Abolishing Interest Slavery

Gottfried Feder explains how he arrived at the view that interest on debts must be abolished

Introduced and translated by Hadding Scott

THE GENERAL PURPOSE of this short essay is similar to that of the first half of Mein Kampf: to show how the author arrived at his views.

It is interesting to observe in Feder’s account how he values instinct over expertise. This attitude shows up also later in Hitler’s writing and meshes nicely with National-Socialism’s friendliness toward hereditary psychology. The valuation of instinct over reason is something found much earlier in Schopenhauer, who regarded reason as a very flawed and unreliable faculty.

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Inner History of the Abolition of Interest-Slavery
by Gottfried Feder

Völkischer Beobachter, 1920, No. 72
Translation by Hadding Scott, 2012

 Fortunate is he who recognizes the deep causes of things. 
— Vergil 

Gottfried Feder

“HOW DID you really arrive at the abolition of interest-slavery?” is a question now often posed to me. I know not whether Columbus too was often asked: How did you really arrive at the discovery of America? The answer to such a question can and will turn out very differently, depending on the position that the questioner takes in regard to the matter and in regard to the person. In any case I want to try to give an answer that satisfies the questioner and — what I consider more important in such cases — satisfies in best conscience the one who was asked.

In recognizing utterly important, perhaps the most important connections in the world’s great questions, it is probably always a matter of a lightning-like intuition, of creative insight into hitherto obscure relationships, illumined by exciting prospects for the future. This birth of an idea, this sudden, clear cognizance of a truth, stands at the intersection of the inner and outer history of the idea. 

The inner history is often obscure and hidden; it runs part of its course entirely in the subconscious. In all cases however evidence for the psychological development of an idea can be found by thorough investigation of inner experiences; concomitantly of course a certain mental orientation is the prerequisite for correctly evaluating the experiences of the soul.

This mental prerequisite however cannot be in any way based in the effect of specialized training, but lies much more generally in the correct instinct for certain relationships.

In my case a good sense of relative magnitude was perhaps the prerequisite for the final assembly of the, at first correctly sensed, and then scientifically verified, array of facts. And in my specialized work as an engineer this sure sense for the order of magnitude has always been for me more important and more dependable for results of calculations, or for the dimensioning of construction-components, than the results of the slide-rule and the table of logarithms, which of course produce numerically much more precise results, but do not give the correct “decimal point.” It is upon the correct “decimal point” however, in other words upon the order of magnitude — whether ones, tens, hundreds, or thousands — that solutions to the most significant questions of economic policy depend, not upon the second, third, or fourth position in the number-series. The key consideration is not whether the German fixed-interest debt-burden amounts to 275 or 320 billion, and not whether the total capital of all German joint-stock companies amounts to 13.8 or 14.6 billion; the key consideration rather is that fixed-interest certificates demand an interest-payment of about 15 billion, whereas the total dividends of German industry in the best year amounted to only about one billion; thus it is a matter of the order of magnitude of 1:15, in regard to the proportion of the two most familiar forms of value-papers, fixed-interest assets and dividend-papers.[1]

The impact of not-always-easy experiences in life and career upon the orientation of the soul — unlike the comfortable life based on income from mere possession of money, from interest and dividends — caused heightened attention to general economic and social affairs. As a young engineer and entrepreneur with too little capital for my wide-ranging entrepreneurial ambition, I soon became acquainted with the iron, pitiless grip of the impersonal Money-Power that first offers and gives the desired “credit,” but then in every economic crisis proceeds exclusively in accord with the self-serving interests of capital. I then saw outside of Germany how the need of smaller states for credit was carefully nurtured and then the credit was “generously” given, for example the Disconto-Gesellschaft’s 600 million given to Bulgaria in 1913-1914;[2] but then what demoralizing conditions of dependence of every kind also resulted from that. This is how the bridge was created, from narrow personal experience to comprehensive awareness of international relations. The awareness of strong, indivisible financial and moral interrelations was indeed present in the subconscious, but still not at all clear.

The Great War with its enormous impressions in the first years probably muddled the tracing of these financial problems, until the time when the gigantic financing of the World War through our war-bonds, and my uneasiness about the increasing indebtedness of the folk, fortified my attentiveness so much that I repeatedly protested even before banking professionals against the form of our much vaunted “sound debt” compared to the “floating debts” of France and England. Of course at the time I was more or less condescendingly smiled at, although it had to be conceded to me even back then that “of course with continuously increasing” indebtedness there could no longer be talk of a genuine “soundness” of the war-debt.

I would have regarded the indebtedness of the Reich through the certificate-press as enough in itself, without the obligation of further burdening the entire folk with high interest-payments, which, just like the debt itself, given the enormous figures coming into consideration, could never again be regarded as covered by the actual assets of the Reich, but could only ever be covered by the tax-potential of the entire folk. But for as long as a victorious end to the war left open the possibility of a complete or partial unloading of war-burdens, a thorough investigation of these affairs was neglected. As fate then fulfilled itself upon our poor German folk in those dark November days, then all of that experience and knowledge, conscious and unconscious, intuitive and rational, again awakened — and my now clearly recognized answer to the simple question, “What now?” was: Abolition of interest slavery!

In one night the first essay came into being, and already on 20 November 1918 I submitted to the government of the People’s State of Bavaria [under Kurt Eisner] my basic principles and demands for the abolition of interest-slavery.

I emphasize that Socialist thought-processes in no way supported it.

Indeed, unlike the revolutionary slogan of liberty, equality, fraternity, the idea of the abolition of interest-slavery found very little understanding in the Marxist ministry. Not to mention that the capitalist-oriented press cloaked itself in icy silence.

With this emergence of the idea before the public, the idea begins its outer history, which then will answer the also frequently posed question: “What has happened thus far for the actualization of the idea?”


1. Feder here is pointing out that Marxists exaggerated the importance of corporate stock-dividends in benefiting the rich at the expense of workers. While Feder does not disagree with the criticism of stock-dividends, he finds that the amount of interest that had to be paid out to the owners of Germany’s war-debt (and debts in general) was a much larger problem, and also affected workers insofar as they had to pay for it with taxes. He may also be reacting to nitpicking of his Manifesto, wherein he pronounced the ratio of debt-interest to industrial dividends as 20:1 when the figures that he gave indicated 17:1.
2. The Disconto-Gesellshaft was founded in 1851 by David Hansemann. While Hansemann was not a Jew, the bank that he founded became part of the Rothschild Syndicate in 1901. In 1929 it was subsumed into Deutsche Bank. Bulgaria was deeply in debt after the Balkan wars of 1912-1913 and needed to consolidate the debt. After banks in France and Britain refused to issue new loans, the Bulgarian government began inquiring to banks in Austria and Germany. The loan from the Diskonto-Gesellschaft was secured with tobacco taxes, import duties, and revenue from the Bulgarian state’s monopoly on cigarette-paper. Feder was probably especially aware of the Bulgarian situation because he worked on the construction of some official buildings there.

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Source: National-Socialist Worldview

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