23.
ricardo to mill
[Reply to 22.—Answered by 24]
[London, 26 Sept. 1811]
My dear Sir
At the very moment that you are using the most delicate and refined flattery, you declare that you are no flatterer. What was it which gave so much pleasure to the inhabitants of New Grove, in the letter which I received from you on tuesday, but the ingenuity with which you had contrived to make us all feel comfortable with ourselves? Even my sulky tempered girl suffered her features to relax into a smile,—she participated in the self-satisfaction of her father in being thought of so kindly, in the company too in which you are now passing your time. Whenever I perceive that such complacent feelings are excited, I am sure there has been flattery in the case, and equally sure that it has been administered by an able hand. Mr. Mill not given to flatter! look at the note to the last page of the MS which you have just sent to me,— how is Mr. Ricardo there spoken of? If you do not feel yourself under any obligation to give praise where it is deserved, you certainly have no scruples in bestowing it where it is not merited. I thank you however for your letter, and was truly glad to learn that you were all well, and had been employing your time in a way so conformable to my wishes. It was but the day before that we had been speaking of you, speculating on the time when you would come home, —which I am sorry to find is yet so distant. Mrs. Mill and the children will, I hope, have laid in a good stock of health and spirits during the delightful weather which has just passed, to enable them to encounter the less enlivening season which is fast approaching. For Mr. Bentham’s and your kind solicitude, about the price of Omnium, I am really grateful. It is still very rickety, but my apprehensions of any very serious fall have considerably abated. You estimated at a false value my steadiness and knowledge of its nature. These qualities, even if I possessed them are of very little avail in managing so ungovernable a commodity as Omnium, but there is one security which I always take on these occasions, and which I consider by far the most important.—I play for small stakes, and therefore if I am a loser, I have little to regret.
You have given me much satisfaction by informing me that you have obtained a solemn renewal of Mr. Bentham’s engagement to favor me with his company in the spring. I hope it will not now be necessary to defer it till that period, and that he will be of the same opinion when I communicate to you that I am going to live in town, and shall not be more than a mile distant from him. Mrs. Ricardo has lately, on account of the increasing age of our girls and to be nearer to their masters, expressed a wish to go to town:—this wish every hour acquired new force and in a short time became absolutely irresistible. Search was made after a house, and as ill-fortune would have it, one was found, to be disposed of, in Upper Brook Street Grosvenor Square,—the very thing to suit us,—brimfull of every convenience, and containing precisely the number of rooms which our large family required. There was however one obstacle to its purchase, and that a most serious one, the price was enormous, and I would not listen to it. Difficulties however only stimulate the brave and when familiarly contemplated, at every view, appear less formidable. I soon found that my opposition abated in the same ratio as the wishes of those about me increased, and in a few days I was completely vanquished.
In short the house is mine. In addition to some other regrets which I shall feel at leaving Mile end will be that of going somewhat more distant from you,—but then I say to myself that it is to town, and to walk from town is never so bad, though rather more distant, as to walk across dangerous cross roads,—besides I shall have a spare bed which I shall hope I may often prevail on you and Mrs. Mill to occupy.
A truce however to my affairs. I shall leave no room for the remarks which I mean to make on your MS. Well then I like it very much,—it assails our adversaries in most of their strongholds and contains the most close reasoning of any thing that has appeared on our side of the question. I shall not rest till you publish it.
We have so often compared our opinions on this subject that it was not probable that I should find any thing material from which to dissent. There are some trifling points regarding the extent of the admissions of our adversaries;— the idea which they affix to the word depreciation;—the effect produced on prices by the augmentation of circulating medium modified as it necessarily must be by enlarged or diminished bargains on credit or for promissory notes and bills of exchange &ca. &ca. which I will submit to your attention when we meet. I doubt too whether at a time when there is no alarm, either of internal convulsions, or of foreign invasion, the notes of a Bank notoriously insolvent would not circulate at par, provided they were less in quantity than the level of circulation required, and the Government continued to receive them in payment of the taxes. I am much inclined to believe that the notes of a Bank where they were received by Government have never been in any country depreciated from any other cause but from an excess of quantity. I should have been glad if you had shewn the extreme folly of Lord Stanhope’s observation, that it is only in times of barbarism that gold can be required as the standard of currency, —and the total impossibility of regulating the value of a paper currency without some standard of reference. The increased price of commodities is frequently ascribed not to any fall in the value of paper, but to the increased number of purchasers caused by the augmented wealth of the country. Taxation is supposed to be another cause. On these points you might give us much useful instruction;—it is a part of the subject which has been much neglected and your work will not be complete if you are silent on it.
You have no where defined the word value. It has a very different meaning from the word price and yet I think you have often used th[ese word]s as synonymous. You say Page 27. “The value of the precious metals throughout the globe is uniform”,—or rather “the only difference which can exist is the difference constituted by the expence of carriage.” I should have agreed with you if you had said “price” instead of “value”. If a bill on London for £100 will sell in Hamburgh for £98 or as much of the money of Hamburgh as is equal to the bullion in £98 of our’s then I should say that the price of bullion differed 2 pct. in the two countries. But when we speak of the value of bullion we mean a very different thing—we mean, I apprehend, to measure it by some other commodity,—corn, coffee, hardware or any amongst the thousands of commodities which may be exported. Estimated in either of these commodities money or bullion may differ in value in any two countries, not only all the expences attending its exportation, but also all the expences attending the importation of the commodity to be given in exchange for it. Thus if the expence of sending money to the East Indies amounted to 5 pct., and the expence of sending Muslins from the East Indies to London amounted to 10 pct., before money can be exported from England for the purpose of procuring Muslins in return, its value estimated in that commodity must be at least 15 pct. higher in the East Indies than in England. You seem to have been aware of some difficulty in this part of the subject because you observe Page 34 that the consumers pay these expences. Undoubtedly they do but in the first instance they are advanced by the exporter and constitute part of the price of the commodity, and certainly do though it is not immediately apparent determine the exportation of bullion. I think you will agree with me that Bullion will be exported if its price in one country differs any thing more than the expences attending its exportation from its price in the other,—but that when its price does so differ we may be quite certain that its value estimated in some commodity differs considerably more than these expences.
I have the same objection to the followg. passage Page 45. “If it be asked at what limit the importation of corn stops, we answer, at the very limit when the value of gold and silver in the country in question rises above its value in other countries.” It appears to me that the circumstance here stated would prevent the exportation of gold and silver but it would not limit the importation of corn,—England might have a thousand things which were cheaper than corn and which she might therefore be disposed to give in exchange for it. You observe that the demand for corn is unlimited. It is clear that you attach a different meaning to the word demand to what I do. I should not call the mere desire of possessing a thing a demand for it, such desires are undoubtedly unlimited,—but by demand I should understand a desire to possess with the power of purchasing. If so demand is limited.—There are one or two other points which I shall discuss with you when we meet.—I think you must by this time be sufficiently weary of me. On this subject I have no discretion. If you have leisure I should be glad to hear from you again.—
I have not seen but a small part of the Ricardos of Islington, —those whom I have seen entertain sentiments for you no way differing from those which you feel towards them, so take care of yourself. Consider how they unite when attacked. All the Mills in the world would not be a match for them when fairly roused.
Y rs. most truly
David Ricardo
NB. On looking again at the passage Page 45 I am sure we should agree if the word value was more confined in its use for example “at the very limit when the value of gold and silver in the country in question, estimated in corn, rises above its value in other countries.”
Titles (by Subject) 
