A neglected forerunner of Georg Friedrich Knapp : an examination of William A. Berkey

Includes bibliographical references.In the late nineteenth and early twentieth century academic economists assimilated money too much to commodities; they agreed with the age-old notion that the value of money derives from its intrinsic value as a commodity: metallism. Paper money had no legitimate place in their theory and consequently they were out of touch with the constitution of monetary systems. The supporters of alternate monetary theories—who tried to legitimize paper currency—were assailed as crackpot inflationists. Indeed, the majority of economists suspected not only unsound reasoning, but a perverse purpose behind any expression of antimetallism. In 1905, Georg Friedrich Knapp, a German professor and prominent economic historian, published his The State Theory of Money. At first it was attacked as the work of a crackpot inflationist, but currency theory was reordered in light of Knapp's criticism. In fact, students of the history of monetary theory have credited Knapp with delivering the final and decisive blow to metallism. Perhaps for this reason scholars are Inclined to view Knapp*s work as an original theory. However, this thesis claims that one of the best and most comprehensive treatments of the case for the Greenback—William A. Berkey*s The Money Question—deserves recognition as an important forerunner of Knapp’s theory of money. This thesis is divided into four chapters. The first chapter defines the terms used in the thesis, and establishes an historical perspective. The second chapter analyzes Knapp's theory of money, and attempts to show to what extent his work was unique. Berkey's theory of money is developed in chapter three* The last chapter compares the two works, and draws the relevant conclusions of the thesis. This thesis concludes that Berkey anticipated The State Theory of Money. This is not to say that Berkey deserves the credit that has been placed on Knapp. On intellectual grounds though, we must view Knapp as a continuation, possibly a culmination of certain intellectual tendencies in the history of monetary theory. A second, subsidiary conclusion is that greenbackers were not, as they are often represented, simply inflationists. Indeed some, such as Berkey, were concerned with establishing a sound monetary system.M.A. (Master of Arts