Notgeld
In particular, notgeld generally refers to money produced in Germany and Austria during World War I and the Interwar period.
Sometimes other forms were also used: coins, leather, silk, linen, wood, postage stamps, aluminium foil, coal, and porcelain; there are also reports of elemental sulfur being used, as well as all sorts of re-used paper and carton material (e.g. playing cards).
However, the immense volume of issues produced by innumerable municipalities, firms, businesses, and individuals across Germany blurred the definition.
The first period of Notgeld continued until the end of 1914, but mostly ceased once the German Reichsbank made up for the shortage with issues of small denomination paper notes and coins of cheaper metal.
As the war dragged on, acute monetary shortages could not be met by the German central bank, leading to a new period of Notgeld beginning in 1916.
Additionally, the non-precious metals used to mint lower value coins were needed to produce war supplies.
Though the production of Notgeld was initially amateurish, with many set by typewriter or even handwritten, collectors soon appeared on the scene to take hold of the expired 1914 stock.
The Reichsbank could not cope with the logistics of providing all these new notes, and Notgeld was again issued—this time in denominations of hundreds and then thousands of Marks.
Notgeld flooded the economy; it was issued by any city, town, business, or club that had access to a printing press, in order to meet the ever-increasing rise in prices.
By now, Notgeld was being denominated in the form of commodities or other currencies: wheat, rye, oats, sugar, coal, wood, quantities of natural gas, and kilowatt-hours of electricity.
After that date, Goldmarkscheine of regular denominations were briefly issued, until the Reichsbank forbade any further interference in the economy by local authorities.
During the Interwar period, local municipalities and civic groups capitalized on the public memories of Notgeld by issuing certificates aimed at collectors, to raise funds for various building projects.
The Reichsbank kept strict control of the economy during World War II, and forbade local authorities from independently meeting money shortages.
The dire situation after the war forced municipalities to once again issue Notgeld to help the population meet small change needs.
By 1850, the state finances were in such an order as to render them unnecessary, though certain parts of Hungary still experienced shortages as late as 1860, requiring Notgeld-type issues.
In a bid to increase economic activity, several depressed municipalities in the Alps regions of Austria experimented with demurrage features in their Notgeld during the period 1932–1934.
As the notes lost value (Schwund) over time, the idea was to convince holders to spend them quickly, thereby spurring economic activity.
As James lost the war, that replacement never took place, but the coins were allowed to circulate at much reduced values before the copper coinage was resumed.
The government promised to exchange them into the correct value at a future time, a kind of bond made in metal.
[5] Between 1914 and 1927, large amounts of monnaie de nécessité were issued in France and its North African colonies during the economic crisis caused by World War I.
