Two Swiss visitors went round Wörgl in 1933 asking questions, and because both wrote down what they were told, the experiment has something few experiments of its size have: the testimony of the people inside it, taken at the time. The entry quotes a little of it. This is the rest.

Muralt, April 1933

Alex von Muralt was a journalist of the religious-socialist press in Bern who was living in Vienna, and he came to Wörgl in April 1933, nine months into the experiment and three months after the district office had forbidden it. His account appeared in German that summer and in English in the Annals of Collective Economy in 1934, in G. Spiller’s translation, which is the one quoted here.

He went from shop to shop. Every business in the town took the notes at face value, he found, and the notes went back to the treasury as taxes and dues. The shopkeepers “are, of course, not enamoured at the idea of losing 1 per cent at the end of the month if they cannot pass on the relief money, or 2 per cent if they desire to convert it into banknotes. They prefer ordinary money: but most of them favour the experiment because they believe that it slightly raises the turnover or at least stems the anticipated decrease in business.” A grocer complained that the wholesaler who supplied him would take only half of any bill in certificates. The wholesaler, a Kommerzialrat, confirmed it, and added that at the end of the month he deducted the 1 per cent too, “as the wholesale business cannot afford such losses.” He supported the scheme all the same: it had saved the town from shipwreck, and if it were extended to the whole of Tyrol the faster circulation might really tell. A brush-maker who sat on the provincial chamber of commerce said the same. The price of milk in a hamlet south of the town was two groschen lower than elsewhere, which Muralt put down to local conditions; otherwise he found the same prices for the main foodstuffs in Wörgl, Innsbruck and Kitzbühel. “There has been therefore no inflation.”

The treasury’s side he could count. The stamps brought in about 50 schillings a month. In nine months 34,500 schillings of certificates had been handed in at the Raiffeisenkasse for conversion into banknotes, which at 2 per cent had earned the town 690 schillings. The 6 per cent that the bank paid on the 12,000 schillings deposited as cover was worth 720 a year. Together, “an increased annual revenue of over 2,000 schillings, an amount which, in view of the modest financial position of the parish, where the burgomaster has an annual salary of 1,800 schillings, is of some consequence.”

The large claim, that the arrears of tax had come in, he took to Innsbruck. The mayor said that 79,000 schillings of arrears had been paid, 90 per cent of it in certificates, in the first six months; the same figure was in Hans Burgstaller’s pamphlet. “For this striking statement,” Muralt wrote, “I was unable to obtain full confirmation at the offices of the Tyrolese Government.” A senior official there, whom he calls Hofrat Dr B., worked through the departmental files and found the town’s tax receipts up sharply between 1931 and 1932: the amusement, advertising and dog taxes from 5,300 to 5,900 schillings; the supplements on the land tax from 16,500 to 28,570; those on the house tax from 14,170 to 23,560. “These are increases which can only be accounted for by the payment of arrears; but they are not as substantial as those cited by the burgomaster.” In the same year the town’s share of the federal taxes fell from 57,000 to 43,800 schillings and its share of the provincial taxes from 31,900 to 17,100, because the rest of Austria was paying less. A rise in the parish’s own taxes “has undoubtedly occurred; but its real extent could only be settled on the basis of an exhaustive examination of the parish accounts by an impartial accountant.”

Muralt also asked a question nobody in Wörgl had reason to ask aloud. People who had once paid their taxes last were now paying them first, because a shopkeeper holding a pile of notes at the end of the month could clear them without loss by paying the town. Were they paying their suppliers in Innsbruck and Vienna later instead? “I have no data bearing on this problem.” What he could learn at the Raiffeisenkasse was that after a passing rise in August 1932 the savings deposits had stayed about level, “which is not a bad omen seeing the general downward trend in the economic situation,” and that the bank took certificates on deposit at face value from anyone who agreed to be repaid in certificates.

Pfister, 1933

Fritz Pfister, a former member of the city and cantonal councils of Bern, came with a schoolteacher, went from house to house and shop to shop, and put twelve questions to a dozen people whose trades he recorded but whose names, with one exception, he did not: the bank director, the president of the trade association, the police inspector, the priest, the headmaster, a tinsmith, a tailor, the owner of the department store, the chemist, the beer-depot keeper, the doctor and the cinema owner. He published the answers in the Swiss Freiwirtschaft paper Geld und Arbeit in 1933, and Fritz Schwarz reprinted them in 1951. The translations are mine.

Was there any other way out? The bank director: the commune had no other means of easing the crisis. The trade association’s president: the commune had pledged everything it had to pledge, “if we did not have this money there would be no business at all any more.” The police inspector: the only thing that could really help Wörgl would be a government office being moved there; otherwise the town had no future. The chemist: no, or we would not have hit on this remedy. The beer-depot keeper: no; the commune had become unemployed overnight, so to speak. The cinema owner: not good.

