by Menger
[Title Page and Publication Information]: Front matter for Volume IV of Carl Menger's Collected Works, published by the London School of Economics. It identifies the volume as 'Schriften über Geldtheorie und Währungspolitik' and lists the printing details from 1936. [Table of Contents and Editorial Preface]: Table of contents for the volume and an editorial note by F.A. Hayek (F.A.H.). The note explains that the volume contains Menger's writings on money and the Austrian Currency Reform of 1892, including his testimony before the Currency Commission. It also mentions a complete bibliography of Menger's works at the end. [Table of Contents: Money and its Functions]: A detailed table of contents outlining the structure of Menger's work on money. It covers the origin of exchange media, the difficulties of barter, the marketability of goods, the nature of money in economics and jurisprudence, the development of metallic and state-regulated currency, and the various functions of money as a payment medium, store of value, and price indicator. [The Origin of Money and the Difficulties of Barter]: Menger explores the 'mysterious' nature of money, questioning why individuals exchange useful goods for seemingly useless metal discs. He argues that money is not a legal invention but an organic result of economic development. The section details the inherent difficulties of barter (natural exchange), such as the rare coincidence of needs, and introduces the concept of varying marketability (Gangbarkeit) of goods as the key to understanding how certain commodities evolved into media of exchange. [The Concept of Marketability (Gangbarkeit) and the Emergence of Exchange Media]: This section defines 'marketability' (Gangbarkeit) as the varying ease with which goods can be sold at economic prices. Menger uses travel accounts from Africa (Cameron and Barth) to illustrate the friction of barter. He explains that insightful individuals began accepting highly marketable goods they didn't personally need, knowing they could easily trade them later for their actual requirements. This practice spread through imitation and habit, eventually establishing specific commodities (cattle, shells, salt, metals) as money. [The Evolution of Money: Divisibility, Fungibility, and Price Formation]: Menger discusses the secondary qualities that refine money: divisibility, transportability, and fungibility. He provides an etymological overview of the word 'Geld' and its equivalents in other languages. Crucially, he explains how the emergence of money transforms markets from fragmented barter into centralized systems where competition is intensified, leading to more accurate and economic price formation based on general market conditions rather than individual chance. [The Theoretical Dispute: Money as a Commodity vs. Money as a Sign]: Menger addresses the debate between economists and jurists regarding the nature of money. He critiques the 'sign theory' (money as a mere token) and defends the view that money is a commodity with unique marketability. He distinguishes the economic function of money from its legal regulation, noting that while jurists distinguish between 'price' (pretium) and 'good' (merx) for legal clarity, money remains an economic good subject to the laws of exchange. He also critiques the 'trust' and 'convention' theories of money's origin. [The Origin and Perfection of Metallic Money through Coinage]: Menger explains why precious metals became the dominant form of money due to their beauty, scarcity, and durability. He traces the transition from weighing raw metal to the invention of coinage. Coinage solves the problems of verifying purity and weight, significantly reducing transaction costs. He argues that the state's role is to perfect the monetary system by providing uniform, trustworthy units (currency), which facilitates complex credit relations and 'sum debts' (Summenschulden) that would be impossible with raw bullion. [Money as a Medium for Unilateral Payments and Capital Transfer]: This section examines money's role beyond direct exchange: as a medium for unilateral payments (taxes, fines, gifts), subsidiary performances (damages), and as a tool for thesaurization (hoarding) and capitalization. Menger explains that money is the most efficient way to store and transfer wealth across time and space because it grants the holder immediate power over all market goods. He also identifies money as the primary mediator of the capital market (loans). [Money as a Measure of Value and Price Indicator]: Menger critiques the Aristotelian notion that money 'measures' an inherent value equality in exchange. Instead, he argues that money serves as a 'price indicator' (Preisindikator). While money is a convenient scale for comparing wealth and prices at a single point in time/space, it is not an absolute measure across different times or locations due to fluctuations in its own purchasing power. He discusses the early attempts at using index numbers to track the 'external' exchange value (purchasing power) of money. [Internal vs. External Value of Money and the Problem of Measurement]: Menger distinguishes between the 'external' value of money (its relation to other goods) and its 'internal' value (factors affecting value from the side of money itself, like supply and production costs). He references Jean Bodin's discovery that an abundance of gold/silver causes high prices. He argues that while absolute stability is impossible, the state can theoretically regulate the internal value by managing the money supply. He concludes that determining whether a price change originates from the side of goods or money is a complex analytical task that statistics alone cannot fully solve. [The Definition of Money and the Role of Legal Compulsion (Zwangskurs)]: Menger defines money by its function as a generally accepted medium of exchange. He argues against the view that 'legal tender' status (Zwangskurs) is essential to the concept of money. Money exists through social habit before the state regulates it. While the state can perfect money, Menger warns that Zwangskurs is often used to force pathological or depreciated currencies (like assignats) onto the public. True money is accepted voluntarily because of its economic utility, not just legal force. [The Demand for Money (Geldbedarf) in Individual and National Economies]: Menger analyzes the demand for money, rejecting the simple 'velocity of circulation' formulas of Smith, Ricardo, and Mill. He argues that the demand for money is driven