39

2027 S. Bentley Ave., L.A. 25,
August 29, 1957.

Dear Mr. Pound:

I wrote the librarian at Southern Illinois University, asking him your question whether he had used Horton's list. He has answered, that he has, assuming that you mean Marion Horton's *Buying List of Books for Small Libraries*. Thank you for your suggestion.

Did I tell you that Charles Martell in Watertown, acted on your suggestion, and bought a copy of the Kuan-tzu. I hope he will enjoy it.

About Yale undertaking the distribution of my book: There are three -- no, four -- units at Yale to consider: The Press declined to publish my book, even though I stood the expenses. The formal instructors in Chinese matters (all but one) have shown no interest in the Kuan-tzu book. The one man has been of great help to me: Johannes Rahder, an accomplished scholar. Now for the unit that did, for a time distribute the Kuan-tzu (and would have continued, but that I made other plans): Far Eastern Publications. They are mostly busy with class outlines, mimeographed stuff; but were very kind. The reason I withdrew the book from them was this: When I was pronounced in bad health, in the fall of 1955, Southern Illinois University was setting up a University Press. That Press was willing to assume distribution of all my things. So I took some from Texas, and the book from Yale, and put all in one pot. Also, I turned over copies of journal articles, etc., to the SIU library. It was a fortunate early distribution.

2.

I am directing the Univ. Press at SIU to send review copies
of both books on China to Armando Sapori in Rome. And I am
writing him/that this is at your suggestion. Thank you.

Yes, I should like to see Chao's notes on Shang Yang.
And I am glad he is to be in California. If I get anywhere
near the College of the Pacific, I'll look him up and thank
him for his kind words about my inexpert work on China.
And I'll check his address; maybe he will be located in
Stockton; I know the undergraduate work of his college is
there.

Thank you for the sample of the beautiful printing
done by Scheiwiller. Italy is the home of beautiful
printing. Although European printing was "invented" in
Germany (after hearing rumors of what had been done in that
line in China -- would you like to see my book by Carter,
revised by Goodrich, on the Chinese printing?), it was
almost immediately beautified and made readable by the
Italians. So we have "roman" and "italic" as our standard
types. My own Chicago printer of the Kuan-tzu used pretty
enough type and stock, although the devil omitted the
frontispiece and reversed page 17.

I am a little puzzled by an item in your letter of
July 30 "yrs to hand/ this merely to state Edge No 6
(copy by air mail) with Neame's trans/ Cocteau "Leoun"/
also 4 pages Chao's selections from Kuan" . then you kindly
quote what Chao said about my book. But nothing arrived
about Neame, or Cocteau, nor did I see anything on the
edge of any No.6.

3

Aug. 30

41

We have a pretty good selection of your works in the libraries hereabouts, particularly at UCLA. I have looked hastily, but with delight, at your ABC of Reading; and will read carefully the ABC of Economics.

To answer a question you asked me: No, I have not known anyone named Mandel. Although I know of Lothrop Stoddard, I have never met him.

You say you were unable to spot "Ngan" in the comment by Huang. I have called him Wang An-shih; my index puts him on page 230 (a very brief reference) and 388 (even briefer). I shall be glad to send you Williamson's two excellent volumes on Wang and his predecessors, if you wish.

I consider Wang's essay on government (Williamson, Volume I, Chapter VII, the Wan Yen Shu) really a wonderful document.

If you ask for and get my Williamson, blessings on you, you may keep it if you wish. Don't judge me as a reader by the uncut pages. I had an earlier set, but lent it to my brother-in-law, all marked up in pencil, to make smoother and more meaningful. He never returned it, so I bought a new set. I'll even ask it back, if you want my comments.

About Harry Moore going to Carbondale; what is his field? The standard of the faculty at SIU is excellent -- many very good people, and constant work to pick them up.

The work load on the faculty is much too heavy. The dean of the Graduate School is excellent, and he brings in many foreign students, who tone up the place no end, by contrast with the lokal yokels. The standard of admission and retention of undergraduate students is unfortunately very low.

4

Aug. 30

Thank you for your patience with me. I enjoy standing
in the shower of sparks from your whirling emery wheel.
I shall read along at my pedestrian gait, the works of
those to whom you refer.

Please do not take my comments on your own works as
criticism that need be taken seriously or incorporated in
later editions. They are just so much conversation. If
they cause you to change slightly an interpretation here or
there, then make the change of your own volition, not in
any sense of compliance. I enclose a couple of pages of the
same sort on the Cantos (or should I say Cantares?).

Yours sincerely,

August 30. Comments on reading Cantos LII - LXXI

These comments are meant to be conversational, with
no pretense to authority. I am not an expert on China,
merely a lover of ancient China. I know very little of
the history of the American Revolution and later decades.

A few apparent errors in printing:

pages 4 2/3 and 5 1/2: repetition, for two months, of odour
of burning, and to the hearth god the lungs.

top p. 13: There were no coins in general circulation, 1200 B.C.

80, 5 lines from bottom: not distributing, but disrupting

97, line 8: effect, affect?

111, twice on the page: out ports for "our" ports

118 1/2: decent

155 1/2 Vergennes

Unless one already knows the history of China, the
Cantos remain cryptical. If the reader has the history in
mind, the innuendos take on subtle meaning.

This reader conjectured vainly about the historic writings
which furnished much of the source material. Evidently wide
reading. I am sorry that the Wade system of spelling the
Chinese place names and personal names was not followed.

Canto LII: It was not only the Jews that Ben Franklin
wanted to exclude from the new country; he wanted to exclude
all brunets. (You may guess the color of Franklin's hair.)

The Chinese seasons are beautifully handled. (and see
my Kuan-tzu, Essay 40, pages 88-92)

On page 5, lines 6,7: The yin and the yang are not
equal, or in balance, at the solstice; only at the equinox.
At the solstice, one of them is supreme.

With Canto LIII the use of Chinese characters begins.
They are beautiful, and well handled; consequently they
contribute to the artistic appearance and to the poetry.
But they do not help the reader to understand any meanings.

Not only Chinese language, but other languages begin
here too. The macaronic model comes from Italy, where the
languages interspersed were chiefly Greek and Latin. Pound
uses Greek in two forms, in Greek letters, and in Latin
letter transcription -- also a half-dozen or more modern
languages. By the way, the word **mandarin** is of Portuguese
origin, not Chinese; also the word **porcelain** (wooly pig).
Pound's foreign word usage is easier-than in Finnegan's Wake.
to follow

p. 12 1/2. Do not try to see too much in the "schools" that
were established for the young. Few pupils, and terribly
limited curriculum; mostly obedience and conformity to laws
and rites?

Here and later, at intervals, excellent passages on
good rulers and their acts for the good of the people; also
on one or two evil rulers, as on p. 18, taking pot shots
at pedestrians.

21 1/2 Maybe you concede too much to the old vilkin Shih Huang Ti -
that his burning of the books was because of the fools.

2

Cantos

Please remember that these comments are only making conversation; I do not regard myself as God Almighty.

To go back to page 18. I think it is too bad to omit the non-Confucian schools of thought -- Mo Ti, Shang Yang, Lao Tzu, Chuang Tzu, Han Fei-tzu, and the Confucian Mencius. Also, in the Han period, might have picked up the two great historians, and the Voltaire of ancient China, Wang Chung. And two emperors were of interest: You barely mention Wu (or Ou) who conquered to the Caspian, and bankrupted China. And there was Wang Mang, the "socialist emperor".

Of course I respect your right, as an author, to do your own selecting -- not mine.

45 1/3 Not clear whether you approve or disapprove issuing notes and later redeeming them at 1/3 their original value. Maybe even 1/3 is better than the holder would have gotten had he carried gold?

49 3/4 This kindly relief from taxes, to which you refer intermittently: Is it your implication that such could be carried on indefinitely? or do you grant that sooner or later the government finance itself? Would you prefer that the ruler finance his government by the income from his personal fief or desmesne?

50 1/3 Kiassé, and no language clue. Maybe macaronic writing is so intended?

In LVIII and following, the Christian missionaries are handled, in a properly subordinated role. Interesting to more or less group them with Taoists, Buddhists, eunuchs, harems, usury -- as trouble makers.

