The Essence of Money: Argentarius: Letters of a Bank Director to his Son (1921–1923)

400 Pages·2021·7.297 MB·English

by  Alfred Lansburgh, Michael Anton Fischer

nen

Y
E
N
O OF
M
- Argentarius: Letters of a Bank

Director to his Son (1921-1923)

Argentarius:
Letters from a bank director to his son
The Essence of
Money
Contents:
Argentarius Letter Collections (1921 - 1923).
Part I: On Money
Part I: Valuta
Part II: The Central Bank
Part IV: Monetary Crisis
Public domain source: Lansburgh, Alfred (1923): The Essence of
Money, Berlin: Bank-Verlag, 1923
Digital transcription: Prof. Dr. Jan Greitens, Michael Anton Fischer
‘Translation: Michael Anton Fischer
Publisher: Jakubiak & Fischer GmbH, Moosstr. 4, 83404 Ainring,
Germany
Copyright 2021 Jakubiak & Fischer GmbH, all rights reserved.
Portions of this book may be reused for media articles, personal
websites, or in commercial posts and social media, provided they are
credited to this edition, and a reference to the website http://
lansburgh.de is included. Copying the contents of the book and selling
it in another format is not permitted.
Foreword by the Translator
One hundred years have passed, since the first letters in this
book were written. Translating them into English late in
2021, I get an eery fecling.
A feeling, as if, when one replaced the 19xx in the letter’s
titles with a 20xx, the 1921 letters would feel like written
today. And the letters written in 1922 and 1923 would seem
like prophecy.
In this day and age it is more important than ever to study
the works of Argentarius and to act accordingly.
Unlike the author, we have a better weapon to fight the
monetary corruption and greed than Alfred Lansburgh
could ever hope to in his time.
We have a truly hard and incorruptible money - Bitcoin.
With this money, we can achieve, for the first time in
human history, a monetary sign, which accurately
represents true money.
A monetary sign which allows you to sell a good or service
today and which guarantees you will get back an equal
merit in goods or services tomorrow.
I wonder if Alfred Lansburgh would have had agreed with
me on this assessment or if he would have raised objections
on this claim. Unfortunately we can’t ask him.
Please note that Argentarius in his works sometimes uses
examples that in my opinion do use the words value and
merit synonymously.
This is due to the fact that the word value in German
“Wert”, conveis the notion of the English word “merit”
2
better than the German word “Verdienst”. So I am afraid
that, even though he tries to explain himself, thanks to the
peculiarities in the German language, his words may not be
entirely unambigous.
So, when he talks about a hard money preserving value,
what he in my opinion means is really merit.
When he gives an example, like that one unit of money will
buy you a pair of boots today and will buy you a pair of
boots tomorrow, he is really saying that the unit of money
that buys you the merit necessary to provide one pair of
boots today, will buy you that same merit needed to provide
you a similar quality pair tomorrow.
‘This is an important distinction and essential to truly
understanding the contents of this book, so I hope I have
not overstepped my role as a translator in laying my words
into Alfred Lansburgh’s mouth.
Throughout the translation, I have tried to stay as close to
the original publications from 1923 as possible. I have also
restrainend from adding any commentary or unnecessary
footnotes.
The word “Wert” has been consistently translated to
“value”.
Argentarius should speak for himself,
PS. This publication is a labour of love with virtually no
budget. If you find errors, please kindly report them to
[email protected]

