© 2020 National Commonwealth Group 1

Complementary currencies have a long history reaching back to ancient Egypt. Still today, world-

wide, they are empowering people in a monetarily unequal world. When governments and banks

aren’t being the best stewards of communities’ financial stability and growth, people deserve the

ability to provide for themselves. We highlight a few historical and contemporary examples where

complementary currencies have supplemented national currencies to address local needs.

TheFederalReserve(FED)istaskedwithman-

aging the U.S. monetary system and therefore

onewouldbehardpressedtofindavoicewith

greaterauthority. In itsarticlePrivateMoneyin

ourPast,Present,andFuturepublishedby the

Cleveland Federal Reserve, the FED acknowl-

edgesthevalidityofcomplementarycurrencies

and provides a number of historical examples.

Thearticlestartswiththestatement:

“The government isn’t the only entity al-

lowed to issue money. Private citizens and

businesses can too, and throughout U.S.

history, they often have.”

Complementary CurrenciesA time-tested way to create jobs & increase purchasing power.

Historical Examples

United StatesThisclearlyaffirmsNationalCommonwealthGroup’s

mostfundamentalpremisethatwecitizenscanle-

gallycreateourownmoneyanduse it toaddress

ourownneeds.

ThearticlegoesontodescribeconditionsintheU.S.

from the 1800s to the 2000s, stating, “The list of

thosewhohave issuedprivatemoney in theUnit-

edStatesislong.Besidesstateandnationalbanks

(thatis,banksestablishedbystateorfederalchar-

ter),transportationsupplierssuchascanal,turnpike,

and railroad companies have issued money. Coal

miningand lumbercompanieshave issuedmoney,

© 2020 National Commonwealth Group 2

oftencalledscrip,topayworkers.Merchants,farm-

ers,andcommunitygroupshavecreatedtheirown

money,too.

“Each of these examples of private money

arose to serve purposes that were not well

served by government-provided money. These

purposes include having a currency suited for

making small purchases, having a medium of

exchange in remote locations, and having a

means of exchange during financial panics.”

Inthelastsectiontitled“PrivateMoneyintheInter-

net Age”, the author states, “With advances in in-

formationandcommunicationtechnology—notthe

leastofwhich is theability toembedawafer-thin

computerchipintotheequivalentofacreditcard—

itseemedcertainthatanewformofprivatemoney,

“electronicmoney,”wouldariseasanalternativeto

papermoneyandcoinsineverydaytransactions....

“...Atthispoint,theyaremerelynewwaystomake

payments.However, it isprobablynaïve tobelieve

these means will not develop into new forms of

money.Undoubtedly,too,therewillbenewvoidsin

thefuturethatwillrequirenewformsofmoney.Per-

hapsthesevoidswillbefilledbyinnovationsinmon-

eyprovidedbytheFederalReserve.Buttheprivate

sectormightalsojumpinandfillthem,too.”

Justtwoyearsafterthisarticlewaswritten,thepri-

vate sector introduced Bitcoin and digital money

begantoreallytakeoff.

Throughout the history of complementary curren-

ciesintheU.S.,oneparticularvariantcalledStamp

Scrip was used more than any other. Stamp Scrip

is a type of complementary currency where users

havetopurchasestampstoplaceonthebackofthe

papercurrencythatactsratherlikeataxontheuse

ofthemoney.

ThisFEDarticleStamp Scrip: Money People Paid to

UsepublishedbytheClevelandFederalReserveex-

plains that often the driving force behind the use

ofstampscripswasashortageofnationalcurrency

cash.

Thearticlegoesontostatethat,“Stampscripwas

issued by municipalities, civic organizations, busi-

ness organizations, and individuals. Municipalities

issuedstampscripasasourceofrevenue.TheGreat

Depressioncausedanerosion in taxpayer income,

anincreaseintaxpayerdelinquencyrates,andeven

taxstrikes insomecommunities.Allof these took

theirtollonmunicipalrevenues.

Municipalities could make up the shortfall by

making purchases and paying workers with

stamp scrip. Civic organizations issued scrip to

promote employment and various civic projects.”

Stamp Scrip

© 2020 National Commonwealth Group 3

The article points out that many of the U.S.

stamp scrip programs during the Great De-

pression were modeled on two highly suc-

cessful examples in Europe, one in Germany

and the other in the town of Wörgl, Austria.

Infact,attheonsetoftheGreatDepression,oneof

theleadingU.S.economists,ProfessorIrvingFisher,

learnedofthesuccessoftheEuropeanexperiments

described next and determined that “The correct

applicationofstampscripwouldsolvetheDepres-

sioncrisisintheU.S.inthreeweeks.”

