The term Notgeld is a German word for emergency money or necessary money. It was made famous during World War I and for a few years after that in Germany. Notgeld is very collectable and interesting. While Germany probably has had the most versions of Notgeld, it is not the only country to have it, and frankly most economies have used it.
Let’s start with why we have money, whether it is coins, paper or polymer currency? We have money because to make commerce easy we need a thing that can be exchanged for things we need, like food. Bartering makes sense when you have something I need, and I have something you need we can exchange and agree on an exchange value. But that seems hard. If I have eggs and I need wood, I need to find someone with wood who wants eggs.
Early traders and shop owners figured they needed a way to buy items like eggs and wood in exchange for something with a perceived value, like a gold coin, and sell these items for the same gold coins. Local merchants sometimes created their own ‘paper money’ which could be exchanged at their store or other stores that agreed to take the paper in exchange for goods. Obviously, local banks took over this role as they formed. Now lets go into further detail with the notgelds.
Other Forms of the Notgeld
I have merchant notes from England in the 1800’s that have a face value of ‘2 hours of carpentry work’. This is a necessary note. In essence, English Notgeld. In the US, many merchants and railroads facilitated commerce by issuing their own money- so is this US notgeld? During the US Civil War, the Confederacy issues emergency money but these were primarily war bonds. You gave the government something of value and they gave you Confederate dollars that could be used in commerce, but only had exchange value with the government after peace was declared.
Maybe the most common notgeld is prison money. In many countries and at many times, prisons- including POW camps, would issue their own money to facilitate commerce. During the 1930’s global depression, many countries reduced the amount of paper money and coins that were issues. Many cities and small communities created their own notgeld. War often leads to the need for notgeld. During the German occupation of Belgium during World War I, there was a shortage of official coins and banknotes. To keep local businesses going, around 600 local governments and even companies issued their own ‘necessary money (monnaie de necessite in French and noodgeld in Dutch).
It is funny how creative people can be with types of money. I think there was even a time that beaver pelts were used as money for local commerce in the 1700’s North America. I’m glad we use coins and banknotes. I can’t imagine how big my wallet would have to be to use animal skins. What do you think about the notgeld?