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RELIGIOUS OPINIONS—PETITION OF MINISTERS OF THE CHRISTIAN RELIGION FOR FREE DISCUSSION 1 July 1823 - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 5 Speeches and Evidence 
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.
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First published by Cambridge University Press in 1951. Copyright 1951, 1952, 1955, 1973 by the Royal Economic Society. This edition of The Works and Correspondence of David Ricardo is published by Liberty Fund, Inc., under license from the Royal Economic Society.
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RELIGIOUS OPINIONS—PETITION OF MINISTERS OF THE CHRISTIAN RELIGION FOR FREE DISCUSSION
|In Bonuses and Increase of Dividends||7,451,136|
|New Bank Stock (£2,910,600) dividedamong the Proprietors||7,276,500|
|Increased Value of Capital of £11,642,400, (which on an Average of 1797 was worth 125, and which is now worth 250), that is||14,553,000|
|Making in all, on a Capital of £11,642,400, a Gain in 19 Years of||£29,280,636|
I have no Reason to doubt it; I believe it is accurate as far as I recollect. Part of that increased Value is derived from the increased Value of all funded Property.
58. Suppose we were to resume Cash Payments under a Plan which required that the Bank should provide themselves with only Three Millions of Treasure, would not there be a Demand for 15 Millions less of the Produce and Manufactures of this Country, than would be created by imposing on the Bank the Necessity of providing 18 Millions?
Yes, there would; but as we should export these Commodities without procuring a Return of any other which would contribute to our Advantage, the Gold would not be a very desirable Importation.
59. Would not the additional Demand for 15 Millions enrich our Manufacturers, who are the greatest Sufferers by the present State of the Circulation?
In the same Way as if we were to throw those 15 Millions of Manufactures into the Sea, which would also create a Demand for them.
60. Does it signify to our Manufacturers, after they have found a Sale for their Manufactures in France, whether the Purchaser uses them, or throws them into the Sea?
It is of no Importance to them, but of the greatest Importance to the Country, inasmuch as in that Case we should have 15 Millions less of productive Capital.
61. Do you mean to say, that if we sold those 15 Millions for Gold, we should not acquire a Value equal to them in Exchange?
We should acquire a Value equal to them in Exchange; but as such Gold would be a dead Stock, it would be no Advantage or Profit.
62. Do you think it would be advisable to adopt a Plan, under the present Circumstances of the Country, the Consequence of which would be to enrich the Bank, who has been such an inordinate Gainer by the Restriction, at the Expence of abstracting a Demand for 15 Millions worth of their Commodities from our Manufacturers, at a Time, when they have been the greatest Sufferers by the Restriction, and are likely to be great Sufferers by the Resumption of Cash Payments?
In whatever way Compensation was made to the Manufacturers, I should regret that we should think it necessary to make so great a Sacrifice of national Profit and Income, which I think we should be doing if we consented to make 15 Millions of our Capital totally unproductive.
63. Supposing we were to adopt a Plan which should annihilate that Demand for 15 Millions of our Manufactures, do you suppose that that Portion of Wealth would at all exist, in so far as it is composed of Manufacturing Labour?
I think it would; because the Quantity of Labour employed and Commodities produced must be in proportion to the Capital we have; and there can be no Production without occasioning an equal Consumption. In this Case, I think we should consume the Commodities ourselves; in the other Case, they would be consumed by others.
64. Do you mean to say, that an extra Demand for the Commodities of the Country would not produce any Increase of its Manufactures?
I should very much doubt whether it would; the sole Difference would be, with respect to what Commodities would be produced, and to the more advantageous Exchange we should make, by having a more extended Market.
65. Do you mean, that you doubt whether an Increase of Foreign Demand has not always a Tendency to increase the Production and Wealth of a Nation?
In no other Way than by procuring for us a greater Quantity of the Commodities we desire in Exchange for a given Quantity of our own Commodities, or rather for a given Quantity of the Produce of our Land and Labour.
66. Do you then think that it is true, as a general Principle, that the Demand does not regulate the Production of a Country, and that the Increase of the Demand does not add to its Wealth?
An Increase of Demand is serviceable to a Country, inasmuch as it procures for it a more extensive Market, and enables it to get a greater Quantity of Foreign Goods in Exchange for its own; but the Amount and Value of the Commodities produced, whether the Country possess Foreign Trade or not, is always limited by the Amount of Capital employed; and therefore Foreign Trade may alter the Description of Commodities produced, but cannot increase their aggregate Value.
67. Is it possible, then, there should exist an increased Foreign Demand to the Extent of Five Millions, for Cotton Goods for Example, without an Increase of their Price in the Home Market immediately taking place?
Certainly not; but those Cotton Goods cannot be produced unless Capital be withdrawn from other Employments.
68. Do you not know, that when the Demand for our Manufactures is great in this Country, the very Credit which that Circumstance creates enables the Manufacturer to make more extended Use of his Capital in the Production of Manufactures?
I have no Notion of Credit being at all effectual in the Production of Commodities; Commodities can only be produced by Labour, Machinery, and raw Materials; and if these are employed in one Place they must necessarily be withdrawn from another. I am not denying the Advantages of Foreign Trade; but I wish to reduce those Advantages to what I consider their just Value.
69. Have you never known Machinery, raw Materials, and Labour, paid for by any Individual who used them to a greater Extent than the Capital he actually possessed, by Means of the Credit he commanded?
Yes; but if he had not had that Credit, it would have been in the Power of somebody else to have employed them.
70. Whence would that other Person have obtained that Capital, if you suppose that the Capital of the Country is always employed, and that Foreign Demand cannot therefore produce a greater Quantity of Manufacture or rude Produce, which is limited by the Quantity of our Capital?
Credit, I think, is the Means, which is alternately transferred from one to another, to make use of Capital actually existing; it does not create Capital; it determines only by whom that Capital should be employed: the removing Capital from one Employment to another may often be very advantageous, and it may also be very injurious.
71. If Credit always represents an existing Capital, what Advantage does this Country derive from the Institution of Banks of Credit, which is not enjoyed by Countries who have only Banks of Deposit?
The Disadvantage to which those Countries are exposed which have Banks of Deposit only, is, that they are obliged to use a Part of their Capital unproductively; whereas those which have Banks of Credit use their whole Capital productively, except such Part as is kept in Reserve to answer Demands.
72. Am I then to understand, that in Countries which have Banks of Credit, there is never any Capital employed productively, of which there does not exist a similar Quantity of either productive or unproductive Capital, that might be applied to the same Object?
I do not understand the Question: for my Supposition is, that there is no Capital used unproductively, where Banks of Credit exist in a great Degree of Perfection: I think the whole Capital is used productively.
73. Are not the Capitals invested in Land, for Example, capable of Two Uses. 1. Is it not productively used, as vested in Land. 2. May not Money be raised by Credit on that Land, which may be applied to the Purposes of Manufactures?
The Question supposes Two Capitals, the Land, and the Instruments employed in Manufactures; the Money which circulates them forms no Part of the productive Capital, it determines only by whom it shall be employed.
74. May not a Man get Credit from a Bank of Credit on the Security of his Capital, which is profitably employed, whether vested in Stock or in Land, and may he not by means of that Credit purchase or create an additional Quantity of Machinery and raw Materials, and pay an additional Number of Labourers, without dislodging Capital from any existing Employment in the Country?
Impossible; he can purchase Machinery, &c. with Credit, he can never create them. If he purchases, it is always at the Expence of some other Person; and he displaces some other from the Employment of Capital.
75. Are you then of Opinion that there never can be made in any Country Two Uses of the same Capital; one to acquire an annual Revenue, which it produces by the Modes in which it is invested, and the other to acquire a Capital on Credit, which may also be profitably employed by the Person who acquires it, and which will be so whenever there is an increased Demand for Commodities?
Capital can only be acquired by saving. It is impossible that one Capital can be employed by Two Persons at the same Time, or for Two Objects: the greatest Advantage will be sought and obtained at all Times by the Employer of Capital.
76. Will not a great Diminution of the Demand for Commodities prevent his obtaining those Advantages from his Capital, which a great Increase of the Demand for them would secure?
It may, as far as regards the particular Commodity; but if there be a less Production of one Commodity, the Production of another would in a Degree be encouraged.
The Witness is directed to withdraw.
Die Veneris, 26° Martii 1819.
The Lord President in the Chair.
Mr. David Ricardo is called in again, and further examined as follows:
77. Supposing the Plan of the Bank paying its Notes in Bullion, at the Mint Price, as explained in your preceding Examination, to be adopted by the Legislature, will you state your Opinion as to what Period it would be most advantageous to fix for the Commencement of such a System?
It would be difficult to fix on any one Period as most advantageous; but as I think the Effects of a Return to Cash Payments have been already in a great Degree borne, I should not think that there would be any great Difficulty attending the commencing the Bullion Payments even as early as July next.
78. Are you of Opinion that it would be more advantageous to require the Bank to commence this System by Payment of its Notes in Bullion at the Mint Price, or that any Facility would be given to the Plan, by the Adoption of a graduated Scale, by which they should pay at first at the present Market Price, and at Prices successively reduced at stated Periods, until they came down to the Mint Price?
Facility would be afforded by a graduated Scale, commencing at the present Market Price. By far the most important Consideration with me is, preventing the Currency being depreciated, as compared with Bullion, below the present Rate of Depreciation, and by adopting the graduated Scale you would have complete Security upon that Point. At the same Time, I think we should attain the ultimate Result of reducing the Price of Bullion to the Mint Price of £3 17s. 10½d., before the Time to which the Regulation might apply.
79. Would it not therefore be necessary, in the Adoption of such a graduated Scale, to allow the Bank a Discretion to accelerate, but not to retard, the successive Reduction of Prices at which they would give Bullion in Exchange for their Notes?
I think such would be a very good Regulation.
80. Supposing the Bank had Power to accelerate the Rate of Reduction, might not those who were in the Knowledge of the Intention so to accelerate it, take Advantage of that Knowledge, which they would be precluded from doing, if it was to take place at fixed Days?
Such an Effect might possibly take place in a slight Degree. But I have already said, that I think the ultimate Effect would be anticipated, and as every Person would be certain that in a short Space of Time Gold would fall to the Mint Price, they would not be induced to make Purchases above that Price, notwithstanding a premature Reduction in the Price of Gold by the Bank, below that fixed by the Scale.
81. State your Opinion, supposing the System of successive Reduction were adopted, at what Time that Operation might be safely commenced, and how long the Interval ought to be from thence to the Period of Payment at the Mint Price?
I think it could not commence too soon; and with respect to the Interval, it appears to me a Matter of slight Importance; probably Twelve Months would be a good Period. I cannot conceive that the Fall in the Value of Commodities to the Amount of Four per Cent. would be a very formidable Operation, or one likely to be attended with serious Consequences.
82. Do you, having stated that you think that they might begin to pay at the Mint Price on the 5th of July next, suppose that there would be any Advantage derived from postponing that Obligation, by adopting a graduated Scale, other than to save the Funds of the Bank?
I think there would be other Advantages, besides saving the Funds of the Bank; for when I said that on the 5th of July next the Bank might without Difficulty commence paying in Bullion at the Mint Price, I supposed the Bank was to retain the same unlimited Power of increasing their Issues, between this Time and the 5th of July, that they now have. On the Principle of a graduated Scale, commencing at the present Market Price, I concluded that the Regulation of making them pay at the Market Price would be adopted immediately; with that Security, I think there are Advantages in deferring the ultimate Reduction to the Mint Price.
83. If the graduated Scale was to be adopted, so as to afford that Security at the earliest possible Period in which an Act of Parliament could be passed, do you think there would be any Danger to the Public from accelerating the Gradations of that Scale, so as to come to the Payment in Bullion at the Mint Price by the 5th of January 1820?
I think that no Danger would attend the coming to the Mint Price by the Beginning of next Year; in every Change of this Sort, there is some Advantage in making it as gradual as possible.
84. Do you recollect whether within these last Eight Years we have not frequently seen the Circulating Medium of the Country undergo much more formidable Changes with respect to Value than 4 per cent., within a shorter Period than Six Months, judging of the Value of the Circulating Medium by the Price of Gold?
In my Opinion it has undergone much greater Variations than 4 per Cent.; and in the soundest State of our Currency, it would be liable to such Variations.
85. From what Causes could it undergo Variations, exceeding that Amount, if the Currency were restored to its soundest possible State?
It would not undergo any Variation, as compared with the Standard; but I mean, that the Standard itself might undergo Variations exceeding that Amount; the whole Currency is of course subject to all the Variations of the Standard.
86. In that Case, would not the Currency of other Countries, in an equally sound State, undergo similar Variations?
Certainly; the Inconvenience, as far as regarded England, would not be less on that Account; I consider any Variation in the Value of the Currency as an Evil, from producing a Variation in the Prices of all Articles.
87. Is there not this Difference between the Case of a Variation occasioned by Causes peculiarly affecting England, and that of a Variation occasioned by Causes affecting equally all Countries enjoying a sound State of Currency; that in the First Case, the Exchange between this Country and those Countries would be affected; in the Second, the Exchanges between England and those Countries would not be affected?
In the First Case, the Exchanges would be affected; in the Second, they would not, if the Causes operated on all Countries at once; but Scarcity and increased Value of the precious Metals might take place in one particular Country, which would ultimately affect their Value in all; but in the Interval, the Exchange would be affected. The Circumstance of the Exchange being unfavourable, does not seem to me to be any Disadvantage to us.
88. Do you believe, that if this Plan were adopted of Payments in Bullion, according to a graduated Scale of Reduction, there are any Circumstances arising, either from the general State of the Bullion Market, or from any other Causes whatever, which are likely to create Dangers and Difficulty to the Bank in their procuring such Quantities of Gold, and at such Prices, as this Plan would require?
None whatever. The Bank would always have the Power of keeping the Price of Gold rather below that which was fixed by the Scale; and therefore the Price of Gold might gradually be reduced to the Mint Price, without the Bank being under any absolute Necessity of exchanging one Ounce of Bullion for its Notes.
89. If, contrary to all reasonable Expectation, any unfore-seen Contingency of such a Tendency as stated in the preceding Question should by Possibility arise, would not the Plan of a graduated Scale, operating as above proposed for the next 12 Months from the present Time, afford to the Legislature the fullest Opportunity of meeting and providing for such a Case as its Exigency might require?
It certainly would.
90. Is it not also a great Advantage of such a Plan, that nearly the whole Progress of its Operation, and that of our Currency as connected with it, would thus be brought successively under the View of Parliament, instead of its being left to the Discretion of the Bank, until the Arrival of the Time ultimately fixed for Payment in Cash or Bullion at the Mint Price, without any such Gradation?
That would be a considerable Advantage.
91. Having stated that a Circulation of 24 Millions of Bank Notes might be conducted with Three Millions of Bullion; do you not think, that it might be injurious to the general Credit of the Bank, for Parliament to legislate upon the Supposition that it would require one Twelvemonth for them to provide a Sum in that Proportion to any Currency which the Country may require?
The Wealth of the Bank is so well established as a Fact in the Opinion of the Public, that I do not think such a legislative Measure would in the slightest Degree affect the Credit of that Body.
92. Would not the Facility of dispensing with the Gold Coin in Circulation, according to the Plan you have suggested, operate as a Saving of the general Stock; so that a Country which adopted it might be considered, as in that Proportion, richer than a Country which did not?
That is the precise Advantage which I expect to follow from that Measure.
93. Supposing all, or most other Countries successively to adopt the same Plan of Paper Currency, regulated only by the Price of Bullion; must not that Circumstance, by occasioning a great Diminution in the Demand for that Bullion, and consequently lowering its Value throughout the World, ultimately occasion a Depression in all Currency, and a considerable Rise in the nominal Prices of all Commodities?
For a short Time the Value of Gold would be affected, and it would be lowered by such a general Regulation; but, in my Opinion, it would not ultimately be depressed; the Value of Gold and of all other Commodities depending on the Cost of Production, that is, on the Quantity of Labour necessary to produce them, which is not supposed to be either increased or diminished.
94. Supposing Two Countries in every other respect enjoying the same State of Wealth, but with this Difference that one possesses a Circulating Medium which is conducted with Three Millions of Bullion, and the other, over and above the same Degree of Wealth in every Thing (except in Circulating Medium), has a Circulating Medium of Eighteen Millions of Bullion, which of these Two Countries in your Opinion possesses the greatest Wealth?
The Country possessing the Eighteen Millions; but if they had any Intercourse with each other, it would be impossible for the Twenty-one Millions, the Aggregate of the Two Circulations, to be divided in these Proportions.
95. You have stated that a Reduction of Paper in Circulation, to the Amount of nearly Four per Cent., would be necessary, in order to restore the Currency to the legal Standard of the Mint; would those Reductions have any very sensible Effect on the general Rate of Interest or Discounts?
Reduction or Increase of the Quantity of Money always ultimately raises or lowers the Price of Commodities; when this is effected, the Rate of Interest will be precisely the same as before; it is only during the Interval, that is, before the Prices are settled at the new Rate, that the Rate of Interest is either raised or lowered.
96. Are we to understand that, when Money is lent, Capital is advanced, and that Interest only can be effected by the Abundance or Scarcity of real Capital, combined with the Opportunity of employing it?
Precisely so; Money is only the Medium by which the Borrower possesses himself of the Capital which he means ultimately to employ.
