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Austrian Emergency Money (Notgeld)
During World War 1 coins nearly disappeared in Austria-Hungary. The metal the coins were made of was needed for the war production. The Oesterreichisch-Ungarische Bank aimed to replace the coins with banknotes in small denominations. But already in 1914 emergency money was issued in several regions of the country, for instance in Bohemia, Moravia and Bukovina. These early issues of emergency money were relatively few, though.
In 1918 Austrian municipalities, cities and firms started to issue more emergency money, now also in larger denominations. Austria was in a similar financial crisis as Germany at the time. The Oesterreichisch-Ungarische Bank was more and more unable to supply the money needed for circulation. Issues of smaller denomination again increased in 1920.
Emergency money (German: Notgeld) was usually issued to compensate for a shortage of officially recognised money (banknotes and coins). If the central bank or authorised money issuing institution is incapable to supply the required amount of bills and coins for circulation an economic crisis may develop. The lack of physical money means that wages can’t be paid, goods can’t be bought and bills not be paid for. To avoid this misery other trusted institutions or authorities will pitch in and start to issue bills (rarely coins) on their own account: Emergency money.
Emergency money is usually being issued in situation of crises – political (e.g. during a war) or economic (e.g. during and inflation). If they issuer of the emergency money does not back up the created bills with valuables (e.g. gold, goods or currency) of the same value, the issue will cause inflationary pressure.
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Initially the locally issued bills with small denominations were produced purely to compensate for the shortage of coins and were used for payment be the people. These bills are called Verkehrsausgaben (issues for circulation). However, collectors very early on started to get interested in these bills.
The issuers took notice of this soon. They now started to give out whole series of small bills for collectors only. Many of these bills were never used and intended to be used as means of payment. These bills are called Spezialserien (special series). For the towns and firms it was a good business to issue and sell these bills to collectors. They also knew that collectors are usually especially keen on error notes and other rare values. So some towns went as far as producing specific limited series of error notes. While these notes do not have the historic value of the real emergency issues, they contain many attractive rarities, which have become especially popular among collectors, too. Many of the produced series also have some artistic and visual appeal.
Once the Schilling currency had been introduced in Austria in 1924, only very little emergency money was issued in the country anymore. One of the most famous of these later issues is the Schwundgeld given out by the town Wörgl in 1932. After World War 2 there were also some local issues of emergency money, for instance in St. Pöllen and Vienna.
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