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not the saving instinct which prevented. He did not throw the skin away, because he saw that he could apply it so as to satisfy some desire. He did not make a mitten of it, because he saw that he could get more good of it in another way. Similarly bows superseded slings, and guns, bows, not because men were stingy, but because they were ingenious. The whole notion of saving is a relic of the mercantile fallacy; exchange enriches the seller at the expense of the buyer. It is refuted by the same argument. The buyer is a seller. Exchange enriches both. You are right in saying that inflation of the currency will not abolish interest, but I can tell you what will: withdrawing the protection of Government from monopolies. The cause of interest is speculation with a view to getting a monopoly. If a tailor and farmer exchange their products, both gain, but there is no interest, only wages. If they find it convenient to deposit their products with a middle-man, still his commission is only wages. But if the middle-man preceives that the production of clothes is running ahead of the production of food, he can gain (at the cost of the tailor), by buying large quantities of food and paying interest to the farmer, or to a lender who furnishes him money. In the warfare of speculation which ensues ninety-five per cent of the speculators are ruined-eaten by the remaining five per cent, - who finally do secure a monopoly. As wealth increases the battle grows fiercer; till now we have on all hands complaints of over-production and combination to create the poverty necessary to profits. The contemporaries of Swift or Crolsglass would have roared with laughter at the suggestion that men could be idle and hungry because there was too much wealth. The nineteenth century is not so much stupider than the eighteenth or the fifteenth that it will go on swallowing such humbug by the name of science. They will soon find out that redundant wealth should result in communism, and must do so the moment governments cease to protect thieves. C. L. JAMES.

In reply to the first criticism that the admission that governments are great robbers is inconsistent with the assertion that they have sprung from the necessity of protecting the lives and property of citizens- it is sufficient to remark that there is no inconsistency whatever in the statements. As to whether or not there is any incompatibility between the two tasks-robbery and protection it is sufficient to observe that they are both performed by present complex governments. In saying that the need of protection is really the necessity from which governments have sprung, my statement may have been a little rash. Perfectly conclusive evidence on that head is not to be expected, and men may have combined, or may have been coerced into co-operation, for the purpose of aggression, before they had combined for protection.

At any rate, the need of protection, principally against foreigners, is a fact now, and has been a fact throughout that time of which records exist, and it is, therefore, a pardonable hyperbole, if, indeed, at all figurative, to speak of this as the necessity from which government has sprung.

It is a little amusing to be called to task for talking Anarchy without knowing it; at first blush it would appear to the uninitiated a grateful discovery to a professed Anarchist that his sound views are prevailing in quarters where they are expressly repelled. But the peculiar agitation of Mr. James is not so surprising when taken in connection with his absurd contention that Communism would result from Anarchy. Anarchy may be a very bad thing, but it is not so bad as that.

The possession of private property, personally held, and selfishly and exclusively enjoyed, is, perhaps, the most fundamental of social necessities. It is, indeed, pre social; it is, simply, organic. Neither has it anything under the sun to do with the question of POLITICS. So Mr. James's annoyance was, perhaps, due not so much to finding us talking Anarchy without knowing it, as to observing that although we talked very fair Anarchy for poor, muttony bourgeois, we did not, wittingly, or unwittingly, talk communistic nonsense, that is, neither prose nor poetry.

Mr. James's reasoning to show that capital is not the result of saving has the merit of ingenuity and originality. If one asks why water accumulates in a reservoir, and is told that it is caused by the dam, he may, of course, retort that the dam is not the cause, but rather gravity, which makes water seek a lower level; but he would hardly contend that the dam acts to prevent the water from accumulating. Now, in the case of wealth, of which capital is a part,

that part which

is applied to reproduction, it is perfectly evident that there can be no accumulation unless there has first been production; but it is equally evident that there can be no accumulation if the wealth is consumed as fast as it is produced.

In the case instanced by Mr. James it does not necessarily follow that there would be less demand for shoes if all shoemakers gave up the use of tobacco. Some of those now engaged in producing tobacco would produce

other things to exchange for shoes. It is not likely that the world would be richer if falconry had continued to the present time, though that would have afforded lucrative employment for many persons who would have needed shoes, food, and other things. We do, to be sure, find those nations and individuals most sparing in consumption whose production is least; but the saving may not be the cause of the small amount of production. It may be just the other way. Probably few individuals and no nations produce as much wealth as they could produce if their desires were greater. It is conceivable that a nation may be content to consume little, and that in consequence it produces comparatively little. But this is beside the question. Nations find it of the utmost importance that not all of what is produced each year shall be consumed within the year, but that part be saved to aid further production. In this country, according to Mr. Edward Atkinson, about ten per cent of the annual production is saved. Now suppose that the annual production were one half greater, but that only five per cent were saved: the country would be growing in wealth only three fourths as fast as at present. The difference would be even greater, owing to the part which the wealth that is saved plays in assisting further production.

It is perfectly true that invention and industry create capital. It does not at first seem probable that the instinct of saving would induce a savage to make a sling rather than a mitten out of a rabbit skin. But suppose him to be in need of the mitten, and to have thought, "If I make a sling I shall be able to kill two other rabbits and make two mittens." Here is the feeling which leads men to save, to defer a present gratification for a greater future gratification. The process of thought is not so very different from that gone through by a savage who has killed an animal and, after having eaten half of it, says, to himself, "I should enjoy eating the other half, but very likely I shall need it more to-morrow or next day than I need it now, therefore, I will save it." The importance of the inspiration, the perception, that by the aid of a sling a stone can be thrown with more force than by hand, is not to be underrated; but invention usually implies labor, mental and physical, labor not directly applied to satisfying immediate wants, and so

implies preferring a future to a present gratification, and this is the feeling which prompts The refutation of the mercantile saving. theory is complete. The buyer is also a seller And so an inventor is an accumulator. A producer is also a consumer. In order to become rich a nation must produce more. than it comsumes, that is, must save a part of what it produces. Where is the fallacy?



It would be a sufficient reply to Liberty's criticism of the trivial article on Interest at page 201 of TO-DAY, that the article was neither written by the editor nor intended by the writer as a commentary on the anarchist view of interest. It might be encouraging to Liberty that its theory should be described as the most popular fallacy upon the subject"; but I am surprised, on the whole, that this characterization of the fallacy did not warn the editor against taking that shaft to his own bosom. Although I do not agree with him, that, under freedom, capital would cease to be lent at interest, I am perfectly prepared to try that means for this and for every other end- as he well knows. If he will reflect upon the so-called debate -save the mark! upon the silver question in the United States Senate then in progress of consuming the people's hard-earned money at the rate of $10,600 a day (I believe), the editor will read the article on interest in a new light.

For what is the substantial proposition of those who believe that interest can be lowered by the issue of Treasury notes while the monopoly of banking continues? Surely it needs no great reflection to see that the amount of currency, as of other things, required by a given people, with given habits, and in a given industrial state, is a limited quanity, although absolutely indeterminate under the existing restrictions of banking. If money shall be figuratively called a medium of exchange, the industrial state may be fitly symbolized as a receptacle containing this floating, but now, perhaps, artificially immobilized, medium. And the substantial proposition of the inflationists may then be described as the belief that a vessel of a given capacity can be made to contain a greater quantity of fluid, say, by simply turning on the faucet and letting the unfathomable waste of Congressional ignorance escape into it. Now, under free





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