Staatssekretär Dr. Schumpeter über Kriegsanleihe und Vermögensabgabe

Staatssekretär Dr. Schumpeter über Kriegsanleihe und Vermögensabgabe is a short newspaper report of a public speech, not a treatise. It records Schumpeter at the second Lower Austrian Landesbauernratstagung in Vienna on 17 September 1919, followed by Stöckler’s endorsement. The scope is immediate postwar fiscal policy: explaining to farmers why Austria must impose a wealth levy, protect the war loan, seek foreign credit, and yet avoid destroying agricultural production.

The argument is organized as a sequence of constraints. Schumpeter first offers cautious national confidence, but only within the horizon of defeat, shortage, and sacrifice.

Ich glaube ja an die wirtschaftliche Zukunft dieses Landes.

English translation: I do believe in the economic future of this country.

He then corrects the claim that farmers had become rich during the war. Nominal prices in depreciated money do not measure real wealth: an ox sold for 10,000 crowns is profitable only if it can be replaced, and agriculture lacks fertilizer, manure, and livestock. The central conceptual shift is from money receipts to the physical reproduction of productive capacity.

Es gibt keinen Wirtschaftszweig, der dauernd mit einem Defizit arbeiten kann.

English translation: There is no branch of the economy that can operate at a deficit permanently.

This is why cheap cooperative credit matters. Schumpeter does not ask that farmers escape burdens; he argues that if debt again weakens them, state revenue will also weaken. Credit policy is therefore part of reconstruction, supplying missing means of production and enabling the sector to carry unavoidable public charges.

The middle of the report turns to the fiscal programme. Schumpeter answers criticism of delay by saying that no serious plan could precede the peace terms; now that they are known, the programme can go to cabinet and the National Assembly. The harshest point is that Austria must honor obligations to obtain foreign loans, since without them the economy would stop. Domestic sacrifice is thus tied to international creditworthiness.

The key policy claim concerns the Kriegsanleihe. Schumpeter opposes any state action that would damage it, because war-loan claims are held by broad social groups and by cooperative credit institutions. Protecting the loan is not merely solicitude for bondholders; it protects the credit network on which recovery depends.

Ich bin aber auch der Ueberzeugung, daß der Staat der Kriegsanleihe nichts tun darf, denn weiteste Kreise der Bevölkerung und auch die genossenschaftlichen Kreditinstitute haben im weitesten Umfang Kriegsanleihe gezeichnet und ihre Wertverminderung würde für viele den wirtschaftlichen Ruin bedeuten.

English translation: But I am also convinced that the state must do nothing against the war loan, for the broadest circles of the population and also the cooperative credit institutions have subscribed to the war loan on the widest scale, and a reduction of its value would mean economic ruin for many.

He then connects that position to the Vermögensabgabe. If the levy is a shortening of war debts, war-loan paper should be accepted in payment, preferably at issue price. This lets the state reduce debt through taxation without repudiation.

Bezüglich der Kriegsanleihe bin ich der Ansicht, daß sie für die Vermögensabgabe in Zahlung genommen werden muß, da ja diese eine Abkürzung der Kriegsschulden darstellt.

English translation: With regard to the war loan, I am of the opinion that it must be accepted in payment of the capital levy, since the latter represents an abridgment of the war debts.

The levy is to be progressive and severe at the top, but the speech places a strict limit on fiscal extraction. Ordinary tax methods will not suffice; population and finance administration must cooperate in trust. Above all, agriculture must be assessed by lasting earning power, not by inflated asset prices.

Wir können und dürfen bei der Landwirtschaft nicht den augenblicklichen Wert der Liegenschaften und des Fundus instructus der Vermögensabgabe zugrunde legen, sondern den dauernden Ertragswert.

English translation: In the case of agriculture, we cannot and must not take the momentary value of landholdings and of the fundus instructus as the basis of the capital levy, but rather the sustained yield value.

The conclusion states the boundary between legitimate emergency taxation and self-defeating confiscation. Schumpeter is willing to take war-loan paper and money that bankruptcy would make worthless, but not the land, livestock, and organization needed for future output.

Wir werden zwar scharf zufassen müssen, aber Ihr Land und Vieh müssen Sie behalten und die Steuerforderungen des Staates müssen dort zurücktreten, wo Lebensinteressen der Wirtschaft auf dem Spiele stehen.

English translation: We shall indeed have to take firm hold, but you must keep your land and your livestock, and the state's tax claims must give way wherever the vital interests of the economy are at stake.

The report’s relevance lies in its compressed display of Schumpeter as a practical fiscal statesman in the postwar Austrian crisis. It joins nominal/real analysis, public debt credibility, progressive capital taxation, cooperative finance, and the preservation of productive capacity. Stöckler’s closing thanks and promise of support show the political result: a severe national programme is made acceptable to organized agriculture by the assurance that sacrifice must finance reconstruction, not make reconstruction impossible.