Life on Elysium was also flourishing, particularly so now that the slug problem was firmly under control, and the produce that was displayed at the 2nd Annual Flower and Produce Show was even more splendid than that that had been seen the year before. Even so, Nathan West made sure that his arrival did not coincide with the Show itself. He was not sure that he could pull off the same trick twice with the onions. Very likely he would declare that those he had previously declared best pickled would make the best soup, and so on, and he would be derided as a man who did not know his onions.
His arrival was warmly greeted by rather more of the adult members of the population on this second occasion. They recognised his ship, rather than himself, for he remained hooded along with his companions, but he was hailed as the nice gentleman who had called the year before.
Some may have wondered as to his preference for keeping his face in shadow and speculated as to the reason - a nasty birth-mark, an accident, an aversion to sunlight, perhaps - but most Elysians, being private people themselves, happily accepted that he was perhaps a little shy, and amidst all these strangers, it must be difficult for the poor love.
His welcome was made all the more warmer when he brought out the sacks of slug pellets and a collection of shiny new solar-powered teasmades. He was prevailed upon to demonstrate how the teasmades could be installed so that their working parts would be undetectable to passing Imperial Patrol Ships, and then with wads of Toy Town Pounds carefully tucked away, he was invited to Mrs and Mrs Sodbuster's home for a nice cup of tea, made, they proudly declared, with their newly installed teasmade.
After tea, Mrs Sodbuster asked his guest whether he might care to join him in a walk around the village of Little Elysium-on-the-Planet and Nathan was nothing loath. After all, he reasoned, if all went to plan, the planet would effectively be his in a few year's time.
Besides the well trimmed verges, he was pleased to see that the public buildings, the parish hall, the school and the medical centre were all well built and carefully maintained, the roads were free from pot holes and the bridge over the river was stout enough to withstand the strongest of floods.
"Of course, there's a lot more to see outside the village itself," explained Harold Sodbuster. "Farms and tea plantations and managed woodlands, as well as the mill, the forge, the fishery and the weaving shop. Proper little hive of industry it is, Mr West. We're even thinking of building a road down to the sea, which is not so far away. It's over that hill actually. The river goes the long way around."
Nathan decided not to tell Mr Sodbuster that he had done a complete survey of the planet from space and knew far more about its geography than Sodbuster was ever likely to. It might seem rather too proprietorial were he to do so. Instead, he was rather pleased to see that a population that he was beginning to regard as his people was taking such good care of what he was beginning to think of as his property. He bid his host farewell with the promise of more slug pellets the following year.
Yet all was not so well in Little Elysium as it seemed on the surface. That evening, a worried Derek Moneypenny called an emergency meeting with Harold Sodbuster and Ewen Skyspotter.
"So why do you want to meet just us, Derek?" asked a puzzled Chairman of the Parish Council. "If it's important, shouldn't we have all the Parish Council here?"
"What I have to say is a matter of great importance, but it is also a matter for subtlety and discretion. I know you gentlemen to be the most reliable and..." He sought a suitable word. "...unruffled members of this community. Many others will misunderstand things and get panicky and worried."
"What is it, Derek?" asked Mr Sodbuster, somewhat alarmed at the notion there was something over which anyone might have cause to panic, and rather put out by Derek Moneypenny's patronising tone.
"The bare fact is, gentlemen, that our money supply is running dangerously low."
"What, for the Parish Council?"
"For the Parish council and the rest of Elysium as a whole."
"I don't follow, Derek."
"When we set up our money system, we had a limited amount of Toy Town bank notes."
"Yes. Limit the supply to maintain the value, you said."
"Exactly. Well, the supply is a lot more limited, now that Mr West has taken so many of them for those teasmades and the slug pellets."
"Is that a problem? It just makes them more valuable surely."
"Yes, but a sufficient number is required, otherwise we will get log jams in the economy. When there is sufficient money, people will have money to spend whilst they themselves are earning, and in spending money themselves other people will be able to earn. D'you see?"
"But, if there's insufficient money, people who haven't got any money will not be able to spend it until they've earnt it, so the people who they would want to spent it with won't be able to earn it themselves until such time as the first people have earnt it and then start to spend it."
"Is that what's called a recession?"
"Exactly, a slow down of economic activity, which will make us all worse off."
"Yes, I see, Derek. You did well to tell just us. What do you think, Ewen?"
"The obvious thing is to print off some more Toy Town bank notes."
"We can't. We can't make paper of that quality nor print anything of that standard."
"Does that matter?"
"If people start getting notes that are not proper Toy Town pound notes they will think that something funny is going on. That was the whole point, they are not easily reproduced, not with our limited technology."
"How much do we have in the Council strong box?"
"A little under three hundred pounds."
"And how much in circulation?"
"Given the amounts that Nathaniel West has taken, I'd say less than two hundred pounds. And that's another strange thing," continued Derek. "Have you stopped to ask yourself why a galactic trader like him wants Toy Town pounds?"
"Because it's a sound currency!" asserted a proud Chairman of the Parish Council.
"Yes, but only on Elysium. He can only spend that money on Elysium, but he doesn't."
"I know why he wants them," came from a voice by the door.
"Who's that!" cried Harold. "Come on, show yourself!"
A hooded figure stepped forward into the hall and for a brief moment, Harold thought that it was Nathan West himself returned. Instead, it was Ewen Skyspotter who recognised the figure.
