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Two Volumes by Gottfried Feder


Gottfried Feder, 1883–1941

2,973 words

Gottfried Feder
Manifesto for the Breaking of the Financial Slavery to Interest [2]
Foreword by Rodney Martin
Translated with a Preface by Dr. Alexander Jacob.
(Uckfield, Sussex: Historical Review Press, 2012)

This volume by Feder is the first of a series of small books by the important, albeit now obscure German campaigner against usury. It will be of scholarly interest insofar as Feder was a seminal influence on the early thoughts of Hitler and was a founder of the German Workers Party. It was Feder who gave opposition to usury and a demand for a new banking system, a technical foundation without which the National Socialist economic and financial policies might not have gone beyond a vague enmity towards capitalism because of its identification with Jews. Whatever other experts on the financial system the National Socialist party had (and I am not aware of the others) it was Feder who was the primary authority — analogous, despite the differences, to Social Credit’s C. H. Douglas in the British Commonwealth states.

While an English translation of Feder’s seminal manifesto against usury has been published in the fascinating collection of documents, Nazi Ideology Before 1933,[1] the manifesto is brief. What this HRP/WVF edition includes is Feder’s detailed “Explanation and Justification,” including a section answering objections to the Feder plan.

In his Preface, Dr. Alexander Jacob provides a biographical sketch of Feder that is valuable given his long-time obscurity. He was more than a theorist, and in 1919 formed a combat league advocating his radical proposals, which represented what he called “aristocratic socialism.” It was Feder along with Drexler and Eckart who founded the German Workers Party in 1919, and that year he published this manifesto, although Lane and Rupp mentioned that it might have been written as early as November 1919.[2] What I find interesting is that Feder first sent the manifesto to the Eisner Marxist government but he did not receive a reply. This probably did not surprise Feder, as he mentions throughout the manifesto that Marxism, whether Bolshevism or Social Democracy, fails to make a crucial distinction between industrial capital and finance capital. Recognizing the Jewish element in usury (which was also recognised by C. H. Douglas), Feder opines that the failure of Marxian Socialism to deal with usury might be a reflection of the disproportionate influence of Jews in both. Marx’s onetime colleague and rival, the Russian Anarchist Mikhail Bakunin, made a similar observation, regarding Marx and Rothschild as two sides of the same coin.[3]

Like Douglas, Feder was trained as an engineer and from 1917 on, taught himself finance and economics (Manifesto, p. ii.).

Hitler was instantly fascinated by Feder’s ideas, which he had heard of prior to joining the German Workers Party,[4] as Feder clarified the meaning of the struggle. Hitler attended Feder’s lectures and was taught the difference between loan and industrial capital of which he had been previously unaware.[5] After the first lecture, in which he first heard about stock-exchange and loan capital, he recalled: “I had now found a way to one of the most essential pre-requisites for the founding of a new party.”[6]

Feder with Hitler and Anton Drexler wrote the 25 point programme of the NSDAP in 1920, hence the points on banking stating:

10. It must be the first duty of every citizen to perform physical or mental work. The activities of the individual must not clash with the general interest, but must proceed within the framework of the community and be for the general good.

We demand therefore:

11. The abolition of incomes unearned by work.

The breaking of the slavery of interest

Feder participated in the 1923 Munich Putsch but was only fined 50 marks as his position was briefly that of “finance minister.” In 1924 he was elected to the Reichstag (Manifesto, p. iii.). In 1931 Feder was made chairman of the NSDAP economic council. He was already however being gradually sidelined, as Hitler sought to moderate the socialist program to accommodate industrialists such as Krupp (Manifesto, p. iii.). Hence, when Hitler assumed government in 1933, Feder was only made a State Secretary and soon withdrew from government to become a professor until his death in 1941 (Manifesto, p. vi). In this respect he is similar to Walther Darré, Minister of Agriculture, who was also gradually moved aside due to the contingences of war.[7] However, it would be an error to readily dismiss Feder’s fundamental influence on Third Reich finance and economics, as Anna Bramwell does when she writes that while Darré became an important figure, especially prior to the war, “Feder’s Social Credit died without issue.”[8]