LX Voltaire was certainly impressed by the Edict of Tolerance.

p. 75, 5 lines from bottom: error? from the Mohammeds?

I ran into more conflict between the Christian religious orders, prior to de Tournon; but that need not be told here.
p. 83, good comedy.

And now to the American scene.

Your interest in money, paper money, taxes, bills of credit, excuse from taxes, corruption in government, intrigue and interference and encroachment, by devotees of religions, the dull injustice inflicted by bureaucrats . . . must be baffling to your poet confraternity. (and banks)

This constitutes a welcome recapture of the emotions and vitality of the revolutionary days.

Lewis Maverick

August 30.

September 1

Comments on "Confucius, The Unwobbling Pivot & The Great Digest" (which I return, herewith, with my pencil marks). I repeat, that I do not claim to be right, in any instance of indicated change of text; I merely offer my interpretation as a point in discussion.

General points: There must be several words in Chinese, like "eigentlich" and "also" in German, which serve chiefly as a place for the speaker to stand for a moment and rest on his elbow. Probably they should be translated by the "ugh" of the American Indian. You will see that I have cut out "therefore", thus, hence, etc., almost every time they occur. (maybe too often).

I would make much use of the transcription "tao". The term "ta fu" should not be translated "great officer"; that introduces a false sense of vagueness; the officer called the *ta fu* is very specific in Chinese; he is a minister.

The words east and west should be regarded with suspicion; also north and south. They acquire at times (and probably lose, later) colloquial or idiomatic meanings. Tung-hsi means vaguely "thing" or "effect", probably "asset".

Southern fields or southern acres means *any* fertile fields.

I shall let the marked copy carry the small suggestions; and shall type only where there is something that seems worth talking about.

page 5, item 1: a famous passage: What heaven has established is called (the inborn) nature. The realization (working out) of this nature is called tao, the process. The communicating or expounding of this process is called education.

p. 6, chap. II, item 1: the mean man is entangled in the eddies about ...

Chap. IV, item 1: Most people do not move in harmony with tao (the process). ...

p. 7, continuing: Even those who know may exceed. The monkey-minds don't even get started; they do not understand the tao. Some men of talent shoot past the mark, and others do not quite reach it.

item 2: Few can appreciate the flavors.

p. 12, chap. XIV, item 2: cannot be split (warped) in such a way as to be shut off (permanently) and unable to resume his normal character.

item 4: The small man is concerned about the risks, walking on the edge of the precipice; tries to fool his luck and to ouwit the hazard.

p. 13, Chap. XVI, item 1: Kung said: The underlying nature of energy and of purpose have their *virtue*. The underlying nature of energy and purpose are effective and expert; they are as tangible as the grain of the sacrifice.

2. We perceive them, even though not with the eye or ear; for they are the bones of all things; they cannot be expelled, for they are inseparable; but when something dies, it does not leave them behind.

Sept. 2

Pivot

page 2

p. 15, chap. XVIII, item 3. I have two interpretations of this passage. But first let me make a few background statements: The "Emily Post" classic, the Li Ki, prescribes behaviour for all circumstances. This covers costume, proper conveyance, how to bow to superior and to inferior, how to act at dinner, what kind of boat to use, etc. It is sharply graded according to the office. A mandarin of the first grade is permitted such and such scope for his funeral, for his retinue when on a particular kind of duty, etc. Second grade has his prescriptions. Minor functionaries, two. Merchants are forbidden to dress like mandarins, etc.

My first interpretation (although a bit of a stretch of the actual words) would have it that the passage is telling of the adoption of these rules.

"he honored the earlier dukes in the imperial sacrifices; he prescribed ceremonial procedure for princes and ministers (ta fu), the lesser officers, the scholars, and the minor functionaries ((remember that the same character covers either the people or the minor functionaires)). If the situation was complex, he prescribed for that, too. If the father had been a ta fu, and the son was a scholar, the funeral was that of a ta fu and the sacrifice that of a scholar; whereas, if the father had been a scholar and the son was a ta fu, the funeral was that of a scholar, and the sacrifice that of a ta fu."

With less enthusiasm, I offer my second interpretation, which follows the text more closely, and shows the Duke of Chow generously admitting the officers to minor parts in the great imperial rites:

"he honored the earlier dukes in the imperial sacrifices, and extended participation in the ceremonies to the princes and ta fu (ministers) to the rest of the officers, to the scholars, and to the people (or minor functionaires). If the father had been". . .(as above).

This second interpretation would need a footnote, along the lines of the above explanation.*

*The imperial regulations prescribed a strict regimen or ceremonial in many details of life; each rank of officer had prescribed costume, retinue, chariot, boat and ceremonial behaviour.

p. 22, Chap. XXI. My contribution is unsatisfactory. Intuitive intelligence, that which springs from sincerity alone (what Thorstein Veblen liked to call naïve common sense), is nature or inborn talent. Intelligence or knowledge produced by reason or disciplined study is the result of education. (Both are good?) Sincerity will create intelligence as if carved with a sharp knife-blade, and reason or discipline will create intelligence as if cut true with a chisel. ((maybe "can", instead of "will"?))

Sept. 2

Pivot

page 3

p. 24, chap. XXVI, item 7. The word "ambiguity" seems to add a great deal of meaning.

top p. 25, the first paragraph. I have made a number of clumsy changes; my changes are based on the assumption that sun and moon are jointly the parents. I believe that it might just as well be assumed that the sun is the only parent; then of course, the plural form would need to give way to the singular.

The sun and the moon have the stars as their children. The zodiac groups measure the seasons and warn of the passing of time. They (the sun and moon; or shift to the singular, for the sun) carry all these suspended, thousand on thousand, all looking down from above on the multitude of things created (the multitude of earthly creatures); they move them, now hither, now thither, keep watch over them, incite or activate them; they appoint the times of their motions. All are bound into a system with determined successions in a fixed order. The visible heaven is but one, though it may appear to be many.

p. 34, Chap. II, item 1: a famous passage:

> If one learns how to make oneself new for a day,
> Then, day by day, make oneself new,
> Again and again, make oneself new.

p. 35, bottom 3 lines: A prince should base his conduct on humanity . . . As a government officer, in respect . . . but

p. 45, item 16: To see high merit *not* raise it to office; to appoint it, but not give proper promotion -- is to challenge fate. To see iniquity *but* not throw it out; to depose it, but not send it into distant exile -- is to err.

41

2027 S. Bentley Ave., LA 25, Calif.
Sept. 5, 1957.

Dear Mr. Pound:

Thank you for your letter of Aug. 29. I'll answer it
later.

Now I wish to present only one topic, in the nature of
a postscript to my comments of Sept.1, on the Unwobbling Pivot.
This p.s. is inspired by reading Winthrop Sargeant's excellent
article in the current New Yorker (issue of Aug. 31) on Zen
Buddhism and Suzuki. As he points out, the Buddhists and the
Taoists stress intuitive thinking; they try to wean us away
from orderly study and rational thinking. Now, my question
relates to a passage that I had already labeled unsatisfactory.
Was Confucius directly criticizing such teaching? or was the
passage endorsing the Taoist rejection of orderly study? If
the latter, then there arises the suspicion that the passage
is not the work of Confucius, but an interpolation, a forgery
by some Taoist. Clearly, none but an expert in classical
Chinese written characters can resolve the problem; maybe it
--the passage -- has no reference to Taoism at all.

I shall rewrite the passage, although Confucius were
protesting against the Taoists: (it was at bottom my p.2)

Intuitive knowledge, that which springs from the self
without study, may be called natural or inborn.
Knowledge produced by reason and disciplined study
may be called the result of education.
Intuitive knowledge can be as precise as though carved
with a knife-blade. (carved in wood, rather shallow or weak)
That which results from study as though cut true with
a chisel. (deeper, more powerful, as in working on jade?)

probably it would be well also to have a look at the earlier
passage -- your page 5, item 1; middle my page 1 -- Is there
a concession to Taoism here? a protest against Taoism? Does
it contain an opposition or a parallelism between intuitive
and acquired knowledge? Does it look like a forgery?

Yours sincerely,

Sept. 6

page 5.

But I shall not continue, essay by essay, through the
Kulchur book. That book and your last letter, cause me to
conclude that you and I simply differ basically on our ideas
of money and interest.