by the need for cash reserves to ensure economic security and continuity, not just for immediate spending. He discusses how banks, clearing houses, and credit instruments reduce the need for physical cash (bargeldersparende Institute) while the increasing complexity of a wealthy economy tends to increase the overall demand for liquid means. [Bibliography of Monetary Literature]: A comprehensive bibliographic overview of works on money, numismatics, and monetary policy. It lists major historical catalogs, collections of tracts (such as those by Overstone and McCulloch), and modern literature reviews up to the late 19th century, including references to the 'currency dispute' (Währungsstreit). [The Purchasing Power of the Austrian Guilder (1889)]: An essay originally published in the 'Neue Freie Presse' discussing the specific monetary situation in Austria-Hungary. Menger explains the anomaly where the Austrian guilder's purchasing power is significantly higher than its silver content value. He attributes this to the 1879 suspension of private silver coinage, which created an artificial 'scarcity value' (Seltenheitswert). He warns that this state-controlled value is precarious and calls for a formal legal regulation of the currency to protect the economy from arbitrary administrative changes. [Contributions to the Currency Question in Austria-Hungary]: Menger reviews the history of the Austrian currency from 1848 to 1878, the period of the 'silver agio'. He identifies the root cause of the currency's depreciation as the state's financial dependence on the National Bank and the excessive issuance of unredeemable state notes. He critiques past reform attempts by ministers Bruck and Plener and argues that the only path to stabilization is the reduction of the floating state debt and the decoupling of the bank from state financing. [The Disappearance of the Silver Agio]: Menger describes the spontaneous disappearance of the silver agio in Austria-Hungary during the second half of 1878. He provides a detailed chronological account of silver exchange rates at the Vienna Stock Exchange, noting how the currency reached parity with silver without direct government intervention, effectively ending a period of paper money devaluation that had lasted since 1848. [Causes of Currency Regulation and the International Silver Market]: This section analyzes the external economic factors that led to the stabilization of the Austrian currency, primarily the global fall in silver prices relative to gold starting in 1871. Menger explains how arbitrageurs imported silver to be minted in Austria, eventually driving the value of silver coins down to the level of paper currency, a process facilitated by the rigid nature of the Austrian bank note circulation under the Peel system. [The Emergence of Monetary Anomalies in Austria-Hungary]: Menger examines the unique 'limping' silver standard that emerged after the 1879 suspension of private silver minting. He provides extensive data on the disparity between the market price of silver in London and the exchange value of the Austrian gulden, arguing that the currency's value became detached from its metallic base, functioning instead as a 'scarcity value' (Seltenheitswert) maintained by government restriction of the money supply. [Evils and Dangers of the Current Currency System]: Menger outlines five major dangers posed by the existing currency system: 1) constant exchange rate fluctuations hindering trade; 2) isolation from international capital flows leading to higher interest rates; 3) the legal uncertainty of the 1879 minting suspension; 4) the risk of a renewed silver agio during crises; and 5) the threat of a further collapse in silver prices. He cites expert testimony (Austen, Kimball, Lexis) regarding the inexhaustible supply and falling production costs of silver to argue that the current price is artificially high and poses a systemic risk. [V. Die verschiedenen, bei der Valutareform in Oesterreich-Ungarn in Betracht kommenden Währungsformen]: Menger introduces the central question of the currency reform: the choice of the new monetary metal. While the governments of Austria and Hungary appear committed to the gold standard due to favorable financial conditions and international trade considerations, Menger anticipates significant parliamentary debate. He notes that scientific opinions are divided and that various interest groups feel threatened by the transition, necessitating a thorough examination of different monetary forms. [a) Die Silberwährung]: Menger analyzes the possibility of returning to a pure silver standard. He argues that this would lead to a significant devaluation of the currency (approximately 22%), resulting in a massive redistribution of wealth from creditors to debtors. He provides historical data comparing the value of the Austrian gulden to gold and silver parities since 1879, concluding that a return to silver is impractical and would fail to solve the core issues of monetary instability. [b) Die verschiedenen Formen der Doppelwährung]: This section examines bimetallism (the double standard). Menger acknowledges its strong support in parliament, particularly among agrarian interests and certain experts like Eduard Suess. However, he argues that a national bimetallic system would effectively collapse into a silver standard due to market ratios. He also dismisses international bimetallism as a viable path for Austria-Hungary, citing the failure of previous international monetary conferences (1878, 1881) and the risk of a sudden drop in the value of money if silver reservoirs were opened. [c) Die Goldwährung]: Menger argues that the gold standard is the necessary choice for an economically advanced nation. Gold is presented as the 'world money' of the modern era, offering superior convenience for large transactions and international payments. He posits that remaining on a silver standard would economically isolate Austria-Hungary. Despite some reservations regarding value stability, he concludes that the transition to gold is the only practical measure to achieve parity with neighboring economies. [d) Die Bedenken gegen die Goldwährung (Die Wertsteigerung des Goldes)]: Menger addresses the primary concern regarding the gold standard: the potential for gold to appreciate in value, which would lead to falling commodity prices and increased debt burdens. He examines gold production statistics from 1856 to 1891, noting a recovery in production levels in the late 1880s (particularly in South Africa). While he is less