Current Social and Economic Issues

GA 332b — 31 October 1920, Dornach

Prospectus of the “Futurum A.-G.”

Economic Society for the International Promotion of Economic and Spiritual Values, Dornach near Basel, concerning the issue of 5,350,000 francs of nominal new shares

Prospectus, October 31, 1920

Series A: preferred shares at Fr. 1,000.
Series B: shares at Fr. 500.
Series C: shares at Fr. 1,000.

Letters of this kind usually end up in the trash. The sensible person understands this. Because more often than not, they promise things that the interested parties have often enough experienced not being fulfilled. But here is a letter that wants to talk about a special kind of economic and financial foundation. One that wants to be so strongly and seriously rooted in the social plight of our time that the founders would like to choose a more effective way of communicating than a brochure. But initially no other way is possible, and so one would like to build on the insight of those who begin to read and are then determined by the seriousness of the matter to read further. The increasingly difficult global economic situation today, which is leading entire areas of Europe towards decline (see appendix I on the global economic situation), demands new ideas and new economic initiatives that work just as effectively in positive development as the forces that are currently evident in the decline of our culture. 1. The activities of Futurum A.-G. The company FUTURUM A.-G. (Economic Society for the International Furthering of Economic and Spiritual Values), founded on June 16, 1920, with its headquarters in Dornach, wants to take up its economic activity in the spirit of the positive development referred to above. In order to fulfill its task, it is necessary for FUTURUM A.-G. to expand indefinitely and gradually develop into the economic associations that must be striven for in an emerging economy.¹ The FUTURUM A.-G. should work as a single enterprise in the way that needs to happen on the broadest scale if our ailing economic life is to recover. This is possible only if the sins of omission of the present economy are seen through impartially and consciously avoided in an undertaking that is capable of unlimited expansion. Today's mode of production is based on pure profit interest. Both the entrepreneur (capitalist) and the wage earner devote themselves to production only from the point of view of profit. Therefore, in reality, the satisfaction of general needs is becoming more and more dependent on the pursuit of profit, while it is the consumption needs that bring the spiritual and moral aspect into social life. They alone give the entire economic life a meaningful basis. Today, production is carried out for the sake of profit, and the needs of consumers are only taken into account insofar as they can be made subservient to the pursuit of personal gain. Economic activity in the sense of meeting needs is considered obsolete. Consideration of the socially harmful consequences of the arbitrary business and production activities of the capitalist and the wage laborer is considered inconvenient because these harmful consequences only become apparent later. We are now in the midst of such social consequences and should therefore be able to understand the real connections between cause and effect in economic life. As a result of not taking consumer needs into account in production, these same needs became, as it were, fair game. We are experiencing this realization today in the revolutionary needs of the masses, which express themselves in strikes, etc. One produces on a tolerable basis and as a reaction one produces the revolt of those needs that arise as the highest possible business profit and as high wages from the interest in profit. A healthy modern economy must be supported by a practical intellectual life that will not advise a production that is based on the result alone, but on a production that arises from the realization of the connection between consumer interests and social conditions. Such companies will not be less profitable than the present ones. They will, however, avoid production methods that are harmful to social life. Our present-day economy is impractical because the scientific knowledge of the present does not provide any insights into the understanding of social interrelations. The ideas emanating from the Goetheanum in Dornach produce such a practical economic way of thinking because they grasp the individual and social nature of the human being. The sins of omission in political economy to date are expressed in the 90% increase in the need for strikes between 1913 and 1919 (see Appendix I). It is out of such considerations that FUTURUM A.-G. intends to commence its economic activity. The statutes state the purpose of the company as: “the establishment, financing and operation of purely economic and economically-intellectual (educational institutions, scientific research institutes, etc.) enterprises, as well as participation in such. Individual transactions may also be concluded for its own account or for the account of third parties. The company is authorized to establish branch offices in Switzerland and abroad.” This general formulation of the company's statutory purpose can, of course, say nothing about the way in which FUTURUM A.-G. positions itself in practical economic life and how it wishes to be distinguished from other production and financing companies. 1. It is not a company that has been founded for the sole purpose of fighting in today's economic battle in a forward-moving line and thus generating a particularly high dividend. It has been explained above how such ventures gradually erode the economic and, indirectly, their own foundations. Article 29 of the company statutes therefore states, among other things: “A dividend shall be paid on the share capital which, in line with the prevailing monetary conditions, represents an appropriate interest payment on the nominal value of the share capital." This provision enables the management to focus on building their companies in a financially sound manner that avoids creating social tensions. The subordination of all business matters to an authoritative dividend policy is thus avoided. 2. The FUTURUM A.G. wants to bring together all those reasonable personalities as shareholders in an economic working group in the form of a joint-stock company who, based on their practical experience, have come to the conclusion that an attempt at reconstruction in this time of crisis can only be based on new ideas, as represented by the threefold social order. 3. The Society seeks to distinguish itself from conventional financial institutions by placing economic and practical considerations rather than profit considerations at the forefront of its financing activities. In today's banking system, capital is only made available in return for high rates of return and extensive collateral (guarantees, pledges, etc.). The lender pays no attention to whether or not these returns are achieved through unsound economic practices. Even if the managers of the companies receiving financial support are unable to guarantee that the capital they borrow will be used appropriately due to a lack of efficiency, a loan will still be granted today as long as the pledged assets or the available guarantees sufficiently secure the loan amounts. FUTURUM A.