[Liberty, August 16, 1890.]

To-day’s rejoinder to my criticism of its article on interest is chiefly remarkable as an exhibition of dust-throwing. In the art of kicking up a dust the editor is an expert. Whenever he is asked an embarrassing question, he begins to show his skill in this direction. He reminds one of the clown at the circus when stumped by the ring-master to turn a double somersault over the elephant’s back. He prances and dances, jabbers and gyrates, quotes Latin forwards and Greek backwards, declaims in the style of Dr. Johnson to the fishwife, sings algebraic formulæ to the music of the band, makes faces, makes puns, and makes an excellent fool of himself; and when at the end of all this enormous activity he slyly slips between the elephant’s legs instead of leaping over his back, the hilarious crowd, if it does not forget his failure to perform the prescribed feat, at least good-humoredly forgives it. But I am not so good-natured. I admire that, as a clown, I find the editor interesting, but his performance, appropriate enough in a Barnum circus ring, is out of place in the economic arena. So I propose to ignore his three pages of antics and note only his ten-line slip between the elephant’s legs, or, laying metaphor aside, his evasion of my question.(70 ¶ 1)

I had challenged him to point out any lending of capital in a typical banking transaction which I had described. He responds by asking me to define capital. This is the slip, the evasion, the postponement of the difficulty. He knows that, if he can draw me off into a discussion of the nature of capital, there will be an admirable opportunity for more clownishness, since there is no point in political economy that lends itself more completely to the sophist’s art than this. But I am not to be turned aside. I stick to my question. In regard to the notion of capital the editor of To-day will find me, so far as the immediate question at issue is connected with it, the most pliable man in the world. I will take the definition, if he likes, that was given in the previous article in To-day. There it was said that money was one thing and capital another; that capital consists of the agencies of production, while money is only a means for the transfer of these; that what men really want is not money, but capital; that it is for the use of capital that interest is paid; and that this interest, this price for the use of capital, lowers, generally speaking, as capital becomes plentier, and probably cannot disappear unless abundance of capital shall reach the extreme of common property. Now I have shown (at least I shall so claim until my question is answered) that in the most ordinary form of transaction involving interest—namely, the discounting of notes—there is absolutely no lending of capital in the sense in which capital was used in To-day’s first article, and the consequence, of course, is that defense of interest which regards it as payment for the use of capital straightway falls to the ground. But if the editor of To-day does not like the view of capital that was given in the article criticized, he may take some other; I am perfectly willing. He may make a definition of his own. Whatever it may be, I, for the time being and for the purposes of this argument, shall say Amen to it. And after that I shall again press the question whether, in the transaction which I described, there was any lending of anything whatever. And if he shall then answer, as a paragraph in his latest article indicates, Yes, the bank lent its notes to the farmer, I shall show conclusively that the bank did nothing of the kind. If I successfully maintain this contention, then it will be demonstrated that the interest paid in the transaction specified was not paid for the use of anything whatever, but was a tax levied by monopoly and nothing else.(70 ¶ 2)

Meantime it is comforting to reflect that my labor has not been entirely in vain. As a consequence of my criticism of To-day’s article on interest, the editor has disowned it (though it appeared unsigned and in editorial type), characterized it as trivial (heaven knows it had the air of gravity!), and squarely contradicted its chief doctrinal assertion. This assertion was that the amount of currency can have no effect upon the abundance of capital. It is contradicted in these terms: Evidently money is a necessary element in the existing industrial plexus, and increase of capital is dependent upon the supply of a sufficient amount of money. After this I have hopes.(70 ¶ 3)