Kuno Renatus - The Twelfth Hour of Capitalism

First published in 1932 by Alfred A. Knopf, Inc.

This edition first published in 2019 by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business

1932 by Taylor and Francis

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A Library of Congress record exists under ISBN:

ISBN 13: 978-0-367-24554-2 (hbk)
ISBN 13: 978-0-429-28315-4 (ebk)

Copyright 1932 by Alfred . Knopf, Inc.
All rights reserved No part of this book may be reprinted in any form without permission in writing from the publisher First Edition

PUBLISHED IN GERMANY UNDER THE TITLE DIE ZWLFTE STUNDE DER WELTWIRTSCHAFT (C. H. BECK'SCHE VERLAGSBUCHHANDLUNG, MUNICH) FIRST PUBLISHED IN ENGLISH IN 1932

Manufactured in the United States of America

"Unless all the signs are deceiving us, we are living in a period in which, if the existing system of trade and industry is to be preserved from grave and lasting convulsions, it is necessary to introduce a broader and more generous conception of the idea of capital."

DR. BRNING, GERMN CHANCELLOR,
IN HIS SPEECH OF JUNE 27, 1931

To the English Edition

In the months that have passed since the appearance of the German original of this book, nothing has happened to upset the interpretation given by the author to the world economic crisisgladly as he would have seen himself put in the wrong by a revival of trade. International unemployment has further increasedin Germany the number of the workless has risen above six millions, in France it has reached one millionand the general picture here given is in no way invalidated by the fact that in Britain, under the working of the new currency policy, unemployment has slightly fallen. The essential point is that the general volume of world trade has further decreased.

Of the events that have happened since the book was finished, two are particularly relevant to its train of thought. Britain has definitely broken with the tradition of free trade which lifted her up in the nineteenth century to a position of unparalleled power. This change of system is the necessary consequence of the abandonment of the gold standard. It is impossible to praise too highly the British national discipline which so far has prevented the sharp fall of sterling on the international market from producing the slightest trace of inflation within the country. Little as an Englishman may now regret the going off gold as an emergency measure, there are few Englishmen who do not hope and expect to find the gold standard restored at some time, on a basis still to be found. Only when that stage has been reached will it be perfectly plain what it was essentially that made the abandonment of gold necessary, and drove the country into it: the great reduction which was thus effected in British indebtedness, measured, not by the present internal purchasing power of the paper pound, but by the international standard of gold. Although, owing to the unchanged internal purchasing power, the reduction has as yet worked itself out only partially, it has already brought manifest relief to the country's economic situation, and the British nation appreciates the relief. Will it recognize the deeper causes of this relief, will it realize that they do not lie simply in the cutting off of the Empire from the outer world (a step which is in conflict with the tradition of British history), but in the reduction of indebtedness? And will that fact reveal to it the direction in which the path to real recovery lies?

In the United States President Hoover has issued an appeal against bank-note-hoarding. We drew attention in the last chapter of this book to the American hoarding, which has since grown to the dimensions of a menacing calamity. President Hoover estimates the amount of hoarded notes at 1,300,000,000 dollars. What a mass of mistrust finds expression in such a figure, and what an extent of unremunerative burdening of the note bank! If one takes the number of the workless in America as ten millions, there are 130 dollars withheld from employment for every workless person! But experience has shown that in matters of this sort purely moral appeals are rarely effective. The figure serves more as an indication for everyone of the caution which his neighbour is showing in dealing with his money, and everyone asks himself: "If he is being cautious, can I be less so?" Already the United States Government has taken a further step and gone to work with much more substantial means than those of a mere appeal. Under Senator Glass's Bill the note cover is being slightly reduced. The American position is strong enough to enable this change in the stipulated cover (at present proposed for one year only) to be made without any immediate danger to the dollar. As the number of notes in circulation is being increased, it is quite likely that some of the hoarded notes will also come back into use. But it must not be overlooked that the step is a symptom of America's expectation of further withdrawals of gold by France (the total gold shipped by America in January 1932 is estimated at some 112,000,000 dollars), and of her desire to ease her position in regard to France. This may bring temporary assistance to American trade and industry, but it is the very reverse of the way back to the general prosperity of the past; it is, on the contrary, a further move towards independence of the world outside and so a step away from the unity of the world's economic system.

Meanwhile, little Switzerland has issued a 3.5 per cent federal loan, a type of loan which has been absent for decades from the Swiss Stock Exchange List. This course is indicated by the trend of the market; when will the Governments of the great creditor States systematically embark on it and push on with it, and so put a term to the sufferings of the nations?

KUNO RENATUS

February 1932