Hermann von Schullern zu Schrattenhofen: Review of Wirth and Juglar (1891)

Hermann von Schullern zu Schrattenhofen’s 1891 comparative review examines Max Wirth’s Geschichte der Handelskrisen, in its fourth edition, and Clément Juglar’s Des crises commerciales et de leur retour périodique en France, en Angleterre et aux États-Unis, in its second. Its organizing contrast concerns geographical scope and explanatory method: Wirth offers a broader international history of crises, while Juglar develops a more extensive theoretical account of their recurrence. Schullern recommends both as means of understanding economic development through its disturbances.

The review first reconstructs Wirth’s distinction between crises of circulating media and crises of capital. The former arise from interrupted circulation or excessive issues of compulsory-tender credit money; the latter concern production, speculation, property values, or trade. Wirth assigns particular importance to overspeculation. Division of labour makes discrepancies between supply and demand more likely, while joint-stock companies concentrate capital in enterprises whose favourable conditions may prove temporary. Entrepreneurial excitement, credulity, and expectations of rapid enrichment consequently become warning signs.

Anticipating a crisis, however, does not automatically make prevention effective:

Unter Umständen ist nun diese Voraussicht nützlich, da es prophylactische Mittel gegen die Krisen gibt, in der Regel aber muss die Wirksamkeit solcher Mittel von langer Hand vorbereitet sein, wenn sie helfen sollen.

English translation: Under certain circumstances this foresight is useful, since there are prophylactic means against crises; as a rule, however, the efficacy of such means must be prepared long in advance if they are to help.

Schullern’s account of Wirth thus distinguishes long-term institutional preparation from more immediate restraints on speculation. Education and a simpler legal framework belong to the former; bank reserves and higher discount rates can serve the latter. Supervision of joint-stock companies, stronger shareholder rights, publicity, limits on credit, and improved statistics also enter the preventive programme. Once disturbance has become crisis, the appropriate response remains conditional:

Ist die Krise einmal ausgebrochen, so wird der Staat unter Umständen zu Hilfe kommen müssen, unter anderen Umständen aber wird er genötigt sein, den Prozess sich selbst abwickeln zu lassen, wie dies denn tatsächlich früher oder später geschieht.

English translation: Once the crisis has broken out, the state will under certain circumstances have to come to the rescue; under other circumstances, however, it will be compelled to let the process run its own course, as indeed actually happens sooner or later.

This position neither prescribes universal intervention nor excludes public assistance. The accompanying concern for useful employment gives protection of workers a place within crisis policy. Schullern also notes the continuity of Wirth’s theory since 1858, which Wirth himself regards as evidence of its correctness. His historical survey reaches from the early sixteenth century into the reviewer’s present, although its treatment of cartels and strikes receives criticism for brevity.

Juglar receives a qualified preference on theoretical grounds:

Juglar fasst, wie gesagt, den theoretischen Theil viel breiter und vielleicht auch tiefer als Wirth.

English translation: Juglar, as has been said, conceives the theoretical part far more broadly and perhaps also more deeply than Wirth.

The qualification matters: Schullern values Juglar’s explanatory reach without simply dismissing Wirth’s historical contribution. Juglar locates crisis within the recurrent movement of a credit economy. Easier credit expands business and raises commodity prices; when prices cease rising, accumulated stocks fail to find buyers. Liquidation then prepares renewed prosperity, which eventually produces another crisis. Monetary and commercial disturbances are connected, and the reach of credit prevents crises from remaining merely local.

This cyclical explanation also creates a diagnostic problem: how can observers identify the economy’s current phase? Schullern emphasizes Juglar’s use of exchange movements, particularly as recorded in bank balance sheets, rather than ordinary consumption data alone. Banks occupy a double position in the argument. Credit expansion contributes to instability, yet banking records make its development observable, while banking action can help prevent or combat crises. Juglar’s discussions of wages and interest extend the analysis beyond the immediate sequence of boom and liquidation.

In closing, Schullern highlights Juglar’s contention that bad harvests, wars, and epidemics need not themselves interrupt prosperity. The decisive obstruction occurs when rising prices impede exchange. Temporary suffering is acknowledged within a larger confidence in the advance of general wealth. This perspective differs in emphasis from Wirth’s more explicit programme of safeguards and assistance, but both works connect historical evidence with explanations of economic disorder. The review’s concluding medical analogy makes their shared value clear: knowledge of the social economy requires attention to its pathological conditions as well as its prosperity.