December 2021, Michael Anton Fischer
Part I: On Money
First Letter
Two nations
The crime of ignorance
Berlin, New Year's Fve 1920/21
Midnight. Outside, dear James, the New Year's Eve bells
are once again ringing out a great year. A solemn moment
for people who let the calendar dictate the hours of their
inner upliftment. Disraeli's 'two nations’, the two great
people into which every so-called cultural state splits, live
their existence doubly intensely at this moment. Wealth
increases wellbeing through wine, dance and play, up to the
point of intoxication; I gaze at it from my study out the
festively flashing windows. Poverty, which I do not see
because it hides between its bare four walls in distant
neighbourhoods, makes the guilty sacrifice to the new year
by letting the tears of everyday life flow doubly abundantly.
I myself, as you know, have no sense of celebration. But I
still can't completely escape the magic of New Year's Eve. It
forces me to gather my thoughts, to reflect spiritually, and
many an unclear feeling in me takes on a firm, sharply
defined shape.
I see myself standing, as it were, on the narrow ridge that
separates the two great peoples in our fatherland, the
dancing ones here, the weeping ones there. And as I look
down into this divided life and activity, it is as if I could
clearly see all the levers and wheels of the great mechanism
that determines the social relations of countries and
continents and which usually remains hidden from the
profane eye. My gaze, sharpened by the consecration of the
moment, overlooks the economic laws that cause wealth
and poverty to arise, grow, stand still or decline. I see how,
S
under certain conditions, the partition between the people
of the haves and the have-nots rises or falls. And with
frightening clarity I see how disastrously those eternal
economic laws have been at work in the year that has just
passed: The abrupt partition between the two people of
one and the same country has increased enormously. Tears
flow threefold on this side, wine on the other. And at the
same time as the dividing wall, the age-old resentment of
the two people, who will never understand each other, is
growing into an enormous hatred that will one day lay the
cultural world in ruins if its causes are not eliminated in
time.
In this clear realisation, which I draw from the sound of the
New Year's Eve bells, I sit down at my desk to talk to you
once again, my dear James. I have decided in this hour to
take up again the thread I dropped years ago; the
instructive letters I sent you before the World War are to be
continued. Docendo discimus: He who teaches others
learns himself. I want to become clear about some things by
forcing myself to make them clear to you. And conversely, it
is my fatherly duty to transfer to you, the son, as completely
as possible the knowledge I have gathered over decades of
professional activity. Many things would be better in the
world if every gencration took this duty seriously and if it
were taken for granted that the sum of the father's
knowledge would regularly form the son's foundation of
knowledge, to which he would then have to add a new story
for his own descendants. In this way an inheritance of
knowledge is created which is equally valuable for the
individual as for the whole.
Happy is the state which has the certainty that the sum of
the experiences of its ancestors is embodied in each
member of a particular profession! It finds established
traditions everywhere and knows without further ado where
to look for its regents, its diplomats, its officers, its judges
6
and its civil servants. He does not need to experiment and
shake up the classes. I know very well, my son, that this
does not correspond to your liberal views, and make no
attempt to convert you. Conversion will come of its own
accord when you are in my years. Then you will understand
the profound wisdom of the ancient Egyptian and Indian
principle of caste, which leaves every human being where
he is rooted, where he finds the conditions of existence
corresponding to his constitution and where he is of the
best use to the whole with his balanced person.
You are the son of a bank director and a future bank
manager yourself. It would reflect badly on me if you were
to handle the instrument that I will entrust to you one day,
this instrument of such great economic importance, in a
bungling manner. Anyone who wants to manage a bank
must first and foremost know what a bank is; must know
what role the banking system of a country plays within the
national economy as a whole must be aware that certain
functions of the banks not only have very specific economic
effects, but also far-reaching social and political
consequences.
But all this can only be recognised by those who have
mastered the laws of the capital market, who know exactly
under what conditions the productivity of a country is
condensed into capital, and how the individual uses of
capital have an effect on the productivity of the country.
Here the mechanism of the working people as a whole has
its real driving force, here the economic fortunes of the
state are decided, here lies the social germ which splits one
and the same nation into two hostile peoples. There is only
one path, my son, that leads to full clarity about this, and at
the starting point of this path is money. If there are so few
people today, even among my own colleagues, who grasp
the deepest essence and workings of the capital market and
the banks that direct it, it is solely because knowledge of
money is so bitterly lacking today.
Until a few years ago, no one but a few experts dealt with
the monetary system, and those who did remained stuck in
the purely theoretical and abstract. This is quite
understandable: for decades there has been no compelling
reason to concern oneself more deeply with the highly
concrete money that pulsates vividly through all markets.
Just as the best woman is the one who is spoken of the least,
so money was spoken of so seldom before the war, because
it was doing its duty in all cultural countries in a well-
behaved and respectable manner.
Money thus was a matter of course that did not need to be
talked about much. Even the national economists, for
whom nothing can be taken for granted, were deceived by
the housewife virtue of money. Their newer schools put
forward theories that one could only read with a shake of
the head, remembering the famous assignations from the
French Revolution and the other youthful sins that good
money had on its conscience.
The prevailing view before the war was that money was a
purely expedient institution of the state, like the police and
the passport system, useful but not indispensable. One
could manage with money but also without it. Its external
form and its intrinsic value are absolutely irrelevant. ‘The
state is the sovereign master of money, which it can produce
from any material it deems suitable and in any quantity it
deems necessary. You too, dear James, at that time
considered money to be nothing more than a creature of
the state's legal system, or, which in this case is the same
thing, of the state's arbitrariness. Despite all my efforts, I
was unable to convince you otherwise. You were just as
unwilling as the others to see that the state basically has
nothing to do with the creation of money, and that when it
8