worried about a total depletion of gold, he remains concerned about the systemic tendency of gold to increase in value as more nations adopt it. [e) Die voraussichtliche Wirkung der Valutareform Oesterreich-Ungarns auf den Goldwert]: Menger calculates the specific gold requirements for the Austro-Hungarian reform. He analyzes the current composition of the money supply (banknotes, state notes, and silver/copper coins) as of December 1891. He estimates the total future need for circulation at 950–1000 million gulden. By accounting for token coinage (silver, nickel, copper) and unbacked banknotes, he determines the net amount of gold that must be acquired from international markets to support the new 'crown' currency. [Statistical Scenarios for Currency Regulation in Austria-Hungary]: Menger presents four detailed statistical scenarios (I-IV) for the regulation of the Austro-Hungarian currency, varying the inclusion of state notes and silver courant. He includes estimates of gold requirements and historical data on the unbacked banknote circulation of the Austro-Hungarian Bank from 1888-1891, while referencing expert opinions from the Valuta-Kommission such as Dub (Rothschild), Lindheim, and Hertzka. [The Impact of Currency Reform on Global Gold Value]: Menger analyzes the potential for Austro-Hungarian currency reform to cause a significant increase in the global value of gold. By comparing the projected gold needs of Austria-Hungary to existing global reserves and the historical precedent of the German monetary reform, he argues that the withdrawal of such large quantities of gold will inevitably lead to appreciation and associated economic challenges. [Preventative Measures Against Gold Appreciation and International Cooperation]: Menger discusses strategies to mitigate the dangers of gold appreciation, advocating for the correct determination of the transition ratio (Relationsfrage) and international agreements. He proposes several measures to reduce gold demand, such as using silver for lower-value denominations, expanding clearing systems, and international coordination to prevent individual nations from destabilizing the market through competitive gold acquisition. [Timing the Transition and the Role of the 'Limping' Gold Standard]: Menger argues for delaying the final determination of the currency transition ratio until gold reserves are secured to avoid market speculation. He then defends the 'limping' gold standard (hinkende Goldwährung), where silver remains legal tender alongside gold. He critiques the 'pure gold standard' fanatics, arguing that a contingent silver circulation does not harm national credit, as evidenced by Germany and France, and is a necessary pragmatic step given global silver stocks. [The Future Monetary Unit: Questions of Unification and Foreign Systems]: Menger discusses the choice of a future monetary unit for Austria-Hungary, arguing against joining foreign systems like the German Mark or the Latin Union's Franc. He emphasizes that domestic economic stability and historical continuity are more important than simplifying international trade for a small group of merchants. He provides historical examples of how populations cling to familiar currency units despite legal changes. [Gulden vs. Krone: The Debate Over the New Monetary Unit]: Menger examines whether the 'Gulden' or the 'Krone' (half-gulden) should be the future unit. He critiques arguments that a lighter unit promotes thrift or social welfare, asserting that the wealth of a nation is independent of its currency's weight. He argues that the Gulden is an ideal unit because it aligns with the smallest practical transaction values (the Kreuzer) and warns that changing the unit causes unnecessary confusion and economic harm to the poor. [The Transition to the Gold Standard: Preface and Table of Contents]: This segment contains the title page, preface, and table of contents for Menger's work on the transition to the gold standard. Menger highlights the unique difficulty of the Austrian-Hungarian reform due to the 'over-valuation' of the currency relative to silver since 1879 and the instability of the global precious metal markets. [The Conversion Ratio (Relation) and the Calculation of Averages]: Menger critiques the government's proposed conversion ratio (Relation) between the old currency and the new gold standard. He argues that the government's calculation, based on averages from 1879-1891, is flawed because it ignores the rising value of gold over that period. He demonstrates through statistical tables that the proposed 'Krone' is too heavy, effectively disadvantaging debtors and failing to account for the deflationary pressure of the reform itself. [The Rising Value of the Austrian Currency and Monetary Policy]: Menger examines the argument that the rising value of the Austrian currency justifies a higher gold parity. He argues that the appreciation since 1879 is not a defect of the currency itself but a result of government policy regarding silver coinage. He warns against artificial currency appreciation caused by a scarcity of circulating media and asserts that the government has a duty to prevent both artificial appreciation and depreciation to maintain stability. [Analysis of Gold Exchange Rates (1889–1891) and Trade Balances]: Menger critiques the government's reliance on the high gold parity observed between 1889 and 1891 as a basis for the new currency relation. He provides a detailed table of import and export figures from 1879 to 1890, arguing that the favorable trade balances and high currency values of the recent years were abnormal and influenced by temporary factors like the American silver experiment. He concludes that the proposed parity is too high and suggests a lighter gold crown. [The Momentary Exchange Rate and International Relations]: This section addresses the concern that the currency relation must match the current momentary exchange rate to satisfy foreign interests. Menger argues that the market would have adjusted to a lower parity just as easily and that foreign creditors actually benefit significantly from the transition to gold, as their silver-based claims are being converted at a rate far more favorable than the actual market price of silver. [The Problem of Stabilizing Currency Value]: Menger redefines the goal of the currency reform, shifting from the historical focus on preventing depreciation to the modern need to stabilize an 'appreciated' currency. He explains that since 1879, the Austrian florin has gained a premium over its