Amonn’s article examines the proposed establishment of a Czechoslovak bank of issue through amendments to the banking law of 1920. He distinguishes institutional reorganization from substantive monetary reform: private ownership does not itself improve currency management, while changes to the bank’s financial foundation and the postponement of redenomination may weaken the reform.
Die Tschechoslowakei besitzt bereits seit dem Jahre 1920 ein Notenbankgesetz, hat aber bisher keinen Gebrauch davon gemacht.
English translation: Czechoslovakia has possessed a note-bank law since as early as 1920, but has hitherto made no use of it.
The existing Bankamt, attached organizationally to the finance ministry but autonomous in its operations, provides Amonn’s starting point. Its performance challenges the assumption that a private central bank necessarily manages money better than a public institution. The prevailing institutional ideal is therefore something to examine rather than accept:
Als das Ideal der Notenbankorganisation wird aber eine staatlich beaufsichtigte private Notenbank angesehen.
English translation: As the ideal of note-bank organization, however, a private bank of issue under state supervision is regarded.
Amonn doubts whether state supervision would leave such a bank genuinely independent. Wartime experience demonstrated the susceptibility of central banks to government demands, and statutory protections remain politically revocable. His distinction between ownership and monetary competence is explicit:
Den Geldumlauf kann eine Staatsnotenbank, beziehungsweise ein mit den Funktionen einer Notenbank bekleidetes staatliches Bankamt gewiß ebensogut regeln wie eine private Notenbank.
English translation: The circulation of money can certainly be regulated just as well by a state bank of issue, or by a state banking office invested with the functions of a bank of issue, as by a private bank of issue.
Nevertheless, foreign creditors’ preferences give privatization a practical rationale. Financial opinion, especially in England, may make a private institution better placed to obtain the foreign-exchange credit needed for stabilization. The argument concerns access to finance, not an inherent superiority in regulating circulation.
The proposed bank’s resources matter more directly. Under the original scheme, a capital levy expected to yield seven to eight billion crowns was reserved for monetary purposes. Its proceeds could retire notes or purchase gold and foreign exchange, strengthening domestic purchasing power or external exchange stability. The amendment would instead allocate receipts above five billion to redeeming government treasury bonds eligible for discount.
Amonn acknowledges that redemption could remove a potential source of monetary expansion. He nevertheless argues that taxation or a long-term loan should finance it. Diverting the levy sacrifices resources available for monetary contraction or reserve accumulation. In his analysis, a temporary possibility of additional notes backed by claims is exchanged for a permanently larger volume of uncovered notes. The objection is not that lasting damage must follow, but that the new bank would begin from a weaker position and stabilization would take longer.
The article’s extended second movement addresses the decision to retain the existing crown provisionally and stabilize its dollar exchange rate instead of introducing the “heavier” monetary unit envisaged in 1920. Amonn rejects the belief that combining several crowns into one new unit would itself produce lasting price increases. Redenomination changes neither available goods nor the relationship between production and nominal incomes. Psychological impulses might raise individual prices temporarily, but competition and reduced sales would constrain them. German price developments therefore cannot simply be attributed to the introduction of the Rentenmark.
Denomination nonetheless matters for economic judgment. A unit closer to the prewar measure would make comparisons of prices, salaries, taxes, and public expenditure more intelligible. Amonn distinguishes the arithmetic neutrality of changing the unit from its potential to facilitate politically difficult adjustments.
Rent control and senior civil-service salaries illustrate this argument. Postponed rent increases, he contends, obstruct the recovery of construction and threaten competitiveness against Germany. Incomes will not spontaneously rise sufficiently to accommodate normal rents; higher housing costs must initiate adjustment. Meanwhile, apparently large nominal salaries conceal senior officials’ diminished real remuneration, which he places at one-half or one-third of prewar levels. A prewar-comparable monetary scale would reveal these disparities and weaken resistance to correction.
Amonn’s conclusion connects monetary design with public understanding. Policy should not preserve misleading nominal magnitudes merely to accommodate popular fears. Establishing a private bank may satisfy foreign financial expectations, but that achievement should be judged separately from reserve strength and the usefulness of the monetary unit. On the proposed terms, reform risks becoming a monetary retreat, although legislative revision could still improve it.
This work was divided into 1 sections when it entered the library's research corpus—an apparatus for search and citation, not necessarily the author's own table of contents. Each title opens its summary.
Put a question to this work; the Librarian answers from its 1 sections and cites the passage.
Ask the Librarian