33.: malthus to ricardo5[Reply to 32] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 6 Letters 1810-1815 
The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 6 Letters 1810-1815.
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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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malthus to ricardo
[Reply to 32]
Weston House Guildford Jany 1st .
My dear Sir,
I write from Surrey which will account for my not answering your obliging letter before.
I was sorry to find before I set out that on account of some expected communications from the Directors relative to the late troubles in the College, it would be necessary for the Professors to meet a week before the termination of the vacation, which I fear will entirely prevent our paying you and Mrs. Ricardo a visit at Mile End in our way thro Town from Surrey. I hope however that we shall be able to indemnify ourselves early in the Spring. I will endeavour to see you myself if I can about the 14th. We may either breakfast at Mr. Sharpe’s, or at some Coffee house in the neighbourhood of the Change; and I will then bring your papers. I shall be obliged to return to the College the same day.
I most entirely approve of the first part of the paper you were so good as to leave with me; but notwithstanding your last explanation I am still of opinion that the exchange has a strong tendency to recover itself. In the case we were considering, it is true that our goods abroad would fall, but the foreign goods which we were in the habit of importing would remain at the same price, and it is not possible to conceive that the usual competition for bills to pay for these commodities, should not prodigiously slacken, when the means of payment were clogged with an unfavourable exchange of 3 per cent.
You desire my particular attention to the resemblance between the effects of what I allow to be a redundancy of currency, and the granting of a subsidy or the purchase of large quantities of corn in a scarcity. I do attend, but cannot see the strong resemblance you speak of. In the one case there is a strong tendency to an immediate importation of commodities and exportation of bullion; and in the other case the immediate tendency is to an exportation of commodities. And even after the first effect is over, when there may be some apparent resemblance, yet upon a nearer view it fails. In the case of a real redundancy of currency all commodities are affected, and are rendered dearer at home and comparatively cheaper abroad; whereas in the other cases the prices of particular commodities alone, are affected, which I hold to be a most important difference.
If bullion only goes abroad to restore the level of currency, of course a compression of the paper at home would have the same effect, but suppose in a subsidy of 4 millions, 2 millions remained yet unpaid after the exchange had fallen to the price of the transport of the precious metals, would you not by compressing the currency instead of sending the bullion, force out commodities in order to pay the remaining debt which ought not naturally to have gone, to the obvious inconvenience of both nations.
I write in great haste and in the midst of company, so you must make allowance for errors.
Very sincerely Yours
T R Malthus