Felix Somary’s 1932 pamphlet addresses the world depression as a linked crisis of banks, currencies, war debts, reparations, fiscal policy, and trade. It opens from the public recollection of Somary’s earlier forecasts after the Austrian Credit-Anstalt collapse: Italian banking reconstruction, German banking failure, Britain’s departure from gold, and the Kreuger crash. Somary presents these not as intuition but as consequences of a fragile postwar credit system built on short foreign funds, weak balance sheets, and overextended states.
Dies war die Basis meiner damaligen Erklärungen; sie waren keine Prophezeiung, sondern das Ergebnis so ernster Überlegung, wie es die Antwort auf von so verantwortlicher Seite gestellte Frage in diesem Moment erforderte.
English translation: This was the basis of my statements at that time; they were not a prophecy, but the result of such serious reflection as the answer to a question put from so responsible a quarter demanded at that moment.
The argument is diagnostic and programmatic. Somary asks where the remaining dangers lie and what would constitute a real “turn” in the crisis. His answer is that recovery requires the open recognition of losses. The central obstacle is the moratorium mentality, especially the German Standstill agreements: they preserve nominal claims while freezing trade, banking confidence, and currency circulation.
Durch Hinausschieben wird in solchen Krisentagen nichts gewonnen: Man hat Moratorien gemacht, weil man nicht den Mut zur Sanierung gefunden hat; eine besonders üble Rolle spielen dabei die sogenannten Stillhalteabkommen.
English translation: Nothing is gained by postponement in such days of crisis: moratoria have been enacted because the courage for a genuine restructuring was lacking; the so-called standstill agreements play a particularly pernicious role in this.
Somary’s key distinction is between liquidity and insolvency. Debtor countries cannot be made solvent by decrees, exchange controls, inflation, or forced exports if creditor countries refuse imports. Creditor banks, meanwhile, cannot restore confidence by keeping doubtful foreign assets at face value. The crisis is therefore not only German, Austrian, or British; it is a crisis of the entire postwar credit architecture, in which short-term money financed long-term commitments and governments absorbed private failures without having secure credit themselves.
He is pessimistic about political delay but not apocalyptic about capitalism. Crises may prepare revolutions or social transformations, yet they do not automatically produce them. The immediate economic turning point, for Somary, lies in the raw-material markets: prices have fallen toward or below prewar levels, inventories are exhausted, and forced selling cannot continue indefinitely. Recovery should begin where the depression began, in raw-material and colonial economies.
Against easy remedies, Somary is severe. “Credit creation” cannot solve the problem if the deeper shortage is of reliable borrowers and honest balance sheets.
Mit „Kreditschöpfung“ ist wenig zu erreichen, es fehlt nicht an Kapital noch an Kredit, sondern an guten Schuldnern.
English translation: Little can be achieved with "credit creation"; what is lacking is neither capital nor credit, but sound debtors.
His constructive proposals follow from this diagnosis. Reparations and interallied debts should be settled politically, preferably through a European offer to buy American raw materials at current prices in exchange for debt cancellation. European states must cut expenditures and allow prices, wages, rents, and salaries to adjust rather than conceal imbalance through inflation. Foreign debts must be written down where necessary, because uncertain claims do not belong as sound assets on bank balance sheets.
The pamphlet’s force lies in its insistence that bankruptcy acknowledged is less destructive than bankruptcy indefinitely postponed. Somary’s crisis turn is not a return to speculative boom but a disciplined reconstruction of credit through truthful accounting, reduced public burdens, realistic debt settlements, and reopened international exchange.
Der Augenblick zum Eingreifen, zur Herbeiführung der Krisenwende ist heute da — weh unserer Zeit, wenn wir ihn versäumen.
English translation: The moment for intervention, for bringing about the turning of the crisis, is here today—woe to our age if we let it slip.
This work was divided into 16 sections when it entered the library's research corpus—an apparatus for search and citation, not necessarily the author's own table of contents. Each title opens its summary.
Put a question to this work; the Librarian answers from its 16 sections and cites the passage.
Ask the Librarian