97. State what in your Opinion is the Difference between that State of Things, in which a Stimulus is given by fictitious Capital arising from an Over-abundance of Paper in Circulation, and that which results from the regular Operation of real Capital employed in Production?
I believe that on this Subject I differ from most other People. I do not think that any Stimulus is given to Production by the Use of fictitious Capital, as it is called.
98. State what in your Judgment are the Effects on Agriculture, Commerce, and Manufactures of a superabundant Issue of Paper?
Under some Circumstances it may derange the Proportions in which the whole Produce of Capital is divided, between the Capitalist and the Labourer; but in general I do not think it even affects those Proportions. It never I think increases the Produce of Capital.
99. Has such Issue, in your Judgment, any Tendency to the Encouragement of the Commerce or Industry of any People?
I think none, excepting that by affecting the Proportions into which Produce is divided, it may facilitate the Accumulation of Capital in the Hands of the Capitalist; he having increased Profits, while the Labourer has diminished Wages. This may sometimes happen, but I think seldom does.
100. Has not the Increase of Prices during the progressive Depreciation of Paper a Tendency to produce Over-trading, and excessive Speculation?
I think Over-speculation has rather been encouraged by the Facility with which Speculators have been enabled to raise Money upon Discount, in consequence of the progressive Increase of Paper Issues. This Facility would be in a great Degree destroyed, as soon as the full Effect of any given Abundance of Issue on Prices was felt.
101. Is not that Facility, while it exists, wholly given at the Expence of Persons already holding Paper previously in Circulation; or of those who may be compellable by Law to receive it at Par for Payments previously stipulated for, in Money of account?
It is only given at their Expence.
102. Are you of Opinion that the occasional Success of Speculators, and Over-traders, even when beneficial to themselves, is advantageous to the Community, or that such individual Benefits are overbalanced by the general Evils of such a System?
The Public are only interested in the Abundance of Production; these will not be increased; and therefore, if one Party gains, it must be at the Expence of another.
103. Is not the Irregularity of the Distribution, and the Inequality of the Demand, under the System supposed in the last Answer, very injurious to the Country?
104. From what Circumstance do you draw the Conclusion, at any particular Period, that there is a Superabundance of Circulating Medium?
From the Market Price of Gold exceeding the Mint Price in those Countries where Gold is the Standard, and the unfavourable State of the Exchanges.
105. Is not the Market Price of Gold, and the State of the Exchanges, liable to vary, when there is no Variation in the Amount of the Circulating Medium?
The Rate of Exchange is; but the Market Price of Gold I think is not.
106. Does not the Market Price of the precious Metals vary at Hamburgh, when there is no Variation in the Amount of the Circulating Medium; but Payments are made by a Transfer of Credit on the Bank, representing a given Quantity of Silver of a given Fineness?
The utmost Limits of Variation to which Silver would be subject at Hamburgh, would be the Difference of Price at which the Bank purchases Silver, and the Price at which it sold it. And if the Bank of England were to fix the Price of £3 17s. 10½d. for the Rate of Gold, and the Price of £3 17s. 6d. for the Purchase of Gold, as proposed, I think that Gold could never vary but between those Limits.
107. Are not the Rates of Exchange affected by the Balance of Payments on all Accounts?
Yes, within the Limits of the Expence attending the Transmission of Gold.
108. Must not therefore a Part of the Depression of the Exchange between any Countries, be attributable to a Cause independent of the Amount of the Circulating Medium?
Very frequently, but the real Exchange would be in favour of the Country, while the nominal Exchange is against it.
109. Can you therefore conclude, from the Degree to which the Exchange is at any Moment against any Country, that the whole Per-centage of that unfavourable Exchange is owing to the Amount of its Circulating Medium?
A Part may be owing to other Causes. There is no unfavourable Exchange, which might not be turned in our Favour, by a Reduction in the Amount of Currency; it might not however be wise to make such a Reduction.
110. If a considerable Portion of such unfavourable Exchange were at any Time owing to the Balance of Payments being against us, would not a Reduction of our Circulating Medium, grounded on a Supposition that the unfavourable Exchanges was owing to its Excess, be productive of considerable Distress?
It might; but the best Criterion of an Excess of Circulation, is the Agreement of the Market Price of Gold with the Mint Price.
111. Would you then conclude, that when such Agreement exists there can be no Excess in our Circulating Medium?
There might be a temporary Excess in our Circulating Medium, but it would be attended with such a State of Exchange, as would make it profitable for Individuals to export Bullion, or Coin, which would have the Effect of reducing the Circulating Medium to its proper Limits.
112. Can such a State of Exchange be compatible with an Equality between the Mint Price and Market Price of Bullion?
If there was no Seignorage on Coin whatever, nor any Delay in returning Coin for Bullion at the Mint, it is quite compatible.
113. Would you conclude, then, that when not only the Market Price of Bullion does not exceed the Mint Price, but the Exchanges are also favourable or at Par, that there is no Excess of Circulating Medium?
It is quite possible, that under such Circumstances there might be a Deficiency of Circulating Medium, but there could not be any Excess.
114. You have stated that you consider the abundant Issue of Paper as having given Facilities to Speculation; do you conceive, that if on the Balance such Speculations have been unsuccessful, it would have been possible for so large an Increase to have taken place in the internal and external Commerce of the Country, as has occurred within the last 20 Years?
I think the Increase of the external and internal Commerce of the Country totally independent of those Causes.
115. To what Causes then do you attribute it?
To the Discovery of improved Machinery, and to the Industry and Ingenuity of our People.
116. You have stated that the most important Consideration in the Mode of returning to Cash Payments, was preventing the Currency being further depreciated; and if the graduated Scale were adopted you think the ultimate Effect would be anticipated; and with the Security which the Adoption of the graduated Scale would give, that the Bank must ultimately pay in Bullion at the Mint Price, there were Advantages in deferring the Period of the ultimate Reduction to that Price. Do you think, on the whole, that any Inconvenience would arise from prolonging that Period beyond the Period of 12 Months from July next, with a Security that at the different Stages of it the Plan would be put into Execution, sufficient to counterbalance the Convenience which such a Prolongation would give, by giving further Time to the Bank to increase its Treasures, by allowing more gradual Reduction of its Issues, and by enabling all Persons engaged in Commerce to accommodate their Transactions gradually to the new State of our Circulation?
I think the Advantages to be derived from a Prolongation of the Period would preponderate, provided the Public had complete Security, by obliging the Bank to sell Gold at the present Market Price, against a further Excess of Paper Circulation. I say the present Market Price, because I am averse to entrusting the Bank, for even the next Three Months, with the Power of raising the Price of Bullion.
117. Would not the Danger be completely obviated by providing, that on the 5th of July next the Bank should pay its Notes in Bullion at the present Market Price, and not at the Price at which it may then be?
Nothing could prevent it but gross Misconduct on the Part of the Bank.
118. Do you think the Balance of the Advantage of Prolongation would extend to a Period of Two Years from July next?
I think Two Years an ample Time; I should say a less Period; but it may be prudent to consult the Fears of even the most timid.
119. If the Period were to be so prolonged, what would in your Opinion be the best Gradation of Scale, both in Price and Time?
I should think the Price of Gold should diminish 6d. per Ounce at stated and equal Intervals.
120. Do you not think, that the longer the Time allowed the Bank for the Payment of their Notes in Cash or Bullion at the Mint Price, the more necessary the graduated Scale would be, as a Security to the Parliament and to the Public for the Accomplishment of their ultimate Object?
Certainly; without it we should not have complete Security that the ultimate Object would be attained.
121. As Part of the Advantages, to which you look, as facilitating the Operation of the Plan of a graduated Scale, arise from the Certainty which Dealers in Bullion will have, that Bullion will in a short Time be brought down to the Mint Price; would not those Advantages be in some Degree diminished, even by deferring the Period of that ultimate Operation for 6 or 12 Months longer than could really be necessary?
The Advantages would be diminished by deferring the Period: and I am only reconciled to a further Length of Time by a Consideration of the Fears which I think many People very unreasonably entertain.
122. As far, therefore, as your own Judgment goes, should you prefer the Period of One or of Two Years for the Operation?
I should prefer One Year.
123. Do the Prices of Commodities conform to the Fluctuations in the Market Price of Gold, or does not a Length of Time elapse before such Conformity takes place?
They do not immediately conform, but I do not think it very long before they do.
124. If the Prices of Commodities have not already fallen to a Level with the present Market Price of Gold, is it certain there will not be a greater Reduction in their Prices than 4 per Cent., on the Market Price of Gold falling to the Mint Price?
I think the Prices of Commodities fall from a Reduction of the Paper Circulation quite as soon as Gold falls. If the Prices of Commodities and of Bullion have not already fallen in proportion to the Reduction of Paper, I should think that, to make the Value of Bullion and Paper agree, a less Reduction of Paper would be necessary.
125. If the Bank should for their own Security think proper to make a further Reduction of their Notes to the Amount of Three Millions, between this Time and the Month of July next, what Effect would this have upon the Prices of Commodities?
I think a greater Effect would be produced on the Prices of Bullion, on the Currency and on the Prices of Commodities, than what is necessary to bring Bullion down to the Mint Price. Both Bullion and Commodities might probably fall 8 or 10 per Cent. No such Fall could take place if the Mint were open, or the Bank were obliged to buy Bullion at £3 17s. 6d. The Bank could not then reduce the Circulation Three Millions.
126. If, in consequence of large Foreign Payments, the Course of Foreign Exchanges should become more unfavourable, unless counteracted by a great Contraction of Bank Notes, would it not be necessary to make such Contraction for the Purpose of reducing the Market Price of Gold to the Mint Price?
It certainly would; but this is an Inconvenience to which our Currency was always exposed before 1797.
127. Might it not then be necessary for the Bank to make a Reduction of Three Millions between this and the 5th of July, notwithstanding the present favourable Tendency of the Exchanges?
Possibly it might.
128. Supposing the Bank not to think that they could engage with Safety to pay their Notes in Bullion at any specified Period, according to the present Market Price, without previously making a considerable Purchase of Gold, would not such Purchase have a Tendency to increase the Price of Bullion?
I think it would have such a Tendency; but I should not admit this Plea, for I should think it not founded on a Knowledge of the true Principles of Currency, the Purchase of any great Quantity of Gold being wholly unnecessary.
129. Has not the present Suspence of Commercial Transactions, in consequence of the Examination now taking place, the Effect, to a certain Extent, which a contracted Issue of Notes would have had?
I think it has.
130. If then that Suspence were relieved by a Decision one Way or the other, would not the Price of Gold have a Tendency to rise, unless it were counteracted by some further Reduction of Bank Notes?
It would very much depend on the Decision taken.
131. Would not the Danger of any improvident Diminution of Issues by the Bank during the Progress of these Operations, of which we have been speaking, be best obviated by applying to the Period of gradual Reduction the same Principle which you have proposed for Bullion Payments at the Mint Price, viz. an Obligation on the Bank to purchase Bullion at Prices bearing a fixed Proportion to those at which they are to deliver it?
It undoubtedly would; still I am inclined to recommend that the Price at which the Bank should be obliged to purchase Gold, should be at once fixed at £3 17s. 6d. The only Inconvenience that could arise from such a Regulation might possibly be a more rapid Diminution of the Amount of the Currency, than what a graduated Scale would require.
132. But if the Apprehensions of the Bank should so far exceed all just Reasoning on the Subject, as to lead them to make a sudden and excessive Diminution of the Currency, far beyond what the Necessity of the Case might require; might not such a Provision as above stated be useful, not only as a Corrective of the Evil, but also as an Indication to them of the real Circumstances of the Case?
The Provision above stated would afford a complete Security against a sudden and mischievous Reduction in the Amount of the Circulating Medium.
133. How would it afford that complete Security?
Without such a Provision the Bank might diminish their Issues till the Price of Bullion fell to £3 17s. 6d. per oz., with it they could only diminish them till it fell to the Price fixed for the Purchase on the graduated Scale.
134. Might not the Bullion Merchant under such Circumstances, by occasionally bringing forward their Gold to the Bank immediately before the Time at which the Price would be lowered for the Bank to make such Purchases, and by watching the Variations occasioned by the Increase or Diminution of the Issue of Notes, for the Purpose of meeting such Demand, throw great Confusion during the whole Time into the Market Price of Gold; and would not the Uncertainty in which the Bank would be placed, oblige them to withhold the Issue of their Notes on Discount to a considerable Extent?
I think, if the selling Price of Gold and the buying Price of Gold should be fixed too near to each other, the Bank might be exposed to this Inconvenience, but if they differ as much as a Shilling, no great Inconvenience would arise. As to the Question of Discount, the Accommodation to Commerce must depend on the whole Amount of the Circulation, and not on that Part of it which the Bank may issue in that particular Manner.
135. If the Bank were to be the only Market to which Persons would resort for Bullion, as distinguished from Coin, at a fixed Price; might there not be, under extreme Circumstances, a peculiar Run upon the Bank for that Article?
The Run upon them must necessarily be limited by the Amount of their Notes, because it is with their Notes only that the Bullion could be purchased. The Diminution of the Quantity of Bank Notes would increase their Value, and would consequently stop the Demand for Bullion. In this respect we should be precisely in the same Situation that we were previous to 1797, the only Difference would be, that we could then demand Coin, and now we should demand
Bullion; as Articles of Commerce they may be considered as the same.
136. Supposing the Bank to keep no more Treasure than what you consider would be necessary, or Three Millions of Bullion, might not a Run for Bullion to that Amount be made with so much greater Rapidity, than could possibly be made for the same Amount of Coin, as to expose the Bank to greater Danger in the new State of Things, than it could ever have incurred in the former?
Bullion could be drawn out of the Bank in a shorter Space of Time than an equal Amount of Coin, as there would be no Necessity for counting.
137. Might not a Demand for Bullion be made upon the Bank to that Extent, in so short a Space of Time, as not to allow of the Effect which a Diminution of the Quantity of Notes would have in raising their Value, to operate in Time to check such a Run?
I should answer, in no greater Degree than before 1797, and this could only happen in the extreme Case of a Panic, against which no System of Banking can possibly provide.
138. Do you think, on the whole, that the Danger of any such Panic would be increased or diminished, by making Bank Notes payable in Bullion for large Amounts only, or in Coin for the smallest Amounts, as before 1797?
If there is any Difference, I should think that the Danger of Panic would be less in the former Case than in the latter.
139. Would there be, in case of a Panic, less Eagerness to demand Bullion than Coin, if that were demandable?
I think there would be less Eagerness to demand Bullion.
140. Would not such a Demand be made, without any Reference to the Market Price of Gold?
141. Referring to Question and Answer (No. 84), you have stated, that our Currency and Prices have undergone, during the last Eight Years, much greater Variations than what you conceive would be now produced by the Resumption of Cash Payments; was not the Inconvenience which may have resulted at any of those former Periods, from the Fall of Prices, much mitigated by the unlimited Power then possessed by the Bank of increasing its Issues, without any regard to the Price of Gold and the State of Exchanges?
The Variations in the Value of the Currency, and in Prices, have generally been in a different Direction from that at present to be provided against; the Bank having the Power to issue Paper unchecked, could certainly mitigate the Inconvenience resulting from a sudden Fall.
142. When the Bank have lost that Power, might not the same Degree of Reduction of Currency which took place in former Periods produce a greater Reduction of Prices, and of course greater Distress?
Equal Effects would follow equal Amounts of Reduction; but when the Bank was unchecked, they had the Power of arresting that Reduction; an Advantage counterbalanced by other Disadvantages.
The Witness is directed to withdraw.
SPEECHES ON VARIOUS OCCASIONS
GENERAL COURT OF PROPRIETORS OF THE BANK OF ENGLAND1
21 March 1811
Mr. Cattley, the first speaker, ‘entered into a vindication of the Bank, against the attacks made upon them by the Bullion Committee, Mr. Huskisson and others. He said that the Bullion Committee should have examined into the causes of the high price of bullion, which they had wholly neglected to do—and it would not be just to require of the Bank to pay their notes in specie, whilst gold was at so high a price’.
Mr. Ricardo ‘then rose, and was proceeding to make some observations on the remarks of Mr. Cattley, when he was reminded by the Governor that there was no question before the Court.’
Mr. Ricardo said, that he would have wished to set the Honourable Proprietor right, with regard to some of the facts which he had stated respecting the Bullion Committee, but as such discussion was not thought admissible he would confine himself by putting a question to the Directors. He said that in the discussion of principles, it was highly essential that the facts by which those principles were ultimately to be tried, should be correctly stated. He had observed, however, that in the papers which had at different times been submitted to Parliament, there appeared facts which were at variance with each other, and of which he hoped the Court would receive some explanation. It appeared, he said, by a paper which was published in the Appendix to the Report of the Secret Committee of the Lords, that in October of the year 1795, the Directors stated the price of gold bullion to be 4l. 3s. to 4l. 4s. per ounce,2 although no traces of any such price could be discovered in any list that was published during that year; on the contrary, the price quoted in December of that year, in the list which Mr. Goldsmid, in his evidence, declared to be authentic, as he himself furnished the prices to it,1 was 3l. 17s. 6d. That further, in 1797 Mr. Newland, in his evidence before the same Secret Committee, had declared that he had known the Bank to give as much as 4l. 1s., 4l. 2s., 4l. 6s., and as high as 4l. 8s. per ounce and when asked on what occasion the Bank gave 4l. 8s. said it was about two years since, speaking then in March 1797.2 Mr. Ricardo said that there was a paper just laid before Parliament by the Bank, in which they stated, not the lowest, not the average, but the highest price which they had given for gold bullion from 1773 up to the present period. In this account it appeared that the Bank had never given more, from 1786 to 1800, than 3l. 17s. 10½d. per ounce.3 He found it difficult to reconcile this seeming contradiction, and he hoped the Directors would explain it.
