Protocol No. XXI
I will add one more detail regarding domestic loans in addition to the report which I made at the last meeting. I will not speak any more of foreign loans, for they filled our coffers with the national money of the Goys. There will be no foreigners in our government, nobody outside.
We profited by the corruption of the administrators and by the negligence of the rulers in receiving sums that were[68] doubled, trebled, and even more, loaning the Goy governments money which in reality was not needed by the states at all. Who could do the same with regard to us? Therefore, I will only set forth details in regard to domestic loans.
In announcing such a loan, the governments open a subscription to their bonds. To make them accessible to all, they vary the denomination from one hundred to thousands, and the first subscribers are allowed to buy below face value. The following day the price is artificially raised on the pretext that everybody hurried to buy the bonds. In a few more days there is a pretense that the treasury is filled and that it is not known what to do with the money, which has been oversubscribed. (What was the use of taking it?) The subscription is evidently considerably in excess of the amount asked for. Therein lies the effect, for it is thus demonstrated that the public has confidence in the government obligations.
But after the comedy has been played the fact of the debt appears, and it is usually a heavy one. In order to pay the interest, new loans have to be issued, which do not liquidate but increase the original debt. Then when the borrowing capacity of the government has been exhausted, it becomes necessary to meet the interest on the loan—not the loan itself—by new taxes. These taxes are nothing but a debit used to cover a debit.
Then comes the period of conversions, but these only decrease the payment of interest while they do not annul the debts. Moreover, they cannot be made without the consent of the bondholders. When a conversion is advertised, an offer is made to return the money to those who are not willing to convert their bonds. If everybody were to demand his money, the government would be caught in its own net and would be unable to return all the money. Fortunately, the Goy subjects, ignorant of financial affairs, always preferred to suffer a fall in the value of their securities and a reduction of interest to the risk of new investments; thus, they have given these governments more than one opportunity of throwing off a deficit of several millions. At present, with the existence of foreign loans, the Goys cannot play such tricks, for they know that we would demand all the money back.
Thus, an avowed bankruptcy will be the best proof of the lack of common interest between the people and their government.
I direct your express attention to the above circumstance, as also to the following: At present all domestic loans are consolidated into so-called floating debts; in other words, into those whose terms of payment are more or less close at hand. Such debts consist of money placed in savings banks. Being at the disposal of the government, for a considerable length of time, these funds vanish in the payment of interest on foreign loans, and they are replaced by an equal amount of government securities. The latter cover all the deficits in the government treasuries of the Goys.
When we mount the throne of the universe, such financial expedients, being detrimental to our interests, will vanish. We will also destroy all stock exchanges, for we will not allow the prestige of our authority to be shaken by the shifting of the prices of our securities. We will fix the full price of their value legally without any possibility of its fluctuation. (A rise leads to a fall, and this was precisely what we did to the Goy stocks and bonds at the beginning.)
We will replace the stock exchanges by great government credit institutions, whose functions will be to tax commercial values according to governmental plans. These institutions will be in a position to throw daily on the market 500,000,000 shares of industrial stocks, or to buy up a like amount. Thus all industrial enterprises will become dependent upon us. You can well imagine what power that will give us.