Martha Stephanie Braun, Die Doppelnote. Währungspolitische Projekte der Nachkriegszeit (1918–1922)

Martha Stephanie Braun’s essay, originally published in 1923 as a contribution to an edited volume, examines proposals to introduce a gold-backed currency alongside depreciating paper money in postwar Central Europe. Its first part reconstructs the proposals’ emergence and transformation; its second tests their monetary foundations. Braun’s central claim is that a new note cannot repair the economic conditions responsible for the old currency’s depreciation. Without fiscal and productive recovery, parallel currencies threaten one another; once stabilization has occurred, a second currency becomes unnecessary. The essay thus moves from a history of reconstruction projects toward a broader critique of credit-created money.

Braun locates the proposals’ origins in Austria’s crisis of autumn 1919: the peace settlement, shortages of food, coal, and industrial materials, and rapidly deteriorating exchange rates. These circumstances encouraged attempts to provide commerce with dependable money before state finances could be restored. Moritz Benedikt proposed an “Importnote,” backed by anticipated American credit and issued by a privately managed bank. Imports would support production and subsequent exports, supposedly ensuring the notes’ return. Julius von Landesberger elaborated the institutional machinery: foreign capitalization, separate banking and currency departments, reserve requirements, and international central-bank support. Braun treats these as serious responses to genuine needs, while questioning the assumption that a commercially sound bank could isolate its currency from a distressed economy.

Gerard Vissering’s proposals mark a conceptual transition. His internationally organized reconstruction scheme increasingly displaced circulating gold notes with accounts denominated in a stable gold unit. Braun consequently distinguishes the original dual-note project from gold accounting: the latter offers a method of calculation without necessarily creating another physical currency. Her historical narrative follows this movement toward international credit organization rather than monetary invention, particularly around the Brussels financial conference. Political resistance to international control mattered, but so did the growing recognition that credit provision and currency reform were different operations.

The analytical second part begins by distinguishing a legally fixed relationship between currencies from a parallel currency with a fluctuating exchange ratio. Leaving that ratio unfixed avoids certain immediate difficulties, but does not make the currencies independent. Existing paper money remains embedded in wages, taxes, debts, and everyday transactions. A new bank changes none of the underlying excess of consumption over production, which Braun calls the production deficit, nor the state’s practice of meeting its own deficit through note issuance.

Bedeutet aber die Schaffung einer neuen Goldnote das Ende der Inflation? — Keineswegs!

English translation: But does the creation of a new gold note mean the end of inflation? — By no means!

This question supplies the essay’s decisive test. Foreign capital can help restore production, but the introduction of a monetary instrument is not itself the provision of sufficient real resources. Braun interprets inflation as a concealed transfer from recipients and holders of paper money to the state. Introducing a superior alternative may expose and accelerate that process rather than resolve it.

Her most consequential argument concerns the difference between individually rational calculation and its aggregate effects. Businesses borrowing in gold units but receiving depreciating paper revenues face an exchange risk. They will seek to convert receipts immediately, anticipate depreciation in prices, and calculate in the stable unit. Gold accounting therefore reveals losses hidden by nominal profits, yet its general adoption undermines the willingness to hold paper money.

Der Vorteil, der die Goldrechnung auszeichnet, soll nicht verschwiegen werden: Goldrechnung ist die beste Methode, zum Bewußtsein der Kapitalsaufzehrung zu gelangen; darum ist ihre Propagierung als Mittel gegen Verschleuderung von Leistungen des Staates und der Privaten so wichtig. Aber ihre Verallgemeinerung führt letzten Endes zum Zusammenbruch der Papierwährung.

English translation: The advantage that distinguishes gold accounting should not be concealed: gold accounting is the best method of becoming aware of capital consumption; that is why its promotion as a means of preventing the squandering of services supplied by the state and private individuals is so important. But its generalization ultimately leads to the collapse of the paper currency.

The danger also runs in the opposite direction. Holders may redeem gold notes, hoard gold, or transfer wealth abroad; persistent import requirements may drain the issuing bank’s reserves. Refusal to redeem instead risks depreciation of the supposedly sound note. An international central-bank cartel could sustain lending, but its useful contribution would consist in actual credit, not in the special name or form of its currency. Braun illustrates these problems through the British-supported North Russian currency experiment of 1918, where distrust, poor export prospects, and eventual redemption shifted losses onto the foreign guarantor.

The alternative case completes her argument: if reforms already stabilize paper money, the proposed dual system loses its purpose.

In einem solchen Falle ist also die Schaffung einer Parallelwährung überflüssig.

English translation: In such a case, therefore, the creation of a parallel currency is superfluous.

Braun nevertheless goes beyond this practical objection. Against Banking Theory’s confidence that notes issued against sound commercial bills will return automatically and preserve their value, she argues that discount rates themselves stimulate borrowing, production, and prices. Expected returns cannot guarantee repayment in an economy continually altered by innovation, scarcity, war, and harvests.

Banknoten, die auf dem Kreditwege ausgegeben werden, sind Versprechen, Anweisungen auf die Zukunft; und darum ist ihr Wert nie genau zu bestimmen; es ist niemals mit Sicherheit zu erkennen, ob Tendenzen zur Hebung ihres Wertes oder zu seiner Senkung vorherrschen werden.

English translation: Banknotes issued through credit are promises, claims on the future; and therefore their value can never be determined precisely; it can never be known with certainty whether tendencies toward a rise or a fall in their value will predominate.

Her preferred distinction is between credit-created banknotes and notes representing an existing monetary commodity. The conclusion places this monetary orthodoxy within a liberal program of coordinated economic reform. Currency measures alone cannot overcome fiscal deficits, depleted capital, trade restrictions, and constraints on production. Yet Braun rejects policy nihilism: reconstruction requires carefully interlocking reforms, not an isolated monetary remedy. The essay’s enduring relevance lies in its analysis of the unstable coexistence of currencies and of the tension between protecting individual balance sheets and sustaining an inflationary monetary order.