Thomas Tooke | |
|---|---|
 | |
| Born | (1774-02-28)28 February 1774 |
| Died | 26 February 1858(1858-02-26) (aged 83) London, England |
| Nationality | English |
| Academic work | |
| Discipline | Econometrics |
| School or tradition | Classical economics |
Thomas Tooke (/tʊk/; 28 February 1774 – 26 February 1858) was an English economist known for writing on money andeconomic statistics. After Tooke's death theStatistical Society endowed theTooke Chair of economics atKing's College London, and a Tooke Prize.
In business, he served several terms between 1840 and 1852 as governor of theRoyal Exchange Corporation. Likewise, he served for several terms as chairman of theSt Katharine's Docks company.[1] He was also an early director of theLondon and Birmingham Railway.[2]
Born atKronstadt on 29 February 1774, he was the eldest son ofWilliam Tooke, at that time chaplain to the British factory there. Thomas began his professional life at the age of fifteen in a house of business atSt Petersburg, and subsequently became a partner in the London firms of Stephen Thornton & Co., and Astell, Tooke, & Thornton.[3]
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 theBank of England.[3] Tooke was one of the earliest supporters of thefree trade movement which assumed the form in the petition of the merchants of theCity of London presented to the House of Commons byAlexander 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 hisA History of Prices.Lord Liverpool's government, especially throughWilliam Huskisson after 1828, moved in the direction sought.[4]
It was to support the principles of the merchants' petition that Tooke, withDavid Ricardo,Robert Malthus,James Mill, and others, founded thePolitical 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.[4]
Out of controversy overpaper money emerged theBank 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.[4]
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 aFellow of the Royal Society in March 1821, andmembre correspondant de l'Institut de France (Académie des Sciences Morales et Politiques) in February 1853. He resided in London at 12Russell Square, then later in Richmond Terrace, and at 31 Spring Gardens, where he died on 26 February 1858.[4] He is buried atKensal Green Cemetery.[5]
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 bySir Martin Archer Shee.[4]
As a follower of Ricardo,Francis Horner, and Huskisson, Tooke was a supporter of the principles embodied in the report of the bullion committee of 1810. The three years which followed theResumption 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 hisConsiderations on the State of the Currency (1826), and in aLetter 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 thequantity of money.[3]
Tooke is best known for hisA History of Prices and of the State of the Circulation during the Years 1793–1856 (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 withWilliam Newmarch, deal with railways, free trade, banking in Europe and the effects of new discoveries of gold.[6]
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 theNapoleonic 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.[3]
A 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 thecurrency theory, the direct heirs of thebullionists 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 hisEnquiry into the Currency Principle (1844).[7] But in his earlier writings there are many passages inconsistent with his later opinions.[8]
The supporters of the 'currency theory,' whose principles were adopted byRobert Peel and embodied in the Bank Charter Act 1844, were represented bySamuel Jones Loyd,Robert Torrens, andGeorge Warde Norman. They contended thatbanks of issue, by the arbitrary extension of their circulation, could produce a direct effect on prices, and thus stimulatefinancial speculation; thatconvertibility 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.[4]
Tooke, on the other hand, reinforced later on byJohn Fullarton andJames Wilson, maintained that a paper currency which was readily convertible on demand must necessarily conform to the value of a purelymetallic 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.[4] This view, while inconsistent with the quantity theory of money, is consistent with thereal bills doctrine. On this view, a fall in the value of the assets of a money-issuing bank would cause the value of the bank's notes to fall. The public would then require more notes to conduct business, and the bank would willingly issue those notes to customers who offered assets of adequate value in exchange. Thus the quantity of notes would increase after the price level had risen.[citation needed]
He married, in 1802, Priscilla Combe, by whom he had three sons.
A History of Prices in six volumes:
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This article incorporates text from a publication now in thepublic domain: Murray, George Herbert (1899). "Tooke, Thomas". InLee, Sidney (ed.).Dictionary of National Biography. Vol. 57. London: Smith, Elder & Co. pp. 47–48. This article incorporates text from a publication now in thepublic domain: Chisholm, Hugh, ed. (1911). "Tooke, Thomas".Encyclopædia Britannica. Vol. 27 (11th ed.). Cambridge University Press. p. 14.There is information on the Tooke chair and the distinguished economists who have held it in
