Hermann von Schullern zu Schrattenhofen: Review of Michael Flürscheim’s Währung und Weltkrise (1896)

Schullern’s short review recommends Flürscheim’s 1895 pamphlet as an unusually accessible exposition of commodity banks and commodity-backed currency, while questioning the optimism of its economic assumptions. It moves from the pamphlet’s explanatory devices to its diagnosis of crisis, proposed institutions, and unresolved difficulties. The review’s central interest is the connection between monetary reform and the redistribution of economic power.

Schullern advises beginning with the humorous narrative in the appendix, then presents the commodity bank established at Harxheim in December 1894 as a practical illustration of gradual monetary change. Its notes would represent deposited goods and serve as payment for other goods held on deposit:

Ihre Noten werden im Werte deponierter Waren ausgegeben und für andere deponierte Waren an Zahlungsstatt genommen; sie sind wirkliches Geld und Depositenscheine für wirkliche Waren in der vollen Höhe ihres Nennwertes.

English translation: Its notes are issued to the value of deposited goods and are accepted in lieu of payment for other deposited goods; they are real money and deposit certificates for real goods to the full amount of their nominal value.

The dual characterization as money and fully backed deposit certificates explains the proposal’s appeal: purchasing power would be linked directly to available commodities. Schullern reports Flürscheim’s distinction between existing currency as the immediate obstruction to circulation and unequal distribution as the deeper cause of crisis. Purchasing capacity fails to keep pace with productive capacity, producing apparent overproduction; the accumulation of interest further restricts opportunities for employment. The proposed remedy therefore reaches beyond replacing currency. It requires ending the sale and mortgaging of land and creating money whose quantity expands automatically with demand without losing value.

Commodity banks would become fully effective through cooperation with producers’ and consumers’ cooperatives. They would provide interest-free credit for means of production, acquire available land, and lease it to members. Monetary reform thus becomes an institutional programme joining credit, cooperative organization, and land reform, rather than an isolated alteration of the medium of exchange.

Schullern’s concluding assessment distinguishes clarity of exposition from adequacy of proof:

Die Beweisführung ist meist eine verblüffend klare und allseitige, obwohl — und da liegt wohl die Waffe für jeden Opponenten — ab und zu ein allzuweitgehender Optimismus zu Tage tritt (s. z. B. S. 44: Stabilität der Wertverhältnisse) und die Frage nach den Wirkungen einer Beseitigung des Grundeigenthumes durch Flürscheim doch noch lange nicht in seinem Sinne erledigt sein dürfte.

English translation: The demonstration is for the most part an astonishingly clear and comprehensive one, although — and herein doubtless lies the weapon for every opponent — now and then an all too far-reaching optimism comes to light (see, e.g., p. 44: stability of value relations), and the question of the effects of an abolition of landed property is surely still far from being settled by Flürscheim in his own sense.

His reservations concern the stability of relative values and the consequences of abolishing landed property. The review consequently endorses serious attention to Flürscheim without treating the programme as demonstrated. Its closing hope that Harxheim will escape the fate of Proudhon’s bank and its imitators makes practical experience the unresolved test of an intellectually compelling proposal.