Mr. Pearse, the Governor, ‘observed in reply, that the price being stated by the Directors to be 4l. 3s. or 4l. 4s. per ounce in the year 1795, did not afford any proof that the Directors of the Bank had purchased at that price. That 4l. 8s. being given, as stated by Mr. Newland, was, he believed, correct—it was by way of experiment in the beginning of the year 1796, and was obtained by their agent in Portugal, but which was discontinued after a small quantity had been purchased. That in a return which they had since made to the House of Commons, they had stated this and some other exceptions.’4
GENERAL COURT OF PROPRIETORS OF THE BANK OF ENGLAND1
21 December 1815
Mr. Bouverie moved ‘that an account be laid before a General Court...of the amount of the surplus profits of this Company’.
Mr. Ricardo warmly supported the motion, and wished to recal the Court to the consideration of the real question before them, which appeared to him to be, whether the system to be acted upon should be that which was prescribed by the law of the land, and by the Bank Charter, or whether the Proprietors should be deprived of that participation in the profits to which they were, both by the one and the other, so clearly entitled. It had been contended by the Gentlemen who had preceded him, that on the present extended scale of the commerce of the country, the profits of the Bank, instead of being divided among the Proprietors ought to go to an increase of its capital. Now, though he might be of opinion that a Bank, deriving its profits from the capitals of others, required no such increase of capital for itself, yet it was nevertheless a matter of indifference to him in which of the two modes the accumulated profits should be applied; all he contended for was, that the Proprietors had a right in the production of such accounts as would exhibit the actual amount of such profits, and that it might be a subject of future regulation how they should be disposed of.
Mr. Mellish, the Governor, ‘then rose and said that he felt he should be betraying his duty were he to answer the topics urged by the last speaker, as well as the mover; that the Company had all along placed great confidence in their Directors; and that if any reason were harboured for wishing to withdraw it, he begged that their accusation might be spoken out.’
The question was put, and ‘on a shew of hands was lost by about two to one.’
[The question was raised again before a General Court of Proprietors held on 21 March 1816 to declare a Dividend, when an amendment was moved for the adjournment of the Court until 28 March to enable the Governor and Directors to produce accounts showing the surplus profits. The amendment being defeated, a paper signed by eleven Proprietors, including Ricardo, was delivered to the Governor demanding a ballot on the motion of amendment. The ballot took place on 26 March and resulted in the defeat of the motion by 393 votes to 69.1 ]
GENERAL COURT OF PROPRIETORS OF THE BANK OF ENGLAND1
8 February 1816
Mr. Mellish, the Governor, stated that the object for which the Court was called together, was to consider a letter from the Government applying for an extension for two years of the loan of three millions now existing without interest, and for a new loan of six millions at 4 per cent for two years. Ministers intended to propose to Parliament that the restriction on cash payments be continued for one year. The Directors proposed complying with the application of Government. The Governor reminded the Court that ‘their engagements with the country, in so far as it regarded their chartered rights, were now near a termination, and therefore it was absolutely necessary that some understanding should be come to with Government’, in order to effect an arrangement, based on equity and good faith.
Mr. Ricardo wished to know whether it was understood that, at the expiration of the period of the loan, the Bank would continue in the custody of the money of the government? He was led to this inquiry by a paper laid before the House of Commons, in which the Directors seemed to claim the custody of the money as a right.2 Now, however, they seemed to have abandoned this claim.
Mr. Mellish ‘declined entering into any discussion on the topic alluded to by the hon. proprietor. He could not be expected to say what would happen two years hence. In the mean time a bargain must be a bargain.’
The motion was put and was ‘carried by a very large majority, there being only two or three hands held against it.’
GENERAL COURT OF PROPRIETORS OF THE BANK OF ENGLAND1
18 March 1819
On the motion for a dividend, an amendment was proposed that no dividend should be declared until ‘an exposition of the funds, income, and expenditure of the Bank should be made to the Proprietors’. The Hon. Mr. Bouverie stated that the Bank had acknowledged the existence of a Reserved Fund, and the Proprietors ought to be informed of its amount. Sir Thomas Turton said that ‘it seemed absurd to vote a given dividend, without knowing the amount of the capital from which it was distributed’.
Mr. Ricardo was of the same opinion, and expressed his confident belief that the Bank were in possession of at least 5,000,000l., in addition to their known capital of 15,000,000l. It was not a fear of their poverty but a jealousy of their riches that had provoked inquiry. Whilst it was clear, therefore, that the proprietors had a right to know the condition of their affairs, it was equally manifest that no injury would arise from the disclosure. A letter which he had received from one of the directors of the Bank of France2 entirely accorded with his views.
After some further discussion Mr. R. Jackson said that demands for increased dividends might result in their restriction by Parliament, as had happened with the East India Company. While he did not doubt the motives of those who brought forward such motions, ‘it was still certain that patriotism, and a desire to impair the profits of the Bank, were not necessarily connected’.
‘Mr. Ricardo and Mr. Bouverie disclaimed any such object as that referred to by the hon. and learned gent., in the conduct formerly pursued at the East India House; and the former desired also to vindicate an absent member of their body1 from any supposed imputation of the kind.’
The amendments were negatived.
MEETING ON MR. OWEN’S PLAN2
26 June 1819
‘A very respectable and numerous meeting of both sexes was held in Freemasons-hall, for the purpose of taking into consideration the plan of Mr. Owen.’ The chair was taken by the Duke of Kent. After a speech of Mr. Owen, who explained his plan for the employment and improvement of the poor, the names of those who were willing to be members of the committee to investigate the plan were announced.3
Mr. Ricardo begged to trouble the Meeting with a few observations. As his name was placed upon the Committee, he should state shortly those circumstances in which he agreed and in which he differed from the preceding speaker. He completely concurred with him in the commendations bestowed upon the illustrious personage who presided at the meeting. It was an example of zeal for the public good, and of benevolent intention, worthy of the highest praise. In a limited degree he thought the scheme likely to succeed, and to produce, where it did succeed, considerable happiness, comfort, and morality, by giving employment and instruction to the lower classes. No person could admire more than he did, or appreciate more highly, the benevolence of his friend (Mr. Owen) to prosecute his plan with so much zeal, and at the expense of so much time and trouble. He could not, however, go along with him in the hope of ameliorating the condition of the lower classes to such a degree as he seemed to expect: nor should he wish it to go forth to the public that he thought that the plan would produce all the good anticipated from it by his sanguine friend. As a member of the Committee, he should do every thing in his power to forward the objects for which it was appointed.
At a subsequent meeting, held at the City of London Tavern on 26 July 1819, the Committee was finally appointed, Ricardo being a member. In August the Committee appealed for the subscription of £100,000 for the establishment of an agricultural and manufacturing community as an experiment on the lines of that at New Lanark. On 1 Dec. 1819, as the subscriptions amounted to less than £8,000, the Committee resigned and in a final resolution urged that the Government should facilitate the experiment by granting a portion of the Crown lands and using the funds raised for the relief of the poor.1
GLOUCESTER COUNTY MEETING1
30 December 1820
‘One of the most numerous and respectable meetings of the County of Glocester which has been held for several years took place at the Shirehall, Glocester’. The object of the meeting was to consider an address to the King on ‘the illegal and unconstitutional measures’ taken by the Ministers in the late proceedings against the Queen. Lord Sherborne was called to the chair. The address having been unanimously adopted by the meeting,
Mr. Ricardo came forward and was received with marks of approbation. He said he was sure this meeting felt as he did respecting the conduct pursued on a late occasion in the House of Peers by their noble Chairman and by Lord Ducie2 (Loud cheers). The county he was sure could but feel one sentiment upon that conduct; it was entitled to their fullest and most unqualified approbation (Reiterated cheers). These noble Lords had in an independent and manly manner opposed his Majesty’s ministers during the prosecution of the Queen. It became the county to express their opinion of the conduct of the noble lords who had acted in so independent a manner, and his object at present was to propose to them a vote of thanks (Hear). He would take this opportunity of declaring his hearty approbation of the terms of the address, as well as those used by the gentlemen who had spoken upon it. Indeed, if he had any thing in the way of complaint to urge or cavil with, it was, that the address had not gone as far as it ought to have gone; for it appeared to him that many of the evils of which they complained were to be traced to the present constitution of the House of Commons (Applause). If that house fairly and fully represented as it ought the people at large, the country would not now have to deplore such an accumulation of wrongs (Applause). It would have been quite impossible for ministers to have pursued a career so diametrically opposite to the general opinion of the country; nor would a House of Commons, representing the general voice of the community, have suffered such a departure from the public wishes and interests. Entertaining, as he unequivocally did, such an opinion, he must say that he should have still more approved of the address, if it promptly and plainly recommended that no delay should be lost in making the House of Commons what it ought to be, and what its name imported it should be, namely, a representative of the public voice—an organ acting in sympathy with the tone of popular feeling, and constitutionally embodying and expressing the voice of the country at large in a full and unquestionable manner (Great applause). The hon. gentleman concluded by proposing a vote of thanks to Lords Sherborne and Ducie.
‘The motion was unanimously agreed to and followed by three cheers.’
MEETING AT HEREFORD IN HONOUR OF JOSEPH HUME1
7 December 1821
A meeting in honour of Joseph Hume, M.P. was held at Hereford on 7 December 1821, to present him with ‘a superb silver tankard’ and ‘a hogshead of prime Hereford cider’, in recognition of his efforts in Parliament to lessen taxation and reduce corruption. Mr. E. B. Clive presided.
Addressing the meeting, Mr. Hume urged the people to resume their ancient right of control over their representatives in Parliament—the only remedy for the existing abuses in public expenditure. He later complimented Mr. Ricardo and other members ‘for the zealous assistance they had rendered him in Parliament’, and regretted that Mr. Ricardo had been so unjustly misrepresented as a friend of the fundholder and an enemy of the landowner.
The President spoke next and concluded by proposing ‘the health of one of the first political economists of this or any other age, Mr. Ricardo, who I am happy to say is a considerable freeholder amongst us.’2
Mr. Ricardo said, he felt highly gratified by the manner in which the mention of his name had been received by the respectable company before him, and begged to return his grateful thanks for the honour which had been conferred on him. With respect to the misapprehension of an opinion he had given, alluded to by his Honourable Friend Mr. Hume, he should endeavour in very few words to remove it, as he did not wish to occupy the attention of the company by any thing personal to himself. Thinking, as he did, that the national debt was a most oppressive burden on the industry of the country, he had, in his place in Parliament, expressed his opinion that it would be a measure of wisdom to submit once for all to a great sacrifice in order to remove it, and for that purpose recommended a general and fair contribution of a portion of every man’s property;1 not, as had been said, of the property of the landowner only, but of that of the merchant, the manufacturer, and the fundholder. He should have been ashamed of himself if any thing so unfair could ever enter his mind as that of exonerating the fundholder from the payment of his quota of so equitable a tax. On this subject he should say no more, as he fully agreed with his Hon. Friend, Mr. Price,2 that as this day was set apart for the purpose of acknowledging the services of Mr. Hume, questions wholly extraneous should be avoided. Of Mr. Hume’s services to the public, he entertained as high an opinion as any gentleman present; and as he had seen much of his persevering exertions, he could perhaps speak of them with more accuracy than many others. Mr. Hume’s exertions in Parliament had been unremitting as they all knew; but he had duties to attend also in different committees, and few could have a just idea of the number of documents which he had had to consult. When he considered the variety of accounts which came under his notice, and the voluminous reports which he had read, he believed he might say, that in persevering exertions, Mr. Hume had never been surpassed by any former or present member of Parliament. It was a pleasure to him (Mr. Ricardo) to reflect, that he had voted on all occasions in favour of economy; and while he had a seat in the House of Commons, he would continue to give his Hon. Friend his best support in opposing every wasteful expenditure of the public money. He concurred fully with the Hon. Chairman and with Mr. Hume, that a reform in the representation was of vital importance to the interests of the country.—Without it good government might truly be said to be impossible. To obtain a reform, then, every exertion should be made; but he recommended to those who heard him to consider well what constituted a real and efficient reform of the Parliament; for much error might and did prevail on this important question. The subject might be considered under three views—First, the extension of the elective franchise; secondly, the frequency of elections; and, thirdly, the mode of election. With respect to the first of these, the extension of the elective franchise, he did not consider it the most important object of the three he had mentioned, yet no reform could be an adequate one which did not greatly extend the elective franchise—for he should be contented if it went so far as householder suffrage. Upon the second point, frequency of elections, he should say that without it there would be no check in the hands of the electors against the corruption of the members. If elections were not frequent, we should not very materially improve our system, and if they were, it would be but reasonable to allow each member to act as he thought proper, notwithstanding the known sentiments of his constituents—those constituents would have the power to displace him at the following election. With respect to the third point, the mode of election, he thought that of the greatest importance on a question of real reform. To secure a real representation of the people in Parliament, there must be secrecy of suffrage, or as it was commonly called election by ballot. It was nothing but mockery and delusion to pretend to give the right of voting to a man, if you prevented him from exercising it without control. Let the kind offices and superior talents of those above him in station have their due effect in influencing his will—this was a just and legitimate influence, but do not subject his will to the will of another. If you do it, it is not his vote you obtain, but the vote of another man, and it would be better and more honourable to give it to that man in the first instance. He (Mr. R.) had thought much on this subject: he had attentively considered all the objections which were brought against voting by ballot, but he could see no weight in them. He hoped whenever the important subject of reform came under the consideration of the gentlemen present, they would not fail to pay due attention to this vital security for good government.
‘Mr. R. concluded amid loud cheers.’
WESTMINSTER REFORM DINNER1
23 May 1822
‘The Independent Electors of Westminster held their 15th anniversary dinner at the Crown and Anchor Tavern, in commemoration of the patriotic struggle, which terminated in the election of Sir Francis Burdett as their representative in Parliament.’ Sir Francis Burdett was in the chair, and, after several other toasts, he proposed the health of ‘Mr. C. H. Hutchinson,2 Mr. Ricardo, and the reformers of Ireland.’ After a speech of Mr. Hutchinson,
Mr. Ricardo, in returning thanks, declared that there was not in the room a more real friend to the cause of reform than he was. He was a friend, not to a sham reform, but a real one, which would give to the people a majority, and more than a majority, in the House of Commons. This desirable and most necessary end might still, he thought, be attained in the House of Commons; not, indeed, by any efforts of the members within doors, but by the exertions of the people without—exertions which would compel attention, and which must be obeyed. He fully agreed with the noble lord (Nugent) that it was a silly question to ask the reformer to put his finger on the page of history which he deemed his model. His plain answer would always be, that the people had a right to demand the best government they could obtain in their own times, and that if their ancestors had refrained from asking it, it was no reason why their posterity should.
GENERAL COURT OF THE EAST INDIA COMPANY1
12 June 1822
A Special General Court of Proprietors of the East India Company was held ‘to consider a Bill pending in Parliament, for consolidating the several Laws relating to the Private Trade with the East-Indies; and also to consider the propriety of concurring in the repeal of the law by which ships under the burden of 350 tons are at present precluded from engaging in such trade from the United Kingdom.’ Mr. C. Forbes, who opened the debate, said that the East-India interest was not as powerfully represented in Parliament as the West-India interest; he thought it would be good policy if all the Directors were provided with seats in the House of Commons.
Mr. Ricardo regretted the absence of the gentlemen who usually spoke from that part of the Court, and more particularly of Mr. Hume, who was obliged to attend a Committee of the House of Commons, and could not, in consequence, take a part in the discussion; he hoped, however, that the Court would favour him with their attention while he made a few observations. The Hon. Proprietor who had just spoken1 had very properly observed, that, in the House of Commons, the interest of the public only should be looked to; that the Members of that House ought not to be swayed by a partiality for the East or the West-India interest. He admitted that it ought to be so; but that man must be blind, who would say, that the House of Commons, as now constituted, performed its duty in that immaculate manner which the Hon. Proprietor described.
Mr. Lowndes rose to order.
