1] To what I reported to you at the last meeting I shall now add a detailed explanation of internal loans. Of foreign loans I shall say nothing more, because they have fed us with national moneys of the Goyim, but for our State there will be no foreigners, that is, nothing external.

2] We have taken advantage of the venality of administrators and slackness of rulers to get our moneys twice, thrice and more times over, by lending to the Goy governments moneys which were not at all needed by the States. Could anyone do the like in regard to us? Therefore, I shall only deal with the details of internal loans.

3] States announce that such a loan is to be concluded and open subscriptions for their own bills of exchange, that is, for their interest-bearing paper. That they may be within the reach of all the price is determined at from a hundred to a thousand; and a discount is made for the earliest subscribers. Next day by artificial means the price of them goes up, the alleged reason being that everyone is rushing to buy them. In a few days the treasury safes are as they say overflowing and there’s more money than they can do with. The subscription, it is alleged, covers many times over the issue total of the loan; in this lies the whole stage effect – look you, they say, what confidence is shown in the government’s bills of exchange.

4] But when the comedy is played out there emerges the fact that a debit and an exceedingly burdensome debit has been created. For the payment of interest it becomes necessary to have recourse to new loans, which do not swallow up but only add to the capital debt. And when this credit is exhausted it becomes necessary by new taxes to cover, not the loan, but only the interest on it. These taxes are a debit employed to cover a debit.

5] Later comes the time for conversions, but they diminish the payment of interest without covering the debt, and besides they cannot be made without the consent of the lenders; on announcing a conversion a proposal is made to return the money to those who are not willing to convert their paper. If everybody expressed his unwillingness and demanded his money back, the government would be hooked on their own files and would be found insolvent and unable to pay the proposed sums. By good luck the subjects of the Goy governments, knowing nothing about financial affairs, have always preferred losses on exchange and diminution of interest  ...

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