Emil Lederer: Discussion contribution on coal mining (1920)

Emil Lederer’s contribution is a complete attributed speaking turn from the proceedings of the Sozialisierungskommission, concerning coal mining and the economic consequences of monetary depreciation. Responding to Rathenau and Hugo Stinnes, Lederer shifts the discussion from industrial accounting to national economic policy. His central contention is that a scheme to protect mining investment against inflation cannot be judged solely by its benefits to mining enterprises: financing rapid depreciation through higher coal prices would burden consumers and, in his account, obstruct an appreciation of the mark.

Lederer begins by distinguishing the replacement of existing capital from expenditure on expanding productive capacity. Monetary depreciation affects both, since maintaining or enlarging the physical apparatus requires expenditures that accounting must somehow accommodate:

Es handelt sich darum, wie diejenigen Kosten ersetzt werden sollen, die heute in der Abnutzung begründet sind und weiter diejenigen, welche dadurch entstehen, daß der heutige Betrieb erweitert und ausgebaut wird.

English translation: The question is how to cover those costs that arise today from wear and tear, and also those that arise because present operations are being expanded and developed.

He expressly leaves aside whether this should be handled through increased depreciation allowances, correction of book values, insurance funds, or other accounting devices. That exclusion defines the intervention’s scope: its subject is not the technically correct bookkeeping procedure but the economic consequences of obtaining the necessary funds. He formulates the problem as one of managing “industrial inflation” without either abruptly ruining the economy or locking it into the mark’s existing value:

Ich möchte mich lediglich auf die Frage beschränken: wie soll diese Industrieinflation zweckmäßigerweise, d. h. ohne die Volkswirtschaft plötzlich zu ruinieren und, was ebenso wichtig ist, ohne die Volkswirtschaft auf den heutigen Wert der Mark festzulegen, bewerkstelligt werden?

English translation: I would like to confine myself solely to the question: how should this industrial inflation be carried out expediently, i.e. without suddenly ruining the national economy and, equally importantly, without fixing the national economy at the mark’s present value?

The proposal attributed to Stinnes and the coal industry seeks to cancel the effect of monetary depreciation on new investment immediately. Mining enterprises would write off 85 percent of an investment’s acquisition cost, leaving it on their books at 15 percent. Lederer initially assumes a one-year period; an interjection corrects this to two years, which he accepts. Such a procedure would bring the book values of old and new machinery into a certain equilibrium. He acknowledges its logic from the standpoint of the enterprise rather than treating that accounting objective as intrinsically mistaken.

The difficulty lies in how the write-off would be financed. Following Stinnes’s reasoning, Lederer argues that coal prices would have to rise sufficiently to remove the inflationary component from machinery values. Yet what is removed from the capital account would thereby be consolidated in prices. Because coal prices affect other prices, this adjustment would establish a domestic price basis that, he contends, excludes an improvement in the mark’s exchange rate. The enterprise’s protection against currency risk thus becomes a constraint on the economy’s monetary trajectory:

Das wird erreicht, wenn man die heute in Mark zu errechnenden Weltmarktpreise stabilisiert.

English translation: This is achieved by stabilizing world-market prices as calculated in marks today.

Lederer contrasts this large, immediate adjustment with raising the necessary sums on the capital market, possibly through intervention by the Reich. He reads Rathenau’s remarks as pointing toward that alternative, while explicitly noting that Rathenau has offered no concrete proposal. His own contribution likewise does not develop a financing mechanism; it clarifies what is at stake in choosing between funding routes.

The concluding claim is that rapid depreciation financed through coal prices has a double consequence: it heavily burdens consumption and makes that burden lasting by preventing the mark’s appreciation. This is Lederer’s argumentative diagnosis, not a demonstrated quantitative forecast. Its significance is the conceptual shift from a sectoral pricing question to a decision about currency policy and the distribution of reconstruction costs. He closes by questioning whether such a decision properly belongs to the Sozialisierungskommission. The short intervention therefore identifies the national policy commitments concealed within an apparently industrial solution: protecting capital values through prices would also determine who pays and which future changes in monetary value remain possible.