I certainly grant that you are right in interpreting
the statement that "the earth belongs to the living". I was
quibbling. Whoever said that, merely meant that it does not
belong to the dead; he did not mean that posterity has no
claim.

Not even by analogy, nor by a "play" on words -- but
taking other meaning of the principal word -- all value derives
from the future. Never mind the past history. Maybe that is
what poor simple Henry Ford meant, when he said that "history
is bunk". In this field, of value deriving from the future,
the Austrian school of economists is the most vocal. I especially
like Böhm-Bawerk, Positive Theory of Capital, original German
in 1888. The most amusing chapter in it is Book VI, Chapter X,
"Interest under socialism". Here he forecasts pretty accurately,
how the preconceptions of the socialists that interest is
wicked, will lead them to strange and wasteful actions if they
ever get control of a state. I am sending you my copy.

Not that "history is bunk", but I am the bunk in the field
of history. I had not known of Gemistus Plethon and his part
in bringing eastern (Byzantine) wisdom to Italy. I shall go
to the library at UCLA, and see what I can learn about him.

Referring to the Chinese Odes: There is a strong
parallel with the *Farewell to the Songs of Solomon*. In each
case, there has been effort by the devout to show them as
inspired or revealed or at least religious, rather than merely
a compendium of ancient songs.

You and I will likely not convert each other on the
subject of money. Not that we should set aside the topic,
or stop trying to convert, though! For by such earnest
presentation, each organizes his thought, to reveal, at least
to himself, its strengths and weaknesses. I shall ponder for
a long time your letter, and Kulchur. This is a first answer.
There may be many more. I only wish you had a bit more of the
filthy substance, to be able to hurry the publication of the
books you have in process.

Yours faithfully,

Notes on Ezra Pound's *Culture*, 1938, The New Directions Press. Published in London under the title *Guide to Kulchur*.

The first essay: Digest of the Analects:

Confucius does not "know so many things"; he reduces all to one principle.

To call people and things by their names, that is to say by the correct denominations, to see that the terminology is exact. *Explanation*, p. 16.

Confucius against the make-work fallacy.

Meditations are not so good as a study of something in particular.

Duty. Deference. Beek friends among equals. etc.

Confucius and Christianity offer a way of life; but philosophy only a highbrow study, something cut off both from life and from wisdom

24. Dates in China and Greece.

26-27 compliments the scholastics: a verbal culture.

The doctors were careful of their terminology.

One reason that he likes Confucius and Mussolini is that they esteem and recommend poetry.

29 Confucius: you have the main character filled with a sense of responsibility, He and his interlocutors live in a responsible world, they think for the whole social order.

Christians and Greeks less so.

31. Most history ignores the great causes: economic & moral. vaguely begins his aspersions of usury (not here named -- merely "one enemy") The usurers want to keep things confused, and the people ignorant.

No-one regards Plato as practical, or would try out his utopia; whereas, Confucians frequently rise to reform the government.

32. Some Romans admired and followed Zeno. But Zeno was just a nazi from Sparta, a follower of Lycurgus

33. Socrates, as depicted by Plato, strove for precision in speech. & to make people think. Plato leads him improperly to sublimities.

40. Marcus Aurelius a dilettante.

Chap. 4: Totalitarian, 44-50.

Plato, in general to be criticized; but grants he was inspiring. "The history of a culture is the history of ideas going into action. Whatever the platonists or other mystics have felt, they have been possessed sporadically and spasmodically of energies ..." Gemisto brought a brand of platonism into Italy and is supposed to have set off a renaissance.

49. We traced "the just word" back to Elaubert.

50. Definition went out, in the 1500s. After Leibniz, the thought of people who labelled themselves philosophers no longer led or enlightened the rest of the thinkers. (not clear but seems to say the material scientists took the lead, and the contribs of the philosophers were ancillary.)

Victorians (& H.G. Wells) bogged in loose expression.

Pound: Culture gen'l matters 2

Chap 5. Zweck or the Aim, 51-62.

Proud that it is recognized that he occasionally causes
a reader suddenly to see -- or that he reveals the subject
from a new angle.... "until one gets off the dead and
desensitized surface of the reader's mind, onto a part
that will register."

Afraid of newspapers owned by the wealthy.

52-53, the greatness and collapse of the Moslems.
Ideas petrify. An orthodoxy is set up, and all must
swallow it.

"A national dividend ((?!)), distributive economics, the obliteration of snobism, Averrows, Avicenna, a beauty of philosophical writing, a dream cut finer than Plato's, the Alcazar, the Alhambra, a thousand mosques that Keats couldn't have over described, a sense of man and of human dignity yet unobliterated. In 1906 in Tangier, you could see it in the walk of the Moslem. Contempt for poverty, the pride in the splendours of the mind, a sense of intellectual riches held calmly by Frobenius' Arab botanist, outwardly a mere beggar."

Tired of overdose of knowledge, ignoring understanding
& wisdom.

56. "beanery" means college or univ.

57 Admires the kind of thinking by Leo Frobenius.
He uses the word "paideuma" for the complex of the
intooted ideas of any period. Not same as Zeitgeist,
which latter includes also the atmosphere, the tints of
mental air, etc. 58. Paideuma to mean ch'ing ming.

Paideuma seems to mean ch'ing ming.

61 Frobenius Institute & Afrikarchiv.

Earlier Catholic Church practically went out of business
when its own hierarchy ceased to believe its dogma. Leo X.
Executed Scotus Erigena, who held that Authority comes
from right reason. Church is doing better now.

Church should express gratitude to Cavour.

79. The Confucian Great Learning (Ta Hio), the examination of motivation, is an examination with a clear purpose. (other Chinese mention)

The "Parts" of the book seem to have no significance.

Part II begins with Chap.10

91. Praises the Italian civilization.

92 ff. poor translations of the Greek tragedies.

Gaudier, Wyndham, L. and I, as we were in *Blast*, before 1920.

187. Picks my Chinese patronymic as an example: "What
China is and came out of, can be divined from the 187th
ideogram (ma) meaning horse, 22 pages double column of
Morrison of words with the radical horse, and . . . "

Now to Part III, beginning p. 105.

Pound: Culture gen'l matters 3 105

Admires Cocteau. Mussolini a great man, swift of mind, promptly supported by swift emotion showing plainly. Balfour a fake.

112. Food is a French possession.

121 on Chinese. Kung asked his son if he had read the Odes, the Book of Poetry. Poetry is condensed, totalitarian. Couples the Four Classics with Flaubert

122 defends the stoics. Names the prominent members. Petered out in Marcus Aurelius.

127. Kung's four strands: Literature, practice of virtuous actions, no faking, fidelity. Kung insisted on poetry. Plato, the purple swine

130 immoral modern geometries. Previously had been research into reality.

133R.L.Stevenson apparently was refused a teaching post in an American university.

G Rogers fired Kipling from a Phila. paper.

Whereas the civilized Florentines of the Renaissance had the sense to let Raphael choose designs for a new town gate despite his youth (16).

134. Claims credit for his own discovery that Mussolini was introducing a resurrection.

Contempt for London. More (and pity) for Manchester.

Culture is different from and higher than knowledge. More like wisdom.

137. "A civilized man is one who will give a serious answer to a serious question." Civilization itself is a certain sane balance of values."

The VOU Club seems to be in Japan. artists? poetry? Chap. 21. begins p. 141. Praises Italian textbooks. & Italian religious publications.

144. One measure of a civilization is what that age or person really wishes to do. The hope.

Praises Odyssey, Ta Hio, Odes.

"The Duce and Kung fu Tseu equally perceive that their people need poetry."

147. "The stupidity of my age is nowhere more gross, blatant and futile than in the time-lag for getting Chinese texts into bilingual editions. The Ta Hio is so edited." "Fenolloso died in 1908."

"Perhaps Tokyo will take pity on us, perhaps the best hundred books in ideogram will be provided with an English or European crib before we are many more decades deader, older, stupider and void of perception."

Lists a few and discusses placing of ideograms.

-- and for music in ms.

His book: *The Chinese Written Character* (or pages in a book?)

The Forschungsinstitut in Frankfurt, thanks largely to Leo Frobenius, drives toward a new learning. Bilingual texts of the classics could be turned out in a few years.

