Soll die Notenbank gegründet werden?

This file is a short 1922 newspaper intervention by Joseph A. Schumpeter, not a treatise or edited volume. Its scope is immediate and policy-oriented: whether Austria, amid postwar currency collapse and expected foreign credit, should found a new note-issuing bank. Schumpeter’s answer is deliberately conditional. In orthodox monetary policy, a central bank should normally crown stabilization, not precede it:

Daß die Gründung einer Notenbank der letzte und nicht der erste Schritt der Währungssanierung ist, gehörte immer zum ABC der Finanzpolitik der ganzen Welt, und ich glaube, nicht fehlzugehen, wenn ich die Schwierigkeiten, denen die Gründung der österreichischen Nationalbank begegnete, hauptsächlich auf dieses Argument zurückführe, und zwar im Inlande nicht weniger als im Auslande.

English translation: That the founding of a bank of issue is the last and not the first step in the restoration of the currency has always belonged to the ABC of financial policy the world over; and I do not believe I am mistaken in tracing the difficulties encountered by the founding of the Austrian National Bank principally to this argument, at home no less than abroad.

The article first places the issue within the history of note-bank debates, contrasting earlier serious controversies with what Schumpeter calls Austria’s tendency to undertake major financial actions without deep inquiry. He then turns to the government’s decision to begin immediately, chiefly to steady public expectations and rally opinion around the crown. This is not presented as theoretically clean policy, but as a wager whose validity depends on results:

Natürlich ist das ein kühner Schritt, dessen Rechtfertigung nur im Erfolg liegen kann.

English translation: Naturally this is a bold step, whose justification can lie only in success.

Schumpeter’s central conceptual move is to separate psychological effect from structural cure. He concedes that the announcement and expected opening of the bank have already improved exchange, securities, and wholesale markets. Yet he insists that such confidence effects cannot substitute for fiscal reconstruction. Budgetary seriousness, not “programs,” is decisive. Austria cannot be stabilized by slogans, formulas, or a single institutional device:

Österreich ist nicht mit Formeln und Schlagworten zu sanieren.

English translation: Austria cannot be set right by formulas and slogans.

The most forceful part of the article attacks the fantasy of a monetary “tablet” that could heal a state whose administrative, fiscal, and productive organs are damaged. Schumpeter argues that every office, authority, administrative method, state enterprise, and revenue source must be worked through separately. The note bank can succeed only if embedded in this laborious reconstruction; otherwise it risks becoming another mechanism of inflation:

Fährt man so zu wirtschaften fort, so kann auch die Notenbank keinen Erfolg bringen, ganz abgesehen davon, daß die wirkliche Ausnützung der Notenreserve, die nach der Berechnung des Finanzministeriums der neuen Bank noch zur Verfügung stehen würde, eine Inflation zur Folge hätte, die die gegenwärtige noch weit übertreffen müßte.

English translation: If one continues to conduct affairs in this manner, then even the bank of issue can bring no success—quite apart from the fact that the actual utilization of the note reserve which, according to the calculation of the Ministry of Finance, would still be available to the new bank, would entail an inflation that would necessarily far surpass the present one.

Credibility is therefore the hinge of the essay. Schumpeter does not oppose the bank abstractly; he opposes founding it as a substitute for a believable exchange-rate and fiscal policy. If the government cannot name and defend a definite crown rate, and if its conduct betrays doubt in its own success, the institutional innovation can at most buy time:

Solange die Regierung sich daher zu einem bestimmten Kurs der Krone nicht bekennt und nicht bekennen kann, solange unverkennbare Symptome, wie der Kampf gegen den Index, zeigen, daß ihr der unerschütterliche Glaube an den Erfolg fehlt, solange kann auch ein Erfolg in der Frage der Notenbankgründung nur temporär sein.

English translation: So long, therefore, as the government does not and cannot commit itself to a definite rate of the krone; so long as unmistakable symptoms, such as the fight against the index, show that it lacks unshakeable faith in success, so long can any success in the matter of founding the bank of issue only be temporary.

The final section weighs an alternative: using the transferred foreign exchange directly to supply the market and fund the state briefly, thereby gaining a breathing-space for domestic reform. Schumpeter rejects confidence in this route too, because three months would not suffice for real reform. Both options are daring uses of last reserves. The bank plan is intelligible only in connection with the anticipated foreign credit operation:

Denn die ganze Notenbankgründung ist ja nur verständlich unter der Voraussetzung, daß die Kreditaktion gelingt und darf daher nicht ohne Rücksicht auf diese beurteilt werden.

English translation: For the whole founding of the bank of issue is intelligible only on the assumption that the credit operation succeeds, and it may not therefore be judged without regard to the latter.

The article’s relevance lies in its concise theory of stabilization under crisis. Institutions matter, but they do not create credibility ex nihilo; reserves matter, but can be squandered; psychological confidence matters, but only when backed by administrative and fiscal discipline. Schumpeter ends neither with rejection nor endorsement, but with a diagnosis of Austria’s predicament: real chances exist, yet so do dangers requiring political will and moral energy.

Die Situation des Notenbankplanes ist also sehr ähnlich der Situation Österreichs überhaupt: Zweifellos vorhandene Chancen, aber ebenso zweifellos vorhandene Gefahren, deren Überwindung moralische Kräfte verlangt, ein Artikel, an dem dieses Land nie allzu großen Überfluß hatte.

English translation: The situation of the bank-of-issue plan is thus very similar to the situation of Austria as a whole: chances that undoubtedly exist, but equally undoubted dangers whose surmounting demands moral forces—an article of which this country has never had any overabundance.