metallic silver base. He critiques the public misconception that currency appreciation is always an 'improvement,' comparing it to arbitrarily changing weights and measures, and emphasizes that the goal should be a fixed, stable value scale. [Legal Gaps in Silver Coinage Regulation]: Menger identifies a critical legal gap in the proposed monetary treaty between Austria and Hungary: the lack of an explicit prohibition against unilateral silver coinage for the new Crown currency. He warns that this ambiguity could lead to future disputes between the two halves of the empire and urges an amendment to explicitly prevent either side from issuing silver currency without mutual consent. [Limits of the Proposed Stabilization Measures]: Menger analyzes the mechanisms intended to cap the value of the florin using gold parity. While the reform protects against depreciation from silver over-issuance and caps appreciation relative to gold, it does not protect against currency shocks from state note emissions or war rumors. Crucially, it does not protect the economy from the rising purchasing power of gold itself, which affects exports and debtors just as much as currency appreciation would. [Financial Consequences and the Burden on Taxpayers]: Menger discusses the financial risks the government assumes by fixing the exchange rate before securing the necessary gold reserves. He argues that if the price of gold rises during the acquisition phase, the state will face significant losses. Even if the state uses foreign loans to avoid direct losses on currency exchange, the burden is ultimately shifted to taxpayers through the increased real value of their tax obligations in an appreciated currency. [Die Gefahr des Entstehens eines Goldagios und des Scheiterns der Währungsreform nach Fixierung der Relation]: Menger analyzes the risks of a gold premium (agio) emerging after the official exchange rate is fixed but before cash payments in gold are fully implemented. He argues that the appreciation of gold, driven partly by the reform itself, threatens to increase the debt and tax burden on the population. Menger distinguishes between the periods before and after mandatory gold accounting, suggesting that the government and the central bank can prevent a gold agio by restricting the volume of circulating currency (fiduciary media) to maintain the desired exchange rate. He critiques 'secret opponents' of the gold standard who hope the reform will fail or merely serve as a stabilization measure, asserting that the government's commitment to the reform will likely lead to a contractionary monetary policy to secure the legal relation of 1 florin to 2 crowns. [Aussagen von der Währungs-Enquête-Kommission: Einleitung und Fragebogen]: This segment introduces the expert testimonies from the Currency Inquiry Commission (Währungs-Enquête-Kommission). It lists the initial four points of the government's questionnaire regarding the choice of currency base, the role of silver, the use of state treasury notes, and the principles for converting the existing florin into gold. [Aussagen in der 7. Sitzung am 15. März 1892: Die Währungs-Enquête-Kommission]: Carl Menger's extensive testimony during the 7th session of the Currency Inquiry Commission in March 1892. Menger argues for the necessity of transitioning Austria-Hungary to a gold standard to resolve the economic instability caused by the current 'limping' silver currency and its disparity with international gold-based currencies. He discusses the dangers of the government's power to resume silver coinage by administrative decree, the impact of currency isolation on the balance of payments and interest rates, and critiques various alternatives such as national or international bimetallism. Menger provides detailed technical calculations regarding the costs of importing gold from London and the necessary volume of gold reserves (estimated at 600 million gulden) to support a stable transition without causing a global gold price shock. [Interpellationen und Berichtigungen zur 7. Sitzung]: A transcript of the questions (interpellations) directed at Menger by other experts following his testimony. Topics include the circulation of half-kreuzer coins, the impact of currency devaluation on foreign bondholders (specifically Belgian holders of Austrian rentes), the technicalities of gold procurement, and the potential for a 'limping' currency if silver remains in circulation. Menger defends his 'just gulden' principle, arguing that domestic interests must not be sacrificed for foreign speculators and clarifying his methodology for calculating transition ratios based on market averages rather than momentary fluctuations. [Von unserer Valuta (1892)]: An article originally published in the Allgemeine Juristen-Zeitung where Menger explains the 'anomalous' nature of the Austrian silver gulden, whose exchange value has become detached from its intrinsic silver value. He traces the history of the silver agio from 1848 to its disappearance in 1878, attributing the change to international silver price drops rather than domestic policy alone. Menger warns of the 'unlimited' production potential of silver in America and the resulting risk of further devaluation. He concludes with a socio-political argument, asserting that a 'small' (devalued) gulden actually harms the poor—who are net creditors through savings accounts—while benefiting the wealthy debtors, thus advocating for a 'just' stable currency. [Das Goldagio und der heutige Stand der Valutareform (1893)]: A critical analysis of the state of the currency reform a year after the 1892 laws. Menger examines the initial success in gold procurement and the subsequent emergence of a 3% gold agio, which he blames on a combination of worsening trade balances, poor harvest prospects, and policy errors—specifically the premature conversion of state debt and over-hasty gold purchases that exhausted the domestic foreign exchange market. He argues that the agio is not a 'phantom' but a serious obstacle that must be resolved through market cooling and trade improvements before further reform steps can succeed. [Verzeichnis der Schriften Carl Mengers (Bibliography)]: A comprehensive chronological bibliography of Carl Menger's writings, including books, scientific articles, book reviews, and newspaper essays from 1871 to 1915. It lists major works like 'Grundsätze der Volkswirtschaftslehre' and 'Untersuchungen über die Methode', as well as numerous reviews of contemporary economists such as Böhm-Bawerk, Wieser, and Roscher.
