205.: ricardo to trower1[Reply to 203.—Answered by 209] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 7 Letters 1816-1818 
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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ricardo to trower
[Reply to 203.—Answered by 209]
London 24 Feb 1817
Mr. Rose you will have seen has himself answered your questions concerning his proposed measures for regulating Provident Institutions, by the introduction of his bill into the House of Commons, which I believe does not in any material point, differ from that of last year. It retains the clause respecting giving parish relief to contributors, notwithstanding they may have funds in the Bank, which I apprehend will not be suffered to pass without opposition. I am glad to find that we do not differ with respect to the pernicious tendency of the poor laws.—we both wish to see them amended or abolished, but I believe are not quite agreed on the means of obtaining so salutary an end. If I thought with you that the clause in question was calculated to afford great encouragement to the poor to become depositors in these Institutions, I should be friendly to it. My apprehension from its continuing is more that it will not diminish the poor rates than that it will cause any addition to them. There are as you observe two classes of labourers, the single and the married. Notwithstanding that the tendency of the poor laws is to reduce the wages of these classes to the least possible amount on which single men can live, yet this effect is not probably fully accomplished. If it were, neither the single man, who receives no relief from the parish, nor the married man who does, could possibly become depositors, for they would have nothing to deposit. We must suppose then that the single men receive more than their wants require. Our object is to encourage them to accumulate what they can save from their wages, and the question is what effect the insertion or omission of this clause will have on their minds. You think that the chances of poverty are so constantly before their eyes, and that it appears so probable that they may themselves fall into that state, that they would have no motive to acquire property if the possession of property precluded them from receiving relief. I on the contrary maintain that after expending on their own wants the property they had acquired they would be in no worse situation for having acquired it. This of course you would allow, but I am of opinion that the chances of a reverse of fortune are always considerably undervalued by all of us, and therefore that the fear of falling into poverty can have very little influence on the mind of any man whose wages are such as to enable him to save a part of his earnings. The only good that the most sanguine can expect from these Institutions is the withdrawing of this class from the influence of the poor rates and thus by diminishing the number of paupers introduce [more] independent feelings. You will accomplish this object most surely if you take security for the permanence of a man’s good habits. Exclude the clause he will know that to preserve his treasure he must be saving and prudent; insert it he will as surely know that he may indulge in a week or month’s dissipation without infringing on it. I am not so sanguine as many as to the excellent effects which are to follow from these Banks unless we at the same time raise the general rate of wages by confining the operation of the poor laws to cases of extreme necessity. We are I think beginning at the wrong end. Every thing would go on well if we could rescue the lowest labourers with families from an habitual reliance on the rates. By so doing we should better the condition of all above that class and then these Institutions would become powerful auxiliaries. As it is they may introduce better habits amongst a few who now lavish their money away in idleness and extravagance, but in the other case the field would be extended, and the result gratifying to every friend of the poor and to the cause of good government. These rates are a yawning gulph in which all that is valuable will be ultimately swallowed. I hope Mrs. Trower continues in good health. Pray make Mrs. Ricardos and my complts. to her.