This paper deals with Hilbert's substitution method for eliminating bound variables from first order proofs. With a first order system S framed in the ε-calculus [2] the problem is to associate a system S' without bound variables and an effective procedure for transforming derivations in S into derivations in S′. The transform of a formula A derived in S is to be an “ε-substitution instance” of A, i.e. it is obtained by replacing terms εxB(x) in A by terms of S′. In general the choice of these terms will depend on the particular derivation of A, and not on A alone. Cf. [4]. The present formulation sharpens Hilbert's original statement of the problem, i.e. that the transform of A should be finitistically verifiable, by making explicit the methods of verification used, namely those formalized in S′; on the other hand, it generalizes Hilbert's formulation since S′ need not be restricted to finitist systems.

The bound variable elimination procedure can always be taken to be primitive recursive in (the Gödel number of) the derivation of A. Constructions which transcend primitive recursion can simply be built into S′.

In this paper we show that if S′ is taken to be a second order system with constants for functionals, then the existence of suitable ε-substitution instances can be expressed by the solvability of certain functional equations in S′. We deal with two cases here. If S is number theory without induction, i.e. essentially predicate calculus with identity, then we can solve the equations in question by taking for S′ the free variable part S* of S with an added rule of definition of functionals by cases (recursive definition on finite ordinals), which is a conservative extension of S*.