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IV.: Investments and Estates - 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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Investments and Estates
When in 1814 Ricardo was intending to give up the Stock Exchange and become a country gentleman, he bought his first estates, and in 1816 and 1817 made further considerable investments in land. Writing in December 1817 to J. B. Say he describes how he had been gradually retiring from business and had ‘from time to time withdrawn’ his money from the Funds and ‘invested a large portion of it in landed property’.1 His selling out of the Funds had been speeded up by the great rise in their price in 1817; Consols which had been 62 in January had gradually risen to 83 in July, near which level they remained for the rest of the year. At such prices Ricardo considered the Funds ‘enormously high’ in view of the large budget deficit;2 and he told Mallet that ‘he did not conceive how any man who could get his 3½ per cent by land could leave his money in the funds’.3 Two years later, in 1819, he was writing to his own brother-in-law, J. H. Wilkinson, that he had ‘large sums’ to pay for land not yet conveyed to him, adding: ‘I have retained very little money at my disposal as I have invested almost all I have in land, in mortgages and in the foreign funds.’4
First as regards investment in land. Ricardo’s earliest purchase had been the Manor of Minchinhampton in Gloucestershire, which included a large estate of 5000 or 6000 acres and the residence of Gatcomb Park. This he acquired in July 1814 from Philip Sheppard, at a price of £60,000.1 The house had been built shortly after 1770 by Edward Sheppard whose ancestors had owned the Manor since 1651; but his only son Philip Sheppard was a spendthrift whose extravagant habits involved him in debt and finally compelled him to part with the estate.2
Towards the end of the same year 1814 Ricardo bought another property, the Manor of Dalchurst, otherwise Hadlow Place, with other estates near Tonbridge in Kent, from the assignees of George Children. There is no direct evidence of the price, but it was probably upwards of £25,000.3 The payment was not completed till April 1817.
From 1815 Ricardo employed Edward Wakefield to keep him informed of opportunities for investment and to advise him in his purchases of land, and later to supervise the management of his estates.4 Wakefield had considerable experience as a practical farmer and now acted professionally as adviser to landed proprietors.5 In the summer of 1816 he writes to Ricardo: ‘I feel pretty confident that the time has arrived when you may buy to advantage’.1 And a few weeks later: ‘bearing in mind your views of making a large investment in land—I have been looking at various properties on sale—some of which may perhaps be worth your purchasing’.2 Wakefield’s idea was that Ricardo’s landed investments should be made more methodically, with an aim which he describes as follows: ‘I think your great object should be purchasing in the neighbourhood of where you already possess property, or else a large Estate which lays compact.’3 Accordingly, he was critical of Ricardo’s earlier purchase of Dalchurst, of which in the same letter he writes: ‘The Estate which you have in Kent is a bad purchase and away from everything else and gives none of that consequence which would attach to it did it join other Estates.’
Having adopted Wakefield’s plan of ‘compactness’, and on his advice, Ricardo in 1816 bought two great estates in the neighbourhood of Ledbury, on the borders of the counties of Gloucester, Worcester and Hereford. The first of these consisted of the Manors of Bromesberrow and of Bury Court, purchased at a price of £50,000 from Joseph Pitt, Walter Honeywood Yate and others. It included Bromesberrow Place, a house in beautiful surroundings at the foot of the Malvern Hills, which in 1819 Ricardo gave as a residence to his eldest son Osman. The second was the adjoining Manor of Pauntley Court, together with the estates of Wood End, Gamage Hall and Everas, purchased at a price of £54,000 from John Stokes and others. With regard to this, Wakefield wrote: ‘It is as safe a purchase as can be made and will certainly yield you 4 pr. Cent.’1 The payment was spread over two years and was completed in September 1818.
Soon after this purchase, Wakefield was recommending another neighbouring estate, Berrow in Worcestershire: ‘the tythes may be purchased, and the Parish would then so nearly belong to you that a quantity of rich land might be inclosed at a trifling expence and attached to it.’2 In this case the negotiations were protracted, as several interests were involved. In July 1817 Wakefield writes: ‘Now that you have purchased Bromsbero—that property of Mr White called Berrow is important, it runs almost up to the very house.’3 The purchase was not concluded until 1819; the price being £17,500 for the estate and £2,850 for the timber. This estate was bought from Joseph and William White, who appear to have remained as tenants at an annual rent of £675. In the autumn of 1817 Wakefield brought to Ricardo’s notice the Manor of Brinsop, an estate of 800 acres belonging to Dansey Richard Dansey in Herefordshire ‘within a few miles of Bromesberrow’,4 with the fifteenth-century manor house of Brinsop Court, surrounded by a moat.5 The purchase was concluded in the summer of 1818 for £26,000.6 Meanwhile in October 1817 Ricardo had bought from John Garrett an unnamed estate in the parish of Minster in the Isle of Thanet at a price of about £35,000.7 There were also some smaller purchases—groups of cottages or single fields—to round off one or other of the estates.
