Sanierungswerk und Geldwertpolitik — Summary

This file is a contemporary newspaper report of a public debate held in Vienna by the Politische Gesellschaft on 29 January 1924, prompted by Dr. Spitzmüller’s lecture on Austria’s stabilization. It opens by registering the event’s large, elite audience—officials, bankers, industrial representatives, and economists—and notes that Richard Reisch, Josef Schumpeter, and Heinrich Rosenberg spoke, with Spitzmüller’s reply reserved for the following session. The substantive center preserved here is Schumpeter’s speech, a compact defense of Austria’s post-inflation “Sanierung” as a political, fiscal, and monetary discipline.

Schumpeter’s main thesis is that stabilization must be judged by its broad architecture, not by objections to individual measures. He frames the problem as one of collective adherence to a line of policy during a painful transition away from inflation:

Ich fühle es seit einiger Zeit, daß es heute in der Finanzpolitik Oesterreichs nicht auf Details und auf Uebereinstimmungen in diesem oder jenem Punkte ankommt, sondern daß es sich vielmehr hauptsächlich darum handelt, die großen Linien der Sanierungspolitik voll zu erfassen und sich an diesen Linien zu ralliieren.

English translation: I have felt for some time that what matters today in Austria's financial policy is not details, nor agreement on this or that point, but rather chiefly the grasping of the broad lines of the restoration policy and rallying around those lines.

The speech’s first conceptual move is to define monetary stabilization as the indispensable foundation of the National Bank’s credibility. Schumpeter rejects the tempting policy of raising the crown’s exchange value: even if momentarily popular, it would have intensified the stabilization crisis and endangered social peace. His anti-deflationary argument is pragmatic rather than doctrinaire: in Austria’s fragile conditions, even a small upward stabilization would impose heavy costs for no real gain.

Es kann kein Zweifel darüber sein, daß es die einzige mögliche Politik ist, an dem gegebenen Kronenwert festzuhalten, aus dem einfachen Grunde, weil die Stabilität des Kronenwertes ein wesentlicher Teil des Mechanismus und der Konstruktion unserer Notenbank war.

English translation: There can be no doubt that the only possible policy is to hold fast to the given value of the krone, for the simple reason that the stability of the krone's value was an essential part of the mechanism and the construction of our bank of issue.

He then relocates the meaning of the Austrian rescue away from Geneva and the League of Nations loan. External credit matters, but only as support for a process already begun. The essence of recovery lies in the prior internal acts of monetary and fiscal self-restraint; policy must be conducted as if the loan had not arrived.

Nicht in Genf, nicht im Völkerbundkredit liegt das große Verdienst oder auch nur der größte Erfolg. Der Kredit ist vielmehr nur eine Konsequenz der schon begonnenen Sanierung gewesen und ist ein Inzidenz, das die Sache in der Tat sehr wesentlich erleichtert und uns eine Menge schwerer Opfer erspart, aber eigentlich das Wesen der Sache nicht berührt.

English translation: The great merit, or even the greatest success, lies neither in Geneva nor in the League of Nations loan. The loan was rather only a consequence of the already begun restoration and is an incident which does indeed very substantially facilitate matters and spares us a great many heavy sacrifices, but does not really touch the essence of the matter.

Schumpeter’s reconstruction of the stabilization sequence gives the speech its structure. First came administrative authority that prevented disorder; then the decisive halt to inflationary finance; then the difficult maintenance of state functioning without renewed note issue and before the inflow of foreign exchange and credits. He singles out the end of the printing press as an act whose risk had been underestimated after the fact:

Die zweite große Tat – eine Tat, von deren Kühnheit und Gefährlichkeit wir ebenfalls jetzt keine Ahnung haben – war die Einstellung der Notenpresse.

English translation: The second great deed—a deed of whose boldness and dangerousness we likewise now have no inkling—was the shutting down of the printing press.

From there the argument turns to budgetary consolidation. Schumpeter concedes that expenditure cuts and revenue increases may be schematic or “linear,” but he defends them as the only tactically and administratively possible route. His point is institutional: an ideal tax reconstruction during crisis would multiply parliamentary battles and overload the state apparatus. The hard alternative is therefore not between perfect and imperfect reform, but between workable stabilization and abandonment of the rescue.

Will man diese Mittel nicht – man braucht sie nicht zu wollen – dann verzichte man auf die Sanierung.

English translation: If one does not want these means—one need not want them—then let one renounce the restoration.

The closing movement broadens responsibility beyond government. Schumpeter praises Vienna’s municipal government for following the same path and warns experts and intellectual leaders against withdrawing support when the political strain becomes visible. The relevance of the speech lies in this fusion of monetary theory with crisis politics: stable money, balanced budgets, and administrative simplification are not merely technical policies but conditions for preserving Austria’s independent existence and a tolerable standard of life. Schumpeter’s final emphasis is on the psychology of stabilization—fatigue, criticism, and the lure of “Scheinerfolg”—and on the duty of informed elites to sustain confidence when austerity becomes politically hardest.