Stamp Scrip: or, The Woergl Miracle – From the English Paper, The Week, May 17, 1933

Unprecedented and widely significant is a case–just coming before the Austrian courts–arising out of the alarm of the Austrian National Bank over the financial revolution which has brought prosperity to the little Austrian town of Woergl, and which the Bank fears is going to compete with its own monopoly powers. Woergl had been moving rapidly to bankruptcy since the beginning of the crisis. Its factories closed down one after another and unemployment rose daily. Nobody did any business and scarcely anybody paid any taxes. Then Unterguggenberger, Burgomaster of Woergl, proposed the following plan, which was adopted. The town authorities issued money to the value of thirty thousand Austrian schilling notes, which were called tickets for services rendered. The special feature of these notes was the fact that they decreased in value by one percent every month. Anyone holding one of these notes at the end of the month had to buy from the local authorities a stamp of sufficient value to bring the note up to face value. This he affixed to the back of the note, and the proceeds of the stamp went to the poor relief fund. The result was that the notes circulated with unheard of rapidity. They were first used for the payment of wages for the building of streets, drainage and other public works by men who would otherwise have been unemployed. on the first day when the new notes were used eighteen hundred schillings worth were paid out. The recipients immediately hurried with them to the shops, and the shopkeepers and merchants to use them to for the payment of tax to the municipality. The municipality immediately used them to pay the bills. Within twenty-four hours of being issued the greater part of this money had already been passed on its way again. During the first month, the money had made the complete circuit no less than twenty times. There was no possibility of anyone avoiding the one percent stamp tax on any note he happened to hold at the end of the month, since without a stamp to bring it up to face value, the note lost its entire value. Within the first four months after the issue of the new money, the town had accomplished public works to the value of one hundred thousand schillings. A large proportion of tax arrears had already been paid off and there were even cases of people paying taxes in advance. Receipts of back taxes were eight times greater than in the past before the introduction of new money. Unemployment is now reduced enormously, the shopkeepers are prosperous. the fame of the Woergl miracle spread. Irving Fisher, American economist, sent a commission of enquiry to Woergl, and the system has been introduced into a score of American townships. the Austrian National Bank however was highly disturbed by the whole proceeding. now Unterguggenberger is being brought before the courts to explain himself and his plan.

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Tags: 1933, Gold Standard Hoax, Irving Fisher, It Is Easy To Fix The System, Silvio Gesell, Stamp Scrip, The Week, Unterguggenberger, Woergl

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