155. In some countries, the church is Babbitt; not Italy today. Sick of America and England. Recognizes some shortcomings in Italy.

151

EP

Pound, Culture

gen'l matters

4

159

The Tempio Malatestiano ... the apex of what one man
has embodied in the last 1000 years of the occident.

Sigismundo cut his notch. There in Rimini.

Intaglio, painting, the medal.

169. Cute on answering critics: often best to avoid answer.
"Exception: attacks by the very young and honest, where a
reply can educate at least a morsel of the next generation.
My private belief is that the form of such reply should be
as caustic as possible. The bare fact that an infant mewl
is noticed indicates benevolence on the part of an elder."
170 "The earth belongs to the living". ((Catholic Church
knows better.))

172. "Mud does not account for mind. Kant, Hegel, Marx
come out in OGPU. Something was lacking."

Analogies between New Testament thought and the Analects
and the Ta Hio.

173. Parliaments must go on the air. Then the fools will
be shown up. Men of good will and brains may be tempted
into the government.

180. uncomplimentary to T.S. Eliot. But increasing mention
of Eliot, and more complimentary.

Chap. 29 has the title of the book: Guide to Kulchur.
But of course no chapter heading relates much to content.

185. Puritan is so involved in sex that he downgrades all
other types of wickedness. "semiticly to obliterate values".
"The term corporate has some significance. The liver and
heart in a healthy body do not try or tend to reduce each
other to a common level. . . . The endocrines participate,
they do not seek a common level."

202 German poem, Klabund's translation? (from Chinese)?

204 Not much credit to Rilke.

Confucii Chi-King, sive Liber Carminum,

Father Lacharme ex soc. Jesu, a very learned man. This
notable work begun in 1733, and not really finished by
1752. Julius Mohl edited and published in 1829.&1830.

"Now we want the ideograms, even where Lacharme is clear
reading."(( Hence the comments to LM))

214-15 Lacharme's edition again. Discusses particular
passages.

220 wonderful private libraries in Italy. esp. music.
cusses at modern German-American universities -- drive
to "research", based on too little knowledge.

Chap 39, 222-226, man drunk with god, etc. Platonism.

Gemistus Plethon brought over a species of Platonism
to Italy in 1430s. Wonderful sarcophagus in Rimini.

Cites publications about him. Wanted to keep out the
Turks. A boot for Aristotle. Some followers.

mysticism over several pages.

237 rails at Yale, her financial supporters.

5

60

gen. matters.

247. praises the men who kept America out of the League of N. Emperor Chun-Tchi ordered a Tartar language translation of the Odes ((LM and other classics)) 1655. Considered them valuable instrument of government. Lacharme found the Tartar version very useful when he set out to make translation of the Odes.

249 Mussolini has told his people that poetry is a necessity to the state, and Carlo Delcroix is convinced that poets ought to occupy themselves with these matters, namely credit, the nature of money, monetary issue, etc. This indicates a high stage of civilization.

Chap. 49 deals with Kung (also contains economic matter) "Kung's first public job was a Douglasite assessment of the productivity of the province set for his inspection."

Kung interested in folklore. Ovid, too.

276-77 For 150 or 200 years, much Chinese scholarship has lain around in French or Latin. We in the English world could have gotten on with it faster.

299 ff. a bit insulting to Eliot? But keeps improving in attitude. 301 England's reputation for hypocrity is certainly not new.

304 starts long discussion of Aristotle, *Nichomachean Ethics*. Likes Rackham and his edition of Aristotle. A. is a swine and a forger. Hedging, backing and filling.

314 cusses universities again.
318 "The poison of Manchester has so cursed the world that half the anglo-saxons of our time spend their lives in some such imbecility, trying to decide on the form of government for all other races, while themselves being eaten to death by human lice."

321. to the unclearnesses, etc., of Aristotle, prefers the *De Modo Usurarum* of Claudius Salmatius. Shows real curiosity. Wants to know and to show what his terms mean.
((like my comparison of Keynes and B.M. Anderson))

327 Definitions are the first principles of science. (Aris.) several kinds of knowing.

332 The schismatic is a splinterer -- emphasizes something fragmentary and rejects the totality.

333 List of dates (birth & death) of greeks.

In Rackham's preface, it is item which Pound uses as climax -- undesirable conclusion: Hence the tendency to think of the end not as the sum of the goods, but as one good which is the best. Pound says *this* leads plumb back to the split man, schizophrenia. ((LM: as in my early physics class, there are two types of resolution of forces, of which one is selection and exclusion of the alternatives.))

344. Would stimulate a new group of scholars to measure Greece against China, etc. But keep clear meanings.

347 A final boost for *Ta Hio*.

also on
econ.
sheet

342

61

Pound's Culture

stop on p. 42, and run through usury, money, economics.

True

Historical causes were economic and moral. The usurers
are ever busy muddying the waters, to keep the people
ignorant. "ever prattling of short-range causation
for the sake of, or with the result of, obscuring the
vital truth." Captans annonam, etc., that is to say,
hogging the harvest, aiding the hoggers, etc.

Exploitation

Can we sort out "Greek thought" from the iron money
of Sparta ((value solely within the realm, and solely
due to government endowing the money with value)), and the
acute observer who remarked that the great mass of gold
in Athens served merely to assist in their arithmetic.

Intrepid
managed money

intrepid

The student of art will find evidence of Greek
decadence in the art. "The economist will look at their
usury. He will find the idea of it mixed up with marine
insurance. The New Economist will say that with such
neschek((lack of responsibility?)), no empire-building
was possible. I offer another axis of reference: the
difference between maritime and agrarian usury, the
difference between 30 per hundred and 6% average Roman
usury."

Exploitation?

EP.

LM.: Pound needs to ponder Keynes' "specific interest rates", and in particular the interest rate in corn. In February to April, when the unlucky or improvident borrowed, corn was dear in all other markets. In September, when the debt was paid, it was cheap. A 30% or 50% "interest" for the six or eight months may merely have been an evidence of mutual recognition of the fact that corn was not a good measure of value, that its own value fluctuated.

Essay 3, Sparta 776 B.C., is largely on economics. 35-43

"The true nature of money was comprehended in Sparta
by Lycurgus, or at any rate the nature of money for use
inside a given area having orderly government." i.e.
money is only a token, the coin has no intrinsic or commod-
ity value. The stamp makes the value.

Theories;
intrepid;
managed money

Rules out "medium of exchange"; that isn't money;
any commodity can serve for that.

inadequate
managed
money

ok

"The Spartan coin provided a measure. That is the
statal adjunct." ((contribution)) can be performed by
any individual or group of inds. inspiring confidence.
"The use of the precious metals in trading was in the
beginning merely the barter of a commodity."
Athens the granddaughter of a long line of markets;
every form of fraud flourished there. Included usurers.

Theory

Ships took coin on their voyages at the risk of the
owner of the coin((lender, too, he says)) and paid a compos-
ite "tax" ((fee)) covering rental and risk. Financiers
had agents in other ports.

inadequate

True function of money is as a measure.

Early coins were artistic. well made.

The gold coin was good in foreign lands; iron coin not.
Improved milling and use of alloy. ((Keeps talking of gold,
its weight, etc. Actually silver used by Athens.))

Does not mention silver in Athens; nor Xerophon

Usury, money, ec--cs

p. 2.

p. 37.

Paper money became harder to counterfeit than gold ((?)). So the prestige of gold was threatened. ((poor logic)) Examples of guaranteed coin, in Florence, etc., moneys of account (merely written down, having no actuality).

Rome was different -- a responsible ruler. Not busy ing itself with eternit y like the Christians. Nearer to Kung.

Socrates was disruptive. Usurers do not like thought. So the hemlock.

You can find worthy suggestions about conduct in Plato and Aristotle, but in gen. the Greeks not concerned with social responsibility. ((dubious))

EP: Little respect for Caesar, Crassus. "But Antoninus, Constantine and Justinian were serious characters." as would be recognized by Kung, St. Ambrose, or Edmondo Rossoni. Marcus Aurelius a dilettante.

In 138 A.D., Antoninus Pius compared systems of law, concerned about agrarian usury and maritime usury. Law courts of Rhodes and of Athens had questioned whether capitalists should be allowed to seize ships for debt.