Mr. Ricardo assured the Court he would not say another word on the subject. An Hon. Proprietor (Mr. Robertson) seemed to be adverse to opening a free-trade with all European states. If that were the question before the Court, he would willingly meet him on the subject. But the question was not, whether France or Spain should be allowed to enter into the India trade; it was one which entirely concerned English interests. The Gentleman who opened the debate, said he asked only for justice and equality; he wished to be placed on the same footing as the West-India merchant; he did not seek for a monopoly. In those views he (Mr Ricardo) entirely concurred; and, if he wanted to prove their truth and policy, he would refer to the speech of the Hon. Proprietor (Mr. Robertson); for he had shewn that, by taking off restrictions, the trade to the Brazils and to the free-states of South America had increased in a wonderful degree; and, in doing so, he had himself pronounced the warmest eulogium on unrestricted trade. He thought no country could trade advantageously, if she placed restrictions on the commodities with which any state, to whom she was commercially related, could furnish her. It was in vain for the Company to think of sending their goods to India, unless they could take what India was enabled to afford in return. (Hear, hear!) This position was so clear and self-evident, that he wondered any man could doubt it. If all restrictions were removed from the commerce of the country, and it was left to pursue that course which its own active principle would strike out, it would, most assuredly increase in an almost infinite degree. He had no hostility to the West-India interest; on the contrary, he participated in the feelings of regret which their sufferings excited; and if he could assist them, without doing so at the expense of others, he would not be found tardy in affording relief: but he would not support them at the expense of other interests. The buying their sugar at an advanced price was not the only disadvantage which the country suffered from the system. For his own part, he would give to them the difference in price between the East-India and the West-India sugar, as a gratuity, rather than suffer this unjust privilege should be granted to the West-India interest. (Hear, hear!) An Hon. Gentleman (Mr. Carruthers) had protested against the charge that had been levelled at his Majesty’s Ministers, who were said to entertain the intention of giving to one class of persons an unjust advantage over another. That Hon. Gent. seemed to have a very high opinion of his Majesty’s Government. Perhaps he also thought that they meant well. But Gentlemen must shut their eyes, if they did not perceive, that Ministers were not unfrequently obliged to favour particular interests. The power some bodies possessed, the clamour they raised, the interest they commanded in the House of Commons, frequently compelled Ministers to adopt a course which they did not think a proper one. They had an instance of this in the last week. A bill, altering the navigation laws, was passing through the House, and Ministers wanted to carry a clause relative to the importation of thrown silk; but, with all their efforts, they were unable to succeed. In that case Ministers could not carry a point, which appeared to him to be correct. He wished to see a House of Commons free from party, where the interest of the public would alone be considered, in which a deaf ear would be turned to all partial application. (Hear, hear!)
GENERAL COURT OF THE EAST INDIA COMPANY1
19 March 1823
After the quarterly meeting the General Court of Proprietors resolved itself into a Special Court, at the request of nine Proprietors (including Ricardo), ‘to take into consideration the present state of the East-India sugar trade’. Mr. C. Forbes moved:
‘That it appears to this Court, that since the repeal by the act of last session of Parliament, of the restrictions formerly imposed on the West-India trade, no pretension exists for any exclusive protection to the sugars of the West-Indian colonies against those of British India.
‘That as the present unequal duties on the sugars of the East and West-Indies terminate in March 1824, this Court do earnestly recommend to the immediate attention of the Court of Directors the necessity of using their strenuous efforts with his Majesty’s ministers, to obtain an equalization of the said duties.’
Mr. Forbes said that Mr. Whitmore intended to bring this subject under the consideration of Parliament after the recess.1 Mr. A. Robertson, opposing the motion, raised again the question of shipping which had been debated the previous year.2
Mr. D. Ricardo said, he could not follow the Hon. Gent. in his observations with respect to ships of small tonnage; at the same time he thought it was a question of very great importance. The Hon. Gent. had entered into a great number of arguments, in order to dissuade the Court from agreeing to the resolution now under discussion. If he had heard the Hon. Gent. in any other place, or if he had been ignorant of his sentiments, he should indeed have conceived that the Hon. Gent. was addressing an assembly of West-India planters, for he (Mr. Ricardo) should use precisely such arguments as the Hon. Gent. had done, in order to overturn their claims. (A laugh!) The Hon. Gent. had stated truly, that when there was a surplus of sugar in this country, prices must be higher on the continent than here, to induce the merchant to export it; but he would ask the Hon. Gent. was that any reason why an unsound principle should be contended for? He would ask of the Hon. Gent., and of those whose cause he espoused, ‘Are you afraid to give equal rights and an equal protection to all classes of His Majesty’s subjects?’ (Hear!) The Hon. Gent. had also stated, very correctly, that the mere enumeration of exports and imports would not give a true idea of the commerce which one particular country carried on with another. They might export to a country, but it did not follow that that country should pay in a direct manner: because the exporting country might wish to receive the proceeds in commodities which were the growth of another state. The Hon. Gent. said, this was a mere question between the agents of different interests: he (Mr. Ricardo) thought otherwise. He viewed it in the light in which it was regarded by the Hon. Director before him (Mr. Bebb), and he could view it in no other. He considered it to be a question in which the public were the great parties concerned; (Hear!) for he should not have appeared in that Court, he should not have interfered, or raised his voice on this question, but in behalf of the public. (Hear!) It might be very true, that the price of sugar was so low as not to encourage its cultivation; it might be very true that it did not fetch a remunerating price: but were not arts resorted to for the purpose of raising the price? It was acknowledged that there were. And was not a hope held out in some publication, that, by diminishing the supply, the planter might get firm hold of the home-market, keep it without a surplus, and then raise the price as he pleased? Now, he would ask, had the people of England no interest in all this? Had they no interest in procuring their sugar from other countries, and preventing the continuance of this most odious monopoly? They were called on, as the ground for their decision, to compare the exports and imports with reference to the East and West-Indies: but that mode did not satisfy his understanding. He asked, what was the object of this measure? It was to procure sugar at a cheaper rate; and, if it were made manifest to him that, by adopting it, they would make sugar cheaper, he would throw open the trade, although they exported millions of manufactures to the country which at present monopolized it. He thought the Hon. Gent. had encumbered the subject with many things which did not belong to it. He took a large view of the question, with reference to the greater likelihood of retaining our East-India or our West-India possessions. If they entered into these subjects, as connected with the question before them, they would be totally unfit to decide on it, so extremely difficult were they of solution; and he must say, that, for his own part, if he could not give a sound opinion on this particular question, without well understanding the subjects which the Hon. Gent. had brought forward, he would not attempt to give an opinion at all; but, if he thought that the East-Indies or the West-Indies would be severed from this country in a month, it would not alter the vote that he would give: for, would it not still be to the interest of India to send her sugars to this country if she were placed under the Government of any other power? Certainly it would; and, therefore, the parties immediately concerned had little to do with this point. (Hear!) He again asserted, that the public interest was concerned. He would go farther than either of the contending parties were inclined to go. He thought no exclusive protection should be granted to either the East or the West-Indies, and that we should be free to import our sugar from any quarter whatsoever. No possible injury could arise from this. The Hon. Gent. also alluded to another subject, but in a manner which he (Mr. Ricardo) was sorry to hear. He professed his love for freedom of trade, as the principle under the influence of which commerce was sure to prosper; but then he made so many qualifications that he quite lost sight of his original proposition. (A laugh!) He would protect the monopoly of the landed interests, he would protect the monopoly of the tea-trade; and several others, all of them, he believed, just as objectionable as the very monopoly they were discussing. With respect to the shipping-interest, no argument appeared to him to be so weak as that adduced by them. They asserted that, by the adoption of this measure, the shipping of the country would be greatly reduced. But could they get sugar from the East-Indies without shipping? and was not the voyage much longer? Every view he could take of this subject proved to him that those interested in shipping, would be particularly benefited by the proposed equalization. There were some other points to which he meant to call the attention of the Court, particularly with respect to cotton. The Hon. Gent. had instanced the cotton-trade, and argued that by the aid of machinery, by importing cotton from America, and by exporting the manufactured goods to India, great injury was inflicted on the manufacturing class in that country. Undoubtedly some injury was done to that class; but one would think the Hon. Gent. would have turned his attention to the accompanying good. He would ask the Hon. Gent. in what commodities those exports were paid for? Those who exported must have got a return in something else they had not before had. If we send cotton goods to India, they must be paid for. Our cotton goods were purchased with other manufactures; new branches of trade were thus struck out, and both countries were ultimately benefited. The one country was employed in making machinery and working it, and the other in fabricating those manufactures by which our cottons were paid for. Instead of pointing out in what line capital should be employed, he thought it would have been as well if the Hon. Gent. had left that point to be settled by the individual. (Hear!) It was undoubtedly very kind of the Hon. Gent. to lecture those who might be inclined to embark their capital in the East-India sugar-trade; (A laugh!) it was very considerate of him to warn them of their danger; and he thanked the Hon. Gent. for his admonition. (A laugh!) But he could not think, at this time of day, when they had advanced so far in commercial knowledge, that the Hon. Gent. was perfectly competent to decide on the manner in which capital should be laid out (Hear!) Indeed, he seemed anxious to apply the customs of the East to the commerce of Europe, and to keep the same system going on, from father to son, without variation, to all eternity. (Hear!) An Hon. Gent. (Mr. Tucker) had alluded to the subject of slaves, and declared that he was proud to be an Englishman, more particularly in consequence of what had occurred in the last few months. In truth, he had reason to be proud of it. No man could possibly value this country more than he did. It had signalized itself gloriously a thousand times. But he confessed that he really was inclined to blush with shame, to hide his face, when West-India slavery was mentioned. (Hear!) It was a stain on the otherwise pure character of the country, which he ardently desired to see wiped away. (Hear!) The question of slavery was one of infinite importance. It well deserved the consideration of the country. He meant to cast no imputation on the planters; it was the infamous custom, the shocking system, against which he directed his reprobation; for, surely it was impossible that any man could, for a moment, reflect on the treatment and punishment of slaves without shuddering. (Hear!) It was this country that had to answer for the continuance of that abominable system. On this day, he believed, a petition would be presented to Parliament by a most benevolent individual (Mr. Wilberforce) in favour of that unfortunate race of men, who were subjected to the horrors of slavery. He hoped the application would produce its just effect, and that this grievous stain would be removed from the national character. (Hear!)
Mr. Robertson explained that ‘he had not attempted to direct individuals how they were to dispose of their capital’.
Mr. Ricardo said, when he spoke of the Hon. Gent.’s offering his advice as to the disposition of capital, he did not mean it in any invidious sense.
WESTMINSTER REFORM DINNER1
23 May 1823
‘The Anniversary Dinner of the Electors of Westminster, in commemoration of the establishment of their Independence in the Election of Sir F. Burdett, took place at the Crown and Anchor Tavern. At five o’clock upwards of 400 persons sat down to a very substantial dinner.’ Mr. J. C. Hobhouse took the chair, in the absence of Sir F. Burdett who was prevented from attending by illness.
The first toast proposed was, ‘The People, the only source of legitimate power’ (applause).
The next was ‘The King, and may he always recollect his declaration, that he holds the Crown in trust and for the benefit of the people’ (with three times cheers).
Mr. Ricardo next rose and said, a toast had been put into his hands, which he should give with the greatest pleasure— ‘The only remedy for the national grievances, a full, fair, free, and equal Representation of the People in the Commons’ House of Parliament.’ To him it appeared that such a representation of the people was absolutely necessary, as a check and security against misgovernment. It was absolutely necessary that we should have a House of Commons which should represent the people fully and efficiently, instead of representing only a small portion of the people of England. Great difference of opinion existed and might very fairly exist as to the extent to which the Elective Franchise should be carried. A numerous class of persons in this country thought that it should be extended to the whole of the people; others thought it would be sufficiently extensive if given only to householders. Between these two opinions there was much debateable ground; he did not think this a point of such essential importance, as some appeared to consider it, and in his opinion there would be sufficient security for good government if the Elective Franchise was extended no farther than to those who paid direct taxes, or who were fairly called householders. What he considered a point of much greater importance was, that to whatever classes the elective franchise might be given, the privilege should be fairly exercised by those classes (applause). They ought not to be in any degree influenced by those who were superior to them in rank or fortune. He did not deny to the higher classes the fair influence arising from talents, property and good offices, but he did deny to them the privilege of dictating to Electors in the exercise of the elective franchise. He did think it of the utmost importance that the elective franchise should be exercised in such a manner as to give the most complete security, that the votes given should be the real votes of the people. It was said by Mr. Fox in the House of Commons, that he should be a friend to Universal suffrage if he knew any mode by which the real votes of the people could be effectually obtained under such a system, but he objected to Universal Suffrage because he was satisfied that it would in reality give a greater power to the Aristocracy than it at present possessed. In that opinion of Mr. Fox, he (Mr. R.) should entirely concur, if he did not think that there was an easy and practicable mode of securing to the people the free choice of their Representatives. The mode he alluded to was that of secret suffrage, or what was commonly called voting by ballot (applause). By the establishment of such a system he was fully persuaded, that we should have a House of Commons which would fairly express the opinions of the people; and that no measures would originate in such a House of Commons which had not the good of the people for their object. It was to him a subject of congratulation that so small a change as this would secure to the people of this country all the blessings of good government. We were not in the situation of other countries, which in order to obtain those blessings were compelled to go through all the horrors of a revolution. We were so happily situated that nothing but a rational and practicable Reform was wanting to put us in possession of all the blessings we could desire. He knew, it was objected to them, that if they had such a House of Commons as this the Crown and the Aristocracy could no longer exist. He believed no such thing; he believed the people of this country were attached to their institutions. Let them have no motive for changing those institutions, and that attachment would remain. Englishmen were not naturally fond of change; they were not a fickle people; on the contrary, they rather endured abuses too long (applause). There was another security for good government, which he should have been sorry to have forgotten on this occasion. Our Parliaments should be frequently chosen (applause). Without frequent Parliaments there was no security for liberty. It could not be denied that we possessed in this country a good deal of practical liberty, though it was not administered in the way which would contribute most effectively to the happiness of the people. While a free press, and the privilege of meeting to discuss their grievances remained, even shackled as those privileges now were, this country could never be said to be entirely without liberty. The perseverance of the Electors of Westminster had set a great example to the rest of the country, and he trusted the time was not far distant when their firm, consistent, and persevering efforts in the cause of Reform would be crowned with success. The Honourable Gentleman concluded by giving ‘A full, fair and free Representation of the People in the Commons’ House of Parliament.’
TWO PAPERS ON PARLIAMENTARY REFORM
NOTE ON TWO PAPERS ON PARLIAMENTARY REFORM
These two papers were published posthumously by McCulloch in the Scotsman newspaper.
The Observations on Parliamentary Reform appeared in the issue of 24 April 1824, together with an editorial article which opened: ‘We shall be excused, we trust, for taking some pride, in being able to state, that our leading article of to-day is from the pen of the late Mr Ricardo; and when we have made this announcement, it is almost unnecessary to add, that, from what is due to the memory of the author, as well as to the public, the Essay has been printed verbatim, and without the alteration of a word or syllable, from the manuscript.’
McCulloch reprinted it, under the same title, in his edition of Ricardo’s Works, 1846, with the following note: ‘The manuscript of the following Essay on Parliamentary Reform was given by Mr Ricardo, a short time before his death, to Mr McCulloch. The latter, not thinking it right that so important a paper should be withheld from the public, printed it in the Scotsman of the 24th of April 1824.’
The Defence of the Plan of Voting by Ballot appeared in the Scotsman of 17 July 1824, which introduced it with the following paragraph: ‘The following Report of one of Mr Ricardo’s speeches in Parliament—most probably the one he delivered on the 24th April, 1823, in the debate on Lord John Russell’s motion—written in his own hand, was found among his manuscripts subsequently to his death. His friends have kindly communicated it to us, and we now publish it verbatim from the manuscript, without alteration of any kind whatever. Mr Ricardo was always a decided supporter of the system of election by ballot; and he has here stated, with that brevity, clearness, and comprehensiveness of view peculiar to himself, the grounds on which he approved of that system. We will not presume to say that Mr Ricardo has entirely obviated all the objections that have been urged against the ballot; but every one will readily allow that his defence of it is most able and ingenious, and that he has said almost all that can possibly be said in its behalf.’
McCulloch reprinted this paper, with the note, in his edition of Ricardo’s Works, under the title ‘Speech on the Plan of Voting by Ballot’.
Professor Cannan, referring to McCulloch’s supposition that this was a report of Ricardo’s speech on 24 April 1823 in the debate on Lord John Russell’s motion, says: ‘That McCulloch had not taken the most ordinary pains to verify a haphazard conjecture by referring to Hansard is shown by his use of the words “most probably”; that he had not taken the trouble to read the speech which he was reprinting is shown by the fact that it talks of “the Bill”, and is particularly addressed to criticism of two “clauses” in the Bill.1 If Hansard is to be trusted, it was never delivered.’2
Not only was the speech never delivered, but it appears that it was not written for delivery, having been almost certainly composed before Ricardo entered Parliament. The latest date for its composition is fixed by its allusion to the law ‘against the exportation of the coin’ as being ‘on our statute-book’.3 The law was repealed early in July 1819, and its existence could hardly have been used as an argument by Ricardo after 26 May 1819 when Peel’s Resolutions for the Resumption of Cash Payments, which recommended the repeal, were adopted by the House of Commons. Now, between February 1819, when Ricardo took his seat in Parliament, and this date, the question of Reform did not come before the House in any shape.
