That's why Wörgl got shut down, and that is why the Bristol Pound people would be shat upon from a great height if they tried the same.
.....but there's more than one way to skin a cat ;-) "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Wrong. Wörgl deposited an amount of Austrian Schillings in a local branch of Raiffeisen bank, and issued paper certificates redeemable at the local bank at 98% of face value.
The money circulated so fast that only about 1/3 of the originally intended certificated had to be issued. So the Wörgl money was backed three-fold by Austrian Central Bank money. tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
32,000 schillings were printed (in denominations of 5 and 10 sch.), but only 12,000 schillings were issued by the parish by paying its workers. The local currency was redeemable, on demand, for official currency, but there was a 2% fee on such redemptions. For each schilling of local currency issued, one schilling of official currency was deposited (at interest) in a bank account to cover demands for redemption. The depreciation (demurrage) rate was 1% per month. This was called the "Relief tax." In order for a note to maintain its full face value, it was necessary to affix a stamp at the end of each month. these stamps could be purchased at the parish office. The notes expired at the end of the year, but could be exchange, free of charge, for new ones, so long as all the necessary stamps had been affixed.
The local currency was redeemable, on demand, for official currency, but there was a 2% fee on such redemptions.
For each schilling of local currency issued, one schilling of official currency was deposited (at interest) in a bank account to cover demands for redemption.
The depreciation (demurrage) rate was 1% per month. This was called the "Relief tax."
In order for a note to maintain its full face value, it was necessary to affix a stamp at the end of each month. these stamps could be purchased at the parish office.
The notes expired at the end of the year, but could be exchange, free of charge, for new ones, so long as all the necessary stamps had been affixed.
I stand corrected, having always thought that the Wörgl currency had not been backed by Schilling reserves.
But according to Greco it's by no means clear how much of the success was due to the Gesellian demurrage and how much was due to the fiscal multiplier of the public spending by the Wörgl parish. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
