Social Comptabilism / The Cheque and Clearing Service in the Austrian Postal Savings Bank. Proposed Law laid before the Chamber of Representatives of Belgium

by Ernest Solvay; Hector Denis

When we say that the value of things in general would rise in a case of monetary dilatation occurring in the way we have put it, and that it would fall in the case of monetary contraction pure and simple, it is because we are allowing that the supposed want or excess of money would make itself generally felt amongst those engaged in transacting business. If it only affected a special class of such persons, if gold or silver were only wanting or only circulated amongst them, it is needless to say that the rise or fall in prices would only affect the commodities in which their special property exactly consisted. We believe it right to attempt to give as logically deduced from the preceding formulas this note of precision in a rather complex question, which, as we think, has not always been rightly looked at, and that, in consequence of the fact that in money, a marketable article of variable value, is associated with a unity which ought to be invariable.

In our epoch of exact science and profound insight into phenomena and things, it is no longer possible to err on the very basis of a question of an interest so general and so vital as this relating to the monetary system. The suppression of such a defective instrument as money and its substitution by a mere simple writing down of transactions, but legally guaranteed,—a system which we have entitled «Social Comptabilism» demands the study of every economist who wishes progress independently of any dogma, doctrine or party. The time is at hand in which by the force of circumstances it must be carried into effect in highly civilized countries. Germany, almost entirely educated to-day, should have no reason to oppose its adoption, if she saw clearly the advantages which social comptabilism presents and the difficulties and inconveniences which would disappear on its use. It would be a great error to imagine that any kind of economic revolution is necessary to establish it. In Belgium M. De Greef[D], in his «Essais sur la monnaie, le crédit et les banques», has shown how simple, logical and profitable it would be to approach it by rapid strides resting on the fundamental principle of «social comptabilism»,—the guarantee of property. M. H. Denis[E] in his work on the «Organisation et le Fonctionnement du service des chèques et des virements à la Caisse d'Epargne postale de l'Empire d'Autriche», shows how such comptabilism has been already approached in what chiefly relates to deferred payments, in a great country, which although it does not generally lead the way in progress, seems to have correctly apprehended what relates to the machinery money masks and wrongly represents.

We shall only add one more observation in justification of the way we look at the matter, it is that in our country there is in principle at the present time in the financial organisms patronised and guaranteed by the State, all that is needed to realize «social comptabilism». Does not the National Bank of Belgium, as well as the Bank of France, among our neighbours to the west, issue bank notes,—and from our point of view, these notes represent unities of comptabilist value—to all those who offer them sufficient guarantees. In exchange for a deposit of securities, or for well known signatures, paper is obtained, notes equivalent to metal money:—this is already on the road to social comptabilism.

In place of that, let these banks issue notes, counters—only possible to be used once—or rather bankbooks containing leaves or fractions of leaves, or squares having a meaning equivalent to that of notes or counters, or able in some way easily to realize that meaning, and which would be simply obliterated in case of transactions accomplished and the working of comptabilism is fully seen although only at the threshold of the system.

Let the State then enlarge to the utmost degree possible the power of these banks to issue such notes or cheque books; let these be authorised to accept mortgages, deposits and all guarantees from third parties or others, whether directly or more indirectly by the intervention of other public organisms appointed to the work, or even analogous private organisms, of a solvency secured beyond all doubt; let this issue be made for any amounts, however small; let these establishments be even authorised to issue notes similar in form, but blank, or account-books to people without means and only usable on the understanding that all that results in connection with them is at the risk and peril of those transacting business, and we have arrived at comptabilism complete and definitive, even to the point of suppressing the copper coinage.

It is evident that in this way society as it is at present organised, can demonetize the precious metals and establish social comptabilism without in principle having to make any revolution whatever in its present position, it has only largely to increase a portion of its machinery, already existing and in full swing. To sum up, it is a question of a simple change in the machinery of transactions and all society is interested in the realization of such a progress purely mechanical and functional, which moreover has no connection with any doctrine, opinion or party, and is no new invention whatever.

In conclusion, and at the risk of repeating ourselves, in order to explain our idea under all its forms, and to render it accessible to every mind, we think we cannot do better than to recapitulate it in formulating some articles which set forth in principle the basis on which legal arrangements could be made on the hypothesis that the legislative power should determine suddenly to decree the application of «social comptabilism» such as we have defined it in basing it on the guarantee of property, on the employ of account books, with debit and credit entries, and on the use of a stamp or punch to inscribe or obliterate figures.

The articles recapitulate the essential principles of the reform from a point of view wholly general, the only one in this notice we have proposed to examine, leaving for the present absolutely out of consideration details of application which have to be studied and which might vary infinitely.

It is needless to say that we by no means believe that a reform like this can be realized at once, we rather think that it will come by stages, as is always the case in every fundamental change relating to any established order of things.