HepresentedhisfindingstoDeanAcheson,thenun-

der-secretaryof theTreasuryunderFDR.Acheson

sought input from Harvard economics professor

Russell Sprague, who told him that this approach

could indeed succeed in bringing America out of

theDepression,butcautionedhimtocheckwiththe

President.

However, fearing decentralization, President Roo-

sevelt denounced the complementary currencies

soon afterwards and they were prohibited. He did

soinprobablyhismostfamousaddress,theonein-

cludingthephrase“Theonlythingweneedtofear

isfearitself.”

Inthatspeechhealsoannouncedthatby“executive

decree” he would henceforth prohibit ‘emergency

currencies’.Thiswasthecodenameforallthecom-

plementarycurrenciesalready inexistence,andall

thoseinpreparationaroundthecountry.Thatprohi-

bitionlastedfordecades.

Imagine if Fisher’s recommendation had held the

day.TheGreatDepressionwouldhaveendedwell

before World War II and a great deal of suffering

wouldhavebeenavoided.Fortunately,complemen-

tary currencies are now legal in just about every

country.Herearesomehistoricalandcurrentexamples.

TheBavariantownofSchwanenkirch-

enisamongthebestexamplesofthe

Wära, a scrip currency introduced

throughout Germany in 1926 as a

free economy experiment. It was in-

troduced by Hans Timm and Helmut

Rödiger, who were followers of Ger-

man theoreticaleconomistSilvioGe-

sell. The Wära is comparable to cur-

rentmodelsoflocalcurrencies.

In Schwanenkirchen, the new owner

ofasmallbankruptcoalminestarted

topayhisworkers in coal insteadof

Reichsmark.HeissuedtheWäraasa

local scrip which was redeemable in

coal.Thebillwasonlyvalidifastamp

forthecurrentmonthwasappliedto

thebackofthenote.Thisdemurrage

chargepreventedhoardingandwork-

erspaid for their foodand local ser-

viceswiththeWära.

Germany

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AccordingtotheFEDarticle,“Onecouldnothave

recognized Schwanenkirchen a few months after

work had been resumed at the mine. The village

was[prosperous],workersandmerchantswerefree

fromdebtsandanewspiritoffreedomandlifeper-

vadedthetown.HadHerrHebeckerusedhis40,000

ReichmarksinsteadofWära,hiseffortswouldhave

inevitablyresultedinfailure;themoneywouldhave

circulatedthroughonlyoneortwohands,eachper-

son retainingasmuchaspossibleandhoarding it

becauseofthehardtimes.”

The use of this scrip was so successful that

by 1931 the so-called Freiwirtschaft (free

economy) movement had spread through

all of Germany. It involved more than 2,000

corporations and a variety of commodities

backed the Wära.

InNovember1931theGermanCentralbankprohib-

itedtheuseoftheWära.

Before issuing its own currency, Wör-

gl suffered frommore than30%unem-

ployment and ongoing bankruptcies.

Within weeks of issuing its currency,

Worglreachedfullemployment.Thekey

was stamp scrip. The speed that mon-

eychangedhands(14timeshigherthan

thenationalcurrency)helpedkeeplocal

businesses afloat and, in time, brought

backthetown’slostjobs.

Austria

TheresidentsofWörglnotonlyre-pavedthestreets

and rebuilt the water system and all of the other

projects on their mayor’s long list, they even built

new houses, a ski jump and a bridge. The experi-

mentwassosuccessful(whileit lasted)thatitbe-

cameknownasthe“MiracleofWörgl.”

Approximately200othertownsthroughoutEurope

wantedtoreplicatewhatWörgldid–untiltheAus-

trian central bank panicked and shut the program

down.Unemploymentsoaredrightbacktoprevious

levels,workoncivicprojectscametoahaltandDe-

pressionconditionscontinued.

The town of Wörgl was the first in Austria that effectively managed to re-

dress the extreme levels of unemployment caused by the Great Depression.

The experiment was such a success that it gained worldwide attention (link

1, link 2 and link 3.)

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Here we find a sustained period of finan-

cial success based on local currencies spread

throughout Western Europe.

Chapter 6 from the book, New Money for a New

World by Bernard Lietaer (co-architect of the

Euro)andStephenBelgindetailsa250-yearperiod

(1040-1290)ofwidespreadabundance throughout

Western Europe that can be directly attributed to

theextensiveuseof localcurrencies. Theauthors

note that, “There was work for all, with favorable

working conditions and abundant time for family,

community,andpersonalpursuits.Thisepochwas

also characterized by significant advancements in

science, technology, education, literature, music,

arts,craftsmanship,andmore.”

