Emil Lederer: Discussion contribution on coal mining (1920)

This recorded speaking turn from an official commission discussion examines how the acquisition of privately owned coal mines should be financed. Lederer responds to Rathenau’s proposed repayment horizon and an objection raised by Vogelstein. His contribution moves from the difficulties of valuing mines over time to the burden of accelerated repayment, then contrasts a price-financed buyout with full socialization. Its central concern is whether compensation can be arranged without distorting coal prices or generating inflationary effects.

Lederer first challenges the assumption that a long repayment period can rest on a valuation fixed at its outset:

Selbst wenn man sich auf diesen Boden stellt, wenn man also die Tilgungsfrist ziemlich lang annimmt, etwa mit 30 oder 40 Jahren, wie Herr Dr. Rathenau meint, so halte ich es für ganz ausgeschlossen, daß man diese Tilgungsquote, nämlich den Wert der Schächte, im Jahre 1920 ein- für allemal zugrunde legt.

English translation: Even if one adopts this position, thus assuming a fairly long repayment period, perhaps 30 or 40 years, as Dr. Rathenau suggests, I consider it entirely out of the question to fix this repayment quota, namely the value of the mine shafts, once and for all in 1920.

Changing prices could raise or lower mine values, making the initial terms unacceptable to owners or the state respectively. Revision would therefore become necessary. Yet revision introduces an incentive problem: enterprises could pursue investment policies or influence market valuations to increase the sums payable to them. Lederer treats valuation not as a neutral calculation but as something affected by the conduct of those entitled to compensation.

Shortening repayment to eight or ten years does not resolve the difficulty; it shifts it onto coal consumers and the wider economy. Following Vogelstein, Lederer asks whether coal prices could bear an additional charge amounting to ten percent of the capital value. He regards such a burden as highly questionable. The contrast with full socialization is financial: existing capital interest and entrepreneurial profit would instead service the compensation sum, without extracting an additional repayment quota through prices. His claim concerns the financing mechanism, rather than a general account of socialization’s economic consequences.

The objection then broadens beyond mining. Lederer questions a buyout financed by repeated additions to selling prices, through which capital sums accrue to former owners who subsequently reinvest them:

Das scheint mir auf den ersten Blick eine Finanzierung zu sein, welche eine starke inflationistische Wirkung in sich trägt.

English translation: At first glance, this seems to me to be a form of financing that carries a strong inflationary effect within it.

The qualification “at first glance” matters: this is a provisional argument in debate, not a completed theory of inflation. Rathenau interjects that doing everything at once would be worse. Lederer answers by distinguishing immediate acquisition from immediate payment of the entire compensation sum:

Wenn ich es auf einmal mache, dann kann ich es auch so machen, daß ich den Besitzer auf eine Rente setze.

English translation: If I do it all at once, I can also arrange it so that the owner receives an annuity.

The closing reply leaves room for compensation as an income stream. The contribution’s significance lies in separating ownership transfer, valuation, and payment: Lederer argues that financing choices shape incentives, distribute burdens, and determine whether socialization adds pressure to market prices.