-G. cannot therefore be characterized as a moneylender. Rather, it seeks to participate in the management of the associated companies as an active business partner. This initially requires a close business relationship between FUTURUM A.-G. and the financed companies. The latter will therefore generally take the form of branches or subsidiaries. 4. It is mainly a matter of financing those undertakings that are designed to place economic life on a healthy associative footing and shape intellectual life in such a way that legitimate talents are brought into a position in which they can be expressed in a socially fruitful way. Furthermore, enterprises such as laboratories, etc. must also be taken over out of social necessity. These can only bear economic fruit after some time and above all through the healthy ideas that are now being introduced into them. This requires that other enterprises be affiliated that are currently profitable and able to cover the temporary loss of the former. 5. In a company like FUTURUM A.G., the managers should receive information, in consultation with representatives of the intellectual life, about the social consequences of economic actions. The assessment of these social effects, together with the economic aspects, will then be decisive for the realization or rejection of a proposed business operation. In this way, the present-day economic principle, which judges an enterprise only by its profit, and which has led to the severe crisis, will be overcome. 6. The realization that economic activity can develop branches that, while temporarily producing favorable results for the individual entrepreneur, have a destructive effect in the context of the social order, is of extraordinary importance for the future. Therefore, in connection with the information on the current global economic situation (Appendix I), it may be said in the introduction that tensions have arisen during the 19th century from the prevailing cultural conditions and attitudes, which could not fail to lead to world wars and social crises. Many of today's companies are geared towards such socially harmful aspects. On the one hand, the entrepreneur makes a profit out of them and, on the other, generates a loss in the form of social destructive forces that destroy the profits in the economy as a whole. These types of enterprises must therefore be counteracted by those that, based on sound economic thinking and social sensitivity, can be integrated into the social order in a truly fruitful way. 7. A company like FUTURUM A.-G. can initially only overcome the socio-technical and financial crises. But the social difficulties that still arise from the current economic system in the form of the workers' question will also disappear in a company of the kind described, if it is managed correctly. The socially favorable consequences will practically arise, and the example will be convincing. If a company of this kind begins to falter, the participating workers will work with their convictions to restore its influence. Only by uniting the manual workers with the spiritual leaders of enterprises in one interest, through a way of thinking that affects all classes of people, can the social forces of destruction be counteracted. It is a basic condition for this that the spiritual aspirations be intimately connected with all material intentions. II. The capital requirements of Futurum A.-G. In order to approach a task as it has been characterized here, and to be able to carry constructive forces into today's time of crisis as a practical example, FUTURUM A.-G. needs suitable employees and insightful entrepreneurs who are looking for a way to connect their businesses with our corporation in some way. Above all, however, it requires large resources to enable the company to properly tackle its task. Only when it is able to expand without limit can the broad economic basis be gradually created, from which the network of economic associations must grow, placing people in the economic organism in a socially healthy way. The initial capital of FUTURUM A.-G., amounting to 650,000 francs, was raised by the founders within a month. This was to create a concrete basis for advertising the actual initial capital of 6,000,000 francs as coming from a company registered in the commercial register. The objection that a single entrepreneur is not capable of making a significant impact on the economy is unfounded. FUTURUM A.-G. has placed itself squarely in the practical economy with the aim of rapidly expanding and creating the economic instrument with which this impact is to be achieved. Those who want to use their money in a far-sighted way will participate in the subscription of shares in promising companies such as FUTURUM A.-G. and thus work together on the economic reconstruction. If short-sighted people believe that such economic views cannot bear financial fruit, they overlook the fact that clinging to previous economic methods is synonymous with increasing social decline, from which their capital will be destroyed sooner or later. While the consumption of goods continues uninterrupted, production is diminishing more and more as a result of social conflicts. This reduction in manufacturing will soon spread to raw materials and agricultural products, which still exist as reserves today. However, since the available mineral resources can only be added to the social organism through work, the increase in unwillingness to work means a constant decrease in reserves. How the immediate future develops depends on whether a new spirit takes the lead in the individual companies. The FUTURUM A.-G. call for the subscription of new shares is therefore a response to the need to give the company the momentum it needs to bring this spirit into economic life. Board of Directors' resolution on the new share issue. FUTURUM A.-G. can only develop its desired activities if it grows quickly and without limits. The Board of Directors has therefore decided to increase the company's capital in stages, with an initial capital increase from CHF 650,000 to CHF 6,000,000 to be carried out immediately after the entry in the Swiss Commercial Register on October 27, 1920. In order to ensure that the company's purpose, as intended by the founders, is carried out, the voting rights of the 650 founders' shares will be increased from one vote to 20 votes each with effect from January 15, 1921. At the same time, it was decided to issue 350 new shares at 1000 francs with the same voting rights, which can only be subscribed by the founding shareholders or brokered by them to new subscribers. III. Business activities of FUTURUM A.-G. Since its establishment on June 16, 1920, FUTURUM A.-G. has already developed a lively business activity by acquiring and continuing to operate the fully operational companies G. Holz scheiter & Cie., a knitwear factory in Basel, and Minerva A.-G., an umbrella handle and cane factory in Bönigen (near Interlaken), and continues to operate them for its own account. It also exploits a peat field in the Bernese Seeland as a contractor. In addition to these production companies, FUTURUM A.-G. has its own trading department in Zurich and a wholesale business in tobacco products. The banking department at the company's headquarters in Dornach accepts funds in the form of loan notes, savings books or current accounts, and also handles asset management, currency exchange and securities transactions. IV. Excerpt from the statutes of FUTURUM A.