Front matter for Volume IV of Carl Menger's Collected Works, published by the London School of Economics. It identifies the volume as 'Schriften über Geldtheorie und Währungspolitik' and lists the printing details from 1936.
Read full textTable of contents for the volume and an editorial note by F.A. Hayek (F.A.H.). The note explains that the volume contains Menger's writings on money and the Austrian Currency Reform of 1892, including his testimony before the Currency Commission. It also mentions a complete bibliography of Menger's works at the end.
Read full textA detailed table of contents outlining the structure of Menger's work on money. It covers the origin of exchange media, the difficulties of barter, the marketability of goods, the nature of money in economics and jurisprudence, the development of metallic and state-regulated currency, and the various functions of money as a payment medium, store of value, and price indicator.
Read full textMenger explores the 'mysterious' nature of money, questioning why individuals exchange useful goods for seemingly useless metal discs. He argues that money is not a legal invention but an organic result of economic development. The section details the inherent difficulties of barter (natural exchange), such as the rare coincidence of needs, and introduces the concept of varying marketability (Gangbarkeit) of goods as the key to understanding how certain commodities evolved into media of exchange.
Read full textThis section defines 'marketability' (Gangbarkeit) as the varying ease with which goods can be sold at economic prices. Menger uses travel accounts from Africa (Cameron and Barth) to illustrate the friction of barter. He explains that insightful individuals began accepting highly marketable goods they didn't personally need, knowing they could easily trade them later for their actual requirements. This practice spread through imitation and habit, eventually establishing specific commodities (cattle, shells, salt, metals) as money.
Read full textMenger discusses the secondary qualities that refine money: divisibility, transportability, and fungibility. He provides an etymological overview of the word 'Geld' and its equivalents in other languages. Crucially, he explains how the emergence of money transforms markets from fragmented barter into centralized systems where competition is intensified, leading to more accurate and economic price formation based on general market conditions rather than individual chance.
Read full textMenger addresses the debate between economists and jurists regarding the nature of money. He critiques the 'sign theory' (money as a mere token) and defends the view that money is a commodity with unique marketability. He distinguishes the economic function of money from its legal regulation, noting that while jurists distinguish between 'price' (pretium) and 'good' (merx) for legal clarity, money remains an economic good subject to the laws of exchange. He also critiques the 'trust' and 'convention' theories of money's origin.
Read full textMenger explains why precious metals became the dominant form of money due to their beauty, scarcity, and durability. He traces the transition from weighing raw metal to the invention of coinage. Coinage solves the problems of verifying purity and weight, significantly reducing transaction costs. He argues that the state's role is to perfect the monetary system by providing uniform, trustworthy units (currency), which facilitates complex credit relations and 'sum debts' (Summenschulden) that would be impossible with raw bullion.
Read full textThis section examines money's role beyond direct exchange: as a medium for unilateral payments (taxes, fines, gifts), subsidiary performances (damages), and as a tool for thesaurization (hoarding) and capitalization. Menger explains that money is the most efficient way to store and transfer wealth across time and space because it grants the holder immediate power over all market goods. He also identifies money as the primary mediator of the capital market (loans).
Read full textMenger critiques the Aristotelian notion that money 'measures' an inherent value equality in exchange. Instead, he argues that money serves as a 'price indicator' (Preisindikator). While money is a convenient scale for comparing wealth and prices at a single point in time/space, it is not an absolute measure across different times or locations due to fluctuations in its own purchasing power. He discusses the early attempts at using index numbers to track the 'external' exchange value (purchasing power) of money.
