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What the other side of the coin tells us about local economies


When metal for coins became scarce during the first world war, the Reichsbank let German towns print their own cash. While the central bank might have hoped only to alleviate a cash crunch, it ended up unleashing a wave of creativity. The richly decorated and colourful notes, known as Notgeld or “emergency money”, are currently on display in the British Museum’s money gallery, a spectacular record of a turbulent time.

After the war ended, the notes continued in a legal grey area, mostly as a collectors’ item. They were a money spinner for local governments, who decorated them with adverts for the area. Some designs looked back to folklore: one Expressionist note from Auerbach in Saxony depicts a local tale of the mayor appeasing bailiffs by cooking meatballs.

The Notgeld gives a different perspective on the Weimar Republic, according to Johannes Hartmann, the curator of the exhibition. While most people think of Berlin or Munich and associate the period with cabaret, jazz and liberalism, he says, the choice of designs gives an insight into the more conservative, and sometimes reactionary, attitudes of small towns. Many of the Notgeld feature nationalist heroes like Paul von Hindenburg, and one series calls for the return of Germany’s colonies. Others expose dark and violent sentiments: one from Tostedt shows lynched Jewish “profiteers”.

Physical notes and coins, like these, can provide historians with an insight into the kind of image the government wanted to project. During the American Revolution, the US state of Maryland printed notes showing King George III trampling on the Magna Carta.

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This sort of image projection was on display in the UK with the launch of a 50p coin to commemorate Brexit. On its reverse is the legend, “peace, prosperity and friendship to all nations” and the date of Britain’s formal exit from the EU. The oblique reference (the next line of the original Thomas Jefferson quote is “entangling alliances with none”) looks like an attempt to paper over divisions with acceptable sentiments supporting international co-operation.

Most cash is a record only of official history. But alternative money like Notgeld, defaced “suffragette pennies”, and local currencies such as the Bristol pound — reported last week to be on the verge of collapse — tell us more about the subcultures, countercultures and local identities often hidden from view.

While it may no longer have the funds to keep going, the Bristol pound was launched in 2009 to stimulate the city’s economy by trying to keep funds within the area. The theory went that currency that could only be spent locally would stop “leaking out” and help expand the overall economy.

There is some precedent for the model’s success. In 1932, the mayor of the struggling town of Wörgl, in Austria, launched a currency. The money came with an early version of negative interest rates: it would lose value every month unless the bearer bought a stamp. The resulting economic growth from the increase in money supply — the town built a ski jump, improved street lighting and drainage — became known as The Miracle of Wörgl.

The Bristol pound does not appear to have led to similar results. Partly that reflects scale — about £5m worth of transactions have taken place in the five years since it was launched, while Bristol had an annual “gross-value added” (a measure of the size of its economy) of about £14.2bn in 2017. It also reflects the voluntary nature of the project. In Wörgl, the printed money was used to pay wages and workers accepted it because the town let them use it to pay their tax arrears. In Bristol there was little incentive beyond civic feeling.

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Still, as the Notgeld shows, money can be more than just a tool of economics: it is a reflection of cultures and values too. The areas that launched local currencies are famous for containing, as well as spots of extreme deprivation, the sort of socially conscious voluntarist professionals who help boost an economy. Perhaps this makes the most interesting local currency currently being used in the UK the HullCoin, a digital currency launched last year in the port city in northern England that is undergoing something of a comeback. Money can tell us about more than just economics.

gavin.jackson@ft.com



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