In 1818, however, when Ricardo was negotiating for a seat in Parliament, the question of Parliamentary Reform was a constant subject of discussion with his friends. In May he had daily walks with Mill in Kensington Gardens, and he wrote to Malthus ‘we could make a very tolerable reformer of you in six walks if your prejudices be not too strongly fixed.’4 Trower, when on a visit to London, joined in some of these walks1 and after his return to the country continued the discussion with Ricardo by letter. In August Mill went on a visit to Ricardo at Gatcomb and in September they were both in London for a fortnight, always continuing their discussions.2
A comparison of the Ricardo-Trower correspondence in the summer of 1818 with the Observations on Parliamentary Reform and the Defence of the Plan of Voting by Ballot points to the two papers having been also written in 1818. This is confirmed by a comparison with his later speeches on Reform, which he actually delivered in Parliament on 18 April 1821 and 24 April 1823;3 in these speeches he put forward proposals identical with those of the Observations and the Defence, but he omitted certain arguments which were relevant to the political situation of 1818 but would have been uncalled for in 1821 and 1823. Thus the argument in favour of the ballot in the letter to Trower of 27 June 1818 that ‘we should get rid of the disgusting spectacle of the lowest blackguards in every town assembling about the Hustings, and insulting in the grossest, and most cruel manner, those respectable candidates against whom their antipathies are excited’,4 which is echoed in the Defence of the Ballot,5 but not mentioned in the later speeches, was occasioned by the behaviour of the mob at the Westminster election in June 1818. Also, both in his letters to Trower of 1818 and in the Observations Ricardo finds it necessary to defend his proposals for Reform against the charge that, ‘by extending the franchise, you open the door to anarchy, for the bulk of the people are interested, or think they are so, in the equal division of property, and they would choose only such demagogues as held up the hope to them that such division should take place’6 —a danger which is not referred to in the speeches of 1821 and 1823. The fears entertained in the disturbed years 1818 and 1819 by ‘those who have property to lose’,7 had by that time largely disappeared.8
If the supposition that the two papers were written in 1818 is accepted, they may be identified as two of the ‘Discourses’ which Ricardo wrote at the instance of Mill as an exercise in speech-making before entering Parliament. In a letter of 23 September 1818, written from Bagshot and occasioned by the successful conclusion of the negotiations for Ricardo’s seat, Mill urges him to familiarise his mind with the things which must go to the composition of ‘good government’. ‘Then’ he writes ‘there will be no fear about the language in which your thoughts will spontaneously clothe themselves. Let those discourses, therefore, which we have so often talked about, be written without delay.’1 He then gives detailed instructions on the method of composition, and adds: ‘When the writing is done, you should talk over the subject to yourself. I mean not harangue, but as you would talk about it in conversation at your own table; talk audibly, however, walking about in your room.’ The discourses were to be sent to Mill, who would be ‘the representative of an audience, of a public’.2 By 26 October Mill had heard from Ricardo that he was about to begin writing,3 and by 18 November, having returned to London, he had received and read two discourses.4 A third discourse was written shortly after, according to a letter from Mill of 4 December, but does not appear to have been sent to Mill.5
The fact that the Defence of the Ballot is in the form of a parliamentary speech suggests that Ricardo wrote it for a fictitious debate on a Bill for the Reform of Parliament in which he imagined himself to be taking part,1 attributing to previous speakers the objections which were then current.2
Since the above has been in proof, the original MS of the two papers has been found with the Mill-Ricardo papers. It consists of a quire written over 38 pages in Ricardo’s hand, containing four items:
1. ‘Extract of a letter from Hutches Trower to D. Ricardo dated 18 Octr. 1818.’
2. ‘The answer to the above (dated 2d. Novr. 1818).’
3. Defence of the Plan of Voting by Ballot.
4. Observations on Parliamentary Reform (3 and 4 have no titles in the MS).
This combination confirms the conjecture that the papers were written in 1818.
Besides, from Ricardo’s letter to Mill of 8 November 1818, we learn that of the ‘two discourses’ mentioned by Mill on 18 November one was a copy of the letter to Trower of 2 November and the other ‘a subsequent paper which I have just written’. The latter we may suppose, from the sequence in the MS, to be the Defence. The Observations would then be the third discourse of which Ricardo thought so ill that, after announcing in his letter to Mill of 23 November 1818 that he was sending another of his ‘wise discourses’, he added in the postscript: ‘On looking over the papers which I was going to send you, I am so discontented with it that I cannot send it.’ In the end, however, he sent it: ‘yesterday I dispatched to you the paper on reform ... of which I was ashamed at the moment that I was about to enclose it.’ (Letter to Mill, 28 December 1818.)
The text printed in the Scotsman contains occasional changes in wording which, though slight, are not likely to have been introduced by the printer: this suggests that the two papers were printed from copies corrected by Ricardo or possibly by Mill or McCulloch. Therefore the text below adheres to that of the Scotsman, except for the correction of a few misprints.
OBSERVATIONS ON PARLIAMENTARY REFORM1
By the lateMr. Ricardo
A monarch, or any other ruler, wishes to have no other check on his actions but his own will, and would, if he could, reign despotically, uncontrolled by any other power. In every country of the world some check, more or less strong, exists on the will of the Sovereign, even in those Governments which are supposed to be the most despotic. In Turkey, and at Algiers, the people or the army rise up in insurrection, and frequently depose and strangle one tyrant, and elevate another in his place, who is checked in his career by a dread of the same species of violence.
The only difference, in this point, between the Governments of countries which are called free and those which are called arbitrary, is in the organization of this check, and in the facility and efficacy with which it is brought to bear upon the will of the Sovereign. In England the Monarch’s authority is checked by the fear of resistance, and the power of organizing and calling forth this resistance is said to be in the aristocracy and the people, through the medium of the two Houses of Parliament.
It is undoubtedly true that the Monarch would not long venture to oppose the opinion decidedly expressed by the House of Commons, and therefore he may be said to be checked and controlled by those who appoint the House of Commons. All great questions are decided in the House of Commons; the House of Lords seldom gives any opposition to important measures to which the other House has given its sanction. Nor, when the constitution of that House is considered, is such opposition necessary, for the House of Commons is not appointed by the people, but by the Peers and the wealthy aristocracy of the country. The really efficient power of Government is, then, in the hands of the wealthy aristocracy, subject, indeed, to an irregular influence which I shall presently explain. What is the consequence of this?— A compromise between the aristocracy and the monarchy; and all the power and influence which Government gives are divided between them. The Monarch has the appointment to all places of trust and profit—to the Ministry—to the army and navy—to the courts of law; he has also the power of appointing to many other lucrative situations, such as ambassadors, heads and subordinates of public offices, &c. &c. Notwithstanding this great power, his measures can be controlled by the House of Commons, and, therefore, it is of importance to Government to get a majority in that House.
This is easily obtained by giving a portion of these lucrative places to those who have the choice of the majority of the House of Commons; accordingly, it is well known that no means are so effectual for obtaining situations of trust and profit from the Crown as the possession of Parliamentary influence; and, as the appetite for lucrative places is insatiable, both in Ministers and their followers, and the oligarchy and their’s, places are often created for the men, and others are frequently continued after they have become unnecessary, for the advantage solely of these favoured individuals. If, then, there were no other check on both these bodies, England would not have to boast of a better Government than what exists in those countries in which it is called despotic. But, happily, there is another check, and that a tolerably efficient one, which is with the people, and would not, without a violent struggle, be wrested from them. The check on this Government, which operates on behalf of the people, is the good sense and information of the people themselves, operating through the means of a free press, which controls not only the Sovereign and his Ministers, but the Aristocracy, and the House of Commons, which is under its influence. This is the great safeguard of our liberties. Every transaction of the great functionaries of the state is, by means of the press, conveyed in two days to the extremities of the kingdom, and the alarm is sounded if any measure is adopted, or even proposed, which might in its tendency be hurtful to the community. This check, then, like others that we have been speaking of, resolves itself into the fear which government and the aristocracy have of an insurrection of the people, by which their power might be overturned, and which alone keeps them within the bounds which now appear to arrest them. The press, amongst an enlightened and well-informed people, is a powerful instrument to prevent misrule, because it can quickly organise a formidable opposition to any encroachment on the people’s rights, and, in the present state of information, perhaps there would not be found a minister who would be sufficiently daring to attempt to deprive us of it. This power, however, is irregular in its operation. It is not always easy to rouse the people to an active opposition to minor measures, which may be shewn to be detrimental to their interests—neither is it powerful, on ordinary occasions, in getting a repeal of those laws, which, however detrimental, have been long in force, and therefore it is in a certain degree braved. In spite of the thunders of the press men continue to be placed in parliament whose interests are often at direct variance with the interest of the people. The offices of state, and the lucrative situations under government, are not bestowed according to merit; bad laws continue to disgrace our statute-book; and good ones are rejected, because they would interfere with particular interests—wars are entered into for the sake of private advantage, and the nation is borne down with great and unnecessary expenses. Experience proves that the liberty of the press is insufficient to correct or prevent these abuses, and that nothing can be effectual to that purpose but placing the check in a more regular manner in the people, by making the House of Commons really and truly the representatives of the people. Of all the classes in the community the people only are interested in being well-governed; on this point there can be no dispute or mistake. Good government may be contrary to the interests of the aristocracy, or to those of the monarch, as it may prevent them from having the same emoluments, advantage, or power, which they would have if government was not busied about the happiness of the many, but chiefly concerned itself about the happiness of the few, but it can never be prejudicial to the general happiness.
If, then, we could get a House of Commons chosen by the people, excluding all those, whether high or low, who had interests separate and distinct from the general interest, we should have a controlling body whose sole business and duty it would be to obtain good government. It is not denied that, in innumerable instances, the interest of the aristocracy and that of the people will be the same, and therefore many good laws and regulations would be made if the aristocracy were to govern without control. The same may be said of the Monarch, but in many important instances they will also be opposed, and then it is that we shall look in vain for good laws and for good government. A reform in the House of Commons then, the extension of the elective franchise to all those against whom no plausible reason can be urged that they have, or suppose they have, interest contrary to the general interest, is the only measure which will secure liberty and good government on a solid and permanent foundation. This is so self-evident that one is surprised that an argument can be offered against it; but, to do the opponents of this measure justice, they do not advance any direct argument against it; their whole endeavour is to evade it.
A House of Commons such as you contend for, they say, would be a good, but how are you to obtain it? Has not the country flourished in spite of the imperfections you mention, and why would you wish to improve what is already demonstrated to be so good? The House of Commons is not chosen by the people generally, but it is chosen by men who have received a good and liberal education—whose characters are unimpeachable, and who are much better judges of what will conduce to the happiness of the people than they themselves are. By extending the franchise you open the door to anarchy, for the bulk of the people are interested, or think they are so, in the equal division of property, and they would choose only such demagogues as held out the hope to them that such division should take place. To which it may be answered, that although it be true that the country has flourished with a House of Commons constituted as ours has been, it must be shewn that such a constitution of it is favourable to the prosperity of the country, before such an argument can be admitted for its continuance. It is not sufficient to say that we have been successful, and therefore we should go on in the same course. The question to be asked is, notwithstanding our success has there been nothing in our institutions to retard our progress? A merchant may flourish although he is imposed upon by his clerk, but it would be a worthless argument to persuade him to keep this clerk because he had flourished while he was in his employ. Whilst any evil can be removed, or any improvement adopted, we should listen to no suggestions so inconclusive as that we have been doing well. Such an argument is a bar to all progress in human affairs.
Why have we adopted the use of steam engines? It might have been demonstrated that our manufactures had flourished without them, and why not let well enough alone? Nothing is well enough whilst any thing better is within our reach; this is a fallacy which can only be advanced by the ignorant or designing, and can no longer impose on us.
What signifies, too, the unimpeachable characters and the good education of those who choose the members of the House of Commons? Let me know what the state of their interests is, and I will tell you what measures they will recommend.
If this argument were good for any thing, we might get rid of all the checks and restraints of law, as far at least as they regarded a part of the community. Why ask from Ministers an account of the public income and expenditure annually? Are they not men of good character and education?
What need of a House of Commons or of a House of Lords? Are they to restrain the Sovereign? Why should you not place the fullest reliance in his virtue and integrity?
Why fetter the Judges by rules, and burden them with Juries? Is it possible that such enlightened and good men could decide unjustly or corruptly? To keep men good you must as much as possible withdraw from them all temptation to be otherwise. The sanctions of religion, of public opinion, and of law, all proceed on this principle, and that state is most perfect in which all these sanctions concur to make it the interest of all men to be virtuous, which is the same thing as to say, to use their best endeavour to promote the general happiness.
The last point for consideration is the supposed disposition of the people to interfere with the rights of property. So essential does it appear to me, to the cause of good government, that the rights of property should be held sacred, that I would agree to deprive those of the elective franchise against whom it could justly be alleged that they considered it their interest to invade them. But in fact it can be only amongst the most needy in the community that such an opinion can be entertained. The man of a small income must be aware how little his share would be if all the large fortunes in the kingdom were equally divided among the people. He must know that the little he would obtain by such a division could be no adequate compensation for the overturning of a principle which renders the produce of his industry secure. Whatever might be his gains after such a principle had been admitted would be held by a very insecure tenure, and the chance of his making any future gains would be greatly diminished; for the quantity of employment in the country must depend, not only on the quantity of capital, but upon its advantageous distribution, and, above all, on the conviction of each capitalist that he will be allowed to enjoy unmolested the fruits of his capital, his skill, and his enterprise. To take from him this conviction is at once to annihilate half the productive industry of the country, and would be more fatal to the poor labourer than to the rich capitalist himself. This is so self-evident, that men very little advanced beyond the very lowest stations in the country cannot be ignorant of it, and it may be doubted whether any large number even of the lowest would, if they could, promote a division of property. It is the bugbear by which the corrupt always endeavour to rally those who have property to lose around them, and it is from this fear, or pretended fear, that so much jealousy is expressed of entrusting the least share of power to the people. But the objection, when urged against reform, is not an honest one, for, if it be allowed that those who have a sacred regard to the rights of property should have a voice in the choice of representatives, the principle is granted for which reformers contend. They profess to want only good government, and, as a means to such an end, they insist that the power of choosing members of Parliament should be given to those who cannot have an interest contrary to good government. If the objection made against reform were an honest one, the objectors would say how low in the scale of society they thought the rights of property were held sacred, and there they would make their stand. That class, and all above it, they would say, may fairly and advantageously be entrusted with the power which is wished to be given them, but the presumption of mistaken views of interest in all below that class would render it hazardous to entrust a similar power with them—it could not at least be safely done until we had more reason to be satisfied that, in their opinion, the interest of the community and that of themselves were identified on this important subject.
This concession would satisfy the reasonable part of the public. It is not Universal Suffrage as an end, but as a means, of good government that the partisans of that measure ask it for. Give them the good government, or let them be convinced that you are really in earnest in procuring it for them, and they will be satisfied, although you should not advance with the rapid steps that they think would be most advantageously taken. My own opinion is in favour of caution, and therefore I lament that so much is said on the subject of Universal Suffrage. I am convinced that an extension of the suffrage, far short of making it universal, will substantially secure to the people the good government they wish for, and therefore I deprecate the demand for the universality of the elective franchise—at the same time, I feel confident that the effects of the measure which would satisfy me would have so beneficial an effect on the public mind, would be the means of so rapidly increasing the knowledge and intelligence of the public, that, in a limited space of time after this first measure of reform were granted, we might, with the utmost safety, extend the right of voting for members of Parliament to every class of the people.
But it is intolerable, because the House of Commons is not disposed to go the full length of what is perhaps indiscreetly asked of them, that therefore they should refuse to grant any reformation of abuses whatever; that against the plainest conviction they should assert that a House of Commons, constituted as this is, is best calculated to give to the people the advantages of good government; and that they should continue to maintain that the best interests of the people are attended to, when it is demonstrated that they not only are not, but cannot be, whenever they are opposed to the interests of those who are in full possession of power, namely, the King, and the Oligarchy, who are bribed to support his government.
DEFENCE OF THE PLAN OF VOTING BY BALLOT1
By the lateMr. Ricardo
Sir—The general question of a reform in the representation of this House, has been so fully discussed, and so ably supported by many honourable gentlemen that have preceded me in the debate, that I shall not detain the House by offering any observations on it, but shall confine myself to the consideration of that part of the subject, which has been little noticed, but which, in my opinion, is of so much importance, that, without it, no substantial reform can be obtained:— I mean, Sir, the changing the present mode of open election for members of Parliament, and substituting in its room the secret mode, or ballot.
In order to appreciate the advantages which will result from the proposed change, it may not be improper to state, as briefly as possible, to the House, the inconveniences attending the present mode of election; that, having the nature of the evil before them, they may be the better able to judge of the efficacy of the proposed remedy. By some, indeed, it may be thought a vain and useless occupation of the time of the House to recapitulate the evils of our present system, for it may with justice be asked, who amongst us is not acquainted with the bribery, the riots, the intoxication, and the immoralities of every description, which take place on the occasion of every general election? These disgusting facts are unfortunately too notorious, yet it may not be unuseful to submit them to the attention of the House.
The scenes which occur at such times, would disgrace a barbarous people. The reign of the law appears to cease, and impunity to be proclaimed for every species of violence. A rude and brutal populace, the offscourings of our population, surround the hustings, and heap every sort of insult and indignity on the candidate who happens not to enjoy their favour. Dirt, filth, and often stones, are thrown at him—the most unmanly attacks are made upon his person, and it is frequently a task of difficulty to his friends to protect him from the effects of their savage and brutal animosity.
Nor is it the candidate only that is thus exposed to their rage, but every elector is applauded, or hissed, caressed, or furiously attacked, as he may favour or oppose by his vote, the favourite of the mob. Idleness and the neglect of work always follow in the train of an election—they are succeeded by debauchery and intoxication, and for a period the country suffers under all the evils of anarchy. I know that these violences are in almost all cases committed by the lowest of the mob, that they are not to be imputed to the electors themselves, but to the assemblage of the idle and disorderly which every great town affords, but the evil is not less serious on that account, and does not less imperiously call on us for a remedy.