-G. The founding of FUTURUM A.-G. (Economic Association for the International Advancement of Industrial and Cultural Interests) - FUTURUM S.-A. (Societé financière pour le développement international d'intérêts économiques, intellectuels et sociaux) - FUTURUM Co. Ltd. (Economic Association for the international advancement of industrial and cultural interests) - based in Dornach near Basel, was established on June 16, 1920 with a share capital of 650,000 Swiss francs. The purpose of the company according to the statutes has already been mentioned on page 2 of this brochure. The duration of the company is unlimited. The capital stock of 650,000 francs is fully paid up. It is divided into 650 registered shares with a nominal value of 1000 francs each. The Board of Directors is authorized to increase the share capital by issuing new shares up to a maximum of CHF 6,000,000 and to determine the terms and conditions of the issue. The Board of Directors, which according to the statutes should consist of 3-12 members, currently includes the following members: Dr. Rudolf Steiner, Dornach, as Chairman.
Dr. Roman Boos, Dornach, as Vice Chairman.
Ernst Gimmi, Zurich, businessman, as Secretary.
Emest Etienne, Chaney-Genève, Chief Engineer of the Swiss Railway Bank, Basel.
Joh. Hirter, Bern, President of the Board of Directors of the Swiss National Bank, Bern.
Paul de Kalbermatten, Luchon (France), Chief Engineer.
Christian Krebs, Paris, Consul and Industrialist.
Fred. Tharaldsen, Christiania, Industrialist. The members of the Board of Directors perform their duties on a voluntary basis. During their term of office, they must deposit at least one share of the company at a location to be determined by the Board of Directors. The management consists of one or more persons, who are initially appointed by the founding General Assembly and subsequently by the Board of Directors. The following gentlemen are currently members of the management department: Arnold Ith, economist and engineer from Schaffhausen in Basel.
Ernst Schaller, Dr. rer. pol. from Lucerne in Dornach.
Adolf Padrutt, businessman from Pagig (Graubünden) in Basel. The auditors consist of two auditors and one deputy auditor. They are elected by the Annual General Meeting. The Annual General Meeting is normally convened during the first six months after the end of the financial year. Extraordinary General Meetings are convened as and when required. The Annual General Meeting is convened by the Board of Directors, the management or the auditors. A General Meeting must also be convened if one or more shareholders whose votes represent at least 10% of the share capital request this in a signed petition to the Chairman of the Board of Directors or his deputy, stating the purpose. The invitation is sent by registered letter. Resolutions of the General Meeting regarding: 1. amendments to the Articles of Association;
2. the reduction of the share capital;
3. the dissolution of the Company, require a majority of two-thirds of the share capital represented at the vote for their validity. In addition, at least three quarters of the total share capital must be represented for a resolution to dissolve the company. If this is not the case, a second general meeting must be convened at least one month, but no later than forty days, after this date. The resolution of the two-thirds majority of the represented share capital is still legally valid in this second meeting even if less than three quarters of the total share capital is present. Accounting: The financial year is the calendar year. Within the first four months of the financial year, the management must submit the closing balance sheet, the profit and loss statement and a report on the development of the company's assets and circumstances, together with its proposal for the distribution of the company's profits. The amount of depreciation and any reserves are determined by the board of directors. The company's net profit is the surplus of assets over liabilities and is distributed in the following order: 1. Five percent shall be allocated to the reserve fund until it reaches or once again equals one tenth of the share capital.
2. The Board of Directors is authorized to allocate further reserves as it sees fit.
3. A dividend shall be paid on the share capital which, in line with prevailing monetary conditions, represents an appropriate return on the nominal value of the share capital.
4. The General Meeting shall decide on the appropriation of any remaining profit.
5. The dividend shall be paid after the balance sheet has been approved by the General Meeting.
6. The reserve fund is the company's working capital and does not bear interest. It serves to cover losses that cannot be offset against the annual profit. The announcements of the company to the shareholders are made by a written letter and, as far as the legal requirements demand it, in the Swiss Official Gazette of Commerce. Dornach, near Basel (Switzerland), October 31, 1920.
FUTURUM A.-G.
The Board of Directors Enclosures with this prospectus:
1. The current global economic situation.
2. The economic situation of individual countries.
3. Terms and conditions of issue and subscription certificate. Appendix I to the prospectus of October 31, 1920,
by FUTURUM A.-G., Dornach (near Basel),
(Economic Society for the International Furtherance
of Economic and Spiritual Values). The present world economic situation. The hopes that many had placed in the economic and political-legal organization of the post-war period have not been fulfilled. The cultural conditions and attitudes of the 19th century gradually gave rise to the social tensions that led to the economic revolution resulting from the political crises of the world war. Today, this revolution in the form of the social question is looming ever larger over the nations. The general economic situation, as will be shown below on the basis of figures, is therefore, whether it is considered as the result of the war or other events, always the direct consequence of these cultural conditions and attitudes, which have developed more and more clearly in recent decades. Its characteristic symptoms are, on the one hand, a decline in the joy of work and in production, and on the other hand, general inflation, social conflicts and increasing debt. The heavy debt burden that the war brought to individual states amounts to:
the Entente states £24,845 million or 626,590 million francs.
the Central Powers £14,070 million or 354,845 million francs.
the total war costs 38,915 million pounds or 1,000 billion francs. National debt of various states at the end of 1919. The following figures have been converted into Swiss francs on the basis of the coin parities. This debt burden is accompanied by a reduction in the production of the most essential food and consumer goods, which gives rise to serious concerns. Thus, from 1913 to 1919, there was a reduction in: Strike by Spanish railway workers in March.
Strike by Spanish metalworkers in April.
General strike in Spain.
Strike by Portuguese railway, postal, telegraph and telephone staff in March.
Major labor unrest in Poland.
General strike in Yugoslavia in April.
Strike by Romanian workers in the railway and tramway workshops. Railway strike in France. Italian railway strike. Italian agricultural and industrial workers' strike.
Italian general strike in February.
Italian general strike in April.