Read full textMenger distinguishes between the 'external' value of money (its relation to other goods) and its 'internal' value (factors affecting value from the side of money itself, like supply and production costs). He references Jean Bodin's discovery that an abundance of gold/silver causes high prices. He argues that while absolute stability is impossible, the state can theoretically regulate the internal value by managing the money supply. He concludes that determining whether a price change originates from the side of goods or money is a complex analytical task that statistics alone cannot fully solve.
Read full textMenger defines money by its function as a generally accepted medium of exchange. He argues against the view that 'legal tender' status (Zwangskurs) is essential to the concept of money. Money exists through social habit before the state regulates it. While the state can perfect money, Menger warns that Zwangskurs is often used to force pathological or depreciated currencies (like assignats) onto the public. True money is accepted voluntarily because of its economic utility, not just legal force.
Read full textMenger analyzes the demand for money, rejecting the simple 'velocity of circulation' formulas of Smith, Ricardo, and Mill. He argues that the demand for money is driven by the need for cash reserves to ensure economic security and continuity, not just for immediate spending. He discusses how banks, clearing houses, and credit instruments reduce the need for physical cash (bargeldersparende Institute) while the increasing complexity of a wealthy economy tends to increase the overall demand for liquid means.
Read full textA comprehensive bibliographic overview of works on money, numismatics, and monetary policy. It lists major historical catalogs, collections of tracts (such as those by Overstone and McCulloch), and modern literature reviews up to the late 19th century, including references to the 'currency dispute' (Währungsstreit).
Read full textAn essay originally published in the 'Neue Freie Presse' discussing the specific monetary situation in Austria-Hungary. Menger explains the anomaly where the Austrian guilder's purchasing power is significantly higher than its silver content value. He attributes this to the 1879 suspension of private silver coinage, which created an artificial 'scarcity value' (Seltenheitswert). He warns that this state-controlled value is precarious and calls for a formal legal regulation of the currency to protect the economy from arbitrary administrative changes.
Read full textMenger reviews the history of the Austrian currency from 1848 to 1878, the period of the 'silver agio'. He identifies the root cause of the currency's depreciation as the state's financial dependence on the National Bank and the excessive issuance of unredeemable state notes. He critiques past reform attempts by ministers Bruck and Plener and argues that the only path to stabilization is the reduction of the floating state debt and the decoupling of the bank from state financing.
Read full textMenger describes the spontaneous disappearance of the silver agio in Austria-Hungary during the second half of 1878. He provides a detailed chronological account of silver exchange rates at the Vienna Stock Exchange, noting how the currency reached parity with silver without direct government intervention, effectively ending a period of paper money devaluation that had lasted since 1848.
Read full textThis section analyzes the external economic factors that led to the stabilization of the Austrian currency, primarily the global fall in silver prices relative to gold starting in 1871. Menger explains how arbitrageurs imported silver to be minted in Austria, eventually driving the value of silver coins down to the level of paper currency, a process facilitated by the rigid nature of the Austrian bank note circulation under the Peel system.
Read full textMenger examines the unique 'limping' silver standard that emerged after the 1879 suspension of private silver minting. He provides extensive data on the disparity between the market price of silver in London and the exchange value of the Austrian gulden, arguing that the currency's value became detached from its metallic base, functioning instead as a 'scarcity value' (Seltenheitswert) maintained by government restriction of the money supply.
Read full textMenger outlines five major dangers posed by the existing currency system: 1) constant exchange rate fluctuations hindering trade; 2) isolation from international capital flows leading to higher interest rates; 3) the legal uncertainty of the 1879 minting suspension; 4) the risk of a renewed silver agio during crises; and 5) the threat of a further collapse in silver prices. He cites expert testimony (Austen, Kimball, Lexis) regarding the inexhaustible supply and falling production costs of silver to argue that the current price is artificially high and poses a systemic risk.
Read full textMenger introduces the central question of the currency reform: the choice of the new monetary metal. While the governments of Austria and Hungary appear committed to the gold standard due to favorable financial conditions and international trade considerations, Menger anticipates significant parliamentary debate. He notes that scientific opinions are divided and that various interest groups feel threatened by the transition, necessitating a thorough examination of different monetary forms.
Read full textMenger analyzes the possibility of returning to a pure silver standard. He argues that this would lead to a significant devaluation of the currency (approximately 22%), resulting in a massive redistribution of wealth from creditors to debtors. He provides historical data comparing the value of the Austrian gulden to gold and silver parities since 1879, concluding that a return to silver is impractical and would fail to solve the core issues of monetary instability.
Read full textThis section examines bimetallism (the double standard). Menger acknowledges its strong support in parliament, particularly among agrarian interests and certain experts like Eduard Suess. However, he argues that a national bimetallic system would effectively collapse into a silver standard due to market ratios. He also dismisses international bimetallism as a viable path for Austria-Hungary, citing the failure of previous international monetary conferences (1878, 1881) and the risk of a sudden drop in the value of money if silver reservoirs were opened.
