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and armament building. The banks are gorged with governmentpaper just as in Italy and in America, despite all the highly advertisedcleverness of Schacht.Still another method was to issue promissory notes to contractors,much as Mussolini did, which were not negotiable at the banks forthree months, after which time they could be turned in at the banksas collateral, the government extending them automatically everythree months. Much cash was obtained by confiscating the propertyof the Jews, by seizing the funds of trade-unions, as well as the goldreserve accumulated by the republican government and the hundredsof millions of shares owned by government combines and banks.But nothing could save the government from constantly resortingin the end to outright borrowing from individuals and banks, chieflythe latter.This, of course, was using a very old device. But the German Nazieconomists explained very patiently in words of ñwc and six syllablesthat all this was perfectly in accordance with sound national socialistfinance. The old-time fear of state debt was just a silly superstition,the making of these great loans by the state was actually a"dynamic use of public securities" to create greater national income,government debt need never be paid as long as the interest is met,and the interest was not a burden since it was paid by German taxpayersto German bondholders—it was an internal debt and thereforein fact no debt at all. Germany, they explained, had been freedfrom the shackles of finance. One American writer at least said of itwith almost boundless admiration: "The program required money,and Hitler declared the financial obstacles were not to bar the way"The beautiful part of this was that it worked—or seemed to. Andcertain American political financiers pointed out that by this meansHitler had solved Germany's problems and had created "full-blastemployment." "They have attained what economists call full-blastemployment and they are not headed for the financial rocks nomatter how ardently we may hope and believe that such a fate mustbe their end," said Mr. Dal Hitchcock in Harper's. 5 How could anyonedoubt the success of this "new" system of finance? The nationalThe German Financial Revolution," by Dal Hitchcock, Harper's Magazine, February1941.136