These were Ricardo’s investments in landed property, amounting altogether to about £275,000, as they can be traced from the rather fragmentary correspondence and accounts of his land-agent and his solicitors. They agree well enough with the more reliable, if less detailed, statement of his estates that can be obtained from his will, some account of which is given below, p. 104–5.
Next to landed investments in importance came loans on mortgage. The largest of these was an advance of £165,000 which Ricardo made in 1819 to Francis Dukinfield Astley on the security of the Dukinfield and Newton estates near Manchester, partly coal-mining properties. Then there was the loan of £25,000 to Lord Portarlington on his estates in Ireland in connection with Ricardo’s seat in Parliament (as described above, V, xvii-xviii). Finally, in 1821 he lent £10,000 on mortgage to the Corporation of Waterford. This last loan was arranged by his friend Sir John Newport, Member of Parliament for that city.1
The third field of investment which Ricardo entered as part of the re-arrangement of his holdings was that of the French Funds. A somewhat fuller account of this item is possible since much of the correspondence received by Ricardo in connection with it has been preserved.2 In July 1817 while on a visit to Paris he established a connection with two banking houses there, Delessert & Co. and Ardoin & Co.,3 and through them at once invested £100,000 in French stock, dividing the business equally between them. Of this sum he placed three-quarters in the 5 per cent Rentes and a quarter in shares of the Bank of France. Of the latter he bought 450, all of them through Delessert & Co., one of whose partners, Benjamin Delessert, was a Director (régent) of the Bank of France and was in friendly relations with Ricardo, whom he entertained in Paris.1 These shares he appears to have retained till the end of his life.2 Of Rentes he bought in the course of July and August 1817 a total of 2,600,000 francs capital at an average price of 67; one-third of them through Delessert and two-thirds through Ardoin. In July of the following year when the Rentes had risen about 10 points, Ardoin wrote to Ricardo suggesting that this might be a good moment for him to sell at least a part of his holding.3 Within the first ten days of August 1818 on Ricardo’s instructions Ardoin sold out the whole of what they held on his behalf (1,831,000 frs.),4 at over 78. Meanwhile Delessert had written to Ricardo advising him that in their opinion the Rentes were likely to reach a price of 80 within the year.5 When Ricardo, following the successful sale of the Ardoin holding, wrote to Delessert at the beginning of September instructing them to sell out on his behalf, the order could no longer be executed, the price having then fallen below the limit (76½ ex dividend) which he had fixed.6 By November of the same year, as a result of the monetary stringency brought about by the discount policy of the Bank of France, the price had fallen again below 70, and at that level Ricardo bought back 2 million francs capital of Rentes.1 Curiously, although this represented the re-investment of the money obtained from the sale effected by Ardoin, only 1,400,000 frs. was bought through them and the remaining 600,000 frs. through Delessert.