These, however, constitute but one portion, and indeed a very inferior portion, of the evil which attends the present mode of election. Bad as it is, if even at this price we obtained a parliament freely chosen by the people, we should have some consolation, although it would be our duty to endeavour to retain the good, and get rid of what was bad in the system. But this consolation is not afforded us, and in addition to the evil which I have already mentioned, we have the far greater one to guard against, which arises from the influence exercised over the voters at elections. Of what use is it to mark with precision how low in the scale of rank the right of voting for members of parliament shall commence, if you take no steps to secure to the electors the right which you propose to accord to them? It is the most cruel mockery to tell a man he may vote for A or B, when you know that he is so much under the influence of A, or the friends of A, that his voting for B would be attended with destruction to him. He cannot justly be said to have a vote, unless he have the free exercise of it, without prejudice to his fortunes. Is this the case at present? Is it not a delusion to say that every freeholder of 40s. a year has a vote for a member of parliament, when in most cases he cannot vote as he pleases, without ruin to himself? It is not he who has the vote, really and substantially, but his landlord; for it is for his benefit and interest, that it is exercised on the present system. Of what advantage would be the reform that is proposed, of extending the elective franchise to all householders, or as others recommend, to all males of twenty-one years of age, if this increased number of electors were to be, as they now are, completely under the influence of the same men, or of men having precisely the same views and interests, as those who play so grand a part in returning members to parliament? The more extended the suffrage, the more influence would be possessed by Peers, and the wealthy aristocracy of the country, and therefore the more certainly should we have a parliament which would be their representatives, and the advocates of their particular interests, and not of the interests of the great mass of the people. In many populous cities, householders are now said to have votes for the representatives of their city; but are not the cases numerous in which they dare not openly exercise the right? Is it to be expected that they will expose themselves to a resentment which will overwhelm them, whether it be from their best customers, the rich consumers, if they are shopkeepers,—the magistrates, if they are publicans,—their employers, if they are clerks, and in subordinate situations,— or any other class, who may be supposed to have an influence over their property? By extending the suffrage, an additional security is afforded against bribery, because the greater the number of electors the more difficult will it be to provide funds for the purpose of directly influencing votes by means of bribes. But it must not be forgotten that bribery is only one of the modes, and by no means the most efficacious mode, by which voters are influenced. Mr. Bentham’s sagacity did not fail to discover that terror was the great instrument of influence and corruption. Votes are more effectually secured by the fear of loss than by the hope of gain. Those whose characters afford security against the offering of bribes, and who would think themselves disgraced by a practice which is universally condemned, do not disdain to make use of the persuasive instrument of fear. In its operation it is silent— it is not necessary to proclaim to the voter the danger which he runs of disobliging his landlord, or patron; it is understood without explanation, and no one who hears me, can doubt of its powerful effects on every occasion. Although, then, by extending the suffrage you weaken the corruptive effect of bribery, you increase that which is produced by alarm and fear, for in proportion as the fortunes of the voter are more humble, the more surely will he be under the influence of those who have the power to sway those fortunes. Happily a security can be found against this influence, but if it could not, I should deem that an improvement which should raise the qualification, and limit the number of voters; for the chance of finding an independent spirit in electors would be increased, if the qualification was raised to £100 per annum, rather than if it continued as it is, or were lowered below 40 shillings. These, then, are the evils against which we have to provide, and the House will readily perceive that those which arise from riots, intoxication, and idleness, are of a different description from those which are the consequence of undue influence exercised over the minds, directly or indirectly, of the electors; and accordingly the bill before you offers two distinct remedies. To obviate the first evil, it is proposed to take the votes throughout the country on the same day, and, instead of the elections being for the whole of a county, and held in one single place, that votes be received in several districts at the same time. To obviate the second, it is proposed that the ballot, or the secret mode of election, be substituted for the open mode.
These two propositions are very distinct, and they should not be, as they often are, confounded; for one might be rejected, and the other adopted. Those, for example, who are of opinion that the public and noisy assemblage of the rabble about the hustings is attended with benefits outweighing the evils which have been stated, might reject that clause which proposes to take the votes by districts, but might nevertheless adopt the other which requires that the election should be by ballot. The people might assemble about the hustings as they now do; they might listen, or not listen, to the speeches of the candidates as their humour might dictate; they might shew all the usual marks of their sympathy or disapprobation, and yet the voting might be secret; and, on the contrary, those who are in favour of open voting, might approve of votes being given in districts, although they rejected the ballot.
According to the best judgment which I can form on this important subject, we ought to adopt both these clauses. That respecting time and place of voting will give us sufficient security against the disgusting exhibitions and riotous proceedings which have hitherto attended elections. Through the medium of the press, the candidate may make known his pretensions; through the same channel, objections may be made to his principles, or to his former conduct—the press is open to all, and the candidates would no longer be subjected to an ordeal which is not a test of merit but of endurance. Because a man has the honest ambition of representing a populous city in Parliament, must he make up his mind to endure all the insults which can be heaped upon him by the lowest of the rabble? It is said, that it is fit his claims should be examined into,—that without preparation he should be called upon immediately to explain what has been ambiguous in his former conduct;—what are his principles on the grand questions which are likely to be submitted to him; and, that he should be called upon to speak on any other matters which may be proposed to him. This might be useful if he presented himself before an impartial tribunal, but those who make this objection, are bound to shew that candidates on both sides are fairly listened to, and that even the semblance of justice is extended to them. One of the arguments now offered in favour of the borough system, and it is one of considerable weight, is, that without such boroughs, many men of merit would never be in Parliament—and why? because they are troubled with modesty; and with the feelings of gentlemen, which makes it intolerable to them to submit to the injustice, the insolence, and the insults of the lowest of the rabble. That we may be sure of the services of these men, then, I demand that this clause be adopted. These public meetings, it has been said, are useful in giving a tone to public feeling, and raising the lowest of the community in his own estimation, by making him feel that he has a share in the government of his country. Can he be said to have this share if he is without a vote? Does he show his importance by spitting at the candidate, by throwing dirt and filth in his face? This is not calculated to raise him in his own estimation; and if it be right that he should have a voice in the government of his country, give him that voice, and allow him to exercise it legally on the same terms with the first elector in the land, but do not delude us or him, by giving him the shadow, and calling it the substance of power!
The other clause, namely, that which establishes the ballot, appears to me to offer complete security against those evils which flow from the influence of power. If voting took place by ballot, all the influence now practised on voters would, in a great measure, cease; for, to what purpose would you threaten a man for the vote he should give, or how could you punish him for it when given, if by the regulation you were absolutely precluded from knowing for which candidate he voted? Establish the ballot, and every elector is from that moment in possession of a real and not of an imaginary privilege. Of what use would it be to threaten a publican with the loss of his licence, a farmer with the deprivation of his lease, a tradesman with the loss of your custom, when you can never know how he voted, unless he chose to communicate it to you? The elective franchise, if it should be thought expedient, might be extended. The very extension would secure you from direct bribery, for no fortune would be equal to bribe a nation of electors, and terror would cease to operate, for it would be in vain to endeavour to mark the victims. An honourable gentleman has said, that if the ballot were established it would not prevent candidates and the friends of candidates from endeavouring to get the promise of votes, and then he observes, that if the electors keep their promises, there will be no advantage from the ballot, as they will vote then precisely as they do now; but if they do not keep their promises, they will be guilty of an immoral act, which may justly be charged on this law. It is the latter proposition only which I am called upon to answer, for if the voters give and keep their promises, no objection can be made to the ballot on that account; it may be said to be useless, but cannot be proved to be pernicious. And with respect to the immorality of not keeping promises, the guilt would lie with those who exacted such unlawful promises. To make a promise of a vote which could not be conscientiously given, would be a crime, but it would be a still greater crime to keep it. The promise is unnecessary upon any other supposition than that of its not being right to perform it. What occasion to exact a promise of any man to do that which his own interest will lead him to do? and in giving his vote he is called upon by duty to act in conformity with his own interest. It may be expedient to instruct such a man, to enlighten him on the subject of his real interest, but here our efforts should cease, and we become criminal if we induce him to act contrary to the dictates of his own conscience, and, instead of condemning him for breaking a promise so criminally exacted and given, the most enlightened morality would teach and require that such promises should be violated. The law does not recommend or encourage any species of crime or immorality,—it is enacted with a view to correct an evil which is an insurmountable bar to good government; it requires that every man shall vote according to his conscience, without any deceit or subterfuge; and shall such a law be given up, because the enemies of good government may take advantage of the respect with which men ought to regard their promises, in order to subvert it. If the end we have in view be good, we must not be diverted from our purpose by any partial evil which may attend the means by which we are to attain it. All punishment is an evil, but is justified by the good end which it is to accomplish. It might much more rationally be objected to the excise laws, that they should not have been enacted because they offer temptations to crimes which would not have been committed but for those laws. And what shall we say of the laws against usury, and against the exportation of the coin? The end of these laws is bad—they are binding only on the conscientious, and have opened a wide door to the commission of the crimes of fraud and perjury. With these laws on our statute-book, are we to be discouraged from making one, which has the happiness of the people for its object, because it would be immoral (as it is alleged) to break a promise unlawfully and immorally exacted. But supposing that the breaking of such promises were immoral, would the practice be of long continuance? Would any man persevere in exacting promises, when he found by experience that the promisers did not consider them binding? He would not be tempted to continue an offence with great trouble to himself, as soon as he found that it was unattended with advantage. The immorality, then, to whomsoever it might attach, would soon be at an end; and the law would be efficacious without even this alloy.
One Hon. Gentleman has observed, that he is prepossessed in favour of open voting, without being able to give any reason why he prefers it. To that Hon. Gentleman I might answer, that I have a different prepossession from him, and the instinct of my mind would be just as good, as an argument, as the instinct of his. In fact one mode of voting can be preferred to another only as means to an end, in themselves they are alike indifferent.
To conclude, Sir, the establishment of the ballot would make this House what it ought to be, the real representatives of the electors, and not the representatives of those whose situation gives them a commanding influence over the will of the electors. I am not now considering whether it would be desirable that the elective franchise should be extended, kept on its present footing, or contracted within narrower limits, for on any of these suppositions, the ballot appears to me to be equally expedient. Whoever may be the electors, the representatives should represent them, and their interests, and not those whose interests may, on many occasions, be in direct opposition to theirs.
DRAFT OF A LETTER TO A NEWSPAPER ON THE EFFECTS OF PEEL’S BILL
[After the meeting at Hereford in his honour (see above, p. 471), Joseph Hume went to Monmouth where he was admitted a freeman of the borough on 10 December 1821. A brief report of the proceedings was given in The Times of 17 December. Ricardo was not present on this occasion, when some of the speakers attacked him for his currency plan to the operation of which they attributed the fall in the prices of agricultural produce.
The following draft letter was intended for an unidentified newspaper which had reported those speeches: there is no evidence of its having been published or even sent.
A similar reply to the same attacks is in Ricardo’s letter to McCulloch of 3 January 1822; the latter used it as material for an article in the Scotsman (see below, IX, 140, n. 2).
The MS, in Ricardo’s handwriting, is in the Mill-Ricardo papers.]
In your account of what passed at the meeting at Monmouth when Mr. Hume was admitted a member of the Corporation of that city it appears that Mr. Moggridge and Mr. Palmer entered pretty fully into the question of the effect which had been produced on the circumstances of farmers by the operation of Mr. Peel’s bill passed in 1819 and Mr. Palmer in particular alluded to the opinion on that subject given by Mr. Ricardo at various times—he said that1
It appears to me Sir that the effects ascribed by those gentlemen to Mr. Peel’s bill by the great rise which has been occasioned in the value of money should rather be ascribed to a great fall in the value of the commodities of which they were speaking viz. Corn, cattle and the other raw produce of the earth. It is at all times exceedingly difficult when two commodities alter considerably in relative value to determine accurately to the alteration in the value of which it is principally to be ascribed, and the least which those gentlemen could have done would have been to have given their reasons for thinking that since 1819 gold had risen so enormously in value as they contended for. It must be recollected that gold is a commodity as well as corn and cattle, and that its price is equally operated upon by the rise and fall in the value of paper money not regulated by any standard. Mr. Palmer cannot deny that in 1819 when Mr. Peel’s bill [was passed]1 a quarter of wheat sold for 2 in paper money, at the same time it sold for £ in gold or for penny-weights in gold. At the present time a quarter of wheat sells for £ in gold or for pennyweights in weight. What is the cause of this difference,—it is owing entirely to the alteration in the value of gold say Mr. Moggridge and Mr. Palmer. I want to know to what cause they ascribe this alteration in the value of gold and on this subject they are silent, they give us no satisfaction whatever. If the question had been asked them at the Meeting when they delivered their opinions they would probably have said it is owing to the contracted quantity of paper currency,—but this would have been far from a satisfactory answer, for they were bound to shew how the contraction of a paper currency acted on the value of gold. Mr. Palmer alluded to the opinions given [by]3 Mr. Ricardo in the following terms—I regret that Mr. Ricardo was not present to answer for himself, but I think it would not be difficult to justify the opinions which were attacked. It will be recollected that Mr. Ricardo wrote a pamphlet to shew that a currency might be regulated by a metallic standard without the use of any other metal as money but silver and copper the latter for payments under a shilling the former4 for payments under a pound. For this purpose Mr. Ricardo proposed that the Bank should be obliged to give gold in bullion in exchange for their notes if of a certain amount on the demand of the holder of them. It was with reference to this plan that Mr. Ricardo was examined before the Committee on Bank Affairs and it is probable that seeing there was no necessity for the use of any gold in the circulation and being satisfied that the Bank had a sufficient quantity of that metal to answer all the demands that could be made on them on such a system of currency he answered that Did Mr. Ricardo mean by this that gold itself could not thereafter vary, and that if it did the currency which was to be1 regulated by the value of gold would not vary with it? quite the contrary, it is evident from the whole of the reasoning of the pamphlet in question that he considered gold as a variable commodity, as well as corn or any other merchandize, but his argument was, “adopt my system which will render all demand for gold unnecessary, and will therefore probably be unattended with any variation in the value of that metal, and then the whole variation in the value of money will be only equal to the difference between the value of paper and the value of gold or 5 pct.. You can now buy a quarter of corn with as much gold as is coined into £ for the same quantity of corn you are obliged to give £ in bank notes. Diminish the quantity of bank notes and you will raise them 5 pc. in value and when this is effected you will obtain a quarter of corn for £ in paper as well as in gold—the price of corn in gold will not be altered, its price in paper2 will fall 5 pct..” it is for Mr. Palmer to shew what is defective in this reasoning. Mr. Ricardo could not mean to say that no variation should thereafter take place in the value of gold, he must have known full well that the currency of every country regulated by a metallic standard was liable to all the variations of that standard. In Mr. Ricardo’s speeches on Mr. Peel’s bill, to which reference has been made, he said that we should be still liable to have our currency vary in proportion as the metal varied which was the standard, but that this was an inconvenience to which all metallic currencies were exposed—it was one to which France, Holland, Hamburgh and all those countries whose currencies were on the most solid system were exposed, and no case could even be imagined to exempt a currency from such variations.—It may be said that this is a good defence for Mr. Ricardo’s evidence before the committee, when he had reason to think that his plan was the one contemplated respecting the operation of which only he was examined, but it is not equally good for the opinion which he afterwards expressed in his speech when he had seen Mr. Peel’s bill and which was essentially different from his proposed plan as it provided for payments in coin in 1823 and therefore made a demand for gold obviously necessary and the rise of its value certain. To this Mr. Ricardo would probably answer that he saw no such obvious necessity for the demand for gold— that as he understood the bill no specie would be necessary till May 1823 four years distant from the time of discussion and he might confidently reply that if for 3 out of these 4 years his plan had a fair trial it would be found so efficient for all the objects of the most improved currency that the legislature would have altered the law and dispensed with specie payments altogether: In the speech to which allusion has been made I recollect he advised the Bank to sell gold instead of buying it so little did he think the quantity actually in the possession of the Bank inadequate for all the purposes of bullion payments.
Mr. Ricardo cannot fairly be held responsible for the narrow views, and obstinate prejudices of the Bank of England. He could not contemplate that the Bank would so narrow the circulation of paper as to occasion such a rise in its comparative value to gold and the currencies of other countries as to make the influx of gold into this unexampled in amount. He could not foresee that they would immediately provide themselves with so large a1 quantity of gold coin as to make it incumbent on them to apply to the legislature to permit them to withdraw all their small notes and fill the circulation with gold coin even so early as the middle of 1821—this is what Mr. Ricardo could not anticipate—he relied on there being no demand for gold and the Bank by their injudicious measures occasioned a demand for many millions. He supposed that the reverting from a currency regulated by no standard, to one regulated by a fixed one, the greatest care would be taken to make the transition as little burthensome as possible, but the fact is that if the object had been to make the alteration from the one system to the other as distressing to the country as possible no measures could have been taken by the Bank of England so well calculated to produce that effect as those which they actually adopted.