While I am neither interested in nor qualified to debate the fine points of difference between Feder’s and C. H. Douglas’ ideas, I do not agree with the contention that rearmament was the major cause of Germany’s recovery. Whatever one might say about the extent of Germany’s war production, the foundation remained that of state credit issue, and certain significant socialist policies were enacted including the limitation of industrial dividends. In stating that Hitler received the — belated — backing of certain industrialists — a theory that is popular among both Marxists and Libertarians — it is all too easy to obscure a significant fact: unlike most capitalists other than the Japanese, many German industrialists were nationalists who were loyal first to the Fatherland, rather than primarily to what Feder aptly calls “Mammonism.”

One of the closest parallels to the German financial policy was that of the New Zealand Labour Government, which issued 1% Reserve Bank state credit to fund the iconic state housing program, which alone cut the unemployment rate during the Depression by 75%. That was also a great achievement, despite the outrage by the famous Labour Party politician John A. Lee who was dismayed that Labour did not fulfil its complete program of banking reform.

One therefore does not have to be a “Nazi” to appreciate such policies, although any mention of the success of similar policies in Hitler’s Germany are met with either silence or outrage from other banking reformers, which is the reason why Ezra Pound, despite the cogency of his pamphlets on banking, is generally repudiated as not being a “true” Social Crediter because of his equal enthusiasm for Fascism. Another state that reached economic heights due to adopting Germany’s banking policies, was Japan, where Douglas Social Credit had also been well received before the war.

What I am still not clear about is whether Feder drew a distinction between the issue of currency or what might be called fiat money, and credit. The two are not synonymous and usually the amount of coins and banknotes in circulation compared to compounding-interest credit is very small. Feder seems to be advocating the issue of interest free currency according to the demands of production. The same policy was advocated by the New Zealand banking reformer A. N. Field and his British precursor Arthur Kitson. However that is not the same as issuing interest free credit.

Nonetheless, the revival of Feder’s ideas is especially vital today. Ironically, at the very time that the flaws of the debt system are coming home to roost, there is now less understanding of or interest in alternatives to the debt finance system than ever; the crucial issue that was once talked about on every street corner and at every bar, shop and factory floor throughout much of the world during the 1920s and 1930s. In this respect, much of the Right has been criminally negligent. There is a tiresome preoccupation with side issues, but nothing can be achieved unless the financial system is first dealt with.

It is not necessary for the Right to reinvent the financial wheel. There is a large corpus of material that was formulated decades ago by keen minds on the subject, and because the financial system has not changed, the relevance of these ideas remains. Those such as Ezra Pound, Charles Coughlin, C. H. Douglas, John A. Lee, and Gottfried Feder, should again become required reading and subjects of discussion. Instead, where there is discussion on finance among the Right it often involves some idiot scheme about a silver or a gold standard. The major cause of World War II was fear of Germany’s new banking system, and also the barter trading system that was allowing Germany to displace the USA, Britain, and others in world trade.

As Feder states throughout his manifesto, currency (or credit) is simply intended as a means of exchange, not as a profit-making commodity via usury. During the Medieval era usurers were executed; now they are regarded as the epitome of respectable business practice.

Finally, the ideals of liberating all of mankind from the slavery of usury is one that can capture the imagination of multitudes of people of goodwill, as it once did during the 1920s and 1930s. It is an alternative that leaves Marxism for dead and demands the utmost idealism, based on the closing words by Feder: “Give me your hands, workers of all lands, unite!” (Manifesto, p. 57).

Gottfried Feder
The German State on a National and Socialist Foundation
(World View Foundations/Historical Review Press, due out December 2012).