"Mark? Is that you?"
"It is I, Uncle."
"Then let us see you, my boy. Are you well? Your Aunt Beryl and I were worried. We thought you'd return after a few days and then when you didn't, we thought you'd... We did not know what to think or where to look."
"I disappeared like my father. Like father like son."
Mark pulled down his hood and the three village elders saw before them, not the spotty youth of before, but a tall confident young man. There was the gleam of maturity in his eye and dimple in his cheek.
"Did you hear every word that we said?" asked Harold Sodbuster.
"Every word since you entered this room."
"You were spying on us!"
"Yes, in a way I was."
"What for, you young rascal?"
"And why do you chance to return, just now, Mark?" asked his Uncle.
Mark laughed a little.
"I saw the ship come in. I hoped for a lift."
"To leave us?"
"I thought that I had already left you, but it seems that not only has my chance to leave gone, but my reason to stay has arrived."
"What do you mean?"
"Like I said, I know why West wants your worthless bits of paper."
"Don't start that again!"
"No, forgive me. I meant worthless to him, off this planet. They are, I realise now, a valuable entity on Elysium."
"West expects to return next year to find the economy in difficulties, as Moneypenny says. He will then offer to lend you money, either the very Toy Town pounds that he has taken from you or Imperial Credits. Which, matters not to him."
"We are forbidden Imperial Credits!"
"So you will take the Toy Town pounds. At a rate of interest, of course, and he will sell you more of whatever it is he can sell to you."
"Whatever. In a matter of a few years, not only will you have run out of money, Toy Town pounds or Imperial Credits, but you will be in debt to West with no means of ever repaying it. Nathan West is a very rich man, he has many friends and associates within the Imperial bureaucracy. He is a trader and a financier, but one thing he has yet to acquire is a planet, because inhabited planets are not for sale and uninhabited planets are useless."
"What do you mean?"
"When his plan comes to fruition, you will be his slaves, his willing slaves, forever worrying about the debts you owe him."
"We'll see about that! Right, there'll be no more trading with that there Nathan West!"
"Yes, but that still leaves us with the problem of the shortage of money," wailed Derek Moneypenny.
"You open a bank," continued the placid Mark Skyspotter, seemingly without pause. "The Bank of Elysium, an institution wholly owned by the people of Elysium and controlled by nominees from the Elysium Parish Council. You invite people to place their savings in the bank. Some people still have some money, I gather?"
"Some do, yes."
"Good. So you create two separate sides to the bank. One side is for individual accounts, for those who wish to save and those who wish to borrow those savings. People may borrow for their own purposes, a new house, a new workshop, a new velocipede or whatever. They can borrow money from the bank at a modest rate of interest, say 5%. No more money can be lent out than exists in that fund as savings. Anyone who opens an account receives a cheque book. We can print those I take it, Uncle?"
"People will get used to paying money in and drawing it out of an account by means of cheques, so the Parish Council will be able to spend its money in the form of cheques."
"Right, but only up to the amount still left in the kitty, I take it?"
"No. As I said, there will be two sides to the bank. The second side will create money on behalf of the Parish Council, and will spend it in the form of cheques which everyone will be happy to accept. Most of the cash that you still have left can be spent into the community to circulate as ‘small change' as it were."
"But don't we need to have enough money in the bank to correspond to the amount that people have saved with us?"
"So the Parish Council can spend as much as it likes?"
"No, the Parish Council should only spend when it gets good value for its money, and it should only spend money on capital projects that will benefit the community, a new building or road, say. Everyday running costs of council services will have to be paid for out of taxation, and if councillors think that they can claim large expenses, the system will collapse."
"I wouldn't dream of claiming large expenses. I don't claim any expenses at all, young man!"
"Good. Just don't let it happen."
"I'm sorry, Mark. I'm still not sure how much money we can create with this new banking idea of yours?"
"As much as Elysium needs. Just remember that when it is being created, to pay for public expenditure, it must bear no interest, and only that money which, as it were, has been previously created and then deposited back with the bank as savings can be lent out to borrowers at a rate of interest."
"Why?" asked a puzzled Derek, who thought he knew a thing or two about money matters.
"Because, if you have a system wherein money bears a rate of interest when it is created, you will find yourself in the position that you would have been in had you allowed Nathan West to lend you money. If your money supply bears a charge of interest at its initial creation, you have a debt you can never clear."
"Because the amount of money needed to clear an interest-bearing debt is always greater than the initial debt itself, and if all your money is created as an interest-bearing debt, you will never have enough to clear it, because the amount you need to clear it will always be greater than the amount you have!"
"I see, yes, I do see," said Derek. "By heck. We might well have borrowed from that Nathan West. He seemed such a nice man."
He sat down to take the weight off his feet.
"He knew his onions, at least," confirmed Harold Sodbuster.
Ewen gazed with renewed pride at his nephew.
"So where and how did you learn all this new economic theory, Mark?"
"It is actually not economics, Uncle. It is really just simple mathematics. If you borrow 100% of your total money supply, and 105% is the amount to be repaid, with a rate of interest at 5%, then you will need 105% of your total money supply to repay it, which is, of course, an impossible amount."
"I know what I need now," muttered a rather tired Chairman of the Parish Council. "A nice cup of tea. Why don't we all go back to my place?"
"No," said Ewen. "Why don't we all go to my place? There's a young man here who's aunt is still worrying about him."