Inaddition,thecitizensweredirectlyresponsiblefor

buildingmorethan1,000cathedralsinWesternEu-

rope,alongside350,000churchesandseveralthou-

sandlargeabbeys.

“This medieval building phenomenon is more re-

markable still,” say the authors, “ given that there

was no central authority, church or otherwise, in

charge of initiating or funding the construction of

thesecathedrals.Contrary topopularbelief today,

thesestructureswereneitherbuiltbynorbelonged

tothechurchornobility.Localnobilityandroyalty

customarilydidmakecontributions,butthesemon-

umentswere typicallyownedandfinancedby the

citizensofthemunicipalitieswheretheywerebuilt.”

Thoseefforts initiatedover800yearsagoarestill

providing financial returns today. Tourists flock to

those cathedrals bringing with them money that

they leave in the communities they visit. Almost

nothinginhistoryhasprovidedagreaterreturnon

investment.

Europe in the Central Middle

Ages

Contemporary ExamplesSwitzerland

In 2018, the WIR bank held assets equiv-

alent to more than $5.3 billion USD.

TheWIR(fromtheGermanWirtschaftsringor

‘EconomicCircle’, and ‘wir,’German for ‘we’),

serves small and mid-sized businesses main-

ly in hospitality, construction, manufacturing,

retail and professional services. The WIR of-

fersaclearancemechanisminwhichbusiness

canbuyfromoneanotherwithoutusingSwiss

Francs.TheWIRisoftenusedincombination

withtheSwissFrancindualcurrencytransactions.

The most successful complementary cur-

rency in use today is the WIR in Switzerland.

© 2020 National Commonwealth Group 6

Research by the economist James Stodder (1998;

2005;2007) showed that theWIRcreatesacoun-

tercyclical tendency in the economy, meaning that

duringfinancialcrises,whentheavailabilityoflegal

tender contracts, the trade in the WIR network in-

creases and hence enables member businesses to

avoidaseveredownturninprofitsandannualturn-

over.

InspiredtobringBasquepridebacktotheBayonne

region,agroupofvolunteerslaunchedaeuro-equiv-

alentlocalcurrencyin2013.Theiraimwastoreinvig-

orateenthusiasmfortheirculturalandlinguisticroots

andkeepmoneywithintheFrench-Basqueregionby

supportinglocalbusinesses.

By October 2018, their currency, named the eusko,

reachedtheequivalentof1millioneurosincirculation,

makingitthemostsuccessfulofsuchmonetaryexper-

iments in Europe. Today, 17 municipal governments

and 820 local shops, businesses and associations in

the French Basque Country accept the eusko. Bavaria Germany

TheChiemgauerisoneofthelargestofGermany’s

approximately40regionalcurrencies.Withanother

36inthepipleine,theyarepartoftheRegiogeld(re-

gionalmoney)networkcreatedtoboostlocalecon-

omies, retainmoney incommunities, support local

non-profits,andpromote“buylocal”campaigns.

Named after the region around the Chiemsee

lake in Bavaria, the Chiemgauer started in 2003.

Chiemgauer transactions are handled through ac-

countsatlocalbranchesofseveralregionalcooper-

ativebanks.

Today more than 600 businesses participate and

the value in circulation is approaching $900,000.

Basque Region France

Bristol England

Bristol was the first city in the UK in

which taxes and business fees could

be paid in a local currency.

The Bristol Pound was launched in

2012 to encourage people to spend

their money with local, independent

businesses.

BristolCityCouncil,andotherorgani-

sations in thecity,offer theiremploy-

ees the option to take part of their

salaries in Bristol Pounds. The former

MayorofBristol,GeorgeFerguson,ac-

cepted his entire salary (£51,000) in

BristolPounds.Thelocalgreenenergy

provideralsoacceptsthecurrency.

WIR started in 1934 and

now has over 60,000

users (17% of Swiss business-

es). Annual WIR turnover is

1.5 billion euros.

© 2020 National Commonwealth Group 7

The city of Curitiba’s story illustrates how the in-

troductionofacomplementarycurrencyhelpedan

impoverishedcityleverageitsuntappedhumanre-

sourcestocreativelysolveahostofchallengesand

support recycling and environmental cleanup, job

creationandcityrestoration.

Inpurelyeconomicterms,within25yearsofthepro-

gram’s inception,Curitiba enjoyed a GDP increase

of 75% more than its parent state of Paraná, and

48% more than the GDP of Brazil as a whole.

Curitiba Brazil

Additional ReadingComplementaryCurrencyMovement

LocalCurrenciesPastandPresent

WhatisDepressionScrip?

HistoryofMoney,1930–1933

Michael Sauvante

805 757 1085

msauvante@commonwealthgroup.netscf.green

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