Moriz Dub, Die weitere Entwicklung der Katastrophenhausse in Österreich mit Streiflichtern auf Deutschland (1922)

Moriz Dub’s 1922 study is a short economic pamphlet in the Finanz- und Volkswirtschaftliche Zeitfragen series, written as a sequel to his earlier analysis of the “Katastrophenhausse.” Its scope is Austria after the lost war, with comparative glances at Germany; its method combines social observation, monetary argument, and tables translating Vienna and Berlin share prices into dollar values. Its thesis is that the spectacular stock-market boom is not prosperity, but the market expression of currency collapse.

Als Katastrophenhausse hat sich bereits damals die stürmische Aufwärtsbewegung auf den Börsen dargestellt, als Wirkung und Gegenstück der Geldentwertung, durch welche der Preis der Sachgüter, in dem entwerteten Gelde ausgedrückt, auf das richtige Maß zurückgeführt wurde.

English translation: Even then the turbulent upward movement on the stock exchanges revealed itself as a catastrophe boom — the effect and counterpart of the depreciation of money, through which the price of tangible goods, expressed in the devalued currency, was brought back to its true measure.

Dub begins by showing how inflation transforms social behavior. Fixed incomes, savings, and rentier security have been broken; households seek extra earnings, and even modest property owners follow the stock list as a means of survival or imagined enrichment. The exchange becomes a mass institution because ordinary income no longer sustains life.

Seit Menschengedenken war der Zulauf zur Börse nicht mehr so stark und so auf alle Kreise ausgedehnt wie jetzt.

English translation: Within living memory the rush to the stock exchange has never been so strong nor extended to all circles as it is now.

The pamphlet’s main conceptual move is to distinguish a normal cyclical boom from an inflationary catastrophe boom. Dub concedes that weak currencies have produced export activity, high nominal profits, and reserves for banks and industry. But dividends are too small, and many shares too weak in substance, for yield to explain prices. Investors are not chiefly buying income; they are fleeing money for claims on things.

Eine Konjunkturhausse wie in früheren Perioden des wirtschaftlichen Aufschwunges ist die gegenwärtige Bewegung nur zum geringeren Teile. Die entscheidende Triebfeder ist die Geldentwertung.

English translation: The present movement is only to a lesser extent a cyclical boom like those of earlier periods of economic upswing. The decisive driving force is the depreciation of money.

This leads to Dub’s analysis of foreign exchange as the hidden measure of value. Austria appears cheap to foreigners at the same moment that Austrians experience intolerable dearness. The same depreciation that makes exports possible also enables foreign acquisition of domestic assets, a process he treats ambivalently: foreign capital may restart industry, but it can also mean loss of control over productive property.

Österreich ist für jenen, der mit fremder Valuta rechnet, das billigste Land Europas, während seine eigenen Bewohner unter unerträglicher Teuerung stöhnen.

English translation: For anyone reckoning in foreign currency, Austria is the cheapest country in Europe, while its own inhabitants groan under unbearable inflation.

The empirical center of the study is the revaluation of Austrian and German securities in dollars. In crowns or marks the increases look immense; measured in stable money, most shares remain far below prewar levels. The tables therefore enact the argument: nominal quotations in collapsing currency conceal real impoverishment.

So sind die Kurse das Spiegelbild der Valuta und in den meisten Fällen nur dieses, da sich ja in der inneren Situation der Gesellschaften wenig geändert hat.

English translation: Thus the quotations are the mirror image of the currency, and in most cases nothing more, since little has in fact changed in the internal situation of the companies.

For the conservative holder, the conclusion is harsh. The owner of prewar securities has not become richer; dividends have lost purchasing power, and taxation compounds the illusion by treating crowns and marks as if their names preserved value. Speculators may win on differences, but those gains are not social wealth.

Die hohen Ziffern der Kurse täuschen das Bild nicht vorhandenen Reichtums vor, der Besitzer, der seine Effekten durch längere Zeit hält, wiegt sich in dem Gefühle der Bereicherung.

English translation: The high figures of the quotations feign the picture of a wealth that does not exist; the holder who keeps his securities for a longer period lulls himself into the feeling of having grown richer.

Dub’s treatment of “Substanzwerte” is especially important. In stable times, earnings and dividends would again govern valuation; in inflation, investors prize assets as fragments of inventories, land, buildings, machinery, patents, and claims. But this dominance of substance value is temporary, born of monetary disorder.

Der Begriff der Substanzwerte hat nur in so außerordentlichen Zeiten, wo alles schwankt, eine dominierende Bedeutung.

English translation: The concept of intrinsic asset value takes on a dominant significance only in such extraordinary times, when everything is in flux.

The conclusion rejects both complacency and simple restoration. A sudden return to the old money value would cause crisis, but continuing depreciation deepens dispossession and speculation. Rescue requires practicable stabilization, followed only gradually by improvement; its necessary cost will be a fall in securities, because their rise depended on the expectation of endless currency decline.

Eine wirkliche Beruhigung der Valuta und Besserung des Geldwertes müßte dem ganzen Zauber, der sich jetzt auf dem Effektenmarkte auslebt, ein ernüchterndes Ende bereiten.

English translation: A genuine stabilization of the currency and an improvement in the value of money would necessarily put a sobering end to the whole spell now playing itself out on the securities market.