With a more than tenfold increase in the debt burden of the individual states, production has decreased in all countries. This fact justifies the necessity of a huge increase in the burden on the population if the amortization and interest payments on these debts are to be carried out. Transportation, as a factor that serves production, has also suffered major losses. The war's shipping losses are calculated at 15 million tons, worth 40,000 million francs, and the operating and balance sheets of the railways in the various countries have resulted in billions of deficits in recent years. On the one hand, increasing demands are placed on the individual and the state through increasing debt, while on the other hand, their ability to perform is constantly being reduced as a result of decreasing production. This increase in debt and decrease in production results in increased wage demands from workers and growing capital needs of companies, to satisfy which ever larger loans must be taken out. Since, as a result of the decline in production, the credits granted are less and less backed by real values in the form of goods, they increasingly represent fictitious values (unbacked paper money in circulation, fictitious credits, etc.). The increase in unbacked banknotes in circulation and in national debt clearly shows the extent to which such fictitious values have to be used to cover the need for means of payment.

During the course of this year, the issue of paper money has increased further in the former belligerent states. The uninterrupted activity of the banknote press in Central Europe is well known. In addition to banknotes, Germany is now also issuing treasury bills in order to be able to conceal the enormous increase in the number of notes in circulation in the Reichsbank accounts by transferring some of them to these treasury bills. But even Italy could not wait for the success of its new government bond and had to issue a billion new banknotes at the beginning of this year to meet its current cash needs. The increase in national debt, the increase in paper money in circulation and the decline in production have a knock-on effect on the general cost of living, making it alarmingly more expensive. The percentage increase in inflation in the various countries can be seen from the following figures. The last year of peace, 1913, was taken as the base year, with a figure of 100.

