Protocol No. XX
To-day we shall deal with the financial program, the discussion of which I have postponed until the end of my report because it is the most difficult, conclusive, and decisive point in our plans. In approaching it, I will remind you that I have already intimated that the result of our actions is measured in figures.
When we become rulers, our autocratic government, for the sake of self-defense, will avoid burdening the people with heavy taxes, and it will not forget the rôle it has to play, namely, that of Father and Protector. But as government organization is costly, it is necessary to raise the means for its maintenance. Consequently, we must carefully work out the plan of a fair distribution of taxation.
In our government the sovereign will have the legal fiction of owning everything in his kingdom (which is easily put into practice), and can resort to legal confiscation of all money in order to regulate its circulation throughout the country. Consequently, the best method of taxation is the levying of a progressive tax on property. Taxes will thus be paid without difficulty or ruin in respective proportion to the amount of property owned. The rich must realize that it is their duty to give a part of their surplus wealth for the benefit of the country as a whole, because the government guarantees inviolability of the remaining part of their property and the right of honest gain. I say honest because the control of property will prevent legal theft.
This social reform must come from above, for the time is ripe and it is becoming necessary as a guarantee of peace.
The tax on the poor is the seed of revolution, and it acts detrimentally to the government, which loses the great in its pursuit of the little. Moreover, the taxation of capital will lessen the increase of wealth in private hands, in which at present we have concentrated it as a counterweight to the governmental power of the Goys, namely, to the state treasury.
Progressive taxation, assessed according to the amount of capital, will produce a much greater revenue than the present system of taxing every one at an equal rate, which is useful to us now only as a means of exciting revolt and discontent among the Goys. The power of our sovereign will rest mainly in equilibrium and in guarantees of peace. For these, the capitalists must cede a part of their income so as to protect the action of the government machine. Public needs must be met by those who can best afford to do so and by those from whom there is something to take.
Such a measure will eliminate the hatred of the poor towards the rich, as they will be regarded as the financial supporters of the state and the upholders of peace and prosperity. The poor will also see that the rich are providing the necessary means to insure this end.
To prevent intelligent taxpayers from being too discontented with the new system of taxation, they will be furnished with detailed reports of the disbursement of public funds, exclusive of such as are appropriated for the needs of the throne and administrative institutions.
The sovereign will not own property, since everything in the state will seem to belong to him and these two conceptions would contradict each other. Private means would eliminate his right to own everything.
The relatives of the sovereign, aside from his descendants who will also be supported by the state, must join the ranks of government officials, or otherwise work for the right of holding property. The privilege of being of royal blood must not entitle them to rob the state treasury.
Sales, profits, or inheritances will be taxed by a progressive stamp tax. The transfer of property, whether in cash or otherwise, without the required stamp, will place the payment of the tax on the original owner, dating from the time of the transfer until the time of the reported failure to record the transaction. Transfer vouchers must be shown weekly at the local branch of the state treasury, together with a statement of the names, surnames, and the permanent addresses both of the original and of the new owner. The recording of the names of those participating in a transaction will be necessary in all transactions involving more than a certain amount for ordinary expenditure. The sale of prime necessities will be taxed only by a stamp tax, which will represent a certain small per cent of the cost of the particular article.
Just calculate how many times the amount received from such taxes will exceed the income of the Goy governments.
The state bank must keep a definite reserve fund, and all sums in excess must be put back into circulation. The cost of public works will be met out of this surplus fund. The initiative of such works emanating from the government will also tie the working class to the interests of the government and the rulers. Some of this money will be allotted to prizes for inventions and for the purposes of production.
Even small sums in excess of a certain definite and broadly calculated fund, should not be allowed to be kept in the state treasury, because money is intended to circulate, and every impediment to circulation is detrimental to the governmental mechanism, which the money lubricates; the congestion of lubricating substances can stop the proper functioning of the mechanism.
The substitution of bonds for a part of the currency has created just such an impediment. The result of this has already become sufficiently evident.
We will also establish an auditing office, so as to enable the sovereign to find at all times a full account of state revenues and expenses, except for the current month not yet made up, and that of the previous month not yet presented.
The only person who will not be interested in robbing the state treasury will be the sovereign, its owner. This is the reason why his control will prevent the possibility of loss or misappropriation.
Receptions for the purpose of etiquette, which waste the valuable time of the sovereign, will be abolished, because the ruler needs time for control and thought. Then his power will not be frittered away on the people surrounding the throne for the sake of appearance and brilliance, and who have only their own and not the public interest in mind.
The economic crises were created by us for the Goys only by the withdrawal of money from circulation. Huge amounts of capital were kept idle and were taken away from the nations, which were thus compelled to apply to us for loans. Payment of interest on these loans burdened the state finances and made the states subservient to capital. The concentration of industry having taken production out of the hands of the artisan and put it into the hands of capitalists, sucked all the power out of the people and also out of the state.
The present issue of money generally does not coincide with the need per capita, and consequently it cannot satisfy all the needs of the working classes. The issue of currency must correspond with the increase in population, and children must be reckoned as consumers from the day of their birth. The revision of the issue of currency is an essential problem for the whole world.
You know that gold currency was detrimental to the governments that accepted it, for it could not satisfy the requirements for money, since we took as much gold as possible out of circulation.
