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The Wörgler Freigeld 1932/33

Michael Unterguggenberger


‘Reduce hardship, give work and bread’ is printed on the emergency assistance Wörgl banknote with which the municipality financed an infrastructure building programme. The aim of this aid programme was to create jobs and guarantee the survival of the unemployed and their families. The global economic crisis in 1929 hit Wörgl and the region hard, and unemployment kept growing. State aid was guaranteed for just a few weeks before the municipalities had to step in and become responsible for the survival of families.

An empty coffer at the municipality, unfinished works and 400 unemployed, 200 of which were receiving benefits, in a municipality of 4,200 souls – in this hopeless situation the Mayor of Wörgl, Michael Unterguggenberger suggested an experiment to the Municipality Council: the municipality would implement a building programme for roads and infrastructure, employ people, and create free money (Freigeld) to pay for it all in accordance with the principles of the free economy (Freiwirtschaft) posited by Silvio Gesell. The demurrage is printed with an aid decree at 1% of the nominal value to drive the circulation of the currency. To meet the printing monopoly the national bank had over the regular currency, the municipality deposited the equivalent of the printed aid currency in shillings at the local bank as collateral. The aid money was thus printed as banknotes with the value of 1, 5, and 10 shillings and they acquired their full value every month when stamped.

The Freiwirtschaftsgruppe Wörgl prepared the experiment and the municipal council unanimously approved the decree in 1932. In July 1932, the first building programmes starts. Municipal employees and workers received the free currency in lieu of payment. They purchased goods in the Wörgl shops; the shops then paid their debts to the municipality, taxes, or local suppliers with the Freigeld. The aid currency becomes a demurrage – nobody wanted to possess the notes by the end of the month and pay the stamp duty, and so the money quickly became available for other building measures. At first, roads were repaired, sewage systems and road lighting created, followed by infrastructures for tourism such as hiking paths, a ravine fitted with themed trails, and a ski jump as well as a building and reinforced concrete bridge in the spring of 1933. The aid currency could be exchanged into shillings for circulation outside Wörgl at any time for a 2% tax. To guarantee foreign trade, the local bank gave loans at a 6% interest rate to business people who purchased goods outside of town. All income from the initiative – stamp duty, exchange duty, and interest rates – was used by the municipality to provide for the poor, i.e. running the soup kitchen. The Wörgl demurrage circulated between 9 to 10 times more quickly than the national bank currency. The locally valid payment tool remained and created value and cemented purchasing power. While the rest of Austria saw an increase of 19% in unemployment during the Freigeld period, in Wörgl it receded by 16%

The success lead to international headlines. In May 1933, a good 200 Austrian municipalities wanted to adopt the example of Wörgl and demand Parliament to create the necessary legal framework. However, at the point in time the National Assembly had fallen apart, and Austria was on its way to civil war and dictatorship. The national bank banned the initiative in September 1933 and turned off the gushing money tap in Wörgl. The success of the experiment led to a proper Freigeld tourism. Economists and journalists were convinced, just like France’s former Prime Minister, Edouard Daladier, of the efficacy of the currency which, thanks to the planned demurrage, developed another dynamic compared to traditional money. Rather than increasing interest rates or rewarding money hoarding, the Freigeld and its stamp duty stimulated currency circulation. It was better suited as an exchange tool for the economy as it had an inbuilt depreciation system just like goods and services had.

… in fact that is the cat in the woodshed. The state need not borrow as was shown by the mayor of Wörgl’ wrote Ezra Pound in his Pisan Cantos, published under dramatic circumstances in 1945. The American poet wanted to follow an ancient role model and recount the history of mankind in 100 cantos and, in doing so, created world literature. He judged usury and saw a way out of capitalism and communism in the Wörgl money experiment. Pound visited Wörgl to get an idea of the success of the interestfree money. The middleperson at hand was Rosa Unterguggenberger, the articulate wife of the mayor, who had taught herself Italian and French; right from the very start of the experiment she had contributed heavily to the preparation and implementation thereof, as she was also the owner of a ready-made clothing shop.

Carrying her youngest son Silvio with her, Rosa stood with Ezra Pound in front of her shop, which she managed right up to her death in 1961. However, the shop wasn’t what we still remember of her today – rather the memory of her husband Michael, including the mayorly correspondence he had received from all corners of the world, which Rosa kept at home and protected from being destroyed by the Nazis. Her daughter Lia picked up where her mother left off. She followed in the steps of her father, who passed away in 1936 at just 52, and looked for his travel companion. While Silvio wrote his dissertation in 1951 on the Wörgl Freigeld, in the same year Lia was in charge of organising a Freiwirtschaft congress in Wörgl and collected all that remained from the currency experiment; she also got in touch with Ezra Pound’s daughter, Mary de Rachewiltz at the Brunnenburg in Merano. Lia, for the love of her family, put her own career as a sculptor on hold, hence the lack of artistic works in open spaces. Some of them include an Anna Plochl sculpture at the Town Hall in Graz as well as a bronze relief of her father at the rocky Unterguggenberger memorial at the Wörgl train station. If you consider art as a social sculpture, then Lia’s most important work has to be her extensive knowledge on Freiwirtschaft, her archives, and the many talks on ideas for making money and economising driven by new economic crises, pushing us to find practical implementations of these new models: as a regional currency, bartering system or virtual currency, complementary currencies are booming across the whole world.

The Wörgl Freigeld experiment has been inspiring artists and creative artists for centuries. Take the ‘Knochengeld-Experiment‘ in 1993 in Berlin which saw the participation of a good 60 artists; and Freigeld also circulated in 1995 during the ‘Welkende Blüten’ artistic initiative organised by the Herzgehirn artists group in Cologne. In 1998 Henning Venske and Liederjan had theatres packed with their cabaret show, ‘Eine Reise nach Wörgl’ (A journey to Wörgl). In the Wörgl Freigeld year in 2007 one of the countless cultural and training projects was an intervention by the Wochenklausur artist collective in the form of a scientific dialogue on longsighted economy and, during the Steirischer Herbst Festival, Lia Rigler was there as an expert on knowledge and ignorance. The Hallertauer in Pfaffenhofen in Bayern is a regional currency initiative created on the model of the Wörgl Freigeld since the turn of the century and which considers its notes as money with a social added value. The creators of the regional currency see themselves as social sculptors as conceived by Joseph Beuys and celebrated their 10th anniversary with a music CD presentation and a new series of notes depicting the common good pioneers, including none other than Wörgl’s Freigeld mayor Michael Unterguggenberger. Money shapes our behaviour with one another and with nature, affects all spheres of life and is the base for exploitative structures in its current form. We can also shape money, an idea which is slowly growing thanks to open creative souls which have brought this taboo subject to life in their art.

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Die Aufgaben des Unterguggenberger Institutes, dessen Obfrau Veronika Spielbichler ist, umfassen die Dokumentation, Bildungs- und Öffentlichkeitsarbeit zum Wörgler Freigeld-Experiment 1932/33 sowie zu Komplementärwährungen, Geldsystemen und gemeinschaftlichen Organisationsformen heute.


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