Read full textMenger argues that the gold standard is the necessary choice for an economically advanced nation. Gold is presented as the 'world money' of the modern era, offering superior convenience for large transactions and international payments. He posits that remaining on a silver standard would economically isolate Austria-Hungary. Despite some reservations regarding value stability, he concludes that the transition to gold is the only practical measure to achieve parity with neighboring economies.
Read full textMenger addresses the primary concern regarding the gold standard: the potential for gold to appreciate in value, which would lead to falling commodity prices and increased debt burdens. He examines gold production statistics from 1856 to 1891, noting a recovery in production levels in the late 1880s (particularly in South Africa). While he is less worried about a total depletion of gold, he remains concerned about the systemic tendency of gold to increase in value as more nations adopt it.
Read full textMenger calculates the specific gold requirements for the Austro-Hungarian reform. He analyzes the current composition of the money supply (banknotes, state notes, and silver/copper coins) as of December 1891. He estimates the total future need for circulation at 950–1000 million gulden. By accounting for token coinage (silver, nickel, copper) and unbacked banknotes, he determines the net amount of gold that must be acquired from international markets to support the new 'crown' currency.
Read full textMenger presents four detailed statistical scenarios (I-IV) for the regulation of the Austro-Hungarian currency, varying the inclusion of state notes and silver courant. He includes estimates of gold requirements and historical data on the unbacked banknote circulation of the Austro-Hungarian Bank from 1888-1891, while referencing expert opinions from the Valuta-Kommission such as Dub (Rothschild), Lindheim, and Hertzka.
Read full textMenger analyzes the potential for Austro-Hungarian currency reform to cause a significant increase in the global value of gold. By comparing the projected gold needs of Austria-Hungary to existing global reserves and the historical precedent of the German monetary reform, he argues that the withdrawal of such large quantities of gold will inevitably lead to appreciation and associated economic challenges.
Read full textMenger discusses strategies to mitigate the dangers of gold appreciation, advocating for the correct determination of the transition ratio (Relationsfrage) and international agreements. He proposes several measures to reduce gold demand, such as using silver for lower-value denominations, expanding clearing systems, and international coordination to prevent individual nations from destabilizing the market through competitive gold acquisition.
Read full textMenger argues for delaying the final determination of the currency transition ratio until gold reserves are secured to avoid market speculation. He then defends the 'limping' gold standard (hinkende Goldwährung), where silver remains legal tender alongside gold. He critiques the 'pure gold standard' fanatics, arguing that a contingent silver circulation does not harm national credit, as evidenced by Germany and France, and is a necessary pragmatic step given global silver stocks.
Read full textMenger discusses the choice of a future monetary unit for Austria-Hungary, arguing against joining foreign systems like the German Mark or the Latin Union's Franc. He emphasizes that domestic economic stability and historical continuity are more important than simplifying international trade for a small group of merchants. He provides historical examples of how populations cling to familiar currency units despite legal changes.
Read full textMenger examines whether the 'Gulden' or the 'Krone' (half-gulden) should be the future unit. He critiques arguments that a lighter unit promotes thrift or social welfare, asserting that the wealth of a nation is independent of its currency's weight. He argues that the Gulden is an ideal unit because it aligns with the smallest practical transaction values (the Kreuzer) and warns that changing the unit causes unnecessary confusion and economic harm to the poor.
Read full textThis segment contains the title page, preface, and table of contents for Menger's work on the transition to the gold standard. Menger highlights the unique difficulty of the Austrian-Hungarian reform due to the 'over-valuation' of the currency relative to silver since 1879 and the instability of the global precious metal markets.
Read full textMenger critiques the government's proposed conversion ratio (Relation) between the old currency and the new gold standard. He argues that the government's calculation, based on averages from 1879-1891, is flawed because it ignores the rising value of gold over that period. He demonstrates through statistical tables that the proposed 'Krone' is too heavy, effectively disadvantaging debtors and failing to account for the deflationary pressure of the reform itself.
Read full textMenger examines the argument that the rising value of the Austrian currency justifies a higher gold parity. He argues that the appreciation since 1879 is not a defect of the currency itself but a result of government policy regarding silver coinage. He warns against artificial currency appreciation caused by a scarcity of circulating media and asserts that the government has a duty to prevent both artificial appreciation and depreciation to maintain stability.
Read full textMenger critiques the government's reliance on the high gold parity observed between 1889 and 1891 as a basis for the new currency relation. He provides a detailed table of import and export figures from 1879 to 1890, arguing that the favorable trade balances and high currency values of the recent years were abnormal and influenced by temporary factors like the American silver experiment. He concludes that the proposed parity is too high and suggests a lighter gold crown.
Read full textThis section addresses the concern that the currency relation must match the current momentary exchange rate to satisfy foreign interests. Menger argues that the market would have adjusted to a lower parity just as easily and that foreign creditors actually benefit significantly from the transition to gold, as their silver-based claims are being converted at a rate far more favorable than the actual market price of silver.
