Carl Menger · 1892
Carl Menger’s legislative commentary examines the currency bill introduced in the Austrian and Hungarian legislatures on 14 May 1892, together with the accompanying monetary treaty. Its structure moves from a precise account of coinage and legal-tender provisions to an analysis of their effects on the gulden’s value. The central distinction is between legislating a gold standard and securing its operation while existing silver coins and paper money remain in circulation.
An die Stelle der bisherigen österreichischen Währung (45 fl. ö. W. aus 1 Zollpfund feinem Silber) soll die Goldwährung treten, deren Rechnungseinheit die Krone = 100 Heller ist.
English translation: In place of the hitherto existing Austrian currency (45 florins Austrian currency from 1 customs pound of fine silver) the gold standard is to step, whose unit of account is the crown = 100 heller.
Menger begins with the new standard’s material and institutional specification: 3,280 crowns per kilogram of fine gold, issued as twenty- and ten-crown pieces, with prescribed tolerances, withdrawal of worn coins at state expense, and limited minting charges for private customers. These details establish the crown’s gold content and foreign-currency parities. He then distinguishes gold coinage from the subordinate monetary instruments whose circulation the reform would regulate.
The proposed silver crowns and half-crowns would be minted exclusively for the state, initially to a total of 200 million crowns. Public treasuries would accept them without limit, while compulsory acceptance in private payments would stop at fifty crowns. Existing gulden silver coins, by contrast, would retain unlimited legal-tender status at two crowns per gulden. Nickel and bronze coins would replace older small change under separate issuance ceilings and acceptance limits. Menger’s account thus shows how metal content, minting rights, and legal payment capacity jointly define a coin’s monetary position; denomination alone does not determine it.
The transition also preserves the compulsory acceptance of existing banknotes and state notes at the same two-to-one conversion rate. The introduction of the crown as a unit of account remains a separate legislative step:
Die allgemeine Einführung der obligatorischen Rechnung in der Kronenwährung wird erst durch besondere Gesetze festgestellt werden.
English translation: The general introduction of obligatory reckoning in the crown currency will only be established by special laws.
Yet debtors would immediately acquire the option to discharge obligations denominated in Austrian currency using the new gold coins, or subsidiary coins within their legal limits. The bill therefore changes payment rights before making crown accounting generally obligatory. Menger treats this distinction as economically consequential, not merely administrative.
His concluding analysis explains how the treaty between Austria and Hungary would constrain the gulden’s value from two directions. Unlimited gold coinage, combined with the debtor’s right to pay two gold crowns for one gulden, would cap the gulden’s value at the gold equivalent of those crowns. Conversely, the agreed cessation of further silver-courant coinage would prevent either government from depreciating the currency through unilateral silver issues. With the note circulation also subject to a quota, this closes an important channel of monetary expansion. Menger describes the result as stabilization within bounds, rather than assuming that the legal declaration itself establishes an unconditional gold parity.
The final sentence makes the remaining policy requirement explicit:
Hier sei nur bemerkt, daß die Regierungen Oesterreichs und Ungarns im Falle des Steigens des Goldwertes (zur Vermeidung großer finanzieller Opfer und des Goldagios der Kronen gegenüber den Silbergulden und den Noten) genötigt sein werden, den Verkehrswert der österreichischen Valuta (durch Restriktion der Umlaufsmittel) auf dem Niveau der Parität mit dem Verkehrswerte von 2 Goldkronen zu erhalten.
English translation: Here let it only be remarked that the governments of Austria and Hungary will, in the event of a rise in the value of gold (in order to avoid great financial sacrifices and a gold agio of the crowns against the silver gulden and the notes), be compelled to maintain the exchange value of the Austrian currency (by restriction of the circulating media) at the level of parity with the exchange value of 2 gold crowns.
If gold appreciated, restricting circulating media would be necessary to keep silver and paper at parity with the gold crown and prevent a gold premium. Although Menger reserves a fuller assessment of the reform’s effects for another occasion, this brief commentary identifies its decisive mechanism: a shared legal framework controls minting and payment options, but maintaining the resulting monetary relationship may still require active contraction of circulation. Its significance lies in connecting the technical clauses of currency legislation to the conditions under which a gold standard can actually hold.
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