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III.: A Canard - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 10 Biographical Miscellany 
The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 10 Biographical Miscellany.
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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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A highly misleading picture of the market for British Government loans during the Napoleonic Wars has been given by Professor Norman J. Silberling in an article of 1924, which has been uncritically accepted ever since.1 The gist of his conception is this: ‘In Ricardo’s day the membership of the Stock Exchange comprised two main factions: the contractors to public loans, who naturally took the bull side of the market, and the professional broker-jobbers, who took the bear side in order to derive profits on “continuation”.’2 Having thus set the stage, Silberling enacts a drama in which the villains are the ‘bear-jobbers’ or ‘the inner clique of exchange professionals, of which Ricardo seems to have been an acknowledged leader’, and the heroes the financial house of Benjamin and Abraham Goldsmid, who ‘always stood ready, not only to loan upon the funds, but to purchase them, so that they formed an increasingly important support for the contractors’.3 In the course of his attempt to show that these two parties were the only sources from which advances on the Funds could be obtained, he commits himself to the untenable statement that the Bank of England ‘did no lending on stock collateral’;4 ample evidence against which is available and has been cited in the preceding section.5 Apart from the inherent improbability of either party being consistently a bull or consistently a bear through the vicissitudes of a period of years, there is the fact, of which Silberling was evidently ignorant, that Ricardo was himself a loan-contractor. There were actually more than two parties, and the rivalry between them was expressed as much in competition to secure the contract for the Loan in the first instance as in the conflict of interest between successful and unsuccessful bidders after the Loan had been issued.
Silberling goes on from this general argument to accuse Ricardo of having inserted his first article in the Morning Chronicle (written, he says, ‘in the manner of a fevered alarmist’)1 and then of having published his Bullion pamphlet in order to bring about a fall in the Funds.2 The Bullion Committee itself is alleged to have been a mere tool of the bear clique: ‘Ricardo was not content to let the matter rest with the publication of a pamphlet, and, working through his friend Francis Horner, who now sat in the House of Commons, he began at once to agitate his program in Parliament. Horner managed to have a Committee appointed to canvass the subject of the high price of specie, the state of the exchanges, and other alleged signs of impending ruin’. The manoeuvre, according to Silberling, was crowned with success: ‘The price of the funds, in fact, fell abruptly late in 1810; the Goldsmids were placed in a desperate predicament, and one of the partners committed suicide.’3
Ricardo may well have been a bear in the autumn of 1810 when the fall in the Funds occurred. But Silberling is completely silent about the period of time between Ricardo’s publications and their alleged effect. The article had appeared in August 1809, the pamphlet at the beginning of 1810 and the Bullion Committee was appointed in February, while the great price-fall did not occur until September. During this interval, in May 1810, a new Loan was negotiated which, as we have seen above (p. 80), Ricardo was nearly successful in obtaining; and had he obtained it, the delayed effect of the plan imputed to him would have been to accomplish his own ruin. If the charge were true, is it conceivable that Ricardo would have made a bid for the Loan at that time?
How little Ricardo considered his own currency proposals as an instrument for depressing the Funds is shown by his undiminished advocacy of them at times when he obviously stood to gain from a rise. For instance, when in 1811 he had been successful in securing the contract for the Loan, and his friends were apprehensive about his holdings of Omnium,1 he was writing to Perceval and to Tierney urging the adoption of his plan ‘first, to arrest the progress of the depreciation of our currency, and secondly to restore it to its standard of value’.2
As for the Bullion Committee, this was so far from being a plot against the loan contractors that Sir Francis Baring, the head of the house of Baring, as a witness before the Committee was a principal supporter of their conclusions. Yet the Barings, along with Goldsmid, were contractors for the Loan of 1810.
In conclusion it may be noted that the chief authority on which Silberling relies is an anonymous pamphlet of 1821, which claims to be An Exposé of stockjobbing practices and which gives a lively if somewhat incoherent description of scenes on the Stock Exchange in Ricardo’s time.3 Although Ricardo is not mentioned directly, he is transparently referred to as ‘a bullion pamphleteer’ and as ‘Milord David the bear-general’;1 and the writer presents his own version of events in phrases such as the following: ‘With the creation of false alarms, attacks upon capitalists without, besides Goldschmidt, as Brickwood mentioned hereafter, ticket pocketing, &c. within the Stock Exchange; this bullion pamphlet had its effect, to depress the funds above 10 per cent.; to the destroying this contractor, distressing the capitalists, embarrassing the Minister, and enriching the, at length triumphant Stock Exchange bears, who, in their own words of exultation, had “got stocks at length to a fair jobbing price.”’2
The authorship of this pamphlet, which was evidently the work of a stockbroker, has been attributed to ‘J. Lancaster’.3 This can be no other than Joseph Lancaster who had been a member of the Stock Exchange from 1804 to 1810;4 in that year he defaulted, no doubt in consequence of the fall in the Funds of which his pamphlet so much complains, and he was accordingly excluded from membership by decision of the Committee of the Stock Exchange.5
[1 ]‘Ricardo and the Bullion Report’, being the second of two articles on ‘Financial and Monetary Policy of Great Britain during the Napoleonic Wars’, in Quarterly Journal of Economics, May 1924, vol. xxxviii, p. 397 ff.
[2 ]ib. p. 427.
[3 ]ib. p. 428.
[4 ]ib. p. 428.
[5 ]Above, p. 78, n. 2.
[1 ]Silberling, op. cit. p. 421.
[2 ]‘The publication of a tract emanating from an influential source and calling for drastic credit contraction operated undoubtedly in the direction of creating anxiety, perplexity, and embarrassment.’ (ib. p. 429.)
[3 ]ib. pp. 429, 430.
[1 ]See Mill’s letter of 22 Sept. 1811, above, VI, 48–9.
[2 ]Above, VI, 67. The letter to Perceval is of 27 July 1811 and that to Tierney of 11 Dec. 1811.
[3 ]The Bank—The Stock Exchange—The Bankers—The Bankers’ Clearing House—The Minister, and the Public.An Exposé, touching their various Mysteries, from the times of Boyd, the martyred Goldschmidt, &c. to those of Bowles, Aslett, Lord Peterborough, Cochrane, &c. Including Bulls, Bears, Time Bargains, Stock Exchange Telegraphs, Lotteries, Hoaxes, Bullion and Exchanges; Illustrated by Various Anecdotes, London, E. Wilson and J. Ridgway, 1821, pp. iv, 108. (Some copies have a different title-page, which omits the words before ‘An Exposé’ and has the imprint of J. J. Beresford, n.d. Both issues are in the Goldsmiths’ Library of the University of London.)
[1 ]ib. pp. 12 and 56.
[2 ]ib. p. 47. Goldsmid is referred to throughout as ‘Goldschmidt’.
[3 ]It is thus ascribed in a MS note, apparently of the period, on the title-page of the copy in the Library of Edinburgh University; in this copy several of the persons referred to by nicknames in the text are identified by marginal notes in the same handwriting. (The copy in question is the source of the attribution in Halkett and Laing’s Dictionary of Anonymous and Pseudonimous Literature.)
[4 ]See MS ‘List of the Members of the Stock Exchange from...1802’, 1855. This Joseph Lancaster is not to be confused with the educationist of the same name.
[5 ]See MS Minutes of the Committee for General Purposes of the Stock Exchange, entries of 1 May and 12 June 1811, when Lancaster’s application for readmission, although supported by his creditors, was rejected on a vote. (It is significant that complaint against the ‘capricious and unjust’ treatment of defaulters by the Committee is a recurring theme of the pamphlet; see pp. 1, 8, 97.)