Eugen Peter Schwiedland: Review of Elemér Hantos, Das Geldproblem in Mitteleuropa (1925)

Schwiedland’s English-language review presents Hantos’s book as a study of Central European monetary disintegration and a proposal for regional reconstruction. Moving from wartime and postwar inflation through national stabilisation measures to a projected currency convention, the review foregrounds the tension between political independence and economic interdependence. Its organising premise is Hantos’s conviction that Europe’s new boundaries require compensating institutions:

PROF. HANTOS is convinced that the many unnatural frontiers in present-day Europe must be neutralised by agreements for the regulation of commerce, traffic and currency.

The book expands a memorandum submitted to the League of Nations’ Economic Committee. Schwiedland first surveys its four chapters on inflation in Germany, Poland, Austria, and Hungary, preserving their differentiated causal explanations. German inflation is linked to external political pressures and the policies of compliance and passive resistance; Polish instability to budgetary difficulties; Austrian inflation to the state and the passivity of public and private enterprises. Hungary’s longer and more varied inflation is described as less catastrophic than that of neighbouring countries, with private claims exceeding those of the state. This comparative account makes monetary disorder a problem of distinct political and institutional circumstances, rather than a uniform regional experience.

The review then turns to currency reconstruction, noting Czech exchange-rate policy, the constraints imposed by Germany’s defeat, and Austria’s stabilisation as a model subsequently followed in Hungary. Hantos assigns the note banks a central role in financial recovery, supported by statutory safeguards against renewed inflation. Schwiedland reports his rejection of the alternatives associated with Fisher and Keynes as impracticable under prevailing financial conditions, alongside the difficulties of index-based stabilisation illustrated by Hungary’s “saving-crown.”

In these times very few States can afford the introduction of a real gold standard.

This constraint leads to the intermediate solution of a currency with a “gold nucleus,” regulating circulation through reserves of foreign gold currencies. The conceptual move is from an ideal monetary standard to an arrangement judged feasible within the region’s depleted finances. Yet national stabilisation alone remains insufficient: Hantos considers the successor states too small, economically dependent, and institutionally inexperienced to sustain separate currencies indefinitely.

The foundation of a currency-convention by those six Successor States is therefore the only way leading to a satisfactory end.

The proposed convention would create a monetary area of 90 million inhabitants without requiring a single issuing bank. A trust of national banks would retain separate economic, discount, and foreign-currency policies, while a common supervisory organ would oversee their management; Hantos envisages the Bank of England undertaking this supervisory role. Schwiedland marks the arrangement’s novelty and identifies the political difficulty it must resolve:

In Central Europe, however, the question is just how States, independent politically, but dependent economically, can be united in a currency organisation assuring their full political sovereignty without developing an economic subserviency.

The review’s significance lies in this formulation of monetary cooperation as both a response to economic fragmentation and a test of sovereign equality. Hantos favours a regional union over the broader convention of issuing banks associated with the Genoa Conference, whose implementation would, in his view, delay reconstruction. National currency stability and a common standard are prerequisites; the former had largely been achieved in 1924, except in Yugoslavia and Romania, while the latter would follow a decimal gold system. Schwiedland closes appreciatively with the statistical appendix on banknote circulation, prices, over-industrialisation, and over-capitalisation. His review principally reconstructs Hantos’s argument, with its sharpest qualification emerging around the unprecedented institutional design and the unresolved relationship between common oversight and national autonomy.