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A theme of the dangers, temptations, and blessings of paper money made its way into Part Two of Faust, one of the most famous epic poems in history. Faust came from the pen of Johann Wolfgang von Goethe (1749–1832), a many-sided scientist, statesman, and literary figure whose works can be found on any list of the greatest books in the history of mankind. Line 317 of Faust reads “Man errs as long as he doth strive,” a thought particularly pertinent to a history of paper money that is filled with errors made by societies striving to do too much with too few resources.

Part Two of Faust was finished in 1832. A historical figure, Dr. Johann Faustus, furnished the main subject of Goethe’s poem. The real Faust, living in the sixteenth century, practiced medicine, studied astrology, and conducted experiments in alchemy. The goal of alchemy was to find a method for transforming base metals into gold. Faustus was thought to be a magician and according to legend had dealings with the devil. The story of Faustus passed down to Goethe was probably much more mythical and legendary than historical.

Goethe’s Faust is a restless striving soul disappointed with the brevity of beauty and the never-ending search for elusive truth. He offers to sell his soul to the devil on condition that the devil show him a pleasure that brings lasting satisfaction, one that he would not tire of, but would want to “Tarry a while, you are so fair.” Second only to Faust in Goethe’s play is the devil, Mephistopheles.

In Part One Faust seduces a young maiden, gets her pregnant, kills her brother, and abandons her. None of the pleasures in Part One are able to calm Faust’s striving and enable him to feel fulfilled.

In Act 1 of Part Two, Faust and Mephistopheles visit the emperor of the Holy Roman Empire. They catch the emperor amidst a budget crisis with the pay of soldiers and servants in arrears, and moneylenders demanding payment on debts. Mephistopheles holds out the promise of the alchemist’s dream, the secret to making gold that is as simple as printing paper money. The paper money is secured because “In veins of mountains, walls far underground, gold coined and uncoined can be found.” The emperor, on learning the bills have been paid and seeing joy on so many faces, has to be reminded that the night before he authorized the issuance of paper money. The treasurer tells him that the night before:

The chancellor came and spoke in words that ran:

  • “A lofty festal joy do for thyself attain:
  • Thy people’s weal—A few strokes of the pen!”
  • These you did make, ten thousand fold last night
  • Conjurers multiplied what you did write;
  • And that straightway the good might come to all,
  • We stamped at once the series, large and small;
  • Tens, twenties, thirties, hundreds, all are there.
  • You cannot think how glad the people were.
  • Behold you city, one half dead, decaying,
  • Now full of life and joy, and swarming and playing! Page 110

    The notes bore the emperor’s signature, and on each note could be read:

    • To all whom it concerns, let it be known:
    • Who hath this note, a thousand crowns doth own.
    • As certain pledge thereof shall stand
    • Vast buried treasure in the emperor’s land,
    • Provision has been made that ample treasure,
    • Raised straightway, shall redeem the notes at pleasure.
    • (Goethe, 1952)

    Faust puts the money to good use, digging canals, draining marshes, building factories and new farms. At first the money spreads happiness, but sins are committed in the name of progress. New government functionaries appear on the scene with names such as Quick-loot and Getquick, and soon the emperor faces a rebellion.

    At the end Faust’s pleasure at his good works seems to have met his requirement for a pleasure that never grows stale. As the devil takes his soul, angels redeem Faust, saying redemption is possible for those who never cease striving.

    Goethe correctly anticipated the era of paper money. Before the nineteenth century virtually every experiment with inconvertible paper money had ended with disaster. Inconvertible paper money is money that cannot be converted into precious metals at a fixed rate. A century after Goethe wrote Part Two of Faust, most of the countries of the world adopted inconvertible paper standards