Teoría de la Base del Negocio Jurídico

After some three millennia of alchemical efforts to transmute a base metal into gold and after the widespread scientific and popular press frenzy over atomic transmutation in the early twentieth century, a modern alchemist finally succeeded in producing gold. The climactic moment occurred, however, not in 1907, or even in 1919, but in 1980.

By then, the scientists at the University of California at Berkeley who used a particle accelerator to change a small amount of bismuth into one-billionth of a cent’s worth of gold (at the cost of $10,000 [Levere 2001, 1]) had embarked on research that was more a sideline curiosity than a world-changing event or even a profound scientific achievement. Yet in the 1920s, public fascination with the alchemical nature of the new atomic sciences had reached such a pitch that the consequences of transmutation began to seem relevant to fields other than religion and science. The possibility that an alchemist, radio-chemist, or nuclear physicist might actually harness the mysterious alpha and beta rays to synthesize gold seemed to many to entail fan-tastic and alarming consequences—especially for the world economy.

The preceding chapters have portrayed the consequences for science and for occult alchemy of their mutual interest in material transmutation. This chapter explores different cultural consequences of modern alchemy in relationship to monetary anxieties during the Depression Era. In particular, it narrates how the idea of mod-ern alchemy intensified questioning of the gold standard and of the moral foundation of scientific aspiration. By the late 1920s and

early 1930s, as the West slid into the Depression, modern alchemy began to migrate into discussions of monetary theory and portrayals of economic con-cerns in the press. Atomic alchemy broke down barriers not only between occultism and science but also between those subjects and economics or mon-etary theory. Nowhere was this more evident than in fears about the gold standard’s stability in postwar Britain and America.

This period witnessed a number of calls for abandoning a metallic mon-etary standard. Such calls frequently came from so-called money cranks who fought against the monetary establishment. An insistent, though not always coordinated, movement pushing for monetary and economic reforms briefly attained some visibility in the 1920s and ’30s. Schemes included Guild Social-ism, Social Credit, and stamped money, and among the key figures in Britain and America were A. R. Orage, Clifford Hugh Douglas, and Arthur Kitson.¹ Bridging the fields of monetary theory and modern alchemy was none other than Frederick Soddy. Soddy had just won the 1921 Nobel Prize in chemistry (as the Nobel committee put it, for his ‘‘important contribution to our knowl-edge of the radioactive bodies, and [his] pioneer works on the existence and nature of isotopes’’ [quoted in Howorth 1958, 224]). But his move from chem-istry into economics in the 1920s damaged Soddy’s professional standing as a scientist far more than any public statements about alchemy ever could have.

It has been commonly understood that the carnage and tragedy of the First World War and the economic crises that followed it steered Soddy into economics (Merricks 1996, 108). Other notable public figures, such as Ezra Pound, followed a similar path for like reasons—though Pound’s political sympathies moved him into fascism, while Soddy remained on the Left. As we shall see, however, Soddy’s alchemical interests helped him connect chem-istry to monetary theory. He would eventually cast that relationship as both moral and scientific.

In one sense, the gold standard already was a moral notion for economists.

It was the prime manifestation of what Nicholas Mayhew has called a ‘‘moral idea of money’’ (2000, xi)—the idea that a gold-backed currency is ‘‘a constant and unchanging currency unit with which to measure personal or public ob-ligations’’ (xi). The gold standard was meant to ensure stability in both the domestic economy and international trade, and it was almost an article of faith for most economists. As Mayhew notes, ‘‘So irrevocable did it all seem that when the [British] National government of 1931 did eventually devalue and abandon gold, its Labour Cabinet predecessors complained that no one had told them you could do that’’ (214–15).