We must issue a currency based on the value of the working power, whether it be of paper or wood. We will issue money in proportion to the normal demands of every subject, adding a certain amount at every birth and decreasing it with every death.
Every department (the French administrative divisions),[6] every district, will be in charge of its own accounts.
To avoid any delay in paying government expenses, the terms of such payments will be decreed by order of the sovereign; this will eliminate any favoritism of the ministry (of finance)[7] over any other department to the detriment of the others.
The budget of revenues and the budget of expenditure will be placed side by side, in order that they may always be compared with each other.
We will present plans for the reform of the Goy financial institutions and of their principles, as planned by us, in such a manner that nobody will be frightened. We will demonstrate the need of reform by the disorderly twaddle produced by the financial disorganization of the Goys. We will show that the first reason for this confusion lies in the drafting of rough estimates for the budget, which increases from year to year. This annual budget is with great difficulty made to last during the first half of the year; then a revised budget is demanded and the funds thus allotted are spent in the next three months, after which a supplementary budget is called for and all this is wound up by a liquidation budget. As the budget of the following year is based on the total expenditure of the preceding year, the divergence from the normal reaches fifty per cent annually, so that the annual budget trebles every ten years. Owing to such a procedure, resulting from the carelessness of the Goy governments, their treasuries became empty. The period of loans followed and used up the remainder and brought all the Goy states to bankruptcy.
You can well understand that such a management of financial affairs as we induced the Goys to pursue cannot be adopted by us.
Every loan proves the impotency of the government and its failure to understand its own rights. Loans, like the sword of Damocles, hang above the heads of the rulers, who instead of placing temporary taxes on their subjects, stretch forth their hands and beg the charity of our bankers. Foreign loans are leeches, which can never be removed from the governmental body until they either fall off themselves or the government itself manages to get rid of them. But the Goy governments instead of throwing them off increase their number, so that these governments must inevitably perish through self-inflicted loss of blood.
Indeed, what is a loan, especially a foreign loan, if not a leech? A loan is the issuance of government obligations which involve the liability to pay interest in proportion to the sum borrowed. If the loan pays five per cent, then in twenty years the government has unnecessarily paid in interest an amount equal to the principal sum borrowed. In forty years it has paid twice; in sixty years it has trebled the sum, while the loan still remains an unpaid debt.
From this calculation it is evident that under the system of universal taxation the government takes the last penny from the poor taxpayers in the form of taxes in order to pay interest to foreign capitalists, from whom the money was borrowed, instead of collecting these same pennies for its needs free from all interest.
So long as the loans were domestic, the Goys only shifted the money from the pockets of the poor into those of the rich; but when we bribed the proper persons to make the loans foreign, then national riches poured into our hands and all the Goys began to pay us the tribute of subjects.
The carelessness of the reigning Goys in statemanship, the corruption of their ministers, the ignorance of other officials of financial problems, has forced their countries into debt to our banks to such an extent that they can never pay off their debts. It should be realized, however, that we have gone to great pains in order to bring about such a state of affairs.
Impediments to the circulation of money will not be allowed by us, and therefore there will be no government bonds, except one per cent bonds, so that the payment of interest should not deliver the power of the state to the sucking of leeches. The right of issuing bonds will be exclusively granted to industrial corporations, which will easily pay the interest out of their profits. The government, however, does not derive profit on borrowed money as these corporations do, since the state borrows money for expenditure and not for production.
Industrial bonds will also be bought by the government, which instead of being, as at present, the payer of tribute on loans, will become a sound creditor. Such a measure will prevent stagnation in the circulation of money, as well as indolence and laziness, which were useful to us so long as the Goys remained independent, but are not wanted by us in our government.
How apparent is the shortsightedness of the purely bestial brains of the Goys! It manifested itself when they borrowed money for at interest. It did not occur to the Goys that, at any rate, this money, with the additional interest on it, would have to be taken from the resources of the country and paid to us. Would it not have been more simple to take the needed money from their own people?
This proves the genius of our distinguished mind, for we were able to present the question of loans to them in such a light that they saw in loans an advantage for themselves.
Our estimates, which we will produce when the time comes, will be based on the experience of centuries, on all those experiments which were conducted by us at the expense of the Goy governments; our estimates will prove to be clear and definite, and will obviously demonstrate the advantage of our new system. They will end all those abuses which made it possible for us to master the Goys, but which cannot be permitted in our reign.
We will so organize the accounting system that neither the sovereign himself nor the most humble clerk will be able to deflect the smallest sum from its destination or direct it into a different channel from that indicated in our original financial plan.
It is impossible to govern without a definite plan. Traveling along a definite road with an indefinite supply of provisions destroys heroes and knights.
The Goy rulers, to whom we once gave advice to neglect governmental duties for grandiose receptions, etiquette, and pleasures, only concealed our rule. The accounts of the powerful favorites who replaced the sovereign were drawn up by our agents, and they always satisfied the shallow minds by promises that in the future there would be savings and improvements. Savings from what? From new taxes? This might have been asked but was not asked by those who read our reports and plans. You know to what their carelessness has led them, what financial disorganization they have reached in spite of the wonderful diligence of their people.