The Late Townsend P. Lyon:
His Views on Capital and Interest

E. Yancey Cohen

[Originally published in the Fairhope Courier. Reprinted from Land and Freedom, March-April 1930]

I made the acquaintance of the late Townsend P. Lyon a day or two after my arrival in Fairhope, when Mr. and Mrs. Lyon called to see me at the Colonial Inn. That was in February, 1920, and from that time onward he and I continued firm friends.

T. P. Lyon was a lover of his kind and in turn troops of friends turned to him with a strong, affectionate impulse. But far beyond the limits of his Fairhope circle his dreaming mind went venturing into those Elysian fields which he sighed for humanity's sake. He was an honest thinker, and a stubborn adversary when he felt he was right. He was uneasy and disappointed at the small results of fifty years of effort on the part of Single Taxers to impress the public with the importance of their philosophy, fearing that there must be some screw loose in the machinery. He came finally to believe that the appeal of the Single Tax lacked that warm spirit of proselytism which is necessary to win over large numbers. He told me that the cock-sureness of the average Single Taxer seemed to him rather forbidding, especially as he had come to think that criticism of some of their positions was in order.

For instance, he believed with others that their views on the interest question had done the movement great harm, and that the defense of interest was a weak spot in the shining armor of Henry George. George failed to point out the easy exchangeability of saved capital for investments in land, with the resulting family likeness of their offspring, interest and rent. As one knows to a certainty that on the average one can depend on a sure return from an investment in land, one naturally insists on an equal return when he loans out his funds to a solvent borrower. And he gets it without demur. For the paying of interest has grown to be an accepted convention. The huge volume of governmental and corporate indebtedness with its appendage of the interest coupon, offers a safe harbor for investors which is most inviting. There is no doubt that all of us have come to believe that we are entitled to receive interest on loans we make. The question is whether in the long run the smug collector of interest does or does not rob his brother the borrower.

Leaving aside the consideration that with the downfall of private ownership of land general poverty as we know it today will have disappeared and the present necessity for borrowing have been done away with, the question is whether the usual argument that capital by increasing the efficiency of labor is entitled to interest, is valid. Henry George demolished that claim in his well known examination of Bastiat's story of the plane. The fallacy here, according to Mr. George, is that with the loan of the plane is associated the transfer of the increased productive power which a plane gives to labor. "But this is really not involved. The essential thing which James loaned to William is not the increased power which labor acquires from using continuous robbery of labor and that it must be denounced along with the private ownership of land. With these "Liberators" he placed himself in communication, and one of the last acts of his life was to direct that a package of their monthly publication, edited by R. E. White, 2 Lane Street, Perth, Western Australia, be placed in my hands for distribution.