An Unpublished Letter of Adam Smith Author(s): Adam Smith Source: The Economic Journal, Vol. 33, No. 131 (Sep., 1923), pp. 427-428 Published by: Blackwell Publishing for the Royal Economic Society Stable URL: http://www.jstor.org/stable/2223068 Accessed: 23/03/2009 01:44 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/action/showPublisher?publisherCode=black. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with the scholarly community to preserve their work and the materials they rely upon, and to build a common research platform that promotes the discovery and use of these resources. For more information about JSTOR, please contact
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NOTES AND MEMORANDA AN UNPUBLISHED
LETTER
OF ADAM SMITH
[The following letter from the Glasgow University library formed one of the exhibits at the recent centenary exhibition.] Mr.
THOMAS CADELL,
Bookseller, Strand, London. DEAR
SIR,
You have very great reason to wonder at my long silence. The weak state of my health and my attendance at the Custom House, occupied me so much after my return to Scotland, that tho' I gave as much application to study as these circumstances would permit, yet that application was neither very great nor very steady, so that my progress was not very great. I have now taken leave of my Colleaguesfor four months and I am at present giving the most intense application. My subject is The Theory of Moral Sentiments, to all parts of which I am making many additions and corrections. The chief and most important additions will be to the third part, that concerning The Sense of Duty, and to the last part, concerning The History of Moral Philosophy. As I consider my tenure of this life as extremely precarious, and am very uncertain whether I shall live to finish several other works which I have projected and in which I have made some progress, the best thing, I think, I can do is to leave these I have already published in the best and most perfect state behind me. I am a slow, very slow workman, who do and undo everything I write at least half a dozen times before I can be tolerably pleased with it; and tho' I have now, I think, brought my work within compass, yet it will be the month of June before I shall be able to send it to you. I have told you already, and I need not tell you again, that I mean to make you a present of all my Additions. I must beg, therefore, that no new edition of that book may be published before that time. I should be glad to know how the sale of my other book goes on. FF 2
428
THE ECONOMIC JOURNAL
[SEPT.
I am ashamed of the trouble I have so often given you about the Philosophical Transactions. The second part of 1787 is now due to me; and the first part of 1788, if it is yet published. I should be much obliged if you could find a clever way of sending them to me. Remember me most affectionately to Strahan, and believe me to be, MlyDear Sir, Most affectionately yours, ADAM SMITH.
Edin. 15th March, 1788. OF ORGANISEDMARKETS MAINTENANCE IT is generally recognised that speculation by dealers on the organisedproduce markets is of value to the community. Foolish speculation, such as that of amateurs mostly is, tends to upset the equilibrium of prices:
informed speculation by those who
make a professional study of the market is, on the average, successful, and so both provides profit for the speculator and performs a public service in steadying prices. So far there seems to be agreement; but the question as to where the profits come from has been little studied, and the impression that is prevalent is, I think, erroneous. Thus Mr. J. G. Smith, in his admirable descriptive account (Organised ProduceMarkets(Longmans, 1922, p. 121)), states:" Yet . . . it is difficult to see how the speculative market can be maintained for the legitimate traders without the admission of the foolish outsider also, in quite considerable numbers. As has been pointed out already, it is from this latter class that the expert speculator in the long run derives the main portion of his remuneration for the valuable services he renders. It would not be possible to bring about a condition of affairs under which expert speculators of great experience and knowledge carefully investigated all the circumstances bearing on prices, and then alone worked out the consequences and arrived at a scientifically determined market price." It is a matter of real importance whether this view is correct; whether the existence of a class of foolish " punters " who lose money on the exchanges is essential to their maintenance, or whether the income of exchange dealers comes from another
