Carl Menger, “Von unserer Valuta” (1892)

“Von unserer Valuta” is a journal-published lecture/speech to jurists on Austria-Hungary’s imminent currency reform. Menger’s thesis is that the silver gulden is an institutional anomaly: its purchasing power no longer follows its metal content. The lecture moves from diagnosis, to historical explanation, to reform and conversion justice.

Dasjenige, was nun den österreichischen Silbergulden charakterisiert und von allen anderen Formen des Geldes unterscheidet, ist die Loslösung seines Verkehrswerthes von seinem Silberwerthe.

English translation: What now characterizes the Austrian silver gulden and distinguishes it from all other forms of money is the detachment of its exchange value from its silver value.

Menger first rejects false analogies. Token coins derive value from full money; German thalers and French five-franc pieces are sustained by gold systems. Austria’s gulden has no such superior coin beside it, so the explanation must be historical rather than analogical.

Die Erklärung dieser Erscheinung lässt sich nur auf geschichtlichem Wege geben.

English translation: The explanation of this phenomenon can be given only by way of historical inquiry.

That history runs from the post-1848 paper regime to the disappearance of the silver agio in 1878. A limited paper circulation held its value while world silver fell toward it; arbitrage imported silver for minting; then private silver coinage was stopped in 1879. Once free minting ended, the coined gulden kept legal tender force with paper money while bullion silver continued to depreciate.

Es ist die Erscheinung zu Tage getreten, dass nur das Barrensilber stürzt, aber der Silbergulden, der das gleiche Solutionsrecht mit dem Papiergeld hatte, sich behauptet.

English translation: The phenomenon has become apparent that only bar silver has fallen, while the silver gulden, which had the same legal-tender status as paper money, has held its ground.

The anomaly is not harmless. Austria’s “hinkende Silberwährung” isolates it from gold-standard trading partners, replacing the old silver agio with a fluctuating gold relation. It also weakens the automatic inflow and outflow of money that normally disciplines prices, interest, and arbitrage.

Wir sind in dieser Richtung isolirt.

English translation: In this respect we stand isolated.

Menger adds that the suspension of private minting rested on administrative order rather than secure statute, and that silver production might continue expanding despite falling prices. The gulden’s metal value could therefore diverge still further from its exchange value. A return to real silver currency would not solve this; it would open minting arbitrage and force devaluation.

Die Rückkehr zur eigentlichen Silberwährung würde, wie ich Ihnen überzeugend dargelegt zu haben glaube, nichts Anderes bedeuten, als die Devalvirung unserer Valuta.

English translation: A return to a genuine silver standard would, as I believe I have convincingly demonstrated to you, mean nothing other than the devaluation of our currency.

Bimetallism is treated respectfully but dismissed as impracticable for one state alone. Nor should Austria imitate Germany’s or France’s limping gold standards, which Menger treats as accidents of incomplete reform. His preferred course is the purest feasible gold standard, with silver retained only for Austrian transitional needs.

The most juridical section distinguishes the Barrenrelation, the ratio between uncoined metals, from the Valutenrelation, the ratio between existing money and gold. The issue is not bullion content alone, but the value represented by coined gulden obligations.

Während also die Barrenrelation 1:22 betrug, war die Valutenrelation 1:18.

English translation: Thus, while the bullion ratio stood at 1:22, the currency ratio was 1:18.

A debtor received gulden with full purchasing power, not loose silver worth less; conversion at bullion value would therefore confiscate part of the creditor’s claim.

Es wäre demnach eine grobe Ungerechtigkeit, nach der Barrenrelation überzugehen.

English translation: It would therefore be a gross injustice to transition on the basis of the bullion ratio.

Menger’s closing move rejects the “social” case for a cheap gulden. Modern credit often runs from small savers to wealthier borrowers through savings banks, mortgages, public paper, and commerce. Devaluation would injure depositors, wage earners, and fixed-income recipients. The standard must be neither large nor small, but just.

Dasjenige, was angestrebt werden muss und was bei der Feststellung dieser wichtigen Ziffer die Hauptsache ist, wird ein gerechter Gulden sein (Beifall), ein solcher Gulden, welcher weder Gläubiger, noch Schuldner begünstigt, ein Gulden, durch welchen, wenn ich es kurz aussprechen soll, keine Vermögensverschiebung stattfindet.

English translation: What must be aimed at, and what is the main point in establishing this important figure, will be a just gulden (applause) — a gulden that favors neither creditor nor debtor, a gulden through which, to put it briefly, no shift of wealth takes place.

The work’s relevance lies in joining monetary theory to legal form. Menger treats money as purchasing power sustained by minting rules, legal tender, and expectations; he explains a fiat-like premium in a silver coin; and he makes currency reform a problem of contractual justice as much as metal policy.