41. Claudius Salmatius: The 30% racket on maritime loans "was more than the traffic could bear if the traffic were to conduce to larger statal and imperial organization." The state of mind producing that racket was predatory. The 60% racket of today is worse.

The Roman 6% charge conducted to stability.

42. Suggests that the "forbidden fruit" of Hebrew story is a usury parable. The age of abundance ended when the usury got too high.

Refers vaguely to some remarks by old John Adams, that the money racketeers have defaced and obliterated all monuments likely to enlighten humanity, and interfere with their swindle.

Bread and Circuses. The first duty of the state is the maintenance of public order. ((Does this lead to Kuan?))

Chap. 4, Totalitarian, 44-50.

45. Evidently credits to St. Ambrose the term: Captans Annonam, hoggers of the harvest, cursed among the people. (also see 340-341).

46. That phrase lasts as a root, right up to Dr. Soddy, in Buchart's collection *Tomorrow's Money*. Quotes. As taxation is a forced levy . . . so is the issue of new money a forced levy on the goods ("wealth-on-sale") in the community's marts. Preposterous that banks should have the right to so levy. "The provision of the correct quantity of money should be the first and most important duty of the State." Pound says he assumes public order to have been established first; and that Soddy contemplating England. Evidently Pound would have something else to say in Italy or other corporative state. Where perhaps the guilds could perform functions now relegated to parlmnt.

"Soddy here represents the summit of modern ethics as applicable in ordered society."

Refers vaguely to "the second book, Oeconomicorum". ((LM: both assume the politician is good and banker bad.))

usury, money, ec--cs

p.3.

p.47

Soddy's admirable essay starts with the rise of man (not the fall)

The fight against unjust monopoly has never let up, from the hour of St. Ambrose's philipic. Jean Barral will trace it back to the Egyptian captivity.

"Charlemagne fights the monopolists; he decrees a commodity denar, and the significance escapes ... economists in a sequence of centuries."

In a table, gives fixed prices on oats, barley, rye, wheat, 794,808. Oats has doubled, others increased less. Pound is sure that justice was aimed at.

48. David Hume said prosperity requires continued increase in the amount of money in the country.

In our time, Gesell and Douglas, independently, have learned the lesson of the need for just prices.

"The Catholic Church, aiming at justice ((LM: year 1200? 1400?)), was more intelligent than professors who, in our day, fall for the stability racket, meaning a fixed set of prices, i.e., an unchanging relationship between wanted and/or needed goods and a unit of money."

((LM: yet he has just approved the fixed price, and the commodity denar))

61 Butchart unearthed Stuart Mill's account of the African money of account, the makute. Never in actual existence -- a figment, but useful. Thanks to the competent scholars of Frankfurt. Makute had once existed, as a straw mat.

The Portuguese applied the name to a coin.

Runs down the boors that run down American universities. Chap. 7, Great Bass. Mystical on vibrations slower than music (cycles, rhythms). Clear in mathematics.

Recent encyclical of the popes, and other church papers have contained economic matter: "Quadrigesimo Anno". (excellent)

77"There is more civilization lying around unused in the crannies, zenanas, interstices of that dusty and baroque fabric than in all other institutions of the occident."

Baxter is the swine who sold the English church to the usurers.

Arthur Griffith says: Can't move 'em with a cold thing like economics.

109. With the breakdown of Constantine's and Justinian's economic system, no one could cover church walls with gold mosaic.

Mohammed was against usury. EP
Seems to conclude that consequently art flourished.

A tolerance of usury runs with a fattening (grossness) in art forms.

111. In 1911, there was an international currency (20 franc pieces), and no passports.

115. Suretyship is the beginning of ruin. Don't sign or endorse anyone else's paper.

Salmasius wrote De Modo Usurarum (meant to be 3 vols.?) terminology, customs, laws. But where did the individual

stupid monarchs borrow particular sums?

Rostovtzeff, Ferrero. Who paid for each war? Who refused to pay, and so saved us from other wars?

 Wars are paid for by depreciation of currency. (also blood)

Usury, money, ec-cs
of a public man
p.4

p. 116.

No biography/will be complete without statement of his
financing. Did he connive in swindling the people?

Munition-makers sometimes pretend to support peace movements.

Pacifists often one-track and therefore no good.

120. Marx was sold a pup by the Sadducees.

128-29. The military officer, Col. "X", ignorant of economics.
and does not want -- dare -- to learn

130. The math. having shot into immorality and unreality,
"No other mathematical basis being compatible with a public
instruction that tolerates deliberate falsification of
economic studies. 131. One of Roosevelt's gang, turned
from a discussion of dollars (which were then corrupted)
into one of pure numbers. "This dogfish was probably
unconscious. . . "

And someone called "X", falsified a Douglas equation
containing a time element. X omitted the time element.

Especially hates Hoover.

Helmut Petrix <u>Geldformen der Sudsee.</u>

156-57, "Until the power of hell, which is usura, which is
the power of hogging the harvest, is broken, that is to
say until clean economic conditions exist and the abundance
is divided in just and adequate parts among all men," legal
monkeying with conjugal relations will be futile and evil.

In P.B.'s novel, psychiatrists and patients had been
deformed by economic pressure. Law has horribly supported
the usurer.

158. Democracies have for a century failed lamentably to
educate the people, and keep the people aware of the
absolutely rudimentary necessities of democracy. The first
being monetary literacy.

163. The idea of a measure of value has taken shape slowly.
Thinks decline in art of making coins beautiful contributed
to degenerating of coins.

The real use of gold? false teeth, spectacle frames,
ornament. Reburial (hoarding) a sign of lack of trust in
other institutions, esp. political. Blames on usurers,
or on financiers unjailed. They pervert the press.

166 "I take it Rossoni gets more done than all the rest of
us economists ((my God)) because he does not allow himself
to be too far distracted.". . from grain, wool, and ersatz.

"He saw the point of stamp-scrip in ten minutes and started
to think out how it would fit into the corporate system.

No ! The state couldn't issue it. The corporazioni could."
The state would sell the stamps. In six weeks, Por had two
articles out, one in Rossoni's _La Stirpe_ and the other in,
I think, _Regime Corporativo_. The superiority of these
Corporative State fellows over Gesелites and Doug/ites
is that they are not the least afraid to discuss other
ideas."

167 "Moneta" in Rossoni's lexicon meant gold. La vera ok
moneta e oro. Moneta in Italian therefore equalling coin
in Englash. ((wrong)) I was free to talk stamp-scrip if
I wanted to call it medium of exchange. If I talked about
it too easily, and especially if I tried to explain it to
men of inadequate comprehension, they would merely think
me a lunatic.

Usury, money, econ--cs

p.5

continuing p. 167

Refers again to Butchart's _Tomorrow's Money_. Had 7 heretics.

Next book should cover:

The canonist doctrine of the just price.

Gesell

Douglas, both brought up to date and into focus.

Rossoni (apparently an officer of the state) has created amassi, bonifica, etc. ((Has set up state stockpiles and so bypassed the monopolists & hoarders -- much like Kuan?))

168. Possibility of eliminating ((or reducing)) taxes, because state can USE these materials.

172-73. "Perhaps the first scholarly effort of the New Economy in England in our decades was Butchart's collection on 'Money'; in his second effort he put together Seven Men none of whom took the trouble to understand any of the other six. The book is valuable for two pages by Soddy and for lighting up a few pages of Douglas. The four active domains, or the four expanses of thought that the truly curious reader should look into are Gesell, Douglas, the Canonist doctrine of economics, wherein interest is treated under the general head of just price, and the actual practice and achievement in the corporate states of our time. This latter is a practice inapplicable in countries which have no corporate institutions; it might be unnecessary in any democracy that had the sense to learn money. But no extant democracy can afford to ignore the lesson of corporate practice. The individual 'economist' who attempts to do so is either a fool, knave or ignoramus."

187 hates highway signs (billboards).

188 Claptrap on money: "The moment man realizes that the guinea stamp, not the metal, is the essential component of the coin, he has broken with all materialist philosophies." Both sides were beaten in the war. "Even the Morgan ideology is sinking."

189. repudiates materialism for volitionism." Catholics have made great progress. Now should get down to brass tacks on their just price.

