February 27, 2009

Notgeld - "emergency currency"

You might want to take a look at these pictures of "private money" used in Germany in the 30's. It's interesting both historically and artistically... (Thanks to Shrine of the Holy Whapping.)

Notgeld - Pre-Inflationary German Currency - a set on Flickr:

My wife's family lived in Germany until 1936, when they were lucky enough to leave. My wife's grandfather collected thousands of bills produced by the different towns and companies to make front to deflation first and inflation later and provide certain stability to workers and residents."Notgeld" (emergency currency) was provided by cities, boroughs, or even private companies while there was a shortage of official coins and bills....

...Some companies for example couldn't pay their workers (cashless pay wasn't very popular back then...) because the Reichsbank just couldn't provide enough bills. So they started to print their own money - they even asked the Reichsbank beforehand. As long as the Notgeld was accepted, no real harm was done and it just was a certificate of debt. Often it was even a more stable currency than the "real" money, as sometimes the denomination was a certain amount of gold, corn, meat etc.

And they made it very pretty on purpose: many people would start to collect the bills, and the debt would never have to be paid. Also it was printed on all kinds of material: leather, fabric, porcelain, silk, tin foil...

I will try to slowly scan an extensive collection of these bills in the coming months (I have several thousand of them!).

It may also seem timely, at this time of massive deficits and stimulus spending with no end in sight, to look at some of the possible effects of our actions from a historical perspective. Scrip can be marvelous stuff, and was also used in some cities in the US during the Great Depression. Importantly, it is not legal tender, so the only people who deal in it are those that want to. It is very stable and debt free. To keep it flowing, sometimes it is set up to lose 2% of its value every month, which keeps people from hoarding it....
Posted by John Weidner at February 27, 2009 7:54 AM
Weblog by John Weidner