Eugen Peter Schwiedland, Review of Karl Helfferich’s Das Geld, Sixth Edition (1925)

Eugen Peter Schwiedland’s signed review assesses the enlarged sixth edition of Karl Helfferich’s Das Geld, published in 1923. Its central concern is the book’s explanation of wartime and postwar monetary depreciation, especially the destruction of the German mark. Schwiedland praises Helfferich’s combination of practical statistical information and theoretical interpretation, characterizing the book as a contribution grounded in “sound common sense” and knowledge of economic facts. The review moves from the edition’s expanded coverage to the causes of inflation, its consequences for creditors and enterprises, and the requirements of monetary stabilization.

The new material includes chapters on monetary developments since the beginning of the Great War and on changes in monetary value between 1850 and mid-1923. Figures for 1914–1923 make the edition useful to practitioners, while its interpretation of events appeals to scientific readers. This breadth provides the setting for Schwiedland’s principal interest: Helfferich’s refusal to explain depreciation simply by treating increased currency issuance as the initiating cause of rising prices.

In the German case, the review locates the principal impetus in the mark’s declining foreign-exchange value. Between acceptance of the London ultimatum in May 1921 and the end of January 1923, floating debt increased 12.5-fold, paper-money issuance 23-fold, and wholesale prices 26-fold; the import index and the dollar rose vastly more, by factors of 353 and 346 respectively. Schwiedland presents these discrepancies as evidence for a reversal of the familiar causal sequence:

This proves that the increase of paper currency followed rather than preceded the rise of prices as well as of foreign exchanges, and that the destruction of the mark was quite out of proportion with the increase of paper.

The explanatory distinction is between monetary expansion as an independent cause and expansion as an accommodation to prices and exchange rates already transformed. The review reinforces this argument with episodes in which a temporary fall in the dollar’s price brought down prices and index numbers while note issuance continued. On this account, the supply of paper money had not yet caught up with the economy’s monetary requirements. Schwiedland accordingly endorses the practical necessity of continued printing:

Under such circumstances it was impracticable to stop printing bank notes; had it been ordered, it would have become impossible to furnish the means necessary for carrying on enterprises and paying wages and salaries.

The consequences of depreciation occupy the next stage of the review. Money claims and the incomes derived from them were effectively extinguished. Yet the corresponding reduction in public indebtedness brought little relief to governments facing greatly enlarged budget deficits. Nor did inflation straightforwardly enrich industry: apparent profits could conceal consumption of productive assets. Export taxes and foreign import duties restricted dumping, while foreign borrowing exposed German firms to further exchange-rate losses. Foreign purchases of German shares also raised the prospect of losing domestic control over industry, trade, and transport. The review thus separates nominal gains from actual economic security.

Its concluding argument turns from diagnosis to stabilization. The wartime experience demonstrates the vulnerability of monetary value, particularly under paper-money systems. Schwiedland presents an external currency anchor as the relevant remedy:

If such a monetary system is to be stabilized, it must be through the aim to keep it in a certain proportion to a currency of a fixed value.

Price-index regulation is rejected as impracticable, and attempts to adjust wages to such indexes are said to have driven prices higher. Austria supplies the further observation that high prices did not necessarily encourage output or thrift. The review’s significance lies in its concise, sympathetic presentation of an exchange-rate-centered explanation of German inflation: monetary issuance follows the collapse in purchasing power, nominal debt relief and profits offer deceptive measures of welfare, and stabilization requires a dependable monetary reference rather than domestic index adjustment.