191. Communism as revolt against the hoggers of the harvest was an admirable "tendency". Now stands still or goes backward. Communism is against the best human instincts -- and against the other higher mammals.

"A movement against capital, that cannot distinguish between capital and property is a blind movement. Capital is a claim against others which is not of necessity extinguished even by continual payment at 5% or at 50%."

192. The plough is not the same kind of thing or instrument as a mortgage. "A system which becomes in practice merely another hidden and irresponsible tyranny is no better than any other gang of instigators to theft and oppression." "Men not yet at sufficiently high mental level to consider soberly the requirements of a monetary system are unfit to administer even a lavatory or a chicken run."

196. In our time the curse is monetary illiteracy. . . Cusses the newspapers.

econ

7

249 (repeating what is on general sheet) Mussolini has told his people that poetry is a necessity to the state, and Carlo Delcroix is convinced that poets ought to occupy themselves with these matters, namely credit, the nature of money, monetary issue, etc. This indicates a high stage of civilization.

250. No British minister would have the moral courage to discuss with me the nature of money or the infamy of starving the people. Roosevelt's cabinet ignorant (maybe not Ickes). Men fear the light in economics (kakatropic)

Chap. 46. Decline of the Adamses 254-55

Cusses the tax system, as based on ignorance of the nature of money. "The tragedy of the USA over 160 years is the decline of Adamses." John Adams had the corrective for Jefferson.

"In Italy, the trouble is not too much statal authority but too little."

"Liberalism is a running sore.". .
Even in Italy, as soon as the highway man with sense died, out came highway advertising.

Under protestants, word "moral" was narrowed down to carnal relations. Thus acting as usurer's red herring.

Misstatement, in that Mellon gave great art collection and gallery. Says no man of cabinet rank in England or USA during past 20 years has fostered art or letters. Also Mellons in Pittsburgh, and Hoover at Stanford.

260. Demosthenes was onto most forms of business swindle.

261. "One of the early Mohammedan kalifs did pay a national dividend. He ran with an empty treasury, no national debt, and a share-out."

Whig historians have not emphasized distributism. The British then learn history from prose historians, whereas Macaulay put some important matters into verse.

The attempt of Frederic II of Sicily to enlighten Europe both culturally and economically, was a major event.

Feudal dues have been stressed, but the noblesse oblige in the other direction was important too.

S. Malatesta gave away many castles on his accession.
Madox Ford used to talk of the damage done to England by commutation of duty of overlords to their people into mere money payments.

264 Beginning with the Grant administration, USA slumped.

265. A rector of an English University said that his generation had underestimated Marx. Pound adds that the error in the next three decades was that the fanatics set up Marx as a Koran. He supposes that the real attempt to weigh Marx's veritable merit began with Gesell's statement that Marx never questioned money. He just accepted it as he found it.

In March 1937, Pound got an American near-communist to admit that Quincy Adams was a communist of a sort.

267. Wu Yung, in *The Flight of an Empress*, says the bankers tried to lend money to rising political figures. (at high interest)

67

256

look up

went the
other way

lack of
merit

econ

8

269

Mr. Cullis sends a statement that in 89 BC, the debtors and creditors in Rome had a quarrel, for an old law forbade lending at interest. Praetor Asellio brought to trial. Another Roman example, of lending, where illegal, at high interest. gives the referendés.

270. "The basis of a state is its economic justice."
"Communism with its dictatorship of the proletariat is merely barbarous and Hebrew. . . irresponsible power regardless of intelligence or justice.

271. "We have in our time two parties: the infamous, which tries to sabotage economic knowledge; the intelligent, which demands full light on the issue of coin, paper means of exchange, and of credit." plus the 90% rent.

"The man or entity having credit is one who is privileged to delay compensation for something received."
Kung inspected province to determine productivity. Though interested in increasing agric. production, was against speed-up (Bedaux, Stakhanov)

274. Of living men, Edmondo Rossoni with his agric. experts, etc., is nearest the Confucian model. Tried and condemned Chao tcheng-mao as soon as he had accepted the chief magistracy of Lou. Chao (Pound calls him Mao) was the Mellon of those days. Next a fight with the meat trust. Made the monopolist restore what he had made by violating the just price.

275. The Tartar monarch Tai cut down taxes. Great loyalty.

276. "Before thinking that old-age pensions, medical relief, educational endowments, etc., are news, one should at least glance at a summary of the Chinese story."

277 Kung went for the big bad boss. He went for the meat monopoly. Tai Tsung reduced taxes. Pietro Leopoldo and Ferdinando III cut down taxes. Taxes are infamy.

Italian senate, March 18, 1937. Rossoni receives possibility of complete change in the taxing system.

"Taxes were lowered before Gesell saw how to focus all or a reasonable part of them on the medium of exchange. The state serves in creating a *measure* of exchange. A tax that can never fall on any man save one who has a hundred times the amount of the tax in his pocket at the moment the tax falls due, is the least nocive ((noxious)) of taxes. It must ultimately supersede taxes designed merely to oppress the people and to sabotage all sorts of effort which conduce to the general good or well-being."

"The enemies of mankind are those who petrify thought, that is *kill* it, as the Marxists have tried to in our time, and as countless other fools and fanatics have tried to in all times . . . "

278 Aristotle did not implant a clear concept of money in the general western mind. He saw that money was a *measure*.

288 No sane and clear code can be formulated until and unless all tangled relations between men and women have been analyzed and set in two categories: those due to money and those that are independent of it." 80% of modern situations are due to money. Both parties must be free from monetary pressure. Features Hardy.

econ.

9

322

Aristotle: principle of assignment((reward?)) by desert; criterion of desert being free birth. "The democrats make the criterion free birth, oligarchs make it wealth, others good birth, the aristocrats make it virtue." Pound praises Aristotle's Book V.

323. He has ... come at money from the right side, as a measure. A means of ascertaining the proportionate worth of a house and a pair of shoes.

324. Pound: The value of a thing depends on its Usus; its price may be distorted by its opus ((cost of production)). ((This is good Austrian theory; does Pound Know that?)) Asks whether the word xreia means demand or use.

The idea of money as a guarantee of future exchange is clearly presented. (Doesn't Pound see that stamped scrip shrinks steadily in value?)

325. Says A. is too much charmed by the impractical ideal of fixed prices. Charlemagne's commodity denar. May be a great grandchild of Aristotle?

Arist. Book VIII. Aristocracy passes into oligarchy owing to badness of rulers, who do not distribute what the state has to offer. ... man cannot expect to make money out of the community and receive honour as well.

13

Sept. 14. memo to be included in a letter:

In your letter of Sept. 9, at top your page 2, first three lines. Here a difficult item: monetary consideration in apparent conflict with ordinary economy, thrift, horse sense.

You say, no reason to issue interest-bearing debt; just issue non-interest-bearing MONEY, which is also a debt of the government.

Actually, the quantity of money in circulation is a critical matter. This quantity is overlooked, or secondary, in most of your arguments. In a war, the increase of the government's debt is likely to be tremendous. Even though not directly a monetary increase, it is likely to have monetary effects, bringing inflation of prices. If it all should be made a direct monetary increase, the effect on prices would be a skyrocket inflation of prices, probably immediately destroying the entire economy. By putting the increase in government debt into a (more or less) non-monetary category, that disaster is at least postponed. Maybe the nation (government or private economy) will be able later to find resources somewhere to meet all these debts. Even if the nation is not able to do that completely, the disaster will have been so postponed that in the meantime the war may have been won.

The issue is: immediate collapse -- due to military defeat or to internal collapse -- vs.

at least a possibility of survival.

p. 2½ of the letter:

"The banker has a right to be paid for his skill in estimate."

But he does much more. He is an enterpriser, and thus takes charge of a profit and loss account. In this capacity, he is entitled to a profit.

And he acts as a middleman, assembling the cash of many depositors (to whom he stands as debtor), and lending some or all of it to business men and industrialists (to whom he stands as creditor, or at least a representative of the depositors, who are the real creditors). Here again he is entitled to a profit; here he deals with the principles of probability; once in a while -- when a depression hits -- he loses on this probability gamble, and the bank goes bust; some such banks, even in this emergency, are merely non-liquid -- they are still solvent. The depositors ultimately get back most or all of their deposits.

p. 2 7/8: J. Adams: "To trade on borrowed money is very UNMERCANTILE". Absolutely wrong and reversed.

