Thomas Tooke
Encyclopedia
Thomas Tooke was an English
economist
known for writing on money and his work on economic statistics
. After Tooke's death the Statistical Society
endowed the Tooke Chair of economics at King's College London
, and a Tooke Prize.
In business, he served several terms between 1840 and 1852 as governor of the Royal Exchange Corporation. Likewise, he served for several terms as chairman of the St Katharine's Docks
company. He was also an early director of the London and Birmingham Railway
.
on 29 February 1774, he was the eldest son of William Tooke
, at that time chaplain to the British factory there. Thomas began life at the age of fifteen in a house of business at St Petersburg, and subsequently became a partner in the London firms of Stephen Thornton & Co., and Astell, Tooke, & Thornton.
He took no serious part in discussion of economic questions until 1819, when he gave evidence before committees of both Houses of Parliament on the resumption of cash payments by the Bank of England
. Tooke was one of the earliest supporters of the free trade
movement which assumed the form in the petition of the merchants of the City of London
presented to the to the House of Commons by Alexander Baring
, on 8 May 1820. This document was drawn up by Tooke; and the circumstances which led to its preparation are described in the sixth volume of his History of Prices. Lord Liverpool's government, especially through William Huskisson
after 1828, moved in the direction sought.
It was to support the principles of the merchants' petition that Tooke, with David Ricardo
, Robert Malthus, James Mill
, and others, founded the Political Economy Club
in April 1821. From the beginning Tooke took part in its discussions, and continued to attend its meetings to the end of his life.
Out of controversy over paper money
emerged the Bank Charter Act 1844
, the main object of which was to prevent the over-issue of notes. Tooke was opposed to the provisions of the act. He thought that by some changes in the management of the Bank of England, coupled with the compulsory maintenance of a much larger reserve of bullion, more satisfactory results would be achieved.
Besides giving evidence on economic questions before several parliamentary committees, such as those of 1821 on agricultural depression and on foreign trade, of 1832, 1840, and 1848 on the Bank Acts, Tooke was a member of the factories inquiry commission of 1833. He retired from active business on his own account in 1836, but was governor of the Royal Exchange Assurance Corporation from 1840 to 1852, and was also chairman of the St. Katharine's Dock Company. He was elected a Fellow of the Royal Society in March 1821, and correspondant de l'Institut de France (Académie des Sciences Morales et Politiques) in February 1853. He resided in London at 12 Russell Square
, then latee in Richmond Terrace, and at 31 Spring Gardens, where he died on 26 February 1858.
In the year after Tooke's death the Tooke professorship of economic science and statistics at King's College, London, was founded in his memory, the endowment being raised by public subscription. There was a watercolour sketch of Tooke in the office of the Royal Exchange Assurance Corporation, and a portrait was painted by Sir Martin Archer Shee.
, and Huskisson, Tooke was a supporter of the principles embodied in the report of the bullion committee of 1810. The three years which followed the Resumption of Cash Payments Act 1819 were marked by a fall in the prices of nearly all commodities. An opinion gained ground that the fall was due to a contraction of the currency which was assumed to result from the return to cash payments. To combat this view was the task to which Tooke applied himself in his earliest work, Thoughts and Details on the High and Low Prices of the last Thirty Years (1823), and the same line of argument is pursued in his Considerations on the State of the Currency (1826), and in a Letter to Lord Grenville (1829). He entered on a detailed examination of the causes which might affect prices, and claimed to establish the conclusion that the variations, both during the period of restriction and after the resumption, were due to circumstances directly connected with the commodities themselves, and not to alterations in the quantity of money.
The History of Prices
Tooke is best known for his History of Prices and of the State of the Circulation during the Years 1703-1856 (6 vols., 1838-1857). In the first four volumes he treats (a) of the prices of corn, and the circumstances affecting prices; (b) the prices of produce other than corn; and (c) the state of the circulation. The two final volumes, written with William Newmarch
, deal with railways, free trade, banking in Europe and the effects of new discoveries of gold.
The first two volumes dealt with the period from 1793 to 1837, and were published in 1838. His conclusions were that the high prices which, speaking generally, ruled between 1793 and 1814 were due to a relatively large number of unfavourable seasons, coupled with the obstructions to trade which were created by the Napoleonic Wars
; while the lower range of prices in the subsequent years was attributable to a series of more prolific seasons, the removal of the state of war, and improvement in the processes of manufacture and industry.