In saying this it must not be supposed that I agree with Mr. Moggridge and Mr. Palmer that any thing like the effect which they compute has been produced on the value of the currency by reverting to specie payments. I am of opinion with Mr. Ricardo that if the Bank had followed the obvious course of policy which they ought to have pursued this great measure might have been accomplished with no other alteration in the value of money but 5 pct., but by the course which they did adopt and the demand which they in consequence occasioned for gold bullion they have raised the value of that metal about 5 pct. more and consequently that the whole alteration in the value of the currency since 1819 has been about 10 pct.. My reason for thinking that the demand for gold has caused a rise of 5 pc. in that metal is nearly the same as that expressed by Mr. Tooke in his evidence before the Agricultural committee. This rise in the value of gold it must always be remembered is not confined to this country, it is common to all, and if the standard of all were gold and not silver, the money of all would have varied 5 pct.. What cannot be too often insisted on is that that paper money has only increased in value 5 pc. more than gold—it could not have increased more because it is now on a par with gold and in 1819 and for 4 years before 1819 had not been depressed more than 5 pc. below gold. When Mr. Palmer says therefore that money has altered 50 pct. in value in consequence of Mr. Peel’s bill he must mean that Paper money has risen 50 pct. and gold bullion 45 pct.. If this be true all commodities in this country as well as in every other ought to have varied 45 pc. as compared with gold—Does he or any other man believe this to be the fact? Are the people of France, Germany, Italy, Spain, Holland and Hamburgh obliged to give nearly double the quantities of commodities for the purchase of a given weight of gold. Can the Stock holder with the same money dividend procure double the quantity of all the commodities he desires—it is notoriously otherwise and how men with such good understandings as Mr. Moggridge and Mr. Palmer can be made the dupes of such an absurd theory I am at a loss to conceive.
That raw produce is frightfully depressed no one can deny but that this depression is either wholly or in any very great part occasioned by the rise in the value of money is not made out by any plausible arguments. Corn and raw produce are not exempted from a fall of value more than other commodities and if it be true that they have fallen 50 pct. 40 of that 50 pct. fall is entirely owing to causes which have operated on their value. Such variations are by no means uncommon. In 1792—wheat was at 39/- in 1800—134/- 1804 52/- 1808 81/- 1812 140/- 1814 67/- 1816—53/- 1817—109/- and it cannot be pretended that these variations were occasioned by the altered value in money. That some part of these variations may be imputed to variations in the value of money is not disputed, but while money varied 10 pc. corn varied 100 pc. and why may not the same have occurred now. Those who deny this are bound to give some reason for their opinion— hitherto they have given none.
NOTES ON WESTERN’S ‘SECOND ADDRESS TO THE LANDOWNERS’, 1822
Amongst the pamphlets from Ricardo’s library which are in the Goldsmiths’ Library of the University of London, there is a copy of the Second Address to the Landowners of the United Empire, by C. C. Western, Esq., M.P., second edition, London, Ridgway, 1822, which is annotated by Ricardo.1 The pamphlet was first published late in 1822, when Ricardo was on his continental tour;2 by the end of the year, when Ricardo returned to England, a second edition had appeared; and his notes must have been written after his return.3
The pamphlet contains a violent attack against Peel’s Act of 1819 and against the supporters of the resumption of cash payments. It was referred to by Ricardo in a speech on Western’s motion respecting the resumption of cash payments, on 11 June 1823 (above, p. 317 ff.), when he replied to Western’s accusations.
Ricardo’s notes are written on the margins of the pamphlet and have been partly cut off by the binder. They are here printed in italics.
Ricardo’s first comment is occasioned by Western’s discussion of the ‘inconsiderate and hasty course’ which led to the resumption of cash payments in 1819, as proposed by Peel’s Committee. ‘Of the probable consequences of such a course upon the general prosperity of the country,’ writes Western, ‘the Committees of the Lords and Commons, incredible as it may appear, not only made no adequate enquiry, but seemed purposely to turn their backs upon information tendered, and prophetic warnings given by persons who possessed the fairest claims to attention.’ (p. 5.) Ricardo notes: ‘This Committee recommended a recurrence [to]1Cash payments after a period of 4 years. When [they] did so gold was £4.2.—pr. oz. Mr. Western sup[por]ted a measure which was to make us recur to Cash [payments in a single day] altho’ gold was then £4.15.—p[r. oz.]’.2
Western then discusses the effects upon the agricultural situation of the measures respecting the currency: ‘Peel’s Bill, I say, is the sole cause of our excessive and unparalleled distress. [Ricardo underlines ‘sole’ and notes: ‘Take notice sole cause! ’] It is not that abundant harvests may not lower the price of corn occasionally to some degree of temporary injury to the growers; but no human being ever heard before of their being ruined by the blessing of Providence on their labours.... It is not a ruinous abundance of corn, but a destructive famine of money that is the bane of the country’ (pp. 6–7). Ricardo notes: ‘See Mr. Western speech 1 March 1816, in which he shews the effects of abundance on price.’3
Western’s remedy is the revision of Peel’s Bill of 1819 and the lowering of the standard, in order to obtain a more abundant currency. The effect would be an advanced money price of commodities, but, he asks, what mischief therefrom? ‘The mortgagee would prefer paying higher for his wheat, and his mutton, &c. with the continuance of an interest of five per cent. for his money. The fundholder would enjoy in security, and upon a good title, what he possessed, instead of risking it by a robbery of the public [Ricardo notes: ‘[R]obbery!’], which can be retained only by force, and not by right. The labourer would again perceive that his labour, which is his property, had some value [Ricardo twice underlines ‘some ’ and notes: ‘[H]as it no [v]alue now? ’]; he would soon find an eager demand for it in the market; and wages, like all other commodities for which there is an increasing demand, would experience a consequent advance.’ (p. 24.) Ricardo notes: ‘[W]hy should an [al]teration in [the] value of [mo]ney cause [an] increased [de]mand for [la]bour? ’
Western quotes Hume in his support: ‘Give us a sufficient currency, and we should be in the situation which Mr. Hume in his Essay upon Money, written nearly 100 years ago, describes a country in which money began to flow more abundantly. “Every thing,” he says, “takes a new face—labour and industry gain life— the merchant becomes more enterprising—the manufacturer more diligent and skilful—and the farmer follows the plough with more alacrity and attention.” ... We are in the situation in which Mr. Hume, contrasting his former picture, shews us, of a country in which the quantity of money is decreasing. “The workman,” he says, “has not the same employment from the manufacturer and merchant—the farmer cannot sell his corn and cattle—the poverty, beggary, and sloth thatmust ensue, are easilyfore-seen.”’ (pp. 24–5.) Ricardo notes: ‘An erroneous view of Mr. Hume’.
On Western’s incidental remark, that ‘A further increased quantity of currency has recently taken place by the advance of about two millions to the Government by the Bank, to make the payments to the 5 per cent. creditors’ (p. 26), Ricardo notes: ‘[Id]eny [t]his.’
Western then considers the question whether the people at large would be sufferers from the rise in prices consequent upon the suggested abundance of money. He admits that when high prices are the consequence of scarcity, they must be ‘considered amongst the most severe inflictions to which a people are subject’ (p. 31). But, ‘High price from abundance of money is purely nominal; as if shillings were rained down from heaven, it would very soon require a great number of them to purchase a loaf of bread, and the price would be high; or if sixpences were proclaimed to be shillings, we should nominally pay as many shillings as we do now sixpences. But from high price so caused, or rather low value of money, no evil follows, no alteration of course takes place in the relative proportion of food, to the number of mouths there are to consume it. The bulk of the people must have an increased quantity of money, before the sellers can obtain the higher price, the demand of the opulent classes being too trifling, hardly indeed varying at all. I have often wished that some of those persons, who keep up the fallacy respecting a high money price, would tell me why the people should not be able to obtain as ample a share of the larger quantity of money as of the smaller; this is the point, which if truth were their object, they would see they were bound to make out, and for their own credit, I earnestly invite them for once, at least, fairly and calmly to make the attempt.’ (p. 31.) Ricardo notes: ‘I do not dispute the principle here laid down but I ask in my turn what injury the people w[ould] suffer if the quantity of money was reduced o[ne] half or three fourths. It is entirely a question.’1
Western continues: ‘Now when debts and taxes are considered, the advantage of a high money price becomes as apparent as the destructive consequences of the lower measure of value are now....The farmer with 40s. for his quarter of wheat, and the labourer with his 8s. per week, must feel the excessively increased difficulty of paying the same taxes as they did when the wheat produced 80s., and the labour 16s. The former are indeed sinking under it, and their labourers participate, as of necessity they must, in the distress of their employers. The renewed burnings in many parts of England, with the resolutions of societies of farmers, published in the newspapers, against the use of thrashing machines, are sufficient proofs that the agricultural labourers are reduced, in those districts at least, to a state of acute misery.’ (pp. 31–2.) Ricardo notes: ‘very sophistical. When wheat is at 40/- the labourer will not receive the same money wages as when it is at 80/-. If the real value of the farmer’s taxation as a grower be increased he can [pass on] that increase to the consumer.’
Western gives an illustration to show that the effect of a rise in the value of money on debtors is out of proportion to the effect of a fall upon creditors: ‘suppose a man with an income of two hundred per annum, arising from the efforts of industry in the production of any species of commodities, and that a portion of his capital is borrowed, the interest of which amounts to one hundred per annum—raise the value of money one half [Ricardo underlines the last seven words and notes: ‘Do you not mean, “double the value of money? ”’], his commodities can only return half their money price, that is to say, one hundred pounds per annum, and this industrious man is obviously left wholly destitute; but this is not all—the creditor receiving only, it is true, the same nominal sum, nevertheless obtains that which enables him to possess himself of twice the quantity of the industrious man’s commodities; in truth he seizes the whole property of his debtor: now lower the value of money and let us see what follows; the industrious man pays the debt with half the quantity of his commodities, their money value being doubled, and his creditor retaining the same nominal sum, can only command half of them; this is horrid injustice: but the man is not left destitute; he retains half his income; there is exactly the difference between the half and the whole’ (p. 34). Ricardo notes: ‘Because the degree of variation is less. In one case you raise the value of £1- to £2- in the other you lower the value of £1- to 10/-’1
Western proceeds: ‘As to calculating the effects of raising or lowering the value of money, without reference to debtors and creditors, it would be absurd; because we know the vast extent of public and private debts, and because all our national establishments, civil and military, are charges upon national industry, and as such, operate as debts; the Monarch and the private soldier, the First Lord of the Treasury, and the lowest Clerk in office, are alike in the predicament of creditors; they suffered by lowering the value of money, but were not ruined [Ricardo notes: ‘fallaci[ous]’]; their suffering was acknowledged and alleviated, if not removed, but they are now, in conjunction with public and private creditors, absorbing the entire fruits of the industry of the country’ (p. 35).
There are no comments on Western’s text after p. 35, but Ricardo underlines certain passages (as reproduced below) which are obviously directed against himself. It is to these charges that he replied in his speech of 11 June 1823 (above, p. 317 ff.).
‘The more I reflect upon the state of this country, its immense public debt and taxes, its unrivalled complication of private debts and engagements, the more I am astonished that the idea should ever have suggested itself to the mind of any Statesmen, to raise the value of the money in which they were created; the measure certainly owes its origin, in chief, to men who were gainers or expectant gainers by it; namely, Ministers receiving salaries from the public, others who wish to be Ministers, and some great monied proprietors were called in, who were supposed to be specially qualified to advise upon such a subject. Difficult, however, as it is to account for such an extraordinary proceeding, I do not entertain a suspicion of any selfish motives on the part of the Ministers or their rivals; and I try to believe the same of the great monied men; but when I see public creditors and mortgagees swallowing up the rents of the landowners, the profits of the tenant, and the general fruits of industry, it requires the fullest effort of charity to believe they did not intend it; if we allow them to be honest, they must all of them be content to be regarded by us sufferers, as extremely ignorant of the subject they not only pretended fully to understand, but exclusively to be the only competent judges of. They told us at first that Peel’s Bill would only produce a difference of three or four per cent. in the money price of commodities; they have now nearly admitted its operation to the extent of fifteen or twenty, which of itself must be allowed to be proof sufficient of ignorance at all events: but the actual amount of degradation is in fact much nearer fifty per cent. than twenty.’ (pp. 36–7.)
‘Some of you have estates which were in cultivation centuries ago, and which now yield nothing: to preserve them in cultivation at all, without any rent, is in various instances actually a burthen. [Ricardo writes three exclamation marks on the margin.] ... Why will you not investigate the question? why give up the exercise of your own understanding? why surrender up common sense to the parade of science? Believe me, the economists and bullionists are not gifted with more sense than other people, though they have more pedantry; their confidence and pretensions are imposing certainly, and I do believe have imposed upon some of our more ingenuous Statesmen; but the mist in which they have involved the subject is disappearing, and the dreadful consequences brought upon us by their advice are fully exposed to view; the practical illustration before our eyes of the terrible mistake the Government has been led into, can hardly longer be denied.’ (pp. 39–41.)
‘No. 5 [of the tables in the Appendix] shews the amount of undue gain of the public creditors, by the alteration of the currency through Peel’s Bill, and which is a distinct breach of faith on the part of the Government towards the people of this country, and a palpable robbery. It really appears to me, that our Statesmen, on either side the House, evince by their conduct, a want of any just comprehension of faith towards the public, who pay taxes. I should have thought their first care, at all events the first care of the House of Commons, should have been, that the public should not pay morethan they borrowed.It is hardly denied by any body, that, at this time, the public are compelled to pay substantially, to the extent of twenty or twenty-five per cent. more than they borrowed, and not one word of complaint is uttered by those guardians of the public purse. It is only for the creditors, and all who receive taxes, that they appear solicitous; and for the preservation of sacred faith towards whom, we hear so much canting declamation.... If these observations find their way to the public, I shall of course undergo the censure of those arrogant pretenders to exclusive good faith; but it is high time to speak out, or we shall be inevitably crushed.’ (pp. 44–5.)
Western reprints in an Appendix a ‘Letter upon the Cause of the Distress in Ireland’, to the editor of the Dublin Morning Post, signed ‘A Native of Connaught’ and dated ‘Killcongoll, July 15, 1822.’; on this letter Ricardo comments: ‘According to this letter, the ruin of the poor tenant is caused by the increased value paid to some of the persons who have an interest in the land. If he retain less of the produce they get more—this will not account for scarcity in the country, nor for the high price of potatoes. What I contend for is that there is no anomaly in a glut of wheat from abundance, and a starving population, when that population lives exclusively on the potatoe.’
[1 ]The petition had been drawn up by an acquaintance of Ricardo, the Unitarian minister Robert Aspland; it was signed by 2,047 members of Christian congregations, of whom 98 were ministers. See Memoir of the Life, Works and Correspondence of the Rev. Robert Aspland, of Hackney, by R. B. Aspland, London, 1850, p. 436.
[2 ]Mr. Wilberforce.
[3 ]Misprinted ‘opinions’ in Hansard.
[1 ]By Thomas Paine. Republished by Richard Carlile, London, 1818.
[2 ]William Hone’s parodies of the Church Catechism, the Lord’s Prayer, the Ten Commandments, the Litany, and the Creed of St. Athanasius, published in 1817.
[3 ]This and the subsequent references are to Wilberforce’s speech on M. A. Carlile’s petition on 26 March 1823.
[1 ]See Sermon LXIV, in The Works of Dr. John Tillotson, late Archbishop of Canterbury, London, 1712, vol. 1, pp. 465–6.
[1 ]See Mr. Bankes’ speech on the Roman Catholic franchise bill, 30 June 1823 (Hansard, N.S., IX, 1341).
[1 ]In the debate on the Roman Catholic franchise bill, Mr. Hume having attacked the Methodists as ‘the Protestant Jesuits,’ Mr. Butterworth had retorted, ‘The sect to which he belonged was highly complimented by the censure of a gentleman who had defended the principles of Carlile in that House.’
[1 ]Some light is thrown on this incident by Mallet, who after reporting the debate in his Diary adds: ‘There the debate closed; but it appears that Ricardo had seen Owen in the morning and had asked him whether he had any objection to have his name and peculiar opinions quoted in support of the prayer of the petition, and that Owen had not only assented to it, but told Ricardo that it would be peculiarly gratifying to him. The fact is that Owen is extremely disregardful of established opinions and of public feeling, and that he delights in any opportunity of asserting his own principles. But being in the House during the debate, when he saw the effect produced by Ricardo’s statement, and the feeling it excited in the assembly, his natural boldness forsook him and a desire of fair fame prevailed; he therefore wrote a few lines to Ricardo in pencil desiring him to explain away what he had said, and upon Ricardo’s declining to comply with his request he applied to Money. Ricardo told me that he was very near stating to the House what had passed between him and Owen in the morning; but his good nature prevailed.’(J. L. Mallet’s MS Diary, entry of 10 July 1823.) On the morning of the day in question (1 July) they had met when Owen had appeared before the Committee on the Employment of the Poor in Ireland, of which Ricardo was a member. (See the Committee’s Report, p. 156.)
[1 ]Hansard, XXXII, 41; cp. also ib. 381.
[2 ]Journals of the House of Commons, 1818, p. 272.
[1 ]Hansard, XXXVIII, 995–6.
[2 ]See his speech above, p. 109.
[3 ]See above, p. 323.
[4 ]The Report and Evidence were reprinted in April 1821 (Parliamentary Papers, 1821, vol. iv).
[1 ]1814 (54 Geo. III c. 99), 1815 (55 Geo. III c. 28), 1816 (56 Geo. III c. 40), 1818 (58 Geo. III c. 37).
[2 ]Minute of the Committee of Treasury, 20 Jan. 1819, in Lords’ Report, Appendix, p. 300.
[3 ]Hansard, XXXIX, 72 and 104.
[1 ]Journals of the House of Commons, 1818–19, pp. 64 and 77.
[2 ]Journals of the House of Lords, 1818–19, p. 43.
