production should not be reduced? Would not labour fall with the fall of raw produce? Would not seed and many other expences be also reduced? In fact the price of corn as affected by the currency was of no importance whatever to the agriculturist excepting as he was burthened with fixed money taxes, because all the charges on production would be in proportion to the variations in price from such a cause. This resolution speaks also of the increased charges on the land in consequence of mortgages and other debts being to be paid in money of an increased value. This was undoubtedly true but had not the landholder derived a benefit from this source when money was depreciating and if justice was to be done to all parties would he not have as much to pay on this account as he would have to receive. The Honble.gent kept his eye steadily fixed on the injury which the landed interest had recently sustained,—he wholly forgot the advantage which they had derived from the fluctuating value of money at no very remote period. The 6 th. Resolution of the Hon. gent. Mr. Western told us that during the war the debt had most enormously increased. No one could deny this fact: The war had been a most expensive one, but it left undecided whether that debt had been increased injuriously or unjustly to one particular class: That was the only point in dispute between the honle. gent and himself.

In the 7th. resolution the honbl. gent only asserts what is true that an increased debt must be paid with an additional number of ounces of gold, but in order to ascertain what amount of money such an additional quantity of ounces of gold is equivalent to, why should they not be estimated at the present value of gold, why should the honble. gentleman calculate it at the value of gold of a former period? He Mr. Ricardo must again observe that in proportion as the value of gold had been increased by the act of 1819, he acknowledged taxation had also been increased, but the question here again offered itself on which he should have to observe presently, had it been increased so as on the whole to impose an undue weight on the landed interest? On the 8th. Resolution he Mr. Ricardo should say little, because the honble. gentleman had laid no foundation whatever for his favorite standard of wheat, but if he had, he Mr. Ricardo was at a loss to know on what principle the additional quantity of wheat which the tax payers had to contribute should be estimated in the money price of a former period and not in the money price of the present time. Neither should he Mr. Ricardo make any remark on the 9th. Resolution because as wheat formed a material part of the value on which the wages of labour were expended it was to be expected that labour would vary with the price of wheat. In making labour the standard therefore the honbl. gent. had in fact repeated his former argument respecting a wheat standard. It was not a distinct commodity, affording an additional proof of the alteration in the value of money, but was most particularly governed by the price of wheat almost necessarily rising and falling with it.

In the 11th. Resolution the honble. gentleman assumes that wheat though not a remunerating price is to remain at its present price, but on what ground he has not indeed stated to the house. He Mr. Ricardo was wholly at variance with the honble. gent. on this point, he could not conceive it possible that corn would remain at its present depressed price if it were true as stated by the honb.l. gent. that if it did it could neither afford rent to the landlord nor profit to the farmer. He Mr. Ricardo was fully assured that on such conditions corn could not permanently be grown, and therefore the honble. gentleman’s premises were unfounded or his conclusion must be an erroneous one.

In the 12th. Resolution the House was told that in 1819 when it passed the act for the resumption of cash payments it could not foresee the effects which the former resolutions had enumerated. It would indeed have been strange if it could have foreseen effects which had previously occurred. These resolutions speak of the depreciation as being at its height in 1814. Much of the sufferings of the agriculturist had taken place before 1819 and could not have been the consequence of the act of that year. The question for the House to consider was the effect of the act of 1819. All the former variations in the currency the evils of which no one was more willing to admit than himself had taken place under a system which this act went to put an end to, and it was for putting an end to such a system that it had his warm approbation.—

