“I propose now to issue a diminuendo bond that will in the course of 7,000 years reduce this debt back to the level it started from. Instead of bearing interest, this bond will bear discount. This discount the first year will be precisely what the interest was the last, and each year in the descending future the bond will be reduced to the same amount to which it was increased in the year as far in the past as it is in the future counting from the date of the bond. So that 1,000 years hence the amount of it will be the same that it was 1,000 years ago and so on. Coupons shall be attached, representing the amount of the discount each year which the holders of the bonds shall detach and present to the treasurer to be cancelled. Thus the debt will be reduced every year and it will cost nobody a kik.
“At the end of 7,000 years all the accumulation of interest will have been dissipated and only the principal will be left. This if not paid then will begin to draw interest again, because by the undulatory theory, the wave having reached its lowest ebb must thereafter rise.”
“This was the substance of the king’s speech, and it was highly applauded by the whole assembly, except the Lunarians. They said it looked to them like repudiation, and they told the king they feared it would hurt his credit not only in the Moon, but on the Earth, and Venus, Juno, Pallas, Ceres, Vesta and all the rest. The King replied that he would be sorry to do anything that would impair his credit in the other planets and for that reason would not on any account repudiate. That was why he gave this bond. If he intended to repudiate he would not need to give any bond. By this arrangement they would get their million kiks in the course of time—would no doubt have got them long ago—if that load of interest had not been piled on top of them. The object of this bond was to remove this interest. According to the undulatory theory of finance that he had just announced, the total amount of loss of money employed in business exactly equals the total amount of gain, since money does not change in amount by being used. But in particular cases there may be net gains at the expense of loss somewhere else. And he said that the shrewdness of the Lunarians would have insured to them a measure of net gain; but by no possibility could it have amounted to many times itself even in the course of ages. “It is labor, not money, that creates wealth. If you bury 100 kiks in the ground and after a year dig them up you will not find that they have increased to 105.”