168.: broadley to ricardo1[Answered by 169] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 7 Letters 1816-1818 [1816]
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The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 7 Letters 1816-1818.
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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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168.
broadley to ricardo
[Answered by 169]
Glasgow 3d. June 1816
Mr. David Ricardo Sir,
I have read your pamphlet upon a “Cheap Currency” with your comments upon the advantageous bargains made by the Bank of England with the Ministers of State time after time; the Tables of calculation you have subjoin’d greatly elucidate your remarks and the public at large are greatly indebted to you for them.
Your observations as to the enormous and unreasonable advantages derived by the Bank from the public in consequence of these improvident bargains of Ministers in succession, appear to me incontrovertible; but, I am unable to accompany you with my approbation as to the means you suggest for obtaining a “Cheap currency”.
That the Bank ought to be obliged to relinquish some of its undue advantages as soon as opportunity offers, is what I heartily subscribe to and fervently wish, but, that the Bank should be ruined, or subjected to ruin, for the sake of providing the public at large a “cheap currency” is a proposition so fully fraught with injustice to that Company and impolicy and danger to the nation itself and the Capital in particular, that I request permission earnestly to enter my protest against it.
Your proposition, Sir, is utterly impracticable without the consequence of ruin to the Bank be attatchd to it— before you propose that the Bank should be compel’d to sell Gold Bullion at £3.18—pr. oz you should first provide, that it shall be enabled to buy Bullion at or below that price, and this is what neither you, Sir, nor all the Governments of Europe combined together can accomplish! Bullion is simply an article of Merchandize, and subject to rise and fall in price like other Commodities, and no power on Earth can prevent the fluctuation, and if we for a moment suppose the same prices to recur that we have of late years experienced —or, in short, if the Bank restriction Law had not fortunately taken place—that Corporation would have been ruin’d ten times over if it was even one Hundred times richer than it now is. And why Sir, wilfully ruin one useful establishment—or why should any one single Interest be sacrificed for an imaginary and temporary public advantage or convenience, with nothing but utility to merit such punishment, and without the slightest prospect of any advantage to be derived by it for so immense a risk as that of certain and utter ruin?
The Misfortune is, that you argue from an erroneous proposition or foundation, you have chosen for your standard measure of value a thing that deserves not the Name, you say Bullion at the Mint price is the Standard Measure of value, but, as the price of Bullion does and ever will vary it cannot deserve the denomination of Standard. And this, Sir, is the unfortunate condition of every Man I’ve yet seen write on the subject of Currency—nay it is in fact our Countrys misfortune that our “Standard Measure of Value” has not yet been discovered, or has been intirely overlook’d by every Writer on Political Economy &c. from the justly celebrated Adam Smith down to this day excepting none that I have met with, not even the Members of the Bullion Committee! If this standard was one understood and recognized all jarring opinions on Currency wd. cease and these knotty puzzling points quite simplified. And I have a proposal to make to you which I hope you will comply with.
I am told you have written on Exchanges in an able manner. I never saw your Book and I am far off—but if you will resolve me the following questions I will furnish you with the only certain Standard measure of value that great Britain possesses, as a requital for your trouble.—The first question is—What is meant by Exchange between Countries? that is, does it principally relate to Bills of Exchange and their price?
2ndly will you point out distinctly an example or instance whereby one Country gains and the other Country looses by the rate of Exchange between them? seriously I ask for information and your compliance will oblige.
yr. Hb. Sert.
J. Broadley.
P.S. I request you to excuse this rough Scrawl—I am no scholar but have a sort of curiosity on these subjects—so strong indeed that I fear I may be thought a rude intruder. however. I mean well.
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