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The New International, July 1934

 

Friedrich Engels on Bimetallism

From New International, Vol.1 No.1, July 1934, pp.15-16.
Transcribed & marked up by Einde O’Callaghan for ETOL.

 

London, March 10, 1882

Mr. Bernstein!

I am availing myself of an afternoon that has set in to write to you. As regards the Virgin Mary-Isis, this is a detail into which I would be unable to enter if only because of space, Mariolatry however belonging like all hagiolatry to a far later period than the one considered by me (a time when priestly calculation in the realm of the saints reproduced for the polytheistic peasant people its many tutelary gods), and finally the derivation would have to be proved historically too, for which special studies are required. Likewise with the halo and moonshine. [1] As for the rest, the Cult of Isis was part of the state religion in the imperial days in Rome.

Bimetallism. The main thing is that we, particularly after the ghastly boasting and bragging of many “leaders” about the economic superiority of our party over the bourgeois, something for which these same gentlemen are totally blameless – that we must be on our guard against laying ourselves open to such economic attacks, as these same gentlemen do so unceremoniously the minute they believe they can thereby flatter a certain type of worker, obtain an election victory or some other advantage. Just because silver is extracted in Saxony, they believe it is necessary to go in for the double standard swindle. In order to gain a couple of voters, our party is supposed to make itself awfully ridiculous in the field where its strength certainly ought to lie!

But that’s what our Messrs. literati are. Just like the bourgeois literati they believe they have the privilege of learning nothing and of arguing about everything. They have concocted a literature for us which seeks its equal in economic ignorance, new-fangled Utopism and arrogance, and which Bismarck did us a great favor to interdict.

In the question of the double standard it is not a question today so much of the double standard in general as of a specific double standard in the ratio: gold to silver as 15½ : 1. This, then, to be singled out.

The double standard is rendered more impossible every day by the fact that the value relationship of gold and silver, formerly at least approximately constant and changing only slowly, is now subjected to daily and violent fluctuations, and first of all in the direction that silver falls in value as a result of the immensely increasing production, especially in North America. The exhaustion of gold is an invention of the silver barons. But be the reason for the change in the value what it will, the fact remains, and that is above all what we have to deal with. Silver loses more and more each day the capacity of serving as a measure of value, gold retains it.

The value relationship of the two is now around 17½ : 1. The silver people, however, want once more to dictate to the world the old relationship of 15½ : 1 and that is just as impossible as to maintain constantly and generally machine-spun yarn and fabrics at the price of hand-woven yarn and fabrics. The coiner’s die does not determine the value of coins, it guarantees the recipient only weight and alloy, it can never transfer to 15½ pounds of silver the value of 17½.

All this is so clearly and exhaustively dealt with in Kapital, chapter on money (chapter 3, pp.72 to 120) that there is nothing more to say about it. For material with regard to the latest fluctuations, cf. Soetbeer: Edelmetall, Produktion und Wertverhaltnis, etc. (Gotha, Perthes, 1879). Soetbeer is a first-rate authority in this field and the, father of German coin reform – he advocated the “Mark” of one-third of a Taler even before 1840.

So then: if silver is coined at 15½ pfennig = 1 pfennig gold, then it flows back into the state coffers, everybody tries to get rid of it. That was the experience of the United States with its silver dollar coined with the old content, which is worth only ninety cents, and likewise Bismarck, when he tried to put into circulation again by force the withdrawn silver Talers which had been replaced by gold.

Mr. Bank President Dechend imagines it possible by means of the double standard to pay off Germany's debts abroad in bad silver instead of full-valued gold, and thus avert every gold crisis, which would certainly be very convenient for the Reichsbank [Federal Bank] if it would only work. But the only upshot of the whole thing is that Mr. Dechend himself demonstrates that he is totally incompetent to be bank president and belongs much rather on the school bench than on the Reichsbank.

The Prussian junker would, to be sure, be likewise happy if he were able to pay back or pay interest in silver à 15½ : 1. And as this would have to be settled at home, such a bamboozling of the creditors by the debtors would certainly be workable – if – the nobility could only find people to feed it silver à 17½ : 1 so that it might pay back at 15½ : 1. For his own means do not permit him the repayment. But he did have to take his silver at 15½, and so everything remained for him as of old.

Insofar as the German silver production is concerned, the extraction from German ore takes on a slighter position every year by the side of the (Rhenish) extraction from South American ore. 1876 total production in Germany about 280,000 pounds, of which 58,000 out of South American ore, since then increasing even higher.

That the forcing down of silver to small change must still more reduce the value of silver, is clear; the consumption of silver for other purposes is trifling compared with its consumption for money, and therefore it does not increase because demonetization calls more silver on the market

That England will ever introduce the double standard, is not to be thought of. No country which has the gold standard can now introduce the double standard again for any length of time. A general double standard is moreover already a general impossibility. If everybody were to agree that silver today is once more to have the value of 15½ : 1, they cannot alter the fact that it is worth only 17½ : 1, and there is absolutely nothing to be done about it. You could just as well adopt a decision that 2 x 2 should be 5.

Bamberger did us any number of services in our first period of exile, he was a very decent and obliging man, the secretary of Karl von Braunschweig. Afterwards we lost sight of him.

 

Best greetings,
Fr. ENGELS

 

Footnote

1. The question was the historical connection between the cult of the Virgin Mary with the Jesus child and the cult of the goddess Isis, who bears the young god Horus in her arm. It has more than once been presumed that Mariolatry arose as an imitation of Isisolatry at about the time when the statues of the latter had lost their object. – Note by Eduard Bernstein.

 
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