But a different moral conception of value was employed by occultists, who rescripted the nature of a ‘‘gold standard.’’ In 1907, the year of Ramsay’s 136 m o d e r n a l c h e m y

high-profile transmutation claims—and a time of economic crisis, during which an alarming quantity of British gold drained across the Atlantic to America—Isabelle de Steiger published On a Gold Basis: A Treatise on Mysti-cism. De Steiger, whom we have encountered as a vice president of the Al-chemical Society, a member of the Golden Dawn, and a prominent proponent of spiritual alchemy, chose occult publisher and future Alchemical Society member Philip Wellby to bring out the book. She dedicated it to Mary Atwood,

‘‘my best teacher, the author of ‘A Suggestive Enquiry into the Hermetic Mystery,’ ’’ and a major initiator of the Victorian spiritual alchemy concept. De Steiger advocated a mystical gold standard, distinguishing between a false modern sense of value rooted in material gold and a permanent, spiritual basis for value: ‘‘though the false basis of material gold may be the goal of a debased modern humanity, yet the true religion that would bless mankind is never destroyed, but is an eternal place built on the perfect gold Basis of Immortal Truth’’ (1907, 333). De Steiger appropriates the logic of the gold standard and the terms by which economists valued gold—i.e., its intrinsic and permanent value—to undergird spiritual and moral concerns. Indeed, she situates the moral imperatives of her mystical spirituality in economic terms that, after the War, would become central to the critiques launched by the money cranks at a system that, they argued, encouraged hoarding, stifled the healthy circulation of money, and prevented the laborer from a just share of society’s overall wealth. De Steiger admonishes:

But if a man, having the gold of truth, lazily hoards it, too idle to seek to put it out to interest, or from any other motive misuses it, then is that man rich in knowledge but poor in love to his fellowman; and thus intellectually despising him, he will find it hard to enter into the kingdom, and regeneration will not come near him.

Regeneration is for both rich and poor in this world’s coin if they are rich in generous interest, sympathy, and respect, and full of kindness to their fellowman. (330–31)

De Steiger concludes her 349-page treatise by folding together into a mysti-cal framework concepts of permanence that evoke the material world of economics—the gold standard—and notions of stability, such as the ‘‘Stable Atom’’ derived from mysticism but echoing the science of radioactivity. Be-neath the world of material transmutation asserted by atomic scientists and by alchemists lies a substratum of immutable spiritual value:

But with the fear there is also the twin feeling, hope—hope which blossoms into the eventual knowledge that man can have a certainty

that there is behind all a permanence in the Infinite and Eternal God, the Divinity symbolized to us in Revelation as our Father waiting for us, his children, to come back willingly, and with all the added knowledge of experience, to our birthplace; no longer a temporary inn, but the gold Basis of eternity; hope that the Stable Atom will, in the end of man’s dwelling in this Kingdom of Time, bring him by the royal road home to a royal palace—wherefrom stretches the illimit-able future of Divinity. (349, emphasis in original)

As we shall see, the problems that frequently occurred with the gold standard were understood by most during the late nineteenth and early twen-tieth centuries to concern the supply of available gold. Rarely did anyone question the intrinsic value of gold, or that such a material was required to stabilize the world of commerce. By the 1920s, modern alchemy began to suggest to many that no material had unalterable intrinsic value.²If one metal could be changed into another, if the natural abundance of an element could be changed, or if gold could simply be manufactured by an atomic scientist or an alchemist, how could any metal serve to buttress a monetary system? Such questions led to alarming scenarios about the collapse of the world economy, but they also caused many to begin to rethink the nature of money and to emphasize its basis in human work and need. The ethics of human action, rather than the permanent value of a material, took precedence in these vi-sions. Even the engine that drives human work—energy—came to the fore-front of many new conceptions of money. Just as the spiritual alchemy notion gave Victorian and early-twentieth-century occultists a nonmaterial ethical and spiritual goal for alchemical research (even as it gave way to a spiritualized vision of real, material laboratory transmutations), the energy created by atomic transmutation gave modern alchemists a nonmaterial justification for pursuing transmutation. Energy for the benefit of man came to be seen, as Soddy would put it, as the ‘‘real alchemy,’’ as opposed to the ‘‘false alchemy’’ of mere gold transmutation.