[3 ]See Ricardo’s letters to McCulloch of May 1819, quoted below, p. 367–8, and of January 1822, below, IX, 141.
[4 ]Below, VI, 67.
[1 ]The editor is much indebted to the late Sir Bernard Mallet for allowing him to quote this and many other passages from the unpublished MS in his possession.
[2 ]A Director of the Bank, at this time out by rotation.
[3 ]Alexander Baring was the head of the house of Baring Brothers, the magnitude of whose loans to the French Government in 1818 and 1819 complicated the problem of the resumption of cash payments. Baring himself was in Paris during the early stages of the enquiry, when the examination of the witnesses seemed to proceed somewhat aimlessly; a focal point was provided when, on his return to London at the end of February, Baring’s views in favour of a delayed resumption of payments on Ricardo’s plan became known. In the subsequent debate in the Commons the Chancellor of the Exchequer referred to Baring’s evidence as ‘certainly the most important of any’ (Hansard, XL, 739). And The Times in a leader remarked ‘We wish that the Bank had been able to control Mr Baring’s loans, rather than Mr Baring’s loans had controlled the Bank’ (18 May1819). Mallet records in his MS Diary a conversation with Baring in which the latter described his intricate financial operations in Paris and surmises that Baring was apprehensive of an early resumption: ‘Narrower means of credits, a closer system of discounts, a return to a sound currency in this great commercial country, could not fail affecting all Europe for a time; and it is for a time, and for that very time, that Baring wants facilities of every kind.’ (Entry of 2 March 1819.)
[1 ]Friday 12 and Monday 15 February.
[1 ]Lords’ Report, ‘Minutes of Evidence’, p. 44, Q. 35.
[2 ]Lords’ Report, ‘Minutes of Evidence’, p. 47, Q. 52.
[1 ]Commons’ Report, ‘Minutes of Evidence’, p. 78.
[1 ]Commons’ Report, ‘Minutes of Evidence’, pp. 123–4.
[2 ]Lords’ Report, ‘Minutes of Evidence’, p. 107, Q. 35.
[3 ]Below, VIII, 19.
[1 ]It should be noticed that, in spite of Ricardo’s own evidence, the Committees assumed throughout that his plan excluded payments in specie.
[2 ]Commons’ Report, ‘Minutes of Evidence’, p. 160.
[1 ]Commons’ Report, ‘Minutes of Evidence’, p. 171.
[2 ]Commons’ Report, ‘Minutes of Evidence’, p. 189.
[1 ]Commons’ Report, ‘Minutes of Evidence’, p. 191. When recalled on 25 March Baring confirmed this answer; see ib. p. 204.
[2 ]Commons’ Report, ‘Minutes of Evidence’, p. 224–5.
[3 ]Commons’ Report, ‘Minutes of Evidence’, p. 247.
[1 ]Not to be identified with Ricardo’s friend of the same name.
[2 ]A Reply to Mr. Ricardo’s Proposals for an Economical and Secure Currency, by Thomas Smith, London, Richardson, 1816.
[3 ]Commons’ Report, ‘Minutes of Evidence’, pp. 257–9.
[1 ]Lords’ Report, ‘Minutes of Evidence’, pp. 131–2, Q. 167. Later he was questioned about the period in which ‘the Plan of Mr. Ricardo’ could be carried into effect (p. 136–7).
[2 ]Author, under the pseudonym of Daniel Hardcastle, of a series of letters to The Times on the Bank Restriction; see below, VIII, 3, n. 1.
[3 ]Lords’ Report, ‘Minutes of Evidence’, p. 158–9, Q. 79.
[4 ]Lords’ Report, ‘Minutes of Evidence’, p. 179–80, Q. 83.
[5 ]ib. p. 180, Q. 84.
[1 ]Lords’ Report, ‘Minutes of Evidence’, p. 180–1, Q. 89.
[2 ]Above, I, 372.
[1 ]Lords’ Report, ‘Minutes of Evidence’, p. 182, Q. 89.
[2 ]Journals of the House of Lords, 1818–1819, pp. 147 and 157.
[3 ]Lords’ Report, ‘Minutes of Evidence’, p. 221, Q. 88.
[4 ]Lords’ Report, ‘Minutes of Evidence’, p. 222, Qq. 96 and 97.
[5 ]ib. pp. 225–34.
[1 ]ib. p. 243–4.
[2 ]See Ricardo’s speech supporting the bill, above, p. 2.
[3 ]Below, VIII, 20.
[1 ]See An Address to the Public on the Plan Proposed by the Secret Committee of the House of Commons for Examining the Affairs of the Bank, by Edward Cooke, London, Stockdale, 1819.
[2 ]Speech of 24 May 1819, Hansard, XL, 677.
[3 ]The meeting on 15 May 1819 at the City of London Tavern, held to oppose the Reports of the Committees.
[1 ]Commons’ ‘Second Report’, p. 15.
[1 ]Lords’ ‘Second Report’, p. 18–19.
[1 ]Below, VIII, 26–7.
[2 ]The text of the Resolutions is given above, p. 7–8.
[3 ]59 Geo. III. c. 49. An amendment to the original bill had been adopted on Ellice’s motion; see above, p. 8 and n.
[4 ]The New Times, 15 May 1819.
[5 ]The Automaton Chess-Player was on exhibition at No. 4 Spring Garden (Advt. in The Times, 6 Feb. 1819).
[6 ]The Fair Circassian was the name popularly applied to a lady in the suite of the recently arrived Persian Ambassador. Much curiosity had been aroused by the seclusion in which she was kept; ‘hundreds of loungers and dandies’ crowded outside the Embassy in the vain hope of a glimpse of her. ‘The door of her room is constantly guarded by two black eunuchs, who have sabres by their sides. They are her only attendants, being selected to dress and undress her.’ (The Times, 30 April 1819.)
[7 ]The New Times, 15 June 1819.
[1 ]Letter from E. B. Wilbraham, 7 Feb. 1820, in Diary and Correspondence of Charles Abbot, Lord Colchester, 1861, vol. iii, p. 113. Cp. Tooke’s History of Prices, vol. ii, p. 98–9, and Ricardo’s speech of 8 Feb. 1821, above, p. 76.
[1 ]The title of the Commons’ Reports is: ‘Reports from the Secret Committee on the Expediency of The Bank resuming Cash Payments, Ordered by the House of Commons to be Printed, 5 April and 6 May 1819.’
The title of the Lords’ Reports, as printed for the House of Commons, is: ‘Reports respecting the Bank of England resuming Cash Payments: viz. The First and Second Reports by the Lords Committees appointed a Secret Committee to enquire into the State of The Bank of England, with respect to the Expediency of the Resumption of Cash Payments;—with Minutes of Evidence, and an Appendix:—7 May 1819:—Communicated by The Lords, 12th May 1819. Ordered, by the House of Commons, to be Printed, 12 May 1819.’
[1 ]Reply to Bosanquet; above, III, 195.
[1 ]This answer is amended below, pp. 401–3, Question 106.
[1 ]See Economical and Secure Currency (1816), above, IV, 63
[1 ]Alexander Baring, too, in his evidence to the Commons Committee on 12 March 1819, referred to the possibility ‘that the amount of silver may be hereafter increased by the improvement in the working of the South American mines’ (‘Minutes of Evidence’, p. 192). Cp. below, VIII, 3.
[1 ]Questions 26 and 59.
[1 ]A similar proposal had been made on 10 March by Alexander Baring before the Lords’ Committee: ‘I should certainly say that it would be better to have no Gold Coin, if the Question of the Forgery of Paper can be satisfactorily settled. If there should be a Gold Coin, it must be to a restricted Amount, with a Seignorage which may be carried to any Extent, provided it be not sufficient to encourage illegal coining; the Gold Coin would in fact be a Gold Token, and could not affect the Value of the Standard.’ (Lords’ Report, ‘Minutes of Evidence’, p. 132, Q. 167.) Cp. Principles, above, I, 371–2.
[1 ]There are extensive extracts from the regulations of 1803 concerning French coinage, in Ricardo’s hand, among his papers; these however belong to a much earlier period.
[1 ]The price is not mentioned in the earlier part of the evidence as published; cp. Question 36 ff., p. 381 ff. above.
[1 ]Should be ‘13.79’. See Robert Mushet, An Enquiry into the Effects produced on the National Currency and Rates of Exchange by the Bank Restriction Bill..., London, Baldwin, 1810, Appendix.
[2 ]Cp. above, p. 390–1.
[1 ]Report in the Morning Chronicle of 22 March 1811.
[2 ]See ‘Report of the Lords Committee of Secrecy, 1797’ (reprint in Parliamentary Papers, 1810, vol. iii), p. 84.
[1 ]Goldsmid in his evidence stated that the Tables ‘published by Wettenhall are likely to be correct; they are made from our reports to the person who furnishes him with the prices’ (Bullion Rep. p. 36).
[2 ]‘Report ... 1797’, p. 40.
[3 ]See ‘Bank of England, Accounts...’, ordered to be printed 22 Feb. 1811 (No. 5 of these Accounts is ‘An Account of the highest Prices paid by the Bank for Bullion in each Year, from 1773 to 1809, both inclusive’), in Parliamentary Papers, 1810–11, vol. x, No. 22. Cp. above, III, 77, n.
[4 ]See ‘An Abstract Account of the Prices paid by the Bank of England for Gold and Silver Bullion, in each Year, from 1697 to 28 Feb. 1811’, in Parliamentary Papers, 1810–11, vol. x, No. 69.
[1 ]This report, taken from the Morning Post of 23 Dec. 1815, seems more accurate than those in the other newspapers. Ricardo wrote to Malthus on 24 December that the reporters ‘were most carefully excluded from the Court’, and that the Morning Chronicle had imputed to him what he ‘neither felt nor uttered’. For Ricardo’s own account of his speech see the same letter (below, VI, 335–6), and Economical and Secure Currency (above, IV, 106). The report in the Morning Chronicle of 22 December, to which he objected, was as follows: ‘Mr. D. Ricardo argued in favour of the motion; he stated that he was a great friend to publicity; that he attached no blame to the Directors, on the contrary was ready to give his testimony in their favour, but still that the law of the land was paramount to every consideration, and that no argument of advantage such as had been stated by his neighbour (Mr. Payne) could weigh against it; he would acquiesce in any distribution the Bank Directors might choose to make; that Bankers differed from every other trader, they trade with others’ capital, merchants of every degree with their own.’
[1 ]See the Star, 23 and 27 March 1816.
[1 ]Report in The Times, 9 Feb.1816. Ricardo refers to this Court in ed. 2 of Economical and Secure Currency, above, IV, 88, n. Cp. his letter to Malthus of 7 Feb. 1816, below, VII, 19.
[2 ]Mr. Mellish’s Resolutions, which are discussed by Ricardo and reprinted in Economical and Secure Currency, above, IV, 86 and 138.
[1 ]Report in The Times, 19 March 1819.
[2 ]‘Nous pensons comme vous que l’essence d’une Banque comme de toute institution qui repose sur le crédit doit être la publicit´ la plus entière de ses op´rations et la clart´ de ses comptes.’ (Letter from Benjamin Delessert to Ricardo, dated Paris, 13 March 1819; MS in R.P.)
[1 ]Probably Joseph Hume.
[2 ]Report in The Times, 28 June1819.
[3 ]In a letter to Trower of 8 July 1819 (below, VIII, 45–6), Ricardo explains that he was very reluctant to let his name be on the Committee, as he dissented from all of Owen’s conclusions; he was only persuaded by the entreaties of the Duke of Kent, who assured him that he was ‘not bound to approve, only to examine.’ See also his speech in the House of Commons on 16 Dec. 1819, above, p. 30.
[1 ]See The Life of Robert Owen, written by himself, London, 1858, vol. Ia, pp. 237–50.
[1 ]Report in The Times, 1 Jan. 1821. Ricardo’s speech was reprinted in A Selection of Speeches Delivered at Several County Meetings in the Years 1820 & 1821, London, Ridgway, 1822, pp. 47–8. On this meeting, see VIII, 330.
[2 ]On the third reading of the Bill of Pains and Penalties, 10 Nov. 1820, both Lord Sherborne and Lord Ducie had voted in favour of the Queen.
[1 ]Report in the Scotsman, 22 Dec.1821. A similar report of the speech is contained in a pamphlet entitled The Proceedings in Herefordshire connected with the visit of Joseph Hume, Esq. M.P...., Hereford and London, 1822. On the meeting cp. also Ricardo’s letters of 11 Dec. 1821 to Trower and of 3 Jan. 1822 to McCulloch, below, IX, 121 and 141, n. 1.
[2 ]In the letter of invitation, dated Hereford, 10 Nov. 1821, John Allen, Junr., writing on behalf of the Committee, addressed Ricardo as ‘a Herefordshire Free-holder, and one of the very few Members, who on every occasion supported Mr. Hume’s exertions in the House’. ‘The Committee’ he concluded ‘hope that a gentleman who has purchased estates in the County, and whose parliamentary conduct has been long well-known and respected, will honour the occasion by his presence.’ (MS in R.P.)
[1 ]See above, p. 34.
[2 ]Vice-President of the meeting.
[1 ]Report in The Times, 24 May1822.
[2 ]Christopher Hely-Hutchinson, M.P. for Cork.
[1 ]Report in The Asiatic Journal and Monthly Register for British India and its Dependencies, August 1822, vol. xiv, pp. 152–3.
[1 ]Mr. S. Dixon.
[1 ]Report in The Asiatic Journal and Monthly Register for British India and its Dependencies, April 1823, vol. xv, pp. 370–2.
[1 ]See the debate in the House of Commons on 22 May 1823, above, p. 297 ff.
[2 ]See above, p. 475.
[1 ]Report in the Morning Chronicle, 24 May 1823.
[1 ]Below, pp. 508–10.
[2 ]‘Ricardo in Parliament’, Economic Journal, June 1894, p. 251, reprinted in Cannan’s The Economic Outlook, 1912, p. 91.
[3 ]Below, p. 511–12.
[4 ]Letter of 25 May 1818, below, VII, 263.
[1 ]Letter from Trower, 7 June 1818, below, VII, 268, and to Trower, 27 June 1818, ib. 275.
[2 ]Below, VII, 285, 298–9.
[3 ]Above, pp. 112 and 283.
[4 ]Below, VII, 272–3.
[5 ]Below, p. 504–5.
[6 ]Observations, below, p. 499; and cp. to Trower, 27 June and 20 Dec. 1818, below, VII, 273 and 369–70.
[7 ]Below, p. 501.
[8 ]As evidence of how fully the ruling classes had recovered their self-confidence by 1823, a passage from a speech of Robinson, then Chancellor of the Exchequer, describing ‘the condition of those great masses of our population which are congregated in the manufacturing districts’, may be quoted: ‘What was the state of that population three or four years ago, when they laboured under the severe pressure of acknowledged distress, and what is its actual condition? Where is the disquietude, the tumult, the sedition, the outrage of that period? Vanished. What have we in their place? Peace, order, content and happiness.’ (Speech on the Financial Situation of the Country, 21 Feb. 1823; Hansard, N.S., VIII, 201.)
[1 ]Below, VII, 301.
[2 ]ib. 302.
[3 ]ib. 317.
[4 ]ib. 329. Mill promised ‘a more detailed criticism’, but no such criticism is extant. The tenour of the other letters leaves little doubt that reform was the subject of the discourses.
[5 ]ib. 349–50, 358, 364.
[1 ]He may have had before him the report of the debate in the House of Commons on 2 June 1818, on the Resolutions for the Reform of Parliament which had been drafted by Bentham and introduced by Sir Francis Burdett. See Hansard, XXXVIII, 1118– 1185 and cp. Bentham’s Works, ed. by Bowring, vol. x, p. 491 ff.
[2 ]Thus cp. the passage in the Defence of the Ballot that ‘One Hon. Gentleman has observed, that he is prepossessed in favour of open voting, without being able to give any reason why he prefers it’ (below, p. 512) with the allusion to the opponents of the ballot in a letter to Trower of 18 Sept. 1818: ‘I have never heard any solid reasons for their objections:—they are all to be resolved to an antipathy, for which they can give no account’ (below, VII, 299).
[1 ]Scotsman, 24 April 1824.
[1 ]Scotsman, 17 July 1824.
[1 ]Blank in MS.
[1 ]Omitted in MS.
[2 ]Blank in MS, here and below.
[3 ]Omitted in MS.
[4 ]In MS ‘latter’.
[1 ]‘to be’ replaces ‘on his plan’.
[2 ]In MS ‘gold’.
[1 ]‘so large a’ replaces ‘a sufficient’.
[1 ]Bound with other pamphlets in vol. vi of the Ricardo Collection of Tracts. The notes are here reproduced by kind permission of the Goldsmiths’ Librarian.
[2 ]Ricardo left London on 12 July 1822; the first edition of the pamphlet was advertised in the Morning Chronicle of 9 Nov. 1822.
[3 ]On 23 Nov. 1822 Ricardo had written from Paris that he expected to be ‘the object of much personal attack’ from the country gentlemen. See below, X, 349.
[1 ]Cut off by the binder here and below.
[2 ]On Western’s attitude in 1811 see above, p. 316.
[3 ]See the quotation from Western’s speech of 7 (not 1) March 1816, above, p. 318–19.
[1 ]The remainder of the note is cut off by the binder.
[1 ]The remainder of the note is cut off by the binder.