In 1972, during an audience with the Rebbe, I described the building progress of the new Community Center in London, and the serious financial pressures. Smiling, the Rebbe said, “This will of course always be so, but now the financial problems are much bigger—and that is a good sign.”

The Rebbe related, “A recent visitor from South America said to me that the greatest sign of the strength of the USA is its billion dollars of deficit!”

The Rebbe concluded, “I am pleased to hear of the Center’s progress, and as it continues to grow and attract more Jews for spiritual matters, this will automatically bring in additional funding for these activities.”

Lubavitch House today. (Photo: Osher Litzman)
Lubavitch House today. (Photo: Osher Litzman)

Overbearing Loans

At the end of a later meeting, likewise at a time of very difficult financial conditions, the Rebbe suddenly said, “I would like to take up a few more minutes of your time. I have heard about the high interest rate in England. What is the rate at the present time?”

I responded, “At least 15–16%, and the rates are likely to increase even further.”

The Rebbe continued, “Because the rates may increase, I would like to suggest that twenty people be found to lend £10,000 each, without interest, for one or two years. As a stimulus for this, one in the United States will help, so that you only have to find 19.

“Perhaps if the first loan comes from the USA, and you find Chai (18), then the last loan can also come from here. The first and the twentieth. If successful, this proposal will save $40,000 a year.”

“Perhaps,” the Rebbe said smiling, “it is an advantage that it is not a good time to invest. One can instead make good spiritual use of his money, without negatively affecting his financial situation.” The Rebbe added that I should feel free to tell anyone that the first part was sponsored from the USA.

“Perhaps,” the Rebbe said smiling, “it is an advantage that it is not a good time to invest. One can instead make good spiritual use of his money, without negatively affecting his financial situation.”

In 1975 I was able to report to the Rebbe my success in raising £165,000 in short-term loans. The Rebbe asked, “Is it time to send the $20,000 that was promised?” I said that there was no need, as we had achieved our target and it would be better to hold that money in reserve.

“Very good, it will not be idle,” the Rebbe responded.

Then the Rebbe asked, “You are now saving on all the interest?”

I told the Rebbe that we were currently paying the bank 1.5%.

“I do not understand,” the Rebbe asked, “why do you pay the bank?” I explained that the individual loans were given to the bank, and not to Lubavitch.

“But it is the same money!” said the Rebbe.

I explained that the bank has different requirements for money lent and money borrowed, and may not offset them.

“Why should they receive interest?” the Rebbe queried.

I explained that the bank feels they are actually doing us a favor when they are giving us this rate.

“Very well,” the Rebbe concluded with a smile, “this matter is in the category of laws which one does not understand.”

Solution to Deficit—Cut the Facilities?

In 1983 I concluded my report regarding the immediate and long-term financial situation of London Lubavitch. I included a number of possible solutions which would involve cutting down on the educational facilities.

I stressed how difficult and delicate this was, and how urgently we needed the guidance of the Rebbe.

The Rebbe responded:

By the Grace of G‑d
27th of Elul, 5743 [September 5, 1983]
Brooklyn, N. Y.

Mr. Pinches Meir Kalms
London, England

Greeting and Blessing:

Your letter was received with some delay, and because of the urgency of the matter, my reply was conveyed to you over the telephone.

Here I will reiterate in writing at least one point, based on what I heard from my father-in-law of saintly memory. It is that in regard to any child's education, especially in regard to a Jewish child, it should be borne in mind that if he will not be absorbed in a kosher educational institution immediately, the opportunity may be lost altogether, and it becomes a matter of spiritual Pikuach Nefesh [saving of a life]. On the other hand, the problem of financial capacity of the institution, although it may be difficult, could in time be resolved if the proper effort is made. The principle is similar and familiar also in the business world, and there is no need to elaborate on it, especially to you, knowing your dedication to Yiddishkeit [Judaism] in general and Torah education in particular.

[…]

With blessing,

M. Schneerson