In 1949, A.W.H. (Bill) Phillips, a New Zealand electrical engineer studying sociology as an undergraduate at the London School of Economics, built a hydraulic simulator (called the MONIAC – Monetary National Income Analogue Computer) of the British economy based on contemporary economic theory. It illustrated stocks, flows, employed feedback among variables, drew sharp distinction between exogenous and endogenous variables, and plotted its outputs as behavior over time graphs. All of the “Principles of Systems” articulated by Jay W. Forrester more than a decade later have examples in this simulator. Although the term “system dynamics” had not yet been coined in 1949, this paper suggests that Phillips’ simulator could have been the first true system dynamics model applied to economics! The paper observes that this Phillips’s model possesses the following characteristics common to most system dynamics models: • Operational orientation. • Feedback as a central design feature. • Isolation of outflows from the associated stock. • Use of non-linear functions. • Use of the model as a means to explain a complex system to other people. • Use of the model as a spur to additional models. The paper includes a mapping of the physical components of the machine to system dynamics notation and provides an overview of a system dynamics (Vensim) simulator of the Phillips machine. A number of simulations with the model are presented, together with calibrations against one of the remaining working versions of the MONIAC Phillips Machines housed at the Reserve Bank of New Zealand museum in Wellington, New Zealand.