Menger’s testimony before the Austro-Hungarian Currency Inquiry Commission is a practical monetary memorandum in spoken form. It addresses the standard to be adopted, the place of silver, state notes, the conversion of the gulden, and the proper monetary unit. His argument is not a simple plea for “gold” but a program for replacing an unstable and politically exposed valuta with a legally credible, internationally usable, and distributively fair system.
The urgency of reform lies in the suspended silver regime. Since free silver coinage had been stopped administratively rather than constitutionally, the value of contracts remained vulnerable to a future political decision. In the dual monarchy, Menger stresses, this danger was structurally magnified:
Nun denke man die Gefahr, eine durch die dualistische Gestaltung unserer Monarchie mehr als verdoppelte Gefahr, dass die Silberausprägungen in Oesterreich wieder aufgenommen werden würden!
English translation: Now consider the danger—a danger more than doubled by the dualistic structure of our monarchy—that silver coinage in Austria might be resumed!
He therefore rejects a return to full silver currency and treats national bimetallism as a route to depreciation. International bimetallism is handled more respectfully, as an experiment not absurd in theory, but too uncertain for Austrian policy. Gold is the relatively sounder basis because it connects Austria-Hungary to the dominant commercial world. Yet Menger’s gold policy is deliberately anti-dogmatic: he separates the desirable standard from the hazards of its execution.
Nichtsdestoweniger möchte ich die ernstlichen Uebelstände der Goldwährung und speziell meine Bedenken gegen die Art und Weise der Durchführung derselben, wie sie in dieser Enquête bisher vorwiegend empfohlen wurde, nicht mit Stillschweigen übergehen.
English translation: Nevertheless, I do not wish to pass over in silence the serious drawbacks of the gold standard, and especially my misgivings regarding the manner of its implementation as has hitherto been predominantly recommended in this enquiry.
The central practical issue is acquisition. Austria-Hungary requires large gold reserves, and Menger warns that a great buyer cannot assume a neutral market. He does not fear that gold is physically unobtainable, but he insists that the terms of obtaining it depend on price, timing, expectations, and the international effects of the reform itself.
Also die Angst, dass wir kein Gold erhalten könnten, wenn wir es bezahlen können und wollen, teile ich nicht; aber ich möchte Sie auf eine Eigentümlichkeit der Ware aufmerksam machen, die wir kaufen wollen.
English translation: So I do not share the anxiety that we could fail to obtain gold if we can and will pay for it; but I should like to draw your attention to a peculiarity of the commodity we wish to buy.
This caution leads to his distinctive recommendation: do not fix the final conversion ratio or force new gold circulation before the state has substantially secured its gold and the market has absorbed the operation. Premature definiteness could turn monetary reform into an arbitrary redistribution between creditors and debtors.
Menger’s treatment of silver and paper is equally nuanced. He favors a gold-based system, but not a metallist purism that ignores existing institutions. Limited silver currency and small state notes can remain useful if strictly capped and redeemable; subsidiary media need not drive out gold when gold is the value anchor. He also points to the concrete frictions of silver circulation and transport:
Die deutschen und viele österreichische Bahnen übernehmen Silbersendungen nur, wenn der Verfrachter dieselben begleitet und unter eigenem Verschluss hält. Die Versicherung kann nur bei Gesellschaften für Transportversicherung gedeckt werden.
English translation: The German and many Austrian railways accept silver consignments only if the shipper accompanies them and keeps them under his own seal. Insurance can be obtained only through transport insurance companies.
On conversion, Menger’s guiding norm is the “just gulden”: reform should not enrich debtors at creditors’ expense, or conversely. The market rate is the natural starting point because it expresses what the existing gulden can command in gold, but it must be read critically, allowing for speculation, trade-balance conditions, and the anticipated appreciation of gold during reform. Hence his resistance to early and rigid legal fixation.
The interpellations reveal the political economy of the testimony. Bankers press him on foreign creditors, securities sales, and the claim that any gold operation requires willing counterparties.
Man hat uns allerdings wieder die beruhigende Versicherung gegeben: zum Kaufe gehörten wie zum Heiraten zwei Personen; es müssten sich bei uns Leute finden, welche die Effekten kaufen.
English translation: We have, to be sure, once again been given the reassuring assurance that, as with marriage, a purchase requires two persons; there would surely be people among us willing to buy the securities.
Menger’s reply rests on price theory rather than administrative optimism: counterparts appear at prices, but prices themselves embody scarcity, expectations, and policy credibility. The testimony’s importance lies in this union of Austrian value theory with institutional monetary design. Money is treated as a legal and market institution whose reform must secure convertibility, preserve confidence, limit inferior media, and avoid hidden redistribution by monetary decree.
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