The types of goods used to calculate the increase in inflation from 1913 to 1919/20 vary for the above countries. The figures given therefore cannot be compared directly with each other.

The following table contains the figures for the increase in prices in the individual states, converted to a common basis for comparison. The Swiss price compilations were used as the basis for calculation.

For the retail prices of the most important foodstuffs, the percentage increase compared to the pre-war period as the basis for calculation (100%) is:

Even if individual countries such as Switzerland and the United States of America show relatively favorable figures, it should be borne in mind that the global economic interdependence always ensures a certain degree of equalization. Because the more sustained the economic decline of a country is, the more intensively it will try to spread to economically healthier areas. Thus, in such times and in such countries, the national debts of countries facing economic decline, as listed above, mean the impossibility of continuing economic activity. In countries like England, whose economies are on the rise, the large national debts, which would mean economic ruin for Germany, for example, are much less significant. Nevertheless, this upward development in England will only continue as long as the economic decline in the rest of Europe does not undermine the demand for goods and the supply of necessary products for this country as well.

The trade balances in the individual states, the vast majority of which show an increasing surplus of imports over exports, also allow certain conclusions to be drawn about the state of the various national economies.

Trade balances.

Surplus of imports over exports in millions of francs!

These figures clearly show that the value of exported products is steadily decreasing in comparison to the value of goods imported from abroad. Therefore, a permanent increase in domestic income, at least equal to the surplus of imports over exports, must be created in order to cover this shortfall. If such coverage by creating the necessary national income is not possible, the means of payment must be raised by attacking the national wealth (savings) and by increasing debt (loans and banknote issuance). Such economic management must logically lead to decline. However, the fact that economic management must actually be carried out in this latter way today, because national income is not increasing to a corresponding extent, is clearly shown by the figures given on the decline in production and on the increase in the debt burden and banknotes in circulation. At the recent international finance conference in Brussels, for example, it was clearly stated that the national wealth of Switzerland, a country that was directly spared from the war, has suffered considerable losses since the pre-war period. The surrounding countries were not only forced to incur enormous debts on top of the huge income taxes, but they also had to attack the national wealth itself by legally ordering the surrender of assets. The collapse has thus been set in motion.

America, the huge creditor and supplier of raw materials to European countries, also has an interest in the economic situation of these countries, as shown by Europe's debt to America in mid-1920.

The seemingly solid economic area of America is also directly affected by the economic crisis, however, with labor unrest and strikes also constantly increasing in that part of the world.