During the 1920s and the Depression Era, the fears of economic collapse and hopes for monetary restructuring caused by modern alchemy registered most vividly in American science fiction. Alchemy and, in particular, the new scientifically validated understanding that matter might be transmuted through various processes of energy bombardment did not spur Britain, America, and Western Europe to abandon the gold standard. Numerous market crises, the First World War, and changing governmental responses to depressions helped lead the West away from the classic gold standard and toward the Bretton Woods system and beyond. But the transmutational possibilities that modern 138 m o d e r n a l c h e m y

alchemy raised did draw attention to the problems of a metallic standard for money—whether the bimetallism of silver and gold or a pure gold standard—

and to the nature of money itself.

The occultists and many scientists helped feed the popular press’s ap-petite for alchemy. Alchemical transmutations that had been a topic for occult or gothic literature now became a key theme for science fiction as well. This new generation of science fiction was written during the years of monetary crisis and eventual abandonment of the gold standard, between the turn of the century and the early 1930s. Perhaps the fullest elaboration of modern al-chemy’s threat to the gold standard appeared in the emerging sci-fi pulps of Hugo Gernsback between 1926 and the mid-1930s. These sci-fi stories par-ticularly thematized the effects of modern alchemy—of metallic transmuta-tions caused by the instruments and science of nuclear physics and radio-chemistry—on the world economy and used the theme to interrogate the nature and perils of a metallic currency. Their authors imagined, in a way that would look familiar to Soddy, how science might move society beyond the crises and limitations that a metallic system of exchange imposed on twentieth-century economies. Indeed, the arc from an occult alchemical classic like Edward Bulwer-Lytton’s Zanoni, in the mid-nineteenth century, through the atomic alchemy stories of the turn of the twentieth century to Depression-era narratives traces a blurring of lines between occult or gothic and science fic-tion, and even between those genres and the monetary reform pamphlet.³The occult alchemy that had helped shape the discourse of atomic science and the modern alchemy portrayed in science fiction shared an important feature that resonated with British and American society during the period. They registered alchemical transmutation as a moral issue—at a moment in West-ern economic history that saw unprecedented anxieties about the monetary system.

The Gold Standard: Confidence and Crisis

The modern gold standard in Britain began with the Bank Charter Act of 1844 that established Bank of England notes fully backed by gold. In the United States, its origins were in the Coinage Act of 1873 (the so-called Crime of 1873) when the United States abandoned a bimetallic gold and silver path for a monometallic gold standard. With the Gold Standard Act of 1900, the United States government set the gold quantity that backed each United States dollar.

British sterling financed a large portion of world trade and provided a seem-ingly stable, convertible currency that was interconnected with the American

economy (as well as with those of several other countries). It is clear in ret-rospect that, even through the classic gold-standard period of the late nine-teenth century to 1914, the gold standard could not always guarantee stability.

It could even damage the economy. But the conception of gold as a real and unchanging bearer of value, rather than a mutable token of exchange—in other words, an inherently valued commodity—was tenacious during the pe-riod. As Mayhew explains, ‘‘A precious-metal currency is not necessarily an unchanging one, and the value of precious metal also fluctuates. Scholars, economists, and government ministers have for centuries sought a stable cur-rency, and many have put their faith in metal without really grasping that the value of silver and gold will vary in accordance with supply and demand just like any other commodity’’ (xi).

Adherence to a gold standard flew in the face of nineteenth-century bi-metallic theory and significant regional economic interests. Indeed, the very thing that made precious metals seem enduringly valuable—their rarity—also led to problems. In what Glyn Davies calls ‘‘bimetallism’s final fling,’’ the gold and silver bimetallism of the United States and France in the 1860s was designed to create more stability than a monometallic standard. Theoretically the money supply would be less restricted with two metals, avoiding inflation (Davies 2002, 494). The Coinage Act of 1873 briefly ended the coining of silver dollars, and large silver deposits were discovered in Nevada in the 1870s;

both drove the price of silver down. Banking and economic interests in the cities of the Northeast opposed any return to free silver (that is, the unlimited coinage of silver) for fear of inflation. The silver mining interests in the West and rural communities of the West and South, however, called for a return to bimetallism in order to prop up both silver and farming goods prices. The free silver movement reached its apex in William Jennings Bryan’s run for the presidency on the Democratic ticket in 1896 (and his famous ‘‘cross of gold’’

speech, delivered at the Democratic Convention). Bryan was decisively de-feated. The gold standard seemed to have triumphed (Davies 494–99; Gal-braith 1975, 97–100).