The History of Prices was completed in six volumes; the third, dealing with the years 1838–9, was published in 1840, the fourth in 1848, and the fifth and sixth in 1857, the year before Tooke's death. The whole work comprises an analysis of the financial and commercial history of the period which it covers. The later volumes record of the steps by which Tooke gradually severed himself from the supporters of the currency theory
, the direct heirs of the bullionists of 1810 and 1819. This summary of Tooke's views represents his opinions as they took shape between 1840 and 1844, and were defined in his Enquiry into the Currency Principle (1844). But in his earlier writings there are many passages inconsistent with his later opinions.
The supporters of the ‘currency theory,’ whose principles were adopted by Robert Peel
and embodied in the Act of 1844, were represented by Samuel Jones Loyd, Robert Torrens
, and George Warde Norman. They contended that banks of issue, by the arbitrary extension of their circulation, could produce a direct effect on prices, and thus stimulate financial speculation; that convertibility on demand was not a sufficient safeguard; and that the only adequate remedy was to separate the business of issue from that of banking in such a way that the former should regulate itself automatically, and that the discretion of the directors should be confined to the latter.
Tooke, on the other hand, reinforced later on by John Fullarton
and James Wilson, maintained that a paper currency which was readily convertible on demand must necessarily conform to the value of a purely metallic currency; that for this purpose no other regulation was required beyond ready convertibility; that under these conditions banks had no power of arbitrarily increasing their issues; and that the level of prices was not directly affected by such issues. Before the committee of 1832 Tooke stated that, according to his experience, a rise or fall of prices had invariably preceded, and could not therefore be caused by, an enlargement or contraction of the circulation.
The National Portrait Gallery has two pictures of Tooke
There is information on the Tooke chair and the distinguished economists who have held it in
Attribution
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
economist
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
known for writing on money and his work on economic statistics
Economic statistics
Economic statistics is a topic in applied statistics that concerns the collection, processing, compilation, dissemination, and analysis of economic data. It is also common to call the data themselves 'economic statistics', but for this usage see economic data. The data of concern to economic ...
. After Tooke's death the Statistical Society
Royal Statistical Society
The Royal Statistical Society is a learned society for statistics and a professional body for statisticians in the UK.-History:It was founded in 1834 as the Statistical Society of London , though a perhaps unrelated London Statistical Society was in existence at least as early as 1824...
endowed the Tooke Chair of economics at King's College London
King's College London
King's College London is a public research university located in London, United Kingdom and a constituent college of the federal University of London. King's has a claim to being the third oldest university in England, having been founded by King George IV and the Duke of Wellington in 1829, and...
, and a Tooke Prize.
In business, he served several terms between 1840 and 1852 as governor of the Royal Exchange Corporation. Likewise, he served for several terms as chairman of the St Katharine's Docks
St Katharine Docks
St Katharine Docks, in the London Borough of Tower Hamlets, were one of the commercial docks serving London, on the north side of the river Thames just east of the Tower of London and Tower Bridge...
company. He was also an early director of the London and Birmingham Railway
London and Birmingham Railway
The London and Birmingham Railway was an early railway company in the United Kingdom from 1833 to 1846, when it became part of the London and North Western Railway ....
.
Life
Born at KronstadtKronstadt
Kronstadt , also spelled Kronshtadt, Cronstadt |crown]]" and Stadt for "city"); is a municipal town in Kronshtadtsky District of the federal city of St. Petersburg, Russia, located on Kotlin Island, west of Saint Petersburg proper near the head of the Gulf of Finland. Population: It is also...
on 29 February 1774, he was the eldest son of William Tooke
William Tooke
William Tooke was a British clergyman and historian of Russia.-Life:Tooke was the second son of Thomas Tooke of St. John's, Clerkenwell, by his wife Hannah, only daughter of Thomas Mann of St. James's, Clerkenwell, whom he married in 1738...
, at that time chaplain to the British factory there. Thomas began life at the age of fifteen in a house of business at St Petersburg, and subsequently became a partner in the London firms of Stephen Thornton & Co., and Astell, Tooke, & Thornton.
He took no serious part in discussion of economic questions until 1819, when he gave evidence before committees of both Houses of Parliament on the resumption of cash payments by the Bank of England
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694, it is the second oldest central bank in the world...