["2027 S. Bentley Ave., LA 25,\nSept. 16, 1957.", "Dear E.P.", "Dear Mr. Pound:", "Just a short note. Thank you for the transcript of\nthe excellent radio broadcast from Toronto. I have sent\nit on to Theobald. I shall write him -- and you -- more\nfully in a couple of days. I am rather foolishly planning\nto do a little teaching this semester; and am busy making\nthe necessary preparations.", "You wanted some record of the sheet with the faced\ncarbon paper in your last letter; I remembered an earlier\none. So I copied both pages, and send the originals to\nyou.\n\nU.C.L.A. library. U.C. U.C. U.C. U.C.\n

2027 S. Bentley Ave., LA 25,
Tues. Sept. 24, '57.

Dear E.P.

After a period of some silence, I pick up this very rewarding correspondence. My trouble has been that I have (foolishly?) undertaken to teach a course this semester, at U. of Southern California, dealing with the Far East.

I was surprised to receive from you the copy of *Edge*, with excerpts from my Kuan-tzu. I didn't know such publication was in the works. I'll tell the Univ. Press in Carbondale about it. I take it that Chao Tze-chiang made the selections, since the footnote in Edge corresponds to what you earlier quoted as coming from Chao.

Yes, thanks, I would be interested in Por on Italian Economic Policy. Probably your translation is available at U.C.L.A. library. My noting of activity in Germany and Italy, 1922 to 32, was rather limited.

On Böhm-Bawerk, I didn't think you would be interested in the whole book. It is a one-sided theory, that overemphasizes the demand side of themarket. But it was badly needed in its day, when most economists overemphasized the supply side. Nevertheless, the short chapter on interest in a socialist state is excellent, and should interest you. For example, how they would overemphasize capital construction and remote goals, at the expense of consumers and the standard of living.

This takes me to von Mises. Some of his early work was excellent. But his last book, "The Anti-Capitalistic Mentality" is not good. I wrote a criticism to his publisher, who took it to von Mises, who was undoubtedly offended.

Sept. 24

page 2.

75

Your letter of Sept. 21 says you don't see my objection to stamp-scrip. I have several objections, but I am sorry to list them, as I don't think the listing will do either of us any good. The important function of money, called "the storehouse of value" would be destroyed. Particular groups in the community would be penalized by the 12% tax -- especially the merchants, maybe the farmers. The amount of money in circulation would be chaotic, under no proper control, relative to the amount of goods flowing. Usually about 1/10 or less in money will serve to grease the wheels of commerce for the 100% of goods. The actual bills would be scaly with stamps, some of which would become detached. Then the licking of the bills, be it in a cell or a taxi, this usually involves and affixing of the stamps would be a nuisance, and would turn my stomach. The device of the 2% penalty when banking the money would effectually prevent merchants from making use of the banks for storage of their funds.

It simply *would not be money*. For the most important principle of money is that it be acceptable to the people; stamped scrip would not be acceptable.

The managed money of modern governments is bad enough (I think it is very bad indeed). Stamped scrip would be much worse.

The issue between having the government borrow money to build up a war-oriented economy or they through selling interest-bearing bonds, and borrow money through putting out greenbacks AS MONEY, is in part this matter of quantity of money in circulation. The moving of assets from the category of non-money into the category of money is very serious. The quantity of money must be limited. Such movement brings shocking inflation (or deflation). This could be discussed at great length.

Sept. 24

page 3.

16

Keynes may have called himself an orthodox economist.
So did F.D. Roosevelt say he was acting to SAVE the capitalist
system. But no man in the western world did more than Keynes
to increase government control over the economy.

I do not know whether there was Jewish blood in
Böhm-Bawerk; he was a "von". He does not discuss monetary
issue.

About Santayana and others and their objection to
invisible wealth:

There are grades and differences in invisible wealth.
First, let us consider the life-cycle of the individual.
Unless the parent, or other acting for the parent, takes care
of the infant, he is in a hell of a fix. This usually involves
some form of invisible wealth. And take the aged. Same thing;
a man in his productive years needs to have permission to
store up something, somewhere, for his old age.

Second, let us consider the similar life-cycle of a corpora-
tion or other firm. In a period of transition, closing up
the buggy factory, and getting started making Model T Fords,
shouldn't there be somewhere that wealth could be stored?
Third, suppose one sells his home; he may not buy another
for five years; must the wealth be taken away from him?
Can't he keep it for a while? Suppose a labor union wants
to build up a "war-chest" for a possible future strike?
Shouldn't they be allowed to buy bonds? Or have an idle
bank account?

Now, I will grant that this does not cover the whole
field of invisible wealth. But insurance is a good thing,
etc. The inequalities of wealth were greater in old
feudalistic India than in any capitalist state.

78

October 12, 1957

Dear Mr. Pound:

I have filled in as a substitute teacher at USC for
this semester. But please continue my address as
2027 S. Bentley Ave., LA 25.

The subject of interest, which has occupied our corres-
pondence somewhat, is much broader than the payment of a premium
or agio for borrowed money. It is one of the indices, how man
looks at the future; it is a report of how man looks at the near
and the far (in time). Galliani, about 1750, wrote very nicely
about it. Böhm-Bawerk, in another of his books, expressed some
admiration for Galliani. The reason I wanted you to read that
particular chapter in Böhm-Bawerk is that it expresses, in a
way that I consider combines humor with some indignation, his
regard (low regard) for those who decry interest as something
necessarily evil.

We read in the last couple of years of American observers
-- farmers, contractors, and other practical men -- who visit
Russia (where the calculation of, or allowance for, interest
is considered a sin). They see in Russia, idle pieces of
machinery, farm equipment, construction apparatus, cranes,
cement mixers, etc., which simply sit around, because the
accounting system assesses no charge for time -- for merely
sitting around unproductively. Actually, in proper accounting,
interest charges are a necessary part of cost accounting, even
though entirely within the firm. And, as Böhm-Bawerk prophetic-
ally remarks, a product distant in time, like an oak tree which
will not be ready to cut for 50 years, MUST be rated today at

October 12

page 2.

79

a heavily discounted figure -- nowhere near the mature value.

Also, to narrow the discussion to the actual lending of money, the creditor is regarded as a benefactor by the borrower -- not as a leach or monopolist or parasite. The typical loan is for a productive use, either in industry or business; and the amount of the interest charge depends on several considerations: whether the government is inclined to enforce contracts (if not, then the charge must be higher because of the added risk), on the current demand for capital (when the railroad had been demonstrated to be workable, the whole world wanted to borrow money to build railroads); whether the area is a one-product area, or agricultural (then the rate must be higher, because of the added risk), and on the supply of capital available (at this date, the banks are raising their interest rates, because their supplies of loanable funds have been almost exhausted).

The enterpriser pays wages for the use of labor, interest for the use of capital, and rent for the use of land; he himself assumes the profit and loss account, and consequently receives profit or loss.

To be sure, loans for consumption purposes, or to <u>prince</u> to make war, are in another category. Charity should influence the one, particularly if the creditor has some other means of earning a livelihood besides lending out his money. And, as for <u>lending</u> to the prince, that is a straight gamble, and should be handled on that basis.

Today, with the propensity of governments to "socialize" (i.e. to grab and nationalize private property), the risks of investment are increasing, and must be compensated for in part in the interest rate.

Oct. 12

page 3.

A couple of years ago, my son gave me a book by Raymond de Roover, *Money, Banking and Credit in Medieval Bruges*, subtitle: Italian merchant-bankers, lombards and money-changers; a study in the origins of banking. Repeatedly, the local officials, full of holy zeal, suppressed one or the other of the types of credit institution. But the active merchants and other individuals simply *could not get on* without these aids. Every market *must* have its credit department, its bank or call-loan post, because in almost every transaction, one party or the other *requires* financial aid. The book is most illuminating.

In economics, one of our chief duties is to explain, generation after generation, the function performed by sundry institutions. Attackers come from various directions. One direction is mathematical science. The mathematicians and their fellows think that economic statements could be reduced to formulae, if only competent students would deign to enter that field. They think the field is occupied largely by would-be witches and necromancers. So they come in and try to express the matter of economics in equations and formulae. But they usually do not realize that the variable "x" is shifting and changing, while they think it is standing still as they originally defined it. One subtle variable that defies them is *value*. Essentially, value is a verb, how the subject regards one object as compared with another.