In the United States of North America, the number of strikes and lockouts in 1919 amounted to 3,374, affecting more than 4,000,000 workers. The seven largest strikes there were:

1. Chicago stockyards strike, 65,000 men
2. Sympathy strike in favor of the Tacoma and Seattle machine workers, 50,000 men
3. Atlantic coast longshoremen strike, 100,000 men
4. Strike of the workers in the New York shipbuilding ports 100,000 men
5. Strike in the construction industry in Chicago 115,000 men
6. Massive strike of the steelworkers 367,000 men
7. Massive strike of the coal miners 435,000 men

An approximate idea of the decline in the joy of work and the increase in social conflicts can be gained from the total number of strike days in the most important countries in recent years:

1913 12,000,000 strike days
1918 5,000,000 strike

days (strikes were curtailed by the military dictatorship during the war and by the conscription of the male population into the armed forces).

1919: 1,341 conflicts with 22,750,000 strike days.

The total number of conflicts and strike days for 1920 will be significantly higher than for 1919.

These figures show that the desire to strike in 1919 was 89.8% greater than in 1913. The desire to strike is to be understood as the strikers' need for a means of expressing their general dissatisfaction with the existing social conditions. The following compilation, which only contains information about some of the major labor conflicts in the first half of 1920 and makes no claim to completeness, shows that the corresponding figures for 1920 will express an even greater desire to strike than in 1919.

America:
The two-month dockers' strike in Buenos Aires. The 100,000-strong railway strike in Brazil. Strike by railway workers in the United States of North America.

Asia:
strike by workers in the Japanese ironworks. (Loss of 10 million yen).
strike by 200,000 factory workers in India during the month of February. Various strikes by indigenous workers and Indo-European employees on the coffee and sugar plantations.

Europe: Switzerland: Strike of Swiss construction workers.
Conflict between employees and employers in the Swiss hotel industry.
Major strike at the von Roll ironworks.
Wage dispute in the metal industry in Winterthur.
Imposition of a lockout at the Brown Boveri company in Baden.
Today, the movement among the entire working class is more serious than ever. In Great Britain, after unsuccessful attempts at an agreement between the government and the miners' representatives, the miners' strike broke out on October 17, and it will only be possible to end it definitively after lengthy negotiations. The consequences of this strike for the English economy are particularly serious because numerous industries have been forced to stop working due to a lack of coal. The damage to the entire European economy can be gauged from the fact that, according to authentic estimates, the loss of coal production caused by the strike was estimated at around 15 million tons. In Germany, in addition to ongoing workers' revolts, a momentous price war has begun between German mine workers, and in the Ruhr area, the socialization of German mining is already being demanded. In France, the strikes resulting from the mass dismissal of workers in various French industries will soon take on a larger scale and more serious character. If the French mine owners do not accept the demands of the mine workers, a general strike of miners in France can be expected around mid-November. In Italy, the revolutionary labor unrest in heavy industry has been temporarily resolved, but it was only one episode in the difficult struggle between the Italian bourgeois and socialist parties. That this struggle continues unabated today is proven by the ongoing strike unrest in all cities of Italy and the development of a project by the Italian labor federation for the control of Italian industry by the workers. The Belgian trade union congress in Brussels recently decided on the gradual nationalization of all Belgian industry, with the railways, coal mines, banks, power plants, etc. to be the first to fall prey to communalization. In addition, the miners' general strike is imminent. The strike unrest in America is causing constant disruptions to traffic and business in general, particularly in New York. In addition to the ferment among the working classes of all countries, political events also indicate that what is currently happening in the cultural life of the individual states does not signify a constructive development, but rather a further sanctioning of the conditions and attitudes that led to the world war. The consequences of the Polish-Russian war must be given a significance that deeply affects the current relationship between European states. In the south, the Adriatic problem and the Balkans question still await resolution. Personal sympathies and antipathies are irrelevant when it comes to assessing these events and their impact. In the case of the Russo-Polish war, the main thing is the economic and civilizational consequences that the outcome of this conflict must have for Europe. Likewise, D'Annunzio and his opponents, or the economic disputes in the Balkans, pale into insignificance compared to the great economic prospect of what should happen in the Adriatic and the Balkans to bring about the most fruitful exchange between the Orient and the Occident. Ireland is in a state of open revolt. In the East, the Bolshevik wave is spreading ever further and is already endangering the British possessions there, the mainstay of British world power. All these damages to our civilization cannot be resolved by measures in line with previous practice, but only by creations that form a basis for a healthy economic life.