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Below is an explanation of this symbol the Philosopher's Stone given by Manly P Hall.The Philosopher’s Stone
The Philosopher’s Stone is an ancient symbol of the perfected and regenerated man whose divine nature shines forth through a chain of purified and unfolded vehicles. As the rough diamond is dull and lifeless when first removed from the black carbon, so the spiritual nature of man in its "fallen" state reveals little, if any, of its inherent luminosity.
Just as in the hand of the skillful lapidary the shapeless stone is transformed into a scintillating gem from whose facets pour streams of varicolored fire, so upon the lathe of the Divine Lapidary the soul of man is ground and polished until it reflects the glory of its creator from every atom. The perfecting of the Diamond Soul through philosophical-alchemical art was the concealed object of Hermetic Rosicrucianism.
Albert Mackey sees a correspondence between the Philosopher’s Stone and the Masonic Temple, for both represent the realization and accomplishment of the ideal. In philosophy the Stone of the Wise Man is "supreme and unalterable Reason. To find the Absolute in the Infinite, in the Indefinite, and in the Finite, this is the Magnum Opus, the Great Work of the Sages, which Hermes called the Work of the Sun." (See Morals and Dogma.)
He who possesses the Philosopher’s Stone possesses Truth, the greatest of all treasures, and is therefore rich beyond the calculation of man; he is immortal because Reason takes no account of death and he is healed of Ignorance--the most loathsome of all diseases. The Hermetic Stone is Divine Power, which all men seek but which is found only by such as exchange for it that temporal power which must pass away. To the mystic, the Philosopher’s Stone is perfect love, which transmutes all that is base and "raises" all that is dead. (From the Secret Teachings of All Ages).
The Arabic Connection
"Toledo in Spain also has a connection as it was the headquarters of ‘magicians,’ who knew Arabic and Latin, and were well versed in the literature and history of the day, and a poet called Kyot was reputed to have lived there. Kyot has been identified as an additional source material that Eschenbach used for his rendering of Parzival." (excerpt from Medieval Myth - Arthur and the Grail in the OTG Grail Archives.
"Christian Rosencreutz, who was born, according to legend, in Germany, in 1378. The tale told by the Fama and Confessio is well-known and summarizes many of the elements we have discussed already. Raised in a cloister, Christian Rosenceutz determined while still a youth of fifteen or sixteen to go to the Holy Land-Palestine in a literal sense, but symbolically the supreme center or heart of the world, the Sacred Heart or Holy Grail. ( also please note that the Ka'bah or Sacred Black Stone of Islam is in the Dome of the Rock in The Holy Land)
Geographically he never reached his goal of Jerusalem, visiting instead DAMASCUS or DAMCAR, also Egypt, and Fez. He learned Arabic, and studied "mathematica, physic, and magic" with the Hermetists and spiritual masters of Islam." (see also Islamic Origins of the Rose-Croix in our OTG Grail Archives)
" Accepting this account, we may say that in Arabia he was fully initiated into the sacred sciences of the group of medieval Arab philosophers known as the Ikhwan al-Safa, or Brethren of Purity. There he studied their fifty-two Epistles, fourteen of which deal with the mathematical sciences, seventeen with the natural sciences, ten with psychology and eleven with theology. In Fez through which the great Ibn Arabi had just passed, he would have met with the highest levels of Sufi intellectual realization."
-excerpt from THE ROSICRUCIAN ENLIGHTENMENT REVISITED (1999) BY Ralph White