By Michael UNTERGUGGENBERGER, Burgomaster of Wörgl (Austria).

            On 1 September 1933, in consequence of the repeated orders of the supervisory authorities, the office of the burgomaster of Wörgl withdrew from circulation the depreciating money it had issued. After twelve months of trial, the results and experiences of the much discussed and debated experiment may be profitably examined. Here are the facts.

            Depreciating money is adapted to fulfill the functions of money in every respect Just as well as — or, for the purpose of accelerating its circulation, much better than — unvarying legal tender. No difficulties have arisen in making payments in the new currency or in affixing stamps. Not a single complaint has been lodged on this score, and it may be definitely stated that after a brief period the money was accepted without demur in all shops. This is more than could be said respecting any of the well-meant relief measures of the higher authorities.

            It may be further taken as proved that it is possible, regardless of existing circumstances or of locality, to introduce depreciating money in communities, districts, provinces, or the State. The effect on the circulation is the more salutary, the larger the territory involved.

            The presence of a second currency (gold currency, for instance) is not inimical to the introduction of depreciating money. Experience has shown that the two systems may co-exist, peacefully, without friction, and without inconvenience, and that one system does not prejudice the other, but rather aids it in fulfilling its social mission.

            Its liquidation, as proved by the recent withdrawal, just like its introduction, may be carried out at any time and in all circumstances, within eight days. Properly organised, it is out of the question that those economically interested should suffer.

            The anticipated accelerating effect of the use of depreciating money has been realised at Wörgl, and this to a far higher degree than might have been expected in view of the exceedingly limited scope of the experiment in the midst of an unprecedented local trade depression. The experiment has thus shown and proved that it is even possible to revive economic activity in a specially hard hit district such as Wörgl and its environs.

            The following table, furnishing the current revenue figures of the local budget of 1931 and of 1932 (when depreciating money circulated), prove the preceding contention. To which may be added that it would be justifiable to state that private enterprise benefited by the experiment as much as collective enterprise.

                                        1931     1932    Increase

Canal dues

Land tax …

House tax

Interest and accrued interest

Sundries ……………………… 

            As regards the above figures, it should be expressly noted that they include only current income and exclude arrears paid. Of the heavy arrears accumulated by1931and amounting to 83.000 schillings, 77.327 schillings were paid during 1932.

            This fact must be stressed in order to correct the frequently repeated statement that the above figures comprise also the arrears paid. Moreover, to judge fairly the results obtained, it should be remembered that during the period in question Wörgl was largely deprived of its economic basis. In the parish and its neighbourhood there were about 1.500 unemployed who had in part already become unemployed during 1930 and 1931 and were therefore no longer entitled to unemployment allowances. There was no tourist traffic, etc., at Wörgl.

            If despite the encouraging results mentioned, the aggregate income of Wörgl in 1932 was about 4.000 schillings below that of 1931, this is explained by the fact that the federal tax portion fell from 57.755 to 43.872 schillings and the provincial tax portion from 34.295 to 19.326 schillings, and by the non-recurrence of an extraordinary payment, a Raiffeisen Bank collection of 76.424,60 schillings, which substantially raised the parish income for 1931.

            It argues therefore a complete misapprehension of the facts and even an ostrich-like policy, for Court Counsellor Ernst Bundsmann, Professor at the University of Innsbruck, to say “The total revenue of the parish of Wörgl in 1931 was 319.731 schillings, in 1932 315.356 schillings. This means that the income for 1932 was 4.375 schillings less than that for 1931. The Wörgl experiment is therefore all bluff.” The same holds when that writer states: “The increased receipts in 1932 are balanced by diminished receipts in other directions. There were consequently no funds available to finance relief works to the alleged value of 100.000 schillings.” The truth Is that whilst in 1932 the depression at Wörgl was gravely aggravated by external influences, local improvements not only neutralised these influences, but lightened the burden to be borne. The increase in income from current dues and from arrears paid furnished the parish the indispensable means to pay the wages of those engaged on relief works, the lack of which means prevented the carrying out of relief works in most other parishes.

            According to the figures of the provincial office of works which supervised the undertakings, the relief works started by the parish in 1932, cost 93.796 schillings. This sum did not include building operations at the parish hall nor the construction of the ski platform and of the water reservoir at Winkl, raising thus the amount spent on relief works to considerably above 100.000 schillings. One highly satisfactory consequence of the relief work undertaken was that in 1932, about 15.000 schillings less was absorbed by unemployment allowances than in 1931.

           The amount expended on relief work in 1932 was derived from increased parish revenue, from subsidies out of the Productive Unemployment Fund (3,50 sch. per worker per day), and from a provincial grant of 12.000 schillings for the purchase of materials.

           In March 1933 new relief works were started, for it was found that the depreciating money issued for wage payments would certainly be returned in the form of tax and arrear payments by the time that the next pay date arrived, and would be thus always available for fresh payments.

           The reconditioning of the road leading to the railway station — its widening, cabling, including also the construction of sidewalks and the making and erection of 11 lamp standards with globe lighting; the covering in of the Wörgl brook at its issue from the Mullnertal; the construction of the reinforced concrete bridge across the Wildschonauerstrasse; the demolition of the inn in the new Strassenstrasse and its rebuilding in another road; the widening of a portion of the Wildschonauerstrasse and its extension; the concreting and construction of the water reservoir at the hamlet of Winkl; the construction of forest paths several thousand metres long altogether and the provision of about 300 seats in this connection; the repair and gravelling of farm roads, — all these works have already been carried out this year. The opening up of the hitherto inaccessible Aubach gorge by the construction of a new path, with the help of blasting operations and of the building of several bridges, is in progress and half completed.

           The repairs to the square near Wörgl brook bridge close to the parish hall, the extension of the Silvio-Gesellstrasse, of the new Friedhofstrasse, of the Jahnstrasse, and the joining of the Jahnstrasse and the Salzburgerstrasse, are all in hand. The winter relief programme includes the covering in of the Wörgl brook in its upper reaches, the diversion and the covering in. of the small Latrein brook, and the laying out of a park along the Bahnhofzufahrtsstrasse. The execution of the winter programme is, however, not assured, inasmuch as the withdrawal of the depreciating money is bound to lead to a reduced parish revenue and as there is no certainty that the money required for paying wages will be available. Wörgl will no longer be able to secure the additional funds entitling it to assistance from the Unemployment Relief Fund and from the Voluntary Labour Service. Hence, owing to a deficiency in mobile, liquid money, the workers will have their tools struck out of their hands.

           (Translated by G. Spiller, London.)