He had now about 3 million frs. in Rentes,2 which he held through his Paris bankers until July 1821, the half-yearly dividends being remitted to him in sterling. At this time he transferred the handling of his Rentes to his brother Jacob Ricardo3 who with Samson, another brother, was engaged in extensive financial operations in Paris. Between July and November of that year, they sold on his behalf the stock at an average price of 87½. He shortly afterwards gave instructions to buy it back if it were to fall one or two points.4 The anticipated fall did take place; but at this stage a mishap occurred, in that Clavet Gaubey, the agent de change whom Ricardo’s brothers employed in this business, became a defaulter. The stock was still registered in Ricardo’s name, so that there was no anxiety on that account. But there was some doubt as to how much of the price-difference in the settlement could be recovered. Jacob Ricardo undertook, however, to bear himself any loss that might arise as a result of Ricardo’s having placed the stock at his disposal ‘when it was materially useful’ to him.5
There are hardly any letters preserved subsequent to this incident, so that we cannot follow in detail the later story of Ricardo’s dealings in French stock. However, in a letter of June 1822 to Miss Edgeworth, who had asked his advice on her French investments, he wrote that he had ‘no thought of parting’ with his holding of French stock, adding: ‘If it rose to 100—I might probably be tempted to bring the money to this country, and employ it in the purchase of land or on mortgage.’1 Writing to her again on returning from the Continent in December of the same year, after a period of great fluctuations in price ‘accordingly as the opinions in favour of peace or of war have prevailed’, he said that he had no intention of selling his holding at the present depressed price (88), but would be inclined to sell half of it if the price rose to 95. This he would do, firstly because he had bought it at a much lower price, and secondly because he thought the policy of the French Government might lead to internal disorder, if not to war. But he is confident that whatever happens ‘the funds will survive’.2 In 1823 France declared war on Spain and the price mentioned of 95 was not reached in the few months before Ricardo’s death. From a final letter we learn that, after selling a small part of his holding at 88¼ at the end of June 1823, he still retained some 2¾ million frs. of Rentes.3
We can now evaluate the relative importance of the main types of property in which Ricardo had invested: landed estates, £275,000; sums lent on mortgage, £200,000; French stocks, £140,000. This distribution, which remained virtually unaltered between 1819 and 1823, illustrates Ricardo’s statement in Parliament that ‘it would puzzle a good accountant to make out on which side his interest predominated’ with respect to currency policy.1
When we come to consider the total value of his estate, we have three main sources on which to draw. First, the figures for the various investments described above, which give a total of £615,000; some considerable items, however, are not included in this figure, such as bank deposit, the leasehold house in Brook Street, etc., the value of which is not known owing to the partial character of the documents which have survived. Secondly, the probate value of his estate at death, which was sworn as being under £500,000. Probate value at that time did not, however, include freehold real estate; besides, the figure of £500,000 was an upper limit, implying no more than that the estate was between four and five hundred thousand, since the same sum of £6000 was payable for probate duty on any estate within that range.2Thirdly, the estimate current at the time which is given by the Gentleman’s Magazine3 as £700,000.
On the basis of the probate valuation of the personal property, and the calculated cost of the real estate, Ricardo’s total estate must have been worth between £675,000 and £775,000—which agrees nearly enough with the Gentleman’s Magazine’s figure.4
Ricardo’s annual income from the investments of which we know, amounted to about £28,000. Of this, probably £10,000 was the normal revenue from the estates;1 over £10,000 the interest received on the mortgages,2 and rather less than £8000 the dividends on the French stock.
[1 ]Above, VII, 230. He gives these details to excuse himself from lending money to Say for a speculation in potato flour.
[2 ]Letter to Trower of 23 Aug. 1817, above VII, 181.
[3 ]J. L. Mallet’s Diary referring to his own visit to Gloucestershire in September 1817, quoted above, VII, 187 n.
[4 ]Letter of 2 July 1819, declining an application which Wilkinson had made at the request of a Mr Gordon (on this letter see below, p. 118).
[1 ]Half this sum, corresponding to the unsettled part of the estate, was to be paid in July 1814; the other half, being the purchase money of the settled part, to be retained by Ricardo till Philip Sheppard’s son, then 13, was 21, so as to make a title. (Letters to Ricardo from W. W. Salmon, 23 Feb. 1814 and 22 June 1816 and from Daniel Clutterbuck, 4 July 1814; MSS in R.P.)
[2 ]See A. T. Playne, A History of the Parishes of Minchinhampton and Avening, Gloucester, 1915, pp. 39–43 and 72.
[3 ]This is on the assumption that a Tonbridge tenant whose annual rent was £1050 farmed the whole estate. (The rent is mentioned in a letter from Wakefield, 17 July 1818; later it was reduced.)
[4 ]See, for a few biographical details on Wakefield, above VI, xxxviii. Ricardo seems to have paid him a commission of 1 per cent on the purchase-price of a new estate (from an Account dated 12 Nov. 1818, referring to the Berrow estate), and an annual payment which may be what Wakefield refers to when, in a letter of 20 May 1817, he asks for ‘the £300 on my own account which our mutual friend Mr Mill named to you’. (MSS in R.P.)
[5 ]In a printed Address to ‘Noblemen and Gentlemen interested in the value and management of Landed Property’ Wakefield offers his services to aid in the management of estates by looking over, and making written reports, ‘without interfering with the permanent steward’; also as auditor, superintendent, valuer, etc. (The Address is a leaflet of eight pages without title-page or date, printed by J. McCreery, London; paper water-marked 1813.)
