Josef Kaizl

(10 June 1854 Volyně – 19 August 1901 Myslkovice)

After completing his studies at the Faculty of Law at Charles-Ferdinand University in Prague, he went on to study economics at the University of Strasbourg, where he attended the lectures of Gustav Schmoller and Georg Friedrich Knapp, among others. Upon his return to Bohemia, he worked briefly as a lawyer, before starting as a lecturer at Charles-Ferdinand University in 1879. He was appointed associate professor (1883) and professor (1897) of political economy at the Faculty of Law at the Czech Charles-Ferdinand University in Prague, while also working as a senior lecturer at the Czech Technical College in Prague. He became actively involved in political life in the 1880s. He was appointed deputy of the Imperial Council in 1885 and deputy of the Bohemian Provincial Parliament in 1895. As regards his political views, he initially supported the National Party (Old Czech Party) but later left to join the National Liberal Party (Young Czech Party). Within this party, he was a member of the moderate, realistic wing and was instrumental in shaping its political programme. His expertise in economics led to his appointment as Minister of Finance of Cisleithania in 1898–1899.

When Josef Kaizl published Národní hospodářství (National Economy) in 1881, it was the first Czech academic publication on the national economy. Eleven years later (1892), his two-volume book entitled Finanční věda (Financial Science) emerged as the first Czech overview of financial science, focusing on public finance and the national budget – areas previously unexplored in national economics. Kaizl’s work was influenced by the Younger German Historical School and Socialism of the Chair. At the same time, he tried to respond to new foreign economic schools of thought. In particular, he emphasised the relationship between economic, legal, and political orders, believing that the main objective of a state’s national economic policy was to implement social reform, i.e. a compromise between the principles of radical liberalism on the one hand and the societal benefits of socialism on the other.

Along with Albín Bráf, he also played a key role in developing Czech economic terminology, subsequently using it in his publications. During his tenure as minister, he advocated a stable budget and supported increasing the number of Czech officials at the ministry. Their experience later proved invaluable in establishing the Czechoslovak Minister of Finance following the change of political regime in 1918.

Josef Kaizl in a 1936 engraving by Karel Wolf (1894–1966).
Prepared by the Banknote Printing Works of the National Bank of Czechoslovakia in Prague.

Currency in the age of Josef Kaizl

Coins and banknotes of the Austrian silver currency, introduced by the imperial patent of 19 September 1857, were in circulation for most of Kaizl’s lifetime (45 guldens, each worth 100 new kreuzers, were minted from a silver customs pound of 500 grammes, where a kreuzer no longer made up a sixtieth but a hundredth of a gulden; this marked the introduction of the decimal currency system). It was abolished as of 31 December 1899 by an imperial decree of 21 September 1899. The last coins were withdrawn only after the dissolution of Austria-Hungary (in Czechoslovakia in 1928). Under the Vienna Coinage Treaty of 24 January 1857, Vereinsthalers worth 1.5 guldens each were minted in 1857–1867 alongside land coins after the unification of currencies in Austria, Liechtenstein and the states of the German Customs Union.

1/2 Vereinskrone, dated 1861. Gold 900/1000, diameter 20 mm, weight 5.56 g. The face side features the head of Franz Joseph I with a laurel wreath and a ribbon, and a text listing the emperor’s titles. The reverse side bears the name, fine weight and denomination of the coin and an oak wreath with a ribbon. The edge is smooth with the imperial motto “Mit vereinten Kraeften”. The coin was designed by Johann Roth (face side) and Johann Weiss (reverse side) and minted by Haupt-Münzamt in Vienna. The function of these trade coins was to stabilise the currencies for trade with the German states. They did not constitute an internal currency and were thus converted into guldens. They were also minted with the same parameters and similar design in the German states participating in the currency union with Austria and Liechtenstein.

The Austro-Hungarian Compromise of 1867 was reflected in currency management only in 1878 after extensive negotiations when the Austrian National Bank was transformed into the Austro-Hungarian Bank with two head offices, one in Vienna and the other in Budapest. Unlike typical banknotes with face and reverse sides, all banknotes were bilingual: one side (the Austrian side) was in German and the other (the Hungarian side) was in Hungarian. The banknotes from the first issue in 1880 did not bear the denomination in the languages of the monarchy’s other nations. As a result, they were occasionally met with an unfavourable reception.

Banknote of the Austro-Hungarian National Bank, equal to 1,000 guldens in Austrian currency, first issue, dated 1 May 1880. Paper without watermark, 180×126 mm, hand-engraved copperplate print and letterpress. The Austrian and Hungarian sides feature two ideal female heads in ornamental frames, the left decorated with pearls and ears of grain, the right with a wreath of roses. The label surrounded by fruit garlands features the name of the bank, a woman’s mask, texts and the denomination in two languages. Designed by August Eisenmenger and Josef Storck, engraved by Johannes Sonnenleiter and printed by Oesterreichisch-ungarische Bank, Druckerei für Wertpapiere in Vienna. The note was valid from 1 September 1882 to 31 December 1904 and exchangeable until 31 December 1910. It was the last Austrian currency banknote to hold one of the highest purchasing values in history. Trade necessitated high nominal values as the clearing system did not cover the vast network of entrepreneurs engaging in the buying and selling of goods for cash. The note was equivalent in value to almost a year’s wages of an industrial worker supervisor or more than three years’ wages of an office clerk. It would buy about 1 t of butter, 5 t of flour or 4,000 l of wine.