Laboratory readings: Wörgl's Stamp Scrip – The Threat of a Good Example?    
 Wörgl's Stamp Scrip – The Threat of a Good Example?17 comments
26 Jun 2002 @ 01:50, by Martin Oliver

On July 5th 1932, in the middle of the Great Depression, the Austrian town of Wörgl made economic history by introducing a remarkable complimentary currency. Wörgl was in trouble, and was prepared to try anything. Of its population of 4,500, a total of 1,500 people were without a job, and 200 families were penniless.

The mayor, Michael Unterguggenberger, had a long list of projects he wanted to accomplish, but there was hardly any money with which to carry them out. These included repaving the roads, streetlighting, extending water distribution across the whole town, and planting trees along the streets.

Rather than spending the 40,000 Austrian schillings in the town’s coffers to start these projects off, he deposited them in a local savings bank as a guarantee to back the issue of a type of complimentary currency known as 'stamp scrip'. This requires a monthly stamp to be stuck on all the circulating notes for them to remain valid, and in Wörgl, the stamp amounted 1% of the each note’s value. The money raised was used to run a soup kitchen that fed 220 families.

Because nobody wanted to pay what was effectively a hoarding fee, everyone receiving the notes would spend them as fast as possible. The 40,000 schilling deposit allowed anyone to exchange scrip for 98 per cent of its value in schillings. This offer was rarely taken up though.

Of all the business in town, only the railway station and the post office refused to accept the local money. When people ran out of spending ideas, they would pay their taxes early using scrip, resulting in a huge increase in town revenues. Over the 13-month period the project ran, the council not only carried out all the intended works projects, but also built new houses, a reservoir, a ski jump, and a bridge. The people also used scrip to replant forests, in anticipation of the future cashflow they would receive from the trees.

The key to its success was the fast circulation of scrip within the local economy, 14 times higher than the schilling. This in turn increased trade, creating extra employment. At the time of the project, Wörgl was the only Austrian town to achieve full employment.

Six neighbouring villages copied the system successfully. The French Prime Minister, Eduoard Dalladier, made a special visit to see the 'miracle of Wörgl'. In January 1933, the project was replicated in the neighbouring city of Kirchbuhl, and in June 1933, Unterguggenburger addressed a meeting with representatives from 170 different towns and villages. Two hundred Austrian townships were interested in adopting the idea.

At this point, the central bank panicked, and decided to assert its monopoly rights by banning complimentary currencies. The people unsuccessfully sued the bank, and later lost in the Austrian Supreme Court. It then became a criminal offence to issue 'emergency currency'.

Unterguggenberger was opposed to both communism and fascism, championing instead what he referred to as 'economic freedom'. Therefore, it was deeply ironic that the Wörgl experiment was first branded 'craziness' by the monetary authorities, then a Communist idea, and some years later as a fascist one.

The town went back to 30% unemployment. In 1934, social unrest exploded across Austria. In 1938, when Hitler annexed Austria, he was welcomed by many people as their economic and political saviour.

The 1920's had already seen a scrip currency called the 'wara' in the German town of Schwanenkirchen. This saved the town's economy and kept a coal mine operating. It started circulating more widely, and became part of a movement called 'Freiwirtschaft' (Free Economy), based on the ideas of the economist Silvio Gesell.

Central to Gesell's ideas was the use of a hoarding fee of the kind used in Wörgl (technically known as 'demurrage'). The soundness of such an idea was affirmed by John Maynard Keynes in his 1936 work 'General Theory of Employment, Interest and Money'.

Perhaps the most groundbreaking feature of demurrage is that it is intrinsically anti-inflationary. Whereas conventional currencies are progressively devalued by interest, anti-inflationary money steadily increases in value. As each monthly stamp is added, the value of the note effectively increases by the stamp amount. This is technically equivalent to a negative interest rate.

The present short-term focus of investments, and the consequent lack of long-term vision are exacerbated by interest-driven currency devaluation that, from a profit perspective, reduces the appeal of longer-timescale projects. The use of a demurrage currency gives an edge to those working for sustainability, because a rate of return is achieved SIMPLY BY LENDING OUT MONEY. When money is repaid (remember these are non-interest currencies), it will have increased in value owing to the money saved by having avoided paying the monthly demurrage fees. This has the potential to enable investment in highly benefical but economically marginal activities such as earth repair.