[1 ]Letter of 25 June 1816. This and the other letters from Wakefield referred to below are unpublished. The MSS are in Ricardo’s Papers.
[2 ]Letter of 12 July 1816.
[3 ]Letter of 28 July 1817.
[1 ]Letter of 12 July 1816.
[2 ]Letter of 8 Aug. 1816.
[3 ]Letter of 28 July 1817.
[4 ]Letter of 17 Sept. 1817.
[5 ]See W. H. Cooke, Collections towards the History and Antiquities of the County of Hereford. In Continuation of Duncomb’s History, Hundred of Grimsworth, London, 1892, p. 35. The statement in this work, however, that Ricardo bought Brinsop in 1814 is shown to be inaccurate by Wakefield’s letters of 1817 in R.P.
[6 ]From a Statement of Account of Ricardo’s solicitors, Bleasdale, Lowless and Crosse, dated 7 April 1821, in R.P.
[7 ]Calculated from the ad valorem stamp duty on the purchase deed, £350 paid on 14 Oct. 1817. (Statement of account of Ricardo’s solicitors in R.P.)
[1 ]Letter from Bleasdale, Lowless and Crosse, the solicitors, of 7 Aug. 1820. (MS. in R.P.)
[2 ]The MSS quoted below are in R.P.
[3 ]The latter firm from 1820 was changed to Ardoin, Hubbard & Co. With Delessert Ricardo had had previous relations: in 1802 they had held on his behalf 100,000 francs capital in the French Rentes. (Certificate dated 30 Messidor An 10 in R.P.)
[1 ]See below, p. 351 and above, IX, 236.
[2 ]The shares were bought in 1817 at a price of 1350 francs, and in the summer of 1823 they were quoted at 1550 frs. Meanwhile in 1820 the Bank’s surplus had been distributed to the shareholders at the rate of 202 frs. per share.
[3 ]Letter of 18 July 1818.
[4 ]This included stock bought by reinvesting the dividends.
[5 ]Letter of 6 July 1818.
[6 ]Letter from Delessert of 9 Sept. 1818, in reply to one from Ricardo of 3 September which is not extant.
[1 ]Letters from Ardoin of 31 Oct. and 5 Nov. 1818. From these letters it appears that Ricardo had fixed his buying limit at 72; but Ardoin, in view of the monetary crisis, had taken it upon themselves to delay carrying out his instructions in the expectation of being able to buy more advantageously for him.
[2 ]The precise figure was 2,967,000 frs. capital.
[3 ]Letters from Ardoin, Hubbard & Co. of 2 July and from Delessert of 18 July 1821.
[4 ]Letter from Samson Ricardo, 19 Dec. 1821.
[5 ]Letters from Samson Ricardo, 31 Dec. 1821 and 11 Jan. 1822, and from Jacob Ricardo, 10 Jan. 1822.
[1 ]Letter of 20 June 1822, above, IX, 204.
[2 ]Letter of 13 Dec. 1822, ib. 236–7.
[3 ]The exact sum was 2,723,000 frs. capital. (Letter from Samson Ricardo, 28 July 1823.)
[1 ]Speech of 11 June 1823 in reply to Western’s insinuations, above, V, 317; he also repeated (what he had said in 1821, ib. 90) that he had no interest in British Government stocks. Cp. also the letter to Trower of 28 Dec. 1819, above, VIII, 147–8.
[2 ]‘First Report of the Commissioners for Inland Revenue’, 1857, Appendix N. 44.
[3 ]October 1823, p. 376.
[4 ]Fanciful estimates were also in circulation, such as the figure given by J. B. Say of £1,600,000 (‘quarante millions de notre monnaie’) in ‘Notice sur Ricardo’, Mélanges, p. 86 and Œuvres diverses, p. 406.
[1 ]On the assumption that the estates had been bought at 25 or 26 years’ purchase which is the basis usually mentioned in Wakefield’s letters; but in the years of distress rent reductions had to be agreed to, and there were in any case considerable arrears. The rents of the estates under Wakefield’s supervision amounted to £6040 per year (as shown by an Audit sheet at 4 June 1821); this, however, did not include timber, etc., nor the estates at Minchinhampton and Minster.
[2 ]At the legal rate of interest of 5 per cent in England and 6 per cent in Ireland.