Alfred Amonn, Geldknappheit und Bankpolitik (1925)

Alfred Amonn’s economic-policy article examines Czechoslovakia’s credit shortage and the demand that the state Bank Office relieve industry through additional note-financed lending. Moving from a critique of productive-credit expansion to a diagnosis of the shortage and finally to the relationship between domestic deflation and exchange-rate stability, Amonn argues that monetary relief cannot be judged by its intended productive use alone. Its consequences for prices, foreign-exchange demand, and confidence may endanger both the currency and the production it seeks to support.

Amonn treats the German industrial association’s proposal, defended by Dr. Janovsky, as a serious argument. He also rejects its critics’ claim that additional industrial credit would simply privilege entrepreneurs: genuinely increased production could benefit workers and the wider public. His objection instead concerns the association’s assumption that directing new purchasing power toward production would neutralize inflationary dangers. Spending on materials and wages would raise domestic demand before the resulting goods became available; imported inputs and consumer goods would increase demand for foreign currency. Speculation could amplify these pressures beyond the Bank Office’s limited reserves.

Es steht das auch von Dr. Janovsky als lediglich „labil“ bezeichnete Gleichgewicht der Währung und zugleich das mühsam aufrechterhaltene, ebenfalls nur labile Gleichgewicht der ganzen Volkswirtschaft auf dem Spiele.

English translation: At stake is the equilibrium of the currency, described even by Dr. Janovsky as merely "labile," and at the same time the laboriously maintained, likewise only labile equilibrium of the entire national economy.

The stakes are therefore systemic rather than merely distributive. Amonn recognizes the apparent paradox of an economy possessing factories, workers, and materials but lacking the liquid capital needed to employ them. Printing money seems an inexpensive solution. His invocation of John Law and recent monetary experience explains why this temptation remains dangerous even when the productive benefit is plausible.

Aber dies trifft nur zu, wenn man die betrachteten Nebenwirkungen und Folgewirkungen mit Sicherheit ausschalten oder paralysieren könnte. Wer jedoch zeigt einen Weg hiezu?

English translation: But this holds only if one could with certainty eliminate or neutralize the side effects and consequential effects under consideration. Who, however, shows a way to do so?

This conditional concession is central: Amonn does not deny that monetary expansion could increase output, but demands a credible means of containing its repercussions. He then turns from the general mechanism to the specifically Czechoslovak cause of scarce credit. Against explanations based on wartime impoverishment or diminished thrift, he cites deposit developments and recalls the banks’ recent abundance of funds. Banks had lent these resources to the state, which spent them on consumption. Liquid capital formerly available for production now circulated in consumer-goods transactions.

Das heißt mit anderen Worten, der Staat muß dieses Geld der Volkswirtschaft, von der er es geborgt hat, wieder zurückzahlen.

English translation: That is to say, in other words, the state must repay this money to the national economy from which it borrowed it.

Repayment, rather than new money creation, is his proposed remedy. Budgetary savings, a domestic loan, or foreign borrowing could theoretically restore the funds; under prevailing conditions he regards only foreign borrowing as practicable. This would change the creditor relationship while returning resources to the domestic economy. The scale of industrial demand also matters: a relatively small requirement could be met by other means, whereas financing several billion through note issue would imperil the currency.

The concluding discussion makes quantitative judgment integral to monetary policy. Janovsky sees an apparent contradiction between external stabilization and continuing internal deflation. Amonn argues that the former may require the latter: the crown’s exchange value had risen sharply without a corresponding contraction of circulation. Declining foreign-exchange reserves suggest that maintaining the higher rate still required costly intervention. The appropriate circulation cannot therefore be established by choosing an arbitrary numerical target.

Einen Anhaltspunkt dafür kann nur der Umstand geben, ob das bestehende Kursniveau verhältnismäßig leicht oder schwer behauptet werden kann.

English translation: A point of reference for this can be given only by the circumstance whether the existing level of exchange rates can be maintained relatively easily or with difficulty.

Amonn thus interprets the difficulty of defending the exchange rate as evidence that monetary adjustment remained incomplete. The “tragic” element in financial policy lies not in inconsistency between stabilization and deflation, but in the costly consistency that defending the appreciated currency demands. The article’s significance lies in its separation of productive intentions from monetary effects and of credit scarcity from an insufficient quantity of notes. It presents industrial distress as real while locating its remedy in fiscal repayment and its constraints in the inherited exchange-rate position.