Viktor Mataja, Die Regelung der Valuta in Österreich-Ungarn (1892)

Delivered to the Volkswirtschaftlicher Verein in Innsbruck on 28 March 1892, Mataja’s lecture argues for replacing Austria-Hungary’s artificially sustained currency with a gold standard and convertible banknotes. Its organizing concern is monetary stability: reform must secure economic calculation without redistributing wealth through an abrupt change in money’s purchasing power. The argument moves from the requirements of good money through the existing system’s legal and economic weaknesses to the choice of a metallic standard and the practical conditions of conversion.

Mataja begins with money’s function in obligations extending through time. A manufacturer, mortgaged farmer, or prospective pensioner depends on the purchasing power of future payments. Monetary appreciation burdens debtors; depreciation injures creditors and recipients of fixed incomes. These changes do more than transfer wealth: they undermine calculation itself.

Aus all dem Gesagten folgt also, dass die Wertbeständigkeit des Geldes, die gleichmäßige Erhaltung seiner Kaufkraft im Interesse der Gerechtigkeit und Volkswirtschaft das oberste Erforderniss eines guten Geldes ist.

English translation: From all that has been said, it follows that stability in the value of money, the uniform preservation of its purchasing power, is the foremost requirement of good money in the interests of justice and the national economy.

The mechanism is unequal adjustment. Wholesale prices respond faster than wages, taxes, and contractual charges. Appreciation therefore compresses industrial profits and increases the real burden of agricultural debts. Depreciation temporarily stimulates production while wages lag, but the resulting excessive expansion can culminate in crisis. Mataja’s criterion is consequently neither dear nor cheap money, but continuity.

Austria-Hungary fails this test despite possessing a nominal silver standard. State and bank notes circulate with compulsory acceptance, while banknotes are not redeemable on demand. More fundamentally, the suspension of free silver coinage in 1879 has detached the gulden from its metallic content. Silver worth approximately 76 kreuzer circulates as a gulden because additional bullion cannot freely enter the currency. Restricted supply, rather than the metal itself, sustains its value.

Mataja distinguishes the legal insecurity of this arrangement from its economic consequences. The suspension rests on internal ministerial instructions, not a legislative guarantee. He praises the decision as indispensable, but questions a system whose preservation depends on administrative restraint. Fiscal emergency might tempt the state to profit from additional silver coinage, endangering existing monetary claims.

International isolation supplies the first economic objection:

Wir haben mit keinem einzigen Lande der Welt mehr ein Pari.

English translation: We no longer have a parity with a single country in the world.

Without a common metallic foundation, exchange rates lack the narrow limits maintained elsewhere through transfers and reminting of metal. Small fluctuations can erase merchants’ already slender profits. A second danger arises in emergencies: war or financial crisis could undermine confidence in notes and revive the premium on metallic money.

The third objection reverses the familiar complaint of currency depreciation. Mataja argues that the Austrian currency has recently appreciated, even against gold. After weakening between 1879 and 1887, it strengthened through 1891; he excludes the latest speculative movements from his assessment. An expanding population, commerce, and money economy require more currency, whereas existing rules constrain its supply. He regards Hertzka’s numerical forecasts of appreciation as excessive, but accepts the underlying scarcity argument.

Temporary increases in state notes cannot solve this structural problem. Further silver coinage would complicate eventual reform, while expanding uncovered notes would weaken monetary security. State paper should also remain an emergency resource rather than be exhausted in ordinary times. Appreciation would otherwise favor fixed-income rentiers at the expense of producers, debtors, and employment.

The remedy is free coinage linked to intrinsically full-valued metallic money, with notes redeemable in that money. Silver would perpetuate external instability; bimetallism requires international cooperation that Austria-Hungary cannot await. Gold remains the practicable choice:

Gold gibt gegenwärtig den stabilsten Wertmesser ab und entspricht daher der Haupteigenschaft eines guten Geldes relativ am besten.

English translation: Gold currently provides the most stable measure of value and therefore satisfies the principal requirement of good money relatively best.

The qualification matters: Mataja acknowledges possible gold appreciation, the loss of interest-free state-note financing, and inconvenience in everyday payments. Nevertheless, gold promises steadier foreign exchange, greater access to foreign capital, and potentially lower interest rates. The general interest in productive activity outweighs particular losses.

The final section makes reform’s justice depend on its execution. Gold should be obtained gradually through borrowing, avoiding disruption of the bullion market. Above all, conversion must preserve existing values:

Das Princip hiefür ist wohl ziemlich einfach: die Erhaltung der Continuität des Geldwertes.

English translation: The principle governing this is quite simple: preserving continuity in the value of money.

A single market quotation cannot establish a fair conversion rate when expectations of reform already distort trading. Judgment must determine the gold content that makes the new gulden an equitable successor to the old. Even possible wartime interruption does not justify delay: accumulated reserves would strengthen the state. The lecture thus joins monetary stabilization, contractual justice, international integration, and fiscal preparedness in a historically specific case for gold reform.