Read full textMenger redefines the goal of the currency reform, shifting from the historical focus on preventing depreciation to the modern need to stabilize an 'appreciated' currency. He explains that since 1879, the Austrian florin has gained a premium over its metallic silver base. He critiques the public misconception that currency appreciation is always an 'improvement,' comparing it to arbitrarily changing weights and measures, and emphasizes that the goal should be a fixed, stable value scale.
Read full textMenger identifies a critical legal gap in the proposed monetary treaty between Austria and Hungary: the lack of an explicit prohibition against unilateral silver coinage for the new Crown currency. He warns that this ambiguity could lead to future disputes between the two halves of the empire and urges an amendment to explicitly prevent either side from issuing silver currency without mutual consent.
Read full textMenger analyzes the mechanisms intended to cap the value of the florin using gold parity. While the reform protects against depreciation from silver over-issuance and caps appreciation relative to gold, it does not protect against currency shocks from state note emissions or war rumors. Crucially, it does not protect the economy from the rising purchasing power of gold itself, which affects exports and debtors just as much as currency appreciation would.
Read full textMenger discusses the financial risks the government assumes by fixing the exchange rate before securing the necessary gold reserves. He argues that if the price of gold rises during the acquisition phase, the state will face significant losses. Even if the state uses foreign loans to avoid direct losses on currency exchange, the burden is ultimately shifted to taxpayers through the increased real value of their tax obligations in an appreciated currency.
Read full textMenger analyzes the risks of a gold premium (agio) emerging after the official exchange rate is fixed but before cash payments in gold are fully implemented. He argues that the appreciation of gold, driven partly by the reform itself, threatens to increase the debt and tax burden on the population. Menger distinguishes between the periods before and after mandatory gold accounting, suggesting that the government and the central bank can prevent a gold agio by restricting the volume of circulating currency (fiduciary media) to maintain the desired exchange rate. He critiques 'secret opponents' of the gold standard who hope the reform will fail or merely serve as a stabilization measure, asserting that the government's commitment to the reform will likely lead to a contractionary monetary policy to secure the legal relation of 1 florin to 2 crowns.
Read full textThis segment introduces the expert testimonies from the Currency Inquiry Commission (Währungs-Enquête-Kommission). It lists the initial four points of the government's questionnaire regarding the choice of currency base, the role of silver, the use of state treasury notes, and the principles for converting the existing florin into gold.
Read full textCarl Menger's extensive testimony during the 7th session of the Currency Inquiry Commission in March 1892. Menger argues for the necessity of transitioning Austria-Hungary to a gold standard to resolve the economic instability caused by the current 'limping' silver currency and its disparity with international gold-based currencies. He discusses the dangers of the government's power to resume silver coinage by administrative decree, the impact of currency isolation on the balance of payments and interest rates, and critiques various alternatives such as national or international bimetallism. Menger provides detailed technical calculations regarding the costs of importing gold from London and the necessary volume of gold reserves (estimated at 600 million gulden) to support a stable transition without causing a global gold price shock.
Read full textA transcript of the questions (interpellations) directed at Menger by other experts following his testimony. Topics include the circulation of half-kreuzer coins, the impact of currency devaluation on foreign bondholders (specifically Belgian holders of Austrian rentes), the technicalities of gold procurement, and the potential for a 'limping' currency if silver remains in circulation. Menger defends his 'just gulden' principle, arguing that domestic interests must not be sacrificed for foreign speculators and clarifying his methodology for calculating transition ratios based on market averages rather than momentary fluctuations.
Read full textAn article originally published in the Allgemeine Juristen-Zeitung where Menger explains the 'anomalous' nature of the Austrian silver gulden, whose exchange value has become detached from its intrinsic silver value. He traces the history of the silver agio from 1848 to its disappearance in 1878, attributing the change to international silver price drops rather than domestic policy alone. Menger warns of the 'unlimited' production potential of silver in America and the resulting risk of further devaluation. He concludes with a socio-political argument, asserting that a 'small' (devalued) gulden actually harms the poor—who are net creditors through savings accounts—while benefiting the wealthy debtors, thus advocating for a 'just' stable currency.
Read full textA critical analysis of the state of the currency reform a year after the 1892 laws. Menger examines the initial success in gold procurement and the subsequent emergence of a 3% gold agio, which he blames on a combination of worsening trade balances, poor harvest prospects, and policy errors—specifically the premature conversion of state debt and over-hasty gold purchases that exhausted the domestic foreign exchange market. He argues that the agio is not a 'phantom' but a serious obstacle that must be resolved through market cooling and trade improvements before further reform steps can succeed.
Read full textA comprehensive chronological bibliography of Carl Menger's writings, including books, scientific articles, book reviews, and newspaper essays from 1871 to 1915. It lists major works like 'Grundsätze der Volkswirtschaftslehre' and 'Untersuchungen über die Methode', as well as numerous reviews of contemporary economists such as Böhm-Bawerk, Wieser, and Roscher.
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