A recommended book that covers scrip currencies and more fully explains this 'negative interest' principle is Bernard Lietaer's 'The Future of Money' (see Resources). The following three sites also cover demurrage:


In case the ending of the Wörgl story was disempowering, I'd like to add that the number of complimentary currencies around the world is undergoing an exponential growth. As of 2000, there were more than 2,500 in operation, and I expect that the number is still fast-growing. Local stamp scrip currencies can only work in a country firmly committed to decentralising power.

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26 Jun 2002 @ 06:16 by maxtobin : Thank you for this sharing
Very interesting, I will study this further, welcome to the network and enjoy the spaces!!  

26 Jun 2002 @ 14:31 by scottj : MV = PT?
Some really great stuff here and the links are worth serious study which I hope to find time for soon.

Negative interest rates has got to be the way to go. Interest payments on capital investment sets up something akin to an economic vacuum cleaner which hoovers up value added for the benefit of the owner of the investment capital who need have no input whatsoever into the value adding process. It is the nature of competition in unfree markets to produce ever greater inequality regardless of any "merit" with wealth naturally tending to accumulate where it already exists. With the current interest rate system this creates the mountain of usury that is responsible for nearly all of our problems, denying millions of people the basic means of existence while at the same time furthering the economic and political interests of a handful of disturbed sociopaths.

It seems from what I have read here and elsewhere that a great many people get bogged down in the search for the holy grail of a non money based economy. I can see that the ideal is definitely to move beyond an exchange based system but the fact is we are a very very long way from being able to do that on a global basis. What these experiments seem to be suggesting is that it is perfectly possible to design a money based economy which eliminate the number one problem normally attributed to it, namely accumulation / inequality! This is very important as it points to at least an interim way of dealing with the problem of exchange in a civilised society.

What I keep picking up on at the moment is that we are really living in a period of very rapid breakdown of the current never-enough materialist system and it would not surprise me in the slightest if there was a complete economic meltdown sometime soon (say inside 20 years). If that should occur, utopian dreams of a money free world may not be what we need.

Perhaps the kind of money systems outlined here are?  

3 Jul 2002 @ 04:58 by chaiyah : Alternative Currencies
"Ithaca Money," from Ithaca, New York, is the largest "funny money" system in the US at present. It requires a lot of cooperation; and since Ithaca is a University town [Cornell is there], they have made it work. I have been trying to interest my little town in the Alleghenies in something like this; but the people are very set in their ways and individualistic--mostly farmers.  

17 Jul 2002 @ 00:09 by alchemist : I appreciate the good feedback
The Ithaca 'Hour' is a good example of a well-functioning complimentary currency, and the amount of time Paul Glover has put into it is probably an important contributing factor.

I live about 30km from an Australian farming town called Casino that reminds me of chaiyah's home town. When I was running the local LETS system based here in Lismore, Casino, which was within the operating area of LETS, always had zero members. I think that all you can do in these situations is to nudge people's attitudes forwards bit by bit. It takes a long time.  

25 Aug 2003 @ 12:07 by David B @ : Evil Exchange Based System?
What other way exists to meet your needs? Please, comment on this. Describe a system by which you meet your needs and wants that eliminates exchange? By this I mean a system under which you acquire food, water, shelter and procreate without exchange. I know there is one, it's called subsitence farming or hunting/gathering.

Money is simply a convenient way to exchange. It is a medium of exchange, it is not a problem. Name a problem with money, and I'll guarantee you that it goes back to the monopolistic control of governments/states over money. They appropriate this power to themselves via their first monopoly, right of force.

Go look at what the world was like before money existed. Advanced economies were not possible.

Negative interest rates are an unnaturally occuring artifice, they will only confuse investment. What you see in the example is an almost entirely unhampered market economy! That's why it looks so good. The only "tampering" is the "negative interest". But our system already has an equivalent better investment motivation, it's called interest. It's better because it's rate is determined by the market (except for the Federal Reserve and the World Bank) and the rates adjust to ensure that investment meets demand.


Under negative interest if I hold my money, I pay a fee. If someone else is holding it, they pay the fee. I lose less by lending! OR I MAKE THE AMOUNT OF MONEY I WOULD HAVE PAID IN NEGATIVE INTEREST FEES! The last two statements are equivalent.

