Ludwig von Mises: Review of William F. Spalding’s Eastern Exchange, Currency and Finance. Third Edition (1922)

Mises’s brief book review recommends Spalding’s study of Asian monetary and commercial institutions as a corrective to German monetary theory. Its argument moves from a criticism of the reception of the gold exchange standard to an assessment of the book’s historical coverage and practical usefulness. The guiding claim is that comparative knowledge of monetary arrangements can expose misunderstandings sustained by an influential theoretical school.

Mises singles out Knapp’s account of the Austro-Hungarian Bank’s foreign-exchange policy as untenable. More importantly, he argues that Knapp and his followers failed to recognize its underlying identity with arrangements employed elsewhere:

Er hat auch — und darin sind ihm wie in vielem anderen seine Jünger ganz kritiklos gefolgt — vollkommen übersehen, daß diese Goldkernwährungspolitik im Grunde nichts anderes ist als die Politik des Gold Exchange Standard, die in vielen Staaten, vor allem aber in Britisch-Indien befolgt wurde, und daß diese Politik dort bewußt an die Vorschläge anknüpft, die Ricardo 1816 in seiner Schrift Proposals for an Economical and Secure Currency gemacht hatte.

English translation: He also—and in this, as in much else, his disciples have followed him entirely uncritically—completely overlooked that this gold-core currency policy is fundamentally nothing other than the policy of the Gold Exchange Standard, which was pursued in many countries, but above all in British India, and that this policy there consciously draws on the proposals Ricardo made in 1816 in his work Proposals for an Economical and Secure Currency.

The comparison supplies both an institutional equivalence and an intellectual lineage. Studying Asian currencies would help German readers understand a policy already familiar at home while recovering its connection to Ricardo. Mises does not develop a full monetary theory here; he identifies the misconception that makes Spalding’s empirical material particularly valuable.

The book’s coverage of wartime developments and the first two postwar years receives special praise because that information was otherwise difficult to obtain. Its treatment of India, China, Japan, and other Asian territories also extends beyond currency to commercial organization and customs arrangements. This breadth supports Mises’s judgment that it serves readers concerned with Asian economic conditions generally:

Nicht nur der Nationalökonom, auch der praktische Kaufmann wird es mit großem Nutzen lesen.

English translation: Not only the economist but also the practicing merchant will read it with great benefit.

The closing reference to the book’s favorable English reception reinforces his appeal for German readership. The review’s significance lies in linking practical regional knowledge to theoretical criticism: Spalding’s handbook offers evidence with which to reconsider established German interpretations of monetary policy.