56 



NATURE 



[July 14, 1923 



folk are (i) without (!(•(( of subsistence. 



(2) i(ll(> "•' .M\' iini)rfssi()ii, li, ,.,. i ; iiiK the attention 

 ol I Hill ilu- iiicii to this proiilein, \\;is that a very 

 little tji tlic n'!'M,:,l til,, II.. I, t winch they habitually 

 devote to im lions would give the 



solution ot till . ■ I tarcely bargained for 



Natukk being so widely read as to render it necessary 

 for ine to nu-et philosophical arguments. 



Mr. ! ( i ■( 111 iiil;, who devotes four of your valuable 

 columns to .1 (Ictcnce and elucidation of the philosophy 

 of the system challenged, looks characteristically for 

 a change of ideals to bring about the readjustment 

 which he admits to be most urgent. Now, what was 

 there reprehensible about the ideals of the nineteenth 

 century ? ^\'as it not the ideas which were upside 

 down ? I lUH'd not follow him in his fanciful descrip- 

 tions of and deductions from my views, though, 

 indeed, it is a novelty for readers of Nature to be 

 told that a proposal to ascertain the physical basis 

 of economics is tantamount to an attempt to baulk 

 human evolution and to impose upon man an inferior 

 order of existence. Surely most of us thought that 

 the ascertainment and understanding of the laws of 

 Nature were preliminaries to governing and directing 

 them to human ends. Eastern proverbs notwith- 

 standing, the achievements of one age in this field 

 are the starting-point of those in the next. Your 

 correspondent seems to confuse the methods of 

 science with those that apply to the government and 

 direction of men at the hustings, on the battlefield, 

 in the Courts and theatres, and by the general Press. 

 Such confusion is widespread, and the results of 

 scientific progress need to be safeguarded and made 

 "fool-proof" from the interference of the humane 

 genius. 



However, I cordially agree, and have myself 

 remarked, that the original great rulers of the world 

 were under no such vulgar delusions as are current 

 to-day about gold and money. Mr. H. O. Weller 

 recently told me that Kublai Khan's currency was 

 of papier mdche, and that some of his coinage is 

 extant. The important point to them was not what 

 the coin was made of, but whether they issued it. 

 My description of the present financial system as 

 counterfeit was in allusion to the fact that less than 

 I per cent of the money functioning as such is author- 

 ised by the King and issued by the Royal Mint. 

 Olden-time rulers issued the currency, but that also 

 is " inverted." Since millions are (i) destitute, (2) 

 idle, the presumption is that, although many may 

 understand perfectly the art of making money, the 

 reason which makes this, necessarily, a royal pre- 

 rogative is now not understood by any one. 



I am sorry if the laws of evolution preclude, and 

 the annals of history do not record, an absolute 

 innovation, and I cannot defend the word " absolute," 

 since innovations are necessarily relative. But it 

 will be in the memory of many that recently there 

 was a war, and, before a shot had been fired, a mora- 

 torium terminated the old financial system. The 

 public credit became necessary to maintain solvency. 

 Though it would be rash to predict that in the future 

 the old system may not be restored in a modified 

 form, it does not appear imminent. On my analysis 

 it is difficult to see how the public credit can' be 

 dispensed with. For what else is behind the colossal 

 accumulation of indebtedness which we have in- 

 herited from the age of irreproachable ideals and 

 inverted ideas ? The honest intentions to meet 

 " promises to pay," and the ability to perform what 

 this industrial age and its ideals demand, were quietly 

 transferred to the broader shoulders of the public 

 during the hubbub preceding Armageddon. The 

 rope has been lengthened and its end attached to a 



larger neck. The ultimate ba lit has been 



widened, but from the point o: !,li\si(s ii is 



still ( rcdulity. 



I he spontaneous increment oi v.calti, — •', 



the l;i\sh i)f I 111 I inodvnamics, lil<c all conversion ol 

 natural resources, ulicthcr to uselul or useless forms. 

 You may measun it, so long as it exi.sts tq measure, 

 by the spontaneous uKrement of debt, and the 

 philosopli\- of usur\- i> iiuk h more interesting no 

 doubt than thermodynamics, and is likely to counter- 

 act the unemiiloyment engendered by the achieve- 

 ments of the latter science, even among those who, 

 like your correspondent, find life teiuU to become 

 vminteresting. So you can nuasure the horse-power 

 of an engine by braking it, or the content of a pot, 

 not only by filling it when empty but also by emptying 

 it if it be full. For any other purpose than mere 

 measurement, however, to try to (ill a leaky pot, or 

 to run an engine with brakes on, is Icjolish. So long 

 as wealth production was not understood, the virtues 

 of gold or usury or other magical influence could be 

 invoked. But that time is past. Until Mr. Lane 

 Fox Pitt came to the rescue with his euphemistic 

 theory of psychological inversion (Nature, May 19, 

 p, 670), I found it difficult to discuss these matters 

 without giving offence. I fear, however, that a system 

 of economics based on a philosophy of usury imagines 

 the process of emptying to be a reversible cyclic 

 process — that the pot is emptied back into the clouds 

 rather than into the ocean. 



To come to the concrete, I have a method of pro- 

 ducing, more economically than any other person, the 

 goods that the community desire. Is that a collateral 

 security ? No : but if I have a block of receipts for 

 the wealth blown up in the Napoleonic wars, known 

 as Consols, or any other gilt-edged security, I can 

 obtain the community's credit at any time, without 

 the necessity of being able to produce anything at 

 all. The process is almost too incredibly Gilbertian 

 to discuss in Nature. But clearly there is something 

 very different in practice from primitive philosophic 

 conceptions of credit, since the power to pledge the 

 community's credit is vested, not with those with 

 ability to produce but with those with ability to 

 consume, though the powers of consumption may 

 date back to some remote forerunner of the modern 

 patriot in the Napoleonic era, and the goods consumed 

 then may have already been paid for many times over. 



The use of mechanical energy made possible an 

 enormous, if finite, increase of the revenue of wealth. 

 This annual revenue, by the simple process of dividing 

 it by the rate of interest, say 0-05, is multiplied by 

 twenty or " capitalised." The capital, however, 

 differs from the earlier forms of credit, such as land 

 or factories (that is, until they become obsolete and 

 tumble down), in being non-existent, and this differ- 

 ence I submit is fundamental. It is also under the 

 necessity of increasing according to an exponential 

 law without limit, which is physically absurd. 



Frederick Soddy. 



[We regret to be unable to devote space to further 

 correspondence on this subject. — Editor, Nature.] 



A Puzzle Paper Band. 



Prof. C. V. Boys's puzzle (Nature, June 9, p. 774) 

 is a deal less puzzling (as he doubtless knows) if we 

 begin it at the other end. Instead of making the 

 long belt with its two loops which he describes, and 

 then trying to reduce it to the well-known half-twist 

 " double surface " (cf. e.g. Forsyth's " Differential 

 Geometry," p. 296) of double thickness, let us begin 

 by laying two strips of paper one on the other ; 



NO. 2802, VOL. I 12] 