Meanwhile, with positive interest, if I earn interest when I lend money, I make money by investing it. I give someone the money and they pay me a fee! If I held the money and didn't invest it (hoarding) I would lose money RELATIVE TO THE MONEY I COULD MAKE BY INVESTING IT!

Please notice that the two situations are identical, EXCEPT THAT IN THE LATTER MARKET FORCES DICTATE THE RATE OF INTEREST. The rate of interest adjusts to the rate necessary to balance supply and demand of money in the capital investment market! In the negative interest example, an arbitrary burden has been placed on money, people have an additional factor that must be computed in their transactions. They move money faster, because it's dwindling away, not because they used it to acquire goods they needed. Making people lend money doesn't help them, whoever is stuck holding the constantly depreciating bills is screwed. So someone has to eat that loss. That loss comes out of hte entreprenuer's pocket. It would thus have the necessary effect of reducing the number of person's willing to borrow this depreciating currency.

Though the system did well, it would have done better without the negative interest. The real positive effects were definitely caused by the unhampered nature of that market economy, not by the negative interest.

What we need is to go back to the gold standard and get rid of government money regulations, like the Federal Reserve in the US. Let banks compete to provide reserve notes (currency), make every piece of paper money be backed by a guarantee of gold. This would eliminate artificial inflation, and the boom bust business cycle.  

6 Dec 2004 @ 20:08 by Joe Kelley @ : Free Market
Please look here:

Above is another example of what can happen in a society that manages to avoid forced exchange mediums.

To declare that negative interest or interest earning mediums of exchange do not or cannot work may certainly be true for some yet is obviously not true for others.
Control of the medium exchange as a forced, unnatural monopoly does not appear to be the case in the examples sited here:

Those examples suggest a free market utilizing exchange mediums in the absence of unnatural forces or dictatorial controls. Some of those examples ended at the point of a bayonet.

The exchange medium utilized by greedy, violent, and deceitful people is going to lend itself well to these personality traits. Equitable commerce is something else entirely and can take on many forms, perhaps as many different forms as there are people willing, on their own accord, to imagine, construct, incorporate, and utilize new and better forms of exchange. This is the power locked in the free market that requires a lessening of the involuntary controls currently in force in order to be released. Competition for the best form of exchange will lead the way toward the best form of exchange. Forced compliance toward any specific exchange medium impedes the free market and people’s natural tendency to improve.

If negative interest money is a useful tool for improving commerce as the examples suggest then it can be useful now as long as people are at liberty.  

14 Dec 2004 @ 23:47 by Tyler Jordan @ : alternative currencies
This is certainly the best system I've seen thus far for an alternative currency system. The flaw, as usual, isn't so much the system itself, it's the fact that the PTB will fight it tooth and nail and they have the brainwashed masses behind them. Ultimately, it is an information war, and they have all the major outlets. So I question not this system, but how things can ever change when those in power, the PTB, have no incentive to change things? It is my considered opinion that if we really want to change things, we must apply our creativity and find an incentive for the PTB. If they see a juicy enough carrot, everything will change. They are called the PTB simply because they have the power - control over the global mass of labor via their information outlets. If we can find a good carrot they will use their power to grab it and the rest will follow.

Tyler Jordan, webmaster and author  

22 Jul 2006 @ 01:33 by penty @ : negative cash over time.
We already have a system like this just with different names.

Negative interest for holding money is called inflation, every month your money is worth a little less becasue of it, just like the system above.  

4 Oct 2008 @ 18:40 by Joshua Zeidner @ : article on local currencies
I wrote a fairly popular article on local currencies:


4 Oct 2008 @ 19:30 by hp @ : Beyond Woergel
Have a look at Zeitgeist - Addendum! See you at  

4 Oct 2008 @ 22:40 by George @ : The liberty dollar was started some time
The liberty dollar was started some time ago in the USA as a metal based currency.

It is widely accepted by businesses in some areas of the country.


2 Dec 2008 @ 17:04 by Warren Raftshol @ : Michigan scrip currency
Raftshol for Governor 2010. Visit [link]  

29 Apr 2010 @ 05:51 by Ultrawoman @ : Resource Based Economy  

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