What was expected of it? The bank director: it was possible the council had expected more, but the fear raised by the constantly repeated prohibitions had prevented a greater success. The grocer: that the shortage of money would be overcome, “and that has succeeded.”

How safe did the money seem? The president: most people took it without more ado; he considered it entirely safe and would be sorry to see it go. The police inspector: at first he had been sceptical. Then, at a burglary, the thief had taken only the Austrian money and thrown the Wörgl money away, “so it must have been a stranger; a local would have taken it.” The priest: nobody doubted it, because the cover was known to be complete. The cobbler: because of it many a man had had money again and had had something made that he could not have had on the dole, “and there is nothing to lose on the money itself, because the commune redeems it.” The chemist: the shopkeepers took it from competition as much as anything, once a few of them had hung out placards, “emergency money accepted here.” The doctor: it was taken well on the whole, “only businessmen who take in a lot did not like taking it.”

Did you use it to buy goods, or change it for legal money? The chemist took in 100 to 200 schillings a month in certificates and found they did not disturb his business in the least. A merchant had felt the revival of trade very clearly and used more than half of his notes to buy goods or meet other outgoings. The manager of a closed factory said that if it reopened they would not hesitate to buy certificates from the commune to pay the wages. The tailor: the relief works meant people needed clothes, they came to him and paid in emergency money, “and so I could pay light, water and taxes again.” The doctor: when he had emergency money he gave it to his wife, so that she could take it to the baker or the grocer.

How did the population take it? The tinsmith: well; what was lacking was a little theoretical understanding. The cinema owner: gladly; at the end of the relief works in January a tenth of his takings had been in certificates, now it was a quarter, from people who would otherwise not have come. A merchant: with ordinary money it had often happened that people who had the money to pay their debts kept the merchant waiting, simply to draw interest from the savings bank.

Should it be extended beyond the commune? Everyone said yes. The headmaster thought the accounting might give difficulties. The chemist: the success in a small circle had already been much greater than he had imagined; he had been very sceptical before and was surprised afterwards at how, despite the bad times, the taxes came in.

Do you regard the results as a success? All twelve said yes. The department store’s owner, because the sum in circulation was really quite small and the commune had only about 4,000 inhabitants. The doctor: the whole action was only to be welcomed, “I do not understand why the government’s resistance is so great.”

Have you heard complaints? Ten said no. The bank director, the chemist and the beer-depot keeper: the stamps should stick better.

Were goods bought in the commune that would otherwise have been bought outside? The bank director: certainly. The president: that could not be established. The department store’s owner: in any case the money could only be spent in the commune.

Can you suggest improvements? The beer-depot keeper: the paper is a bit poor. The chemist would raise the charge on redemption from 2 per cent to 5. Everyone else was content.

Does the money with stamps make business harder? No one thought so. The tailor and the tinsmith: “it is money, after all, like any other.” The cinema owner: not in the least, “only an increase in trade was to be observed.”

What do you think of the prohibition? The bank director: instead of forbidding it, better to carry on over a larger area. The president of the trade association, Hans Hutterer: “I am quite decidedly against the prohibition. Rather be locked up than stop the action.” The priest: against it; with the emergency money the factories could be revived. The tinsmith: the ban would be a disadvantage for us; nobody has been harmed so far; “until now there was always only talk; our mayor for once has acted and not just talked.” The tailor: the thing is so simple that a small schoolboy can understand it. The doctor: the ban would be idiotic, because nobody is harmed. The cinema owner: the mayor is a clever fellow, he does not let himself be caught; at the start of the year he had had the choice of three cinemas, in Kundl, in Kirchbichl and here, had been warned that there was emergency money here, had thought that meant there was something to be made, and had chosen Wörgl for exactly that reason.

Pfister added that in all Wörgl he had found one man against the scheme, about sixty, grey and solid with imposing horn-rimmed spectacles, who had talked himself into a great passion without, so far as Pfister could tell, saying anything to the point, and that when he asked the policeman afterwards who the man was, the policeman tapped his forehead twice with his forefinger and shook his head, smiling.

Sources

• Alex von Muralt, “The Wörgl Experiment with Depreciating Money”, Annals of Collective Economy 10, 1934, pp. 48 to 57, translated by G. Spiller; from the German “Der Wörgler Versuch mit Schwundgeld”, Ständisches Leben 6, 1933. The shops, the wholesaler, the prices, the treasury’s arithmetic, the arrears and the Innsbruck official’s figures. reinventingmoney.com
• Fritz Pfister, “Die Geldreform von Wörgl: Wie sie das Volk beurteilt,” Geld und Arbeit, 1933, p. 133, as reprinted in Fritz Schwarz, Das Experiment von Wörgl, Bern 1951. The twelve questions and every answer. userpage.fu-berlin.de