Originally published in 1923, this edition translated and prefaced by Dr. Alexander Jacob is the second in a series of publications by Feder. Hitler regarded The German State as the “catechism” of the Party.

What is particularly interesting in Alexander Jacob’s Preface to this edition is that he traces the pre-Hitler origins of National Socialism to the German Workers Party in Bohemia, whose seminal document was Rudolf Jung’s Der Nationale Sozialismus (1919). Jung had joined the Bohemian Deutsche Arbeiter Partei, founded in 1903, in 1909. The Party was renamed Deutsche Nationalsozialistische Arbeiter Partei (DNSAP) in 1918. Like the later party founded by Drexler, Eckart, and Feder, the Bohemian National Socialists advocated what was intended as a German Nationalist alternative to Marxism. It is from Jung that Feder derived the word “Mammonism” in describing the usurious finical system that controls not only the economy but has wider moral, cultural and spiritual implications.

Indeed, the first chapter is on the “moral foundations,” with the “first law” of National Socialism being “the public interest before self-interest.” This is the basis of what Feder called “aristocratic socialism,” and is inclusive of all classes, other than parasites. Therefore, because the underlying problem of usury will be eliminated, private property is not only not in need of nationalisation, but a new banking system would allow for the wider spread of property, something that was also propounded in Britain during the 1930s by G. K. Chesterton and Hilaire Belloc as the doctrine of “Distributism,” often in alliance with Social Credit. There, however, the inspiration was the Catholic Social Doctrine enunciated in the Papal Encyclicals.

However, in keeping with what might today be called the “third position” basis of these ideas, Feder also condemned the capitalist attitude of unlimited acquisition which, as the Distributists also pointed out, leads to something akin to Communism: the concentration of property into few hands. As Feder, Spengler, and others pointed out, Communism does not aim to transcend capitalism but merely to change the owner class: “The reverse side of this Mammonism is the Marxist world-view,” as Feder put it. Therefore, for Feder National Socialism was more than a political revolution; it was a spiritual and moral revolution, eliminating Mammonism by striking at its foundation: usury. Under this new socialism there would arrive a “reawakening of the German soul, in a nationalist state of work and performance in which each will find his own.”

Feder returns to the “economic foundations,” starting with the moral predicate: “In a healthy economic body morality and national economy cannot be separate.” A just economic and social structure ultimately rests on the honour of its citizens; something that is comparable to the guild ethos of the Medieval era. The first concern therefore is not for profit but for the well-being of the common interest.

In this chapter we come to an interesting question which I alluded to above, that of National Socialism supposedly selling out to the big industrialists. My contention is that German industrialists were not necessarily comparable to the plutocrats of today, or those of other states – other than Japan – in their own time. Feder addresses this matter:

The principle for this limitation lies in the sentence: “Public interest before self-interest.” That this limit for property moreover can be raised very high emerges from the fact that National Socialism will not in any way reject even the largest industrial works, so long as they remain in the private possession of the creators (we think of Krupp, Mannesmann, Thyssen, etc.), as contradicting the interests of the whole, especially when the owners of these large works have a feel for and understanding of social questions and are able to find the right limits between appropriate self-gain from production, an adequate pricing for the sales and the fulfilment of demand of the national economy, and a corresponding and worthy form of participation of the workforce in the revenues of the works.

The question is not so much how much money and property one has but what one does with it, and how its accumulation affects the community. One can see here why Feder calls his Idea “aristocratic socialism,” as it is antithetical to the levelling creed of Marxism, whose utopian vision is a drab, grey equality. Feder deals with further questions of trade, and the federation of the distinctive German provinces rather than a levelling centralism, which might seem closer to Otto Strasser’s position than Hitler’s.

Feder is a proponent of the Leader-principle no less than the mainstream of National Socialists. He is no democrat, and is scathing of “parliamentarianism,” which he regarded as a front for plutocracy. He is also in accord with the rest of party orthodoxy in advocating the exclusion of foreign elements from the leadership of the state. A premise is: “Closing of the nation externally with all freedom and diversity internally. This is the correct idea of a German state.”