He Mr. Ricardo had now to animadvert on the 13th. resolution which contained only the trifling error of 154 millions. He was ready to forfeit all the little credit which he might have with the house if he did not prove his assertion. —The honble. gentleman in this resolution has stated that from the 5th. of Jany. 1798 to the 5th. Jany. 1816 the sum of 459 millions of money had been paid into the treasury on account of loans, for which a capital of £795,334,0003 pct. stock was created,—that in payment of this sum a value equal to 101,203,000 ounces of gold was received and to pay the same capital in 3 pct. stock valued at 80 at the present moment 163,407,306 ounces of gold would be necessary: the difference being 23,311,836 ounces, which the honble. gent. goes on to say constitutes an undue gain to the public creditor at the expence of the public equal in money to 110,974,694£. The annual charge created by the debt contracted from 1798 to 1816 the honl. gent states at 23 millions. In the first place 459 millions were not raised from the public between 1798 and 1816 but 154 millions less than that amount. It is true that the loan contractors or stockholders paid the public 459 millions in a depreciated money during that period, but they received in payment of debt in that same money, during the same time, 154 millions, consequently only 305 millions was received, and an additional debt to that amount only was contracted. It was now acknowledged on all sides that the sinking fund was only a nominal one if it did not arise from a surplus of revenue above expenditure. Suppose that the Chancellor of the Exchequer of those days had acknowledged the delusion of the sinking fund, and had listened to the advice often given by his honl. friend Mr. Grenfell of making the sinking fund commissioners subscribe to the loans of the year how much would the contractors have then paid into the treasury? 305 millions and not 459 as stated by the honbl. gent. But the increased charge on the debt between the two periods is 23 millions says the honbl. gent. but what is the fact? it is only 13 millions. But in addition to these errors, and to swell the loss to the public, the honl. gentn. calls that an undue gain to the stockholder which arises from the difference between the price at which he contracted for the various loans during the war, and the present price of 80 to which the 3 pct. have risen after several years of peace. It is something new to hear this called an undue gain made by the stockholder. If the honbl. gentn. had bought an estate for £100,000 which he could now sell for £130,000 would he call the £30,000 an undue gain? If he had purchased French stock at 58 which has now risen to 90 would he call that an unjust gain? and [what]1 would he think of a French legislator who should seriously propose to diminish the payment to the stockholder on account of such rise? If such a plea was listened to there was an end of all security and good faith, and no man could safely for a moment enter into a contract if government were to consider the profit if he made any an unjust gain.

He Mr. Ricardo would only mention the 14 and 15 resolutions to shew the extravagant conclusions to which the honbl. gentleman had come. He had really submitted to the house a proposition that the stockholder had gained by the alteration in the value of the currency £301,892,000 between 1798 and 1816. The honbl. gentleman first states that the whole amount of money paid for loans during the above period was £459,630,000 which I have proved was in fact only 305,000,000 and yet on this sum he states him to have gained £301,000,000

[Ricardo’s own transcript breaks off here. The conclusion of his speech is reported in Hansard as follows.]

The hon. gentleman seemed to insinuate, that certain individuals were in the habit of making public attacks upon the landlords of this country. The charge could not be brought against him. It was true, he looked upon rents in the same light as he did every other article in the market, liable to fluctuations, and to be regulated according to the demand for the produce of the soil. He had never said that the country would be ruined by a superabundant supply;1 on the contrary, that the country would greatly benefit by that supply; the greater the supply the greater the comfort. Great supply induced low prices; low prices injured the grower, but gave an advantage to the country. It was not, however, that kind of advantage which he should wish it to possess. On the contrary, he would always wish to see the grower receive a fair remunerating price; because he was convinced, that all classes in the country would go on better and more prosperously when the farmer received a fair remunerating price. But a remunerating price had nothing to do with the state of the currency. If corn were down so low even as 20s. and the price of labour and all other outgoings were regulated by that price, the grower could go on paying his rent as well perhaps as when he received 80s. and when his outgoings were in proportion to that price.—With respect to the advantage that one class had gained over the other by the bill of 1819, he would say, that it certainly was impossible to tamper with the currency of a country, without producing such effects. The payers of taxes had lost at one period and gained at another, in consequence of the fluctuations of the currency; but it was quite remarkable to see how nearly at par stood the loss and gain. In his opinion, the great mischief sprung out of the original error, he meant the bill of 1797.—That was the great error— the measure of 1819 was the remedy. The House acknowledged the mischief of the measure of 1797, and they were bound to support the bill of 1819, which was only intended to remedy the original error. If the House at a fatal moment interfered with that bill, what would be the consequence— what would be the state of London the next day? What wild speculation—what ruin would follow! So strong were the evils that would follow such a step, that he anticipated from that House its decided negative to the motion of the hon. member.

After several other speeches, of some of which, ‘from the lateness of the hour, no report has been preserved’ (Hansard ), the resolutions were negatived; and at four in the morning the House adjourned.

[The session closed on 6 Aug. 1822.]

SESSION 1823

The King’s speech on the opening of the session was delivered on 4 Feb. 1823.

[1 ]It cannot have been written in advance, as it contains references to Western’s speech which immediately preceded Ricardo’s.

[1 ]Omitted in MS.

[1 ]Omitted in MS.

[1 ]Mr. Western in his speech had said: ‘When did any man before, see, hear, or read of a country ruined by superabundance? Such a thing had never entered into the head of any but modern philosophers!’

[1]On the earlier version of this resolution (cp. above, p. 224, n. 1) Ricardo writes: ‘Here it is acknowledged that depreciation is measured by the price of gold and not by the price of corn.’

[1]On the earlier version of this resolution Ricardo writes: ‘not unjustly because 10 millions might be necessary to pay the public creditor for the loss he had previously sustained.’