. Tooke was one of the earliest supporters of the free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
movement which assumed the form in the petition of the merchants of the City of London
City of London
The City of London is a small area within Greater London, England. It is the historic core of London around which the modern conurbation grew and has held city status since time immemorial. The City’s boundaries have remained almost unchanged since the Middle Ages, and it is now only a tiny part of...
presented to the to the House of Commons by Alexander Baring
Alexander Baring, 1st Baron Ashburton
Alexander Baring, 1st Baron Ashburton PC was a British politician and financier.-Background:Baring was the second son of Sir Francis Baring, 1st Baronet, and of Harriet, daughter of William Herring...
, on 8 May 1820. This document was drawn up by Tooke; and the circumstances which led to its preparation are described in the sixth volume of his History of Prices. Lord Liverpool's government, especially through William Huskisson
William Huskisson
William Huskisson PC was a British statesman, financier, and Member of Parliament for several constituencies, including Liverpool...
after 1828, moved in the direction sought.
It was to support the principles of the merchants' petition that Tooke, with David Ricardo
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...
, Robert Malthus, James Mill
James Mill
James Mill was a Scottish historian, economist, political theorist, and philosopher. He was a founder of classical economics, together with David Ricardo, and the father of influential philosopher of classical liberalism, John Stuart Mill.-Life:Mill was born at Northwater Bridge, in the parish of...
, and others, founded the Political Economy Club
Political Economy Club
The Political Economy Club was founded by James Mill and a circle of friends in 1821 in London, for the purpose of coming to an agreement on the fundamental principles of political economy...
in April 1821. From the beginning Tooke took part in its discussions, and continued to attend its meetings to the end of his life.
Out of controversy over paper money
Paper Money
Paper Money is the second album by the band Montrose. It was released in 1974 and was the band's last album to feature Sammy Hagar as lead vocalist.-History:...
emerged the Bank Charter Act 1844
Bank Charter Act 1844
The Bank Charter Act 1844 was an Act of the Parliament of the United Kingdom, passed under the government of Robert Peel, which restricted the powers of British banks and gave exclusive note-issuing powers to the central Bank of England....
, the main object of which was to prevent the over-issue of notes. Tooke was opposed to the provisions of the act. He thought that by some changes in the management of the Bank of England, coupled with the compulsory maintenance of a much larger reserve of bullion, more satisfactory results would be achieved.
Besides giving evidence on economic questions before several parliamentary committees, such as those of 1821 on agricultural depression and on foreign trade, of 1832, 1840, and 1848 on the Bank Acts, Tooke was a member of the factories inquiry commission of 1833. He retired from active business on his own account in 1836, but was governor of the Royal Exchange Assurance Corporation from 1840 to 1852, and was also chairman of the St. Katharine's Dock Company. He was elected a Fellow of the Royal Society in March 1821, and correspondant de l'Institut de France (Académie des Sciences Morales et Politiques) in February 1853. He resided in London at 12 Russell Square
Russell Square
Russell Square is a large garden square in Bloomsbury, in the London Borough of Camden. It is near the University of London's main buildings and the British Museum. To the north is Woburn Place and to the south-east is Southampton Row...
, then latee in Richmond Terrace, and at 31 Spring Gardens, where he died on 26 February 1858.
In the year after Tooke's death the Tooke professorship of economic science and statistics at King's College, London, was founded in his memory, the endowment being raised by public subscription. There was a watercolour sketch of Tooke in the office of the Royal Exchange Assurance Corporation, and a portrait was painted by Sir Martin Archer Shee.
Works
As a follower of Ricardo, Francis HornerFrancis Horner
Francis Horner was a Scottish Whig MP for St. Ives in 1806, Wendover in 1807, and St. Mawes in 1812 ....
, and Huskisson, Tooke was a supporter of the principles embodied in the report of the bullion committee of 1810. The three years which followed the Resumption of Cash Payments Act 1819 were marked by a fall in the prices of nearly all commodities. An opinion gained ground that the fall was due to a contraction of the currency which was assumed to result from the return to cash payments. To combat this view was the task to which Tooke applied himself in his earliest work, Thoughts and Details on the High and Low Prices of the last Thirty Years (1823), and the same line of argument is pursued in his Considerations on the State of the Currency (1826), and in a Letter to Lord Grenville (1829). He entered on a detailed examination of the causes which might affect prices, and claimed to establish the conclusion that the variations, both during the period of restriction and after the resumption, were due to circumstances directly connected with the commodities themselves, and not to alterations in the quantity of money.
