RJ gives his opinion of William Jacob's book [presumably his 'An Inquiry into the Production and Consumption of the Precious Metals', 2 vols., 1831]: 'all its figures are so thoroughly illusory that you had better not meddle with it. He begins by attempting to estimate the quantity of the precious metals in ancient days from data which are pure guesses and he carries on calculations so founded up to our own times in fact perpetuating and modifying mere dreams. But if you will state distinctly what facts you want I will see if Porter [George R. Porter] can help us. I have not thought of the subject a long time. Poor old Jacob himself has become partially imbecile but his children do not like it talked of'. RJ has been very ill. 'The Pope is making a strange hash out of his half dead privileges. But though we may laugh at his Puppet Bishops and prophesy that English society and English parties will through the public mind feel and perhaps suffer seriously'.
RJ has bought William Jacob's book with him [presumably his 'An Inquiry into the Production and Consumption of the Precious Metals', 2 vols., 1831] and will write some political economy about it - 'which may or may not keep your speculations or laudable attempt to get at calculations on the subject which we much need'. Jacob's book 'is amusing[,] ingenious[,] plausible from the variety of facts he introduces but a moderately severe criticism shews at once that he has no sound foundation for the amount he assumes as that of the precious metals at different eras'. However on many other points RJ has re-read the book with pleasure and profit: 'But I assume (you have not told me exactly) that you are trying to get at the laws which determine the effect of the fluctuations in the amount of the metallic circulating medium on prices - now I doubt if the actual state of our knowledge we should be equal to more than a hypothetical determination of such questions even if we could substitute real quantities of metals for Jacob's imaginary ones. The effect of a circulating medium upon prices depends on two facts 1st its amount 2ndly on its rate of circulation. The influence of this second fact is great even when the circulating medium consists of the precious metals alone'. This 'influence becomes however (the rate of circulation) overpowering and indefinitely greater when credit as for instance bills of exchange form a large part of the circulating medium and here let me digress and remark that the late Lord Ashburton who understood such subjects better than any one I ever met checked me once for talking of bills and their circulation as including all but exclusively the circulating paper used as money and he enumerated various other securities known to merchants and used as money whose rate of circulation he said was affected by peculiar causes not to be neglected if the whole subject was to be comprehensively treated'. Nonetheless bills are adequate for RJ's present purpose: 'Let us suppose then - that bills to the amount of 100 millions are circulating and that each bill by endorsements liquidates 4 transactions or that the whole circulate goods to the amount of 400 millions. It would be vain obviously to limit the causes which determine prices in such a country solely the amount of the precious metals from time to time in use . But now suppose from difficulties in getting discount and other causes which create mistrust the bills are received in payment less freely and that each liquidates only 2 transactions instead of 4 - they would suffice then to circulate commodities to the amount of 200 millions instead of 400 - the effect of this decrease in the efficiency of a circulating medium must not be reidentified with any result of the fluctuations of the metallic circulation. Can we measure the effects of such panics? No. we have very imperfect knowledge of the amount of bills in circulation we have really no knowledge at all which enables us to trace the changes always more or less going on in their rate of circulation and with absence of such knowledge we can only get into error by fancying that fluctuations in the amount of the precious metals will alone explain fluctuations in prices'. If WW has not already read the supplement on 'Credit' to the Encyclopedia Metropolitana then he should - it 'contains some account of the clearing house now abolish the clearing house and all similar expedient and you would produce an effect on prices which any variations in the actual amount of the precious [metals] would go a very little way towards explaining'. 'All these expedients for substituting other things for metallic money and the average results of them are of secular growth and different nations of the world may be seen adopting them and so adding to their average effects at very different paces. The secular variations in European prices must be viewed surely in connection with this general progress'. Variations which are occasional or sudden 'in the rate of circulation of these substitutes depend on local and temporary causes. Such variations are a great evil and I very much fear that our actual legislation influences the evil occasionally instead of mollifying it but I will not talk politics and I have talked enough surely to shew you that I think I have good reason for considering variations in prices secular or temporary as not corresponding with or limited by variations in the amount of the metallic currency'.
John Herschel is to be Master of the Mint from the 1st of December with a salary of 1500 pounds a year: 'It is really a glorious thing for many good reasons'. RJ is ill. He will write to WW 'a word or two about your bullion question shortly and however I am sure if you can you had better make x's and y's do the work of sums inasmuch as for reasons I will send you I feel confident no calculations worth a farthing exist as to the sums which poor Jacob assumes' [William Jacob, 'An Inquiry into the Production and Consumption of the Precious Metals', 2 vols., 1831]. RJ and Charlotte Jones are to spend a week at the Victoria Hotel [see RJ to WW, 20 October 1850].
RJ has read and enjoyed WW's review of his book ['Review of An Essay on the Distribution of Wealth and the Sources of Taxation by the Revd Richard Jones', The British Critic, Quarterly Theological Review and Ecclesiastical Record, 1831]: 'there can be no question that it will do much good and you snub it too much'. RJ has not had much time to look at WW's paper on Ricardo ['Mathematical Exposition of Some of the Leading Doctrines in Mr Ricardo's Principles of Political Economy and Taxation', 1831], because William Jacob came and saw something in it which he declared would help with his book and subsequently took it off to London. Could WW thank Julius Hare and Connop Thirlwall for their work on Niebuhr [Julius Hare and Connop Thirlwall trans. Niebuhr's 'History of Rome', 2 vols., 1828 and 1831]. RJ suspects that there is 'a storm brewing' at the Edinburgh Review [J. R. McCulloch, 'Review of An Essay on the Distribution of Wealth and on the Sources of Taxation By the Rev. Richard Jones', Edinburgh Review, 1831]. Since writing the above RJ has heard that a review of his book will be in the next Quarterly Review ['Review of An Essay on the Distribution of Wealth and the Sources of Taxation by the Rev. Richard Jones', The Quarterly Review, 1832].
Trinity College - The printers need more manuscript. WW is pleased RJ is satisfied with his arrangements with the book publisher, Murray, and 'glad too that Jacob [William Jacob] is getting a little lighter to your merits. I do not think you need be surprised at his criticism: it means apparently that he understands the latter part of your book much better than the former which according to my conception of his character is just what one should expect. Take care you do not set too much your heart upon immediate brilliant success.'