| Author(s) | Friedrich Engels |
|---|---|
| Written | 10 May 1882 |
ENGELS TO EDUARD BERNSTEIN
IN ZURICH
London, 10 May 1882
Dear Mr Bernstein,
My afternoon having already been broken into, I shall employ it in writing to you. As regards the Virgin Mary-Isis, that was a point upon which I could not enlarge, if only for reasons of space.[1] Like all hagiolatry, the Marian cult belongs to a much later period than the one I am considering (a time when it was clerical policy to produce in the persons of the saints a new version of the polytheistic peasantry's numerous tutelary gods), and finally it would be necessary to provide historical proof of the derivation, which would demand specialised study. The same applies to the gloria and moonlight. In the imperial days of Rome, by the way, the cult of Isis was part of the state religion.
Bimetallism. The main thing — particularly after many of the 'leaders' have been so frightfully cock-a-hoop about our party's superiority over the bourgeois in matters of economics, a superiority of which those gentlemen are totally innocent—the main thing is that we should beware of inviting censure in this field as is unblushingly done by the said gentlemen the moment they think it will serve to flatter a particular kind of worker, win an electoral victory or gain some other advantage. Thus, because silver is mined in Saxony, they think it in order to dabble in the bimetallist nonsense. So to catch a few more votes, our party is to go and make an immortal ass of itself in the very sphere which is supposed to be its forte!
But that's our literary gents all over! Just like the bourgeois literati, they think themselves entitled to the privilege of learning nothing and laying down the law about everything. They have, for our benefit, concocted a hotch-potch of literature which, for ignorance of economics, new-fangled utopianism and arrogance, has yet to find an equal, and Bismarck did us a tremendous favour by banning it.
When we speak of bimetallism today, it is not so much bimetallism generally as the specific case of bimetallism in which the ratio of gold to silver is, say, 15½ to 1. A distinction must therefore be drawn here.
Bimetallism is becoming daily more impracticable in that the ratio of the value of silver to that of gold which, at one time, was at least fairly constant and changed only gradually, is now subject to daily and violent fluctuations, the initial tendency being for the value of silver to fall as a result of the colossal increase in production, especially in North America. The exhaustion of gold is an invention of the silver barons. But whatever the cause of the change in value, it remains a fact and that is what concerns us first of all. Silver is becoming daily less capable of serving as a measure of value, whereas gold is not.
The ratio of the value of the two is now about 17½: 1. But the silver people want to reimpose upon the world the old ratio of 15½: 1, and that is just as impossible as maintaining the price of mechanically produced yarn and cloth everywhere and for all time at that of manually produced yarn and cloth. The die does not determine the value of the coin, it is merely a guarantee, for the recipient, of weight and standard and can never confer on 15½ lbs of silver the value of 17½.
All this is dealt with so lucidly and exhaustively in Capital, chapter on money (Chap. III, pp. 72-120) that there's nothing more to add. For material relating to more recent fluctuations, cf. Soetbeer: Edelmetall-Produktion und Werthverhältnis etc. (Gotha, Perthes, 1879). Soetbeer is the leading authority in this sphere, and the father of German currency reform — even before 1840 he was advocating a 'mark' equivalent to ⅓ taler.
Hence, if silver is minted at 15½ lbs = 1 lb. gold, it flows back into the state treasuries, everyone wants to be rid of it. That's what the United States discovered in the case of its silver dollar minted to the old standard and worth only 90 c, as did Bismarck when he tried forcibly to put back into circulation the silver talers that had been withdrawn and replaced by gold.
Mr Dechend, the chairman of the Bank, imagines that bimetallism will enable him to pay off Germany's external debts in bad silver instead of gold at full value, and thus avoid any kind of gold crisis, something that would certainly be most convenient for the Reichsbank if only it were feasible. But all that is forthcoming is the proof provided by Mr Dechend himself, that he is totally unfitted to preside over a bank and would be more at home at a school desk than a board-room table.
Your Prussian Junker, too, would certainly be happy if the mortgages he contracted in silver at 15½: 1 could be repaid or serviced in silver at 17½: 1. And since this would necessarily occur inside the country, it would be perfectly feasible for debtors to rook their creditors by this means — provided only the aristocracy could find people to lend them silver at 17½: 1 in order that they might make repayments at 15½: 1. For their own means certainly do not permit them to make repayments. But they would, of course, be compelled to accept their silver at 15½ and thus, so far as they were concerned, everything would remain as before.
As regards the German production of silver, its extraction from German ore dwindles yearly in importance as compared with (Rhenish) extraction from South American ore. Total production in Germany in 1876 amounted to about 280,000 lbs, of which 58,000 were from South American ore; since that time this figure has risen considerably.
That the debasing of silver to the status of a fractional currency must depress the value of silver still further is obvious; the use of silver for purposes other than money is minimal, nor is it likely to show a rapid increase because demonetisation throws more silver on to the market.
It is inconceivable that England should ever introduce bimetallism. No country that is on the gold standard could re-introduce bimetallism now and on a permanent basis. In any case, universal bimetallism does not admit of general application; if all men were to agree today that silver was once more to be worth 15½: 1, they could not alter the fact that it is worth only 17½: 1, and there's absolutely nothing to be done about it. One might just as well decide that twice two equals five.
During our early days of exile Bamberger did us many a good turn; he was a decent and obliging man, secretary to Karl of Brunswick. We subsequently lost sight of him.[2]
Kindest regards,
Yours,
F.E.