Richard Kerschagl · 1932
Richard Kerschagl’s booklet is a compact economic theory of exchange control in the crisis of the early 1930s. It asks why states seize, centralize, and ration foreign means of payment, what economic effects follow, and under what conditions such controls can disappear. Its governing premise is that Devisenbewirtschaftung is not a normal currency system but an emergency bridge: it may create time for adjustment, yet it cannot by itself restore equilibrium.
Jede Devisenbewirtschaftung trägt nämlich den Charakter einer ausgesprochen provisorischen Lösung, welche eine Atempause ermöglichen soll, um die Voraussetzungen für eine gesunde und ausgeglichene Entwicklung der Wirtschaft zu schaffen.
English translation: Every system of foreign-exchange control bears the character of a distinctly provisional solution, intended to provide a breathing space in which to create the preconditions for a sound and balanced development of the economy.
Kerschagl begins from the interaction of trade balance, payments balance, and “Währungsbilanz,” the relation between currency issue, cover, and confidence. Exchange control arises when these spheres reinforce crisis: import needs, debt service, capital flight, reserve losses, and domestic credit weakness converge into scarcity of foreign exchange. The administrative apparatus is therefore only the visible sign of a deeper disequilibrium. Kerschagl’s analysis is neither a simple defense of intervention nor a liberal denunciation; it treats controls as forced by circumstances and judged by whether they help restore the conditions that make them unnecessary.
His definition is broad. Exchange control includes compulsory disclosure, surrender, concentration, allocation, and official pricing of foreign exchange and currencies. In practice the net widens to gold, foreign notes, securities, coupons, export proceeds, and foreign claims, because each uncontrolled form of international purchasing power can become a channel of evasion.
Im allgemeinen wird man unter Devisenbewirtschaftung alle jene Maßnahmen verstehen, welche der Erfassung der Devisen einerseits, der Zuteilung derselben andererseits, dienen sollen und zu denen als weiteres Merkmal noch verschiedene Maßnahmen, insbesondere bezüglich Kursfestsetzung und dergleichen, kommen.
English translation: In general, foreign-exchange control is to be understood as comprising all those measures which serve, on the one hand, the collection of foreign exchange and, on the other, its allocation, and to which are added, as a further characteristic feature, various measures particularly with regard to rate-setting and the like.
The central institutional insight is that allocation of foreign exchange is a form of partial planning. To distribute exchange is to distribute access to imported food, raw materials, machinery, and consumer goods; in an import-dependent economy this indirectly shapes production and consumption. Priority lists, import licenses, substitute production, and discrimination among uses follow from the logic of rationing. The regime may be introduced to defend currency stability, but its operation presses into trade policy, credit policy, property rights, and industrial organization.
Kerschagl extends the same logic to clearing systems. Devisen-clearing offsets reciprocal claims while conserving foreign currency; Waren-clearing tries more directly to bind imports and exports to one another. Both can reduce reserve pressure, yet they bilateralize trade, injure transit commerce, create residual balances, and replace market convertibility with negotiated channels. Clearing is thus useful as a crisis expedient, not proof that international payments have healed.
The effects of exchange control are deliberately presented as mixed. It can protect essential imports, restrain luxury consumption, slow reserve drains, and improve the trade balance. But it also obstructs credit and capital movements, weakens gold and currency clauses, burdens savers, encourages evasion, and distorts the structure of trade. Its benefits and harms stem from the same fact: it works by restriction. Success depends less on technical perfection than on whether the economy uses the respite for real adjustment.
The final chapters ask how controls end. Loans may help if they bridge toward structural balance; if they merely finance continuing deficits, they postpone crisis. Gold reserves, gold-exchange arrangements, paper money, central-bank cooperation, and the Bank for International Settlements all have technical value, but none can replace fiscal discipline, non-inflationary credit, productive adaptation, and a viable external position.
Der Weg zu dauernd gesunden Währungen führt über wirtschaftliche Vernunft.
English translation: The road to permanently sound currencies leads through economic reason.
The pamphlet’s lasting interest lies in this refusal to isolate currency technique from economic structure. Written during the breakdown of the European gold-exchange order, it presents exchange control as crisis rationing imposed by scarcity, an administrative apparatus with planning consequences, and a symptom whose removal requires more than exchange regulations themselves.
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