The History of Prices
Tooke is best known for his History of Prices and of the State of the Circulation during the Years 1703-1856 (6 vols., 1838-1857). In the first four volumes he treats (a) of the prices of corn, and the circumstances affecting prices; (b) the prices of produce other than corn; and (c) the state of the circulation. The two final volumes, written with William Newmarch
William Newmarch
William Newmarch was a Yorkshireman, English banker, economist and statistician born at Thirsk, Yorkshire.He took his schooling at York, and, as a young man, held some clerkly appointments in that city...
, deal with railways, free trade, banking in Europe and the effects of new discoveries of gold.
The first two volumes dealt with the period from 1793 to 1837, and were published in 1838. His conclusions were that the high prices which, speaking generally, ruled between 1793 and 1814 were due to a relatively large number of unfavourable seasons, coupled with the obstructions to trade which were created by the Napoleonic Wars
Napoleonic Wars
The Napoleonic Wars were a series of wars declared against Napoleon's French Empire by opposing coalitions that ran from 1803 to 1815. As a continuation of the wars sparked by the French Revolution of 1789, they revolutionised European armies and played out on an unprecedented scale, mainly due to...
; while the lower range of prices in the subsequent years was attributable to a series of more prolific seasons, the removal of the state of war, and improvement in the processes of manufacture and industry.
The History of Prices was completed in six volumes; the third, dealing with the years 1838–9, was published in 1840, the fourth in 1848, and the fifth and sixth in 1857, the year before Tooke's death. The whole work comprises an analysis of the financial and commercial history of the period which it covers. The later volumes record of the steps by which Tooke gradually severed himself from the supporters of the currency theory
Real bills doctrine
The real bills doctrine holds that issuing money in exchange for real bills is not inflationary. It is best known as "the decried doctrine of the old Bank Directors of 1810: that so long as a bank issues its notes only in the discount of good bills, at not more than sixty days’ date, it cannot go...
, the direct heirs of the bullionists of 1810 and 1819. This summary of Tooke's views represents his opinions as they took shape between 1840 and 1844, and were defined in his Enquiry into the Currency Principle (1844). But in his earlier writings there are many passages inconsistent with his later opinions.
The supporters of the ‘currency theory,’ whose principles were adopted by Robert Peel
Robert Peel
Sir Robert Peel, 2nd Baronet was a British Conservative statesman who served as Prime Minister of the United Kingdom from 10 December 1834 to 8 April 1835, and again from 30 August 1841 to 29 June 1846...
and embodied in the Act of 1844, were represented by Samuel Jones Loyd, Robert Torrens
Robert Torrens (economist)
Colonel Robert Torrens was a Royal Marines officer, political economist, MP, owner of the influential Globe newspaper and prolific writer.Born in Ireland, son of Protestant Robert Torrens of Hervey Hill....
, and George Warde Norman. They contended that banks of issue, by the arbitrary extension of their circulation, could produce a direct effect on prices, and thus stimulate financial speculation; that convertibility on demand was not a sufficient safeguard; and that the only adequate remedy was to separate the business of issue from that of banking in such a way that the former should regulate itself automatically, and that the discretion of the directors should be confined to the latter.
Tooke, on the other hand, reinforced later on by John Fullarton
John Fullarton (writer)
-Life:Fullarton was the only child of Dr. Gavin Fullarton, who died in 1795, by his wife, the daughter of Alexander Dunlop, professor of Greek in the university of Glasgow. He went to India as a medical officer in the service of the East India Company, became an assistant surgeon in the Bengal...
and James Wilson, maintained that a paper currency which was readily convertible on demand must necessarily conform to the value of a purely metallic currency; that for this purpose no other regulation was required beyond ready convertibility; that under these conditions banks had no power of arbitrarily increasing their issues; and that the level of prices was not directly affected by such issues. Before the committee of 1832 Tooke stated that, according to his experience, a rise or fall of prices had invariably preceded, and could not therefore be caused by, an enlargement or contraction of the circulation.
External links
The National Portrait Gallery has two pictures of Tooke
There is information on the Tooke chair and the distinguished economists who have held it in
Attribution