Did I say, on page 1, that interest represents the way that the subject looks at the future? Well, here we are again. Interest is a form of value, or of valuing. In this sense, economics is a branch of psychology.

Considering a few topics in psychology, which are of interest in economics, what causes the individual, or the market, to change its mind?

October 12

page 4.

81

What causes the stock market, beginning in July 1957, to fall? Why do the speculators (those who try to read the future) have to become pessimists, where only a month or so ago they were optimists? Optimism gives place to pessimism, not at random, not simply from fatigue at holding one attitude so long, but for reasons. It is one of the functions of the economist to look for those reasons. Optimism was earlier generated from an actual experience of business and industrial success. Now, pessimism arises from either an actual experience of failure, or a very strong reason to expect failure in business and industrial ventures. One reason is that newly invested money, and newly built factories, will probably not return full, normal interest on the money.

But to leave that subject entirely. One of the troubles with religious observers who look at the great markets, like the market for loanable funds, is that they have the erroneous conviction that where one party to an exchange makes money, they other must lose. Actually, the markets continue to satisfy the participants generation after generation, because BOTH PARTIES GAIN. That is probably one of the most important basic truths of economics, and is a good place for me to stop.

Yours sincerely,

2027 S. Bentley Ave., LA 25, October 21

Dear Mr. Pound:

If I could stand off a distance and have a look at myself,
I think it should give me a good laugh. To apologize for my
pomposity and dullness would seem beside the point. The
traits have been exhibited; there they are; what can an
apology do about it?

I have been highly flattered at your correspondence,
your welcoming me, as it were, into the company of friends and
scholars. And then I turn around and lecture you as though
you were a recalcitrant freshman. I assure you I shall try
to stay out of the pulpit hereafter.

This past week I received my first letter from the
admirable Chao, in San Francisco. And I wrote him to thank
him for his very kind review and excerpts in EDGE. He may
come down this way in December. I also heard from Theobald,
acknowledging receipt of the Canadian broadcast. (I had made
copies of it for myself, so I was a bit slow in forwarding
it to him.) I probably told you I had called on Hawley, and
saw his remarkable plant. One parks on a road several hundred
feet above the busy Laurel Canyon Road, which throws out a
constant, though rather faint roar. Then one climbs the
rest of the mountain. And, as I am under sentence for my
heart, I took ten or fifteen minutes for that climb. Hawley
is remarkably well equipped for handling all the oriental
languages -- as you had told me -- and is a wise man.

Oct. 21 3

83

I am reading William Nisbet Chambers OLD BULLION BENTON,
Senator from the New West. It is well written. I do not
know enough of the circumstances to say whether it is true
to the facts. My reading is just approaching the section on
the Bank of the United States.

When I was in Illinois for ten years, my town was near
the town of Benton; he is a great man in all the neighboring
states.

I'll get hold of Andrew D. White's autobiography.

I'd like to know what you think of Wang An-shih's
Wan Yen Shu (in the middle of Vol. I, of Williamson). As I
told you, I consider it a masterpiece in the field of political
thought. And in Vol. II, are short bits on other very inter-
esting Chinese: Sang Hung Yang, Wang Mang, Liu Yen; and
Chapter XIX gives Wang's own essays on some of theearly
men.

My sincere good wishes.

Yours faithfully,

 copies of it for myself, and also copies of it to my
 copies of it for my
 it to him.) I probably told you I had called on Hawley, and
 saw his remarkable plant. One park is on a road several hundred
 feet above the busy Eoral Canyon Road, which goes out a
 constant, though rather faint rear. Then one climbs the
 rest of the mountain. And, as I am underouchance for my
 heart, I took ten or fifteen minutes for that climb. Hawley
 is remarkably well equipped for handling all the oriental
 languages - as you had told me - and is a fine man.

Dear Mr. Pound:

October 21

2

A Chinese friend here in Los Angeles, Dr. Theodore Chen, acted as one of the editors of a series of studies of social and economic events in Chinese mainland since the communist seizure of power -- for the U.S. Air Force. He sent me a copy of one of the studies, by another Chinese named Ong. As I read it, it made me madder and madder. Ong, apparently, was completely uncritical of the communists' statements of purposes and intentions. So, when they said the rural population was divided into five "classes", he simply accepted that as a fact. When they liquidated the uppermost of the five classes, he accepted their statement that it was the act of the other (poorer) peasants, in revenge for the long-continued wickedness and abuse by the top-dog class. And a number of other matters. Even his communists' acceptance of their statements that they were "agrarian reformers", honest, and without further aims, rankled. And, later, when the natural leaders of the peasants had been liquidated, it became easy to drive the complaining but impotent peasants onto the iniquitous state farms -- to compel the peasants to give up the little land-holdings that they loved so dearly. Poor Mr. Ong did not see that the proletarianizing of the peasants had been intended all along. I suggested to Mr. Chen that the pamphlet is so distorting -- shows such gullibility -- that it should be withdrawn from circulation. I may add that Ong had no appreciation of the terrible impoverishing force of overpopulation. So he accepted the communists' statements that the ills of the poorer peasants were solely due to the machinations of the richer peasants.

Oct. 21 3

I'd like to know what you think of Wang An-shih's
Wan Yen Shu (in the middle of Vol.I, of Williamson). As I
told you, I consider it a masterpiece in the field of political
thought. And in Vol.II, are short bits on other very inter-
esting Chinese: Sang Hung Yang, Wang Mang, Liu Yen; and
Chapter XIX gives Wang's own essays on some of theearly
men.

My sincere good wishes.

Yours faithfully,

2027 S. Bentley Ave., LA 25
December 31, 1957.

Dear EP:

Look here, you old buzzard !

I'm going to pay no further attention to your
crack-pot economics, emotional economies, pseudo-economics,
stubborn refusal to look honest economics in the face.

You are a charming poet and brain-twister. You
force many (including me) to reexamine our sacred cows.
You put our discomfiture into beautiful and stimulating
forms. But as I wrote to Cookson, I am not enough of a
 poet? literary critic?) to follow one statement in his
review of _Rock-Drill_. He said your rendering was _unified_
(or some such word)! To me it is highly _fragmented_, and
that seems your essential style of writing in recent years.

I hope, before many months, to be able to send you
a copy of an article I have been pounding on, in my
pedestrian fashion, a definition of industrial productivity.
There are a lot of charlatans misusing the term.

I wish you a happy new year, despite your unfortunate
incarceration.

Yours sincerely,

2027 S. Bentley Ave., LA 25,
March 21, .958.

Dear E.P.

On your suggestion, I tried all the libraries in this neighborhood for the book by McNair Wilson, *The Mind of Napoleon*. None has it. But in the next couple of months I may get up to San Francisco, and will try the library at the University of California in Berkeley.

What a lot of books Wilson has written, both under his own name and his pseudonym, Anthony Wynne!

My wife and I are tentatively planning a trip to Italy, your old stamping ground. We would like to get on the boat here at the Los Angeles Harbor; but there is only one line that will consider us. The freighters who carry so few passengers that they do not carry a physician, will have nothing to do with folks over 65. And the Holland American Line says we have a low place on the waiting list.

We have no special purpose there -- just to take things easy, and see the warm-hearted folk and the artistic and archaeological treasures.

I have been helping a Chinese (named Chang) who, formerly an officer of the Central Bank of China, is now writing a book on the history of that and related institutions, and the course of the inflations -- or the pulsations of the almost continuous inflation.

Best wishes to you.

Yours sincerely,

2027 S. Bentley Ave.,
Los Angeles 25,
April 19, 1958.

Dear E.P.:

Your countless friends over the world are all
jubilant at your release. I shall hope to call on you
in Italy in October (my address there will be care American
Express in Rome).

It must be hard for you to take a new lot of
barbed insults, at this, the time of your release.
But a man at the top of any profession must have the
skin of a rhinoceros.

Blessings on you. And the quiet Mrs. Pound
will now see the end of her patient but yet frightful
vigil.

Yours faithfully