With Part II of the book we come to a more specific program. The first chapter is “The National and Economic Program of the National Socialist German Workers’ Party,” which is comprised of concise points but is lengthier than the 25 point program. Most significantly this program provides a fuller outline of the financial policies based on the premise: “The task of the national economy is the fulfilment of demand and not as high a profitability as possible for loan capital.” Here the socialist principles are based on the recognition of private property while prohibiting hoarding, and the encouraging of private enterprise while discouraging conglomerates. In point 15 of this section the premise of the future Labour Service program is mentioned: “The introduction of a year of compulsory work for every German,” which was primarily for the purposes of creating national solidarity and transcending class-coconsciousness.

Part II of the program specifies the breaking of interest slavery which includes (17) the nationalisation of the banking system. This part elaborates the specifics of financial policy more thoroughly than the Manifesto for the Breaking of Interest Slavery, which outlines an ideology rather than a policy. Point 18 was enacted by the Hitler regime, namely: “The financing of all large public tasks (development of hydro-energy, roadways, etc.) with avoidance of loans through the issuance of interest-free state treasury vouchers or through a cash-free method.” Such a voucher system for exchange is again being not only advocated but also implemented, on local scales around the world, as local communities by necessity begin to look for alterative local currencies. Point 20: “The creation of a non-profit Construction and Economic Bank (currency reform) for the granting of interest-free credit,” was achieved by the First New Zealand Labour Government in 1935 when it nationalised the Reserve Bank. As mentioned previously, the bank issued 1% state credit to fund state housing, and it would be interesting for an informed New Zealander to read that point 25 of Feder’s program states: “Removal of the housing shortage through comprehensive new housing buildings throughout the Reich by means of the new non-profit Construction and Economic Bank . . .” The final point recommends the reduction of taxation, a recommendation also found in Feder’s Manifesto, as taxation largely serves to pay for interest on loans, as do local rates. Indeed, in this reviewer’s residence of Kapiti, 18% of Council rates revenue goes towards payment of debt.

What is of additional interest is the mention (although lack of elaboration) of a corporatist method of government that is lacking in the 25 point NSDAP program: “Development of professional chambers.” The corporatist model was detailed in an article by Feder published in 1919 in Eckart’s Auf Gut Deutsch, entitled “The Social State.”

Part III of the book offers elaboration of the program set out in Part II, dealing with  “state structure,” in which racial admixture and Jewish influence are the focus of condemnation. In these respects Feder differs little from the orthodoxy of the volkisch movement. There is a standard discussion of the Jews.

However, there are relatively detailed chapters on agriculture and national financial reform, the Versailles reparations, and worldwide debt. In discussing the future of the Reichsbank, Feder declares that “The breaking of interest slavery is by far the greatest task of National Socialism.” That is a premise that should be revived today by the Right, which seldom gets beyond such questions as immigration and multiracialism, themselves symptoms — not causes — of a civilization whose decay is set in course by “Mammonism.”


1. Barbara Miller Land and Leila J. Rupp, ed. and trans., Nazi Ideology Before 1933 (Manchester University Press, 1978), pp. 27–30.

2. Ibid., p. 26.

3. Michael Bakunin, Personliche Beziehungen zu Marx, 1971, in Gesammelte Werke, vol. 3 (Berlin, 1924), pp. 204–16. “Bakunin on Marx and Rothschild [3],” The Information Underground.

4. Adolf Hitler, Mein Kampf (London: Hurst and Blackett, 1939), p. 187.

5. Ibid., p. 180.

6. Ibid., p. 181.

7. Anna Bramwell, Blood and Soil: Walther Darré and Hitler’s Green Party (Buckinghamshire: The Kensal Press, 1985).

8. Ibid., p. 5.