In Britain, the security of the British pound had proved key to London’s position as the financial capital of the world before World War I. As Sir William Harcourt, Gladstone’s chancellor, wrote in 1892: ‘‘London. . . is the Metropolis of the Commerce of the World to which all nations resort to settle their business. This I believe. . . to be owing to the soundness of our monetary system, London being the only place where you can always get gold. It is for that reason that all the exchange business of the world is done in London’’

(quoted in Mayhew 176). But such optimism about the availability of gold was not always justified.

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The problem with silver had been its increasing abundance; demand problems nagged the gold standard. While the value of gold, which resulted more from its scarcity than from any of its intrinsic properties, seemed to ensure monetary stability, both Britain and the United States during the clas-sical gold-standard period suffered from problems of gold supply and reserves.

A number of financial panics culminated in a run on gold reserves in the United States Treasury and on gold stocks in 1893 (Galbraith 99). Moreover, in 1907, when Ramsay first declared that he had caused transmutations in his laboratory, a financial catastrophe in America led to a run on British gold.

The Knickerbocker Trust and the Trust Company of America (the third- and second-largest trusts in the United States) collapsed in late 1907, and some 246 banks failed in 1907 and 1908.⁴This climate led to the creation of the Federal Reserve in 1913. But the panic of 1907 reached well beyond American shores, causing serious gold supply problems in Britain as gold drained across the Atlantic to nervous American investors.

Even in the nineteenth century, the gold supply was subject to unstable periods of shortage and abundance. A spike in gold production caused by the Californian and Australian strikes of the 1850s was followed by a decline in production in the 1870s, just as France, Germany, Switzerland, Belgium, and Holland went onto the gold standard. In the 1880s, Britain had begun to discuss a return to bimetallism to ease gold shortages, but gold discoveries in South Africa again raised gold production dramatically. Britain’s emergence from a lengthy depression (1873–96) coupled with the new supplies from South African mines finally put an end to bimetallist schemes (Mayhew 176–

77, 190). The international gold standard between 1890 and 1914 required an accumulation of £1,000,000,000—and only the supplies of gold generated by new discoveries in South Africa, the United States, the Yukon, Russia, and Australia made the widespread adoption of the gold standard possible (Drummond 1987, 17).

In sum, the period from 1902—when Rutherford and Soddy’s work on radioactive transmutation was published—until the early 1930s saw crippling problems in the gold standard. Britain abandoned the gold standard during the crisis brought on by the War in 1914. It and other Western nations that had discarded the gold standard returned to it briefly in the later 1920s: Britain in 1925, France in 1926, Italy in 1927, Norway in 1928, and Portugal in 1929.

In 1931, Britain again abandoned the gold standard until the Bretton Woods Agreement in 1944 created a limited variant of the gold standard and the International Monetary Fund (Mayhew 214–15). And in the United States, due to Depression-era banking and monetary crises, Franklin D. Roosevelt’s first act as president was to declare a bank holiday to buy time to begin banking

reform. In an executive order of April 5, 1933, he confiscated most privately held gold, and in January 1934 the Gold Reserve Act replaced the Gold Stan-dard Act of 1900, bringing gold out of private hands and banks and into the Treasury. This ended the internal circulation of gold in the United States (Davies 516).

Modern Alchemy and Monetary Anxiety

The challenges facing Western powers’ banking systems and governments during the gold-standard years were frequently those of shortages due to runs on gold during financial crises. But the alchemical dream of creating gold, long seen as a vain delusion or as the territory of charlatans hoping to bilk the greedy and the gullible, began to provoke serious thoughts about two issues: first, the catastrophic financial repercussions of synthetic gold on gold-standard economies, and second, the very nature of money.

Concerns about the impact that a modern alchemist’s transmuted gold might have on the economy had been periodically expressed in the United States since Stephen Emmens’s 1897 claims to have created gold from silver.

Concerns about the impact that a modern alchemist’s transmuted gold might have on the economy had been periodically expressed in the United States since Stephen Emmens’s 1897 claims to have created gold from silver.