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Stamp scrip was a type of local money designed to be circulated and not to be hoarded. One type of this worked this way: Each scrip.
Table of contents
- Stamp scrip - Irving Fisher, Hans R. L. Cohrssen, Herbert Wescott Fisher - Google книги
- From Wikipedia, the free encyclopedia
- One thought on “Stamp-scrip anti-money could Save Greece..Sabotage Capitalism”
- Complementary Currencies/BoK EN - Stamp Scrip
Two types of innovative self-liquidating community currencies emerged. Transactions stamp scrip addressed the cash shortage problem. Each time the scrip was used a special stamp, purchased from the issuer of the scrip, had to be affixed to the scrip certificate.
When the scrip had changed hands a sufficient number of times, there would be enough money raised from the sale of stamps to redeem the scrip at par.
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For example, a one-dollar certificate requiring fifty transactions would pay for itself if each stamp was sold at two cents. Time-based stamp scrip, by contrast, required that a stamp be affixed to the scrip certificate every week or fortnight, or month , regardless as to whether it had been used or how many times it had been used in the interim.
There was also a hybrid version that combined the two: a stamp had to be affixed for each transaction, but if the scrip were not used by a the specified date, a stamp had to be stuck on to maintain its validity. The idea of financing poor relief through the means of transactions stamp scrip appears to have originated in Anaheim, California, in A service station manager, Joe Elliott, devised a plan whereby the unemployed of the city would be given jobs on make-work schemes, and paid with special dollar certificates.
They could spend this at the shops of participating merchants, who would then put a special four-cent stamp on the back of the certificate, before passing it on to their employees or customers. Each time the certificate was used, the receiving business was responsible for adding an extra four-cent stamp, until the certificate had 25 such stamps on the back, when there was enough money in the kitty to redeem the stamped coupon for cash. The idea initially worked well.
Thus he finally returned to the first, having cancelled, perhaps Instead of a pen penalty for hoarding, the hungry stomach of the messenger boy sped up the circulation of this money. The scheme was actually operating, and perhaps it still is, although I do not know how successfully. Dothan, Alabama, a town of 16, inhabitants, has issued Stamp Scrip of the dated type. Over a hundred other municipalities 27 including a fair proportion of large cities, are seriously considering the issue of Stamp Scrip of the dated type. In Kansas, a bill is pending in the State Legislature which, if passed, will authorize localities to use scrip and will insure uniformity in the issues although not of the dated type, unless an amendment can be secured.
In the state of Iowa, a bill has been passed authorizing the State itself to issue the scrip and to distribute it among cities and counties. Here, too, the scrip will be the undated type unless the proposed law be amended. Seven or more other state governments are seriously considering scrip projects.
On February 17, , Senator John H. Bankhead of Alabama introduced a bill into Congress for the purpose of authorizing the Federal Government to issue a dated Stamp Scrip that shall operate as legal tender during the limited period of the issue 28 Senator Bankhead's plan is that this emergency issue be injected into the national circulation, partly through the regular expenditures of the Federal Government, partly through the expenditures of the state governments among which certain shares of the scrip issue would be apportioned, and partly through localities among which the states would further sub-divide the issue.
Or influential elements within them. Let us here assemble the points which may be gathered from the few cases now on record. The end depends upon the beginning; and the beginning, in this case is a matter of a interesting enough people of enough different kinds. The Woergl type of Stamp Scrip the dated type is far superior to the Hawarden type, in which the stamps go as you please, Because: a The dates insure the cooperation of those who use the scrip by enlisting their self-interest.
It is to the interest of the passer of a scrip-certificate to see that it passes, lest some day it costs him a dollar to pass a dollar. It is to the interest of the recipient to check up on the passer and see that the scrip has been duly stamped. Thus, both passer and recipient improve their scrip-education by daily practice, and the recipient serves the city as a scrip-watchman.
Redemption should be permissible at any time; but in order to prevent the privilege from being too often exercised by the more timid souls, it should as in Woergl be made more costly than the next transfer of the scrip. For instance, it might be provided and stated on the face of the scrip that to redeem the certificate prematurely one must, besides affixing the neat stamp to advance, also take a discount of 2 to 4 per cent. Also there might be a requirement that when a dollar denomination is passed for less than a dollar's worth of goods, the purchaser shall provide the tradesman with the next stamp in advance.
Also it might be provided that where a dollar denomination is offered for less than a dollar's worth of goods, the tradesman may have the privilege as in Knoxville of keeping the balance, and issuing credit for it on the next purchase by the same customer. All these provisions might be printed on the face of the Scrip; but probably it will be sufficient to have most of them merely included in a prospectus referred to in the general agreement signed by the chief elements of the population as a preliminary to the issue of the scrip. The scrip might, in turn, refer to this agreement.
Payment to be only on completion of the job and on proof of the expenditures.
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This is the anti-depression plan of Col. Malcolm C. Rorty as it would apply to Stamp Scrip. Scrip could also be used to compensate the depositors for part of their losses. How Much Scrip Can be Absorbed? We have the following data: In America, the turnover of money credit currency - we have no figures for other money is, in normal times, about once a forthnight.
But this is a national average. It varies according to the nature of the locality, being slow in sparse settlements and fast in crowded ones. Scrip turnover in Russell, Kansas undated type , was once every three days. Scrip turnover in Rock Rapids, Iowa undated type was once every four days.
As to the distribution of the scrip after it is in circulation, we learn from Russell a town of inhabitants that the sale of stamps was distributed ,as follows: Labor and general population 51 per cent Retailers 49 per cent How far these figures represent the relative turnovers of the corresponding classes in your own locality can probably be more or less roughly ascertained from the Census of Retail Distribution by Cities and Counties which may be available through the local Chamber of Commerce.
For some localities the claim is made that large retail establishments, like department stores, do two-thirds of the retail business. As to your own locality, local authorities will probably have some guess about these proportions. Let us construct a case based on the above supposed data.
These figures are rather unexpectedly good for the undated type - other instances seem to indicate a pour turnover.
Southwick made for the Welfare Service Corp. The small retailer who handles but a few dollars a day may be trusted to dispose of his intake for home uses and in the purchase of supplies and the payment of wages. So we arrive at the case of the large establishments such as department stores and chain stores.
The bank, therefore, becomes important as a clearing house for the scrip of the larger retailers. If not, the proposed issue should be changed accordingly. But first, to facilitate the banks in reissuing the scrip, all who have pay roll demands, including the town, might be induced to re-arrange their pay roll clays through the six days available, so as to even up the daily demands on the bank.
If too much scrip has been issued there is no reason for alarm.
Stamp scrip - Irving Fisher, Hans R. L. Cohrssen, Herbert Wescott Fisher - Google книги
Follow the Woergl example, and keep your excess with the issuing body - in other words reissue only as much as can comfortably be absorbed by your community. Forcing excessive amounts into circulation would tend to lessen its purchasing power as compared with ordinary dollars. For rural districts, where the speed of circulation cannot be expected to equal that of a fairly populous town, the two per cent weekly "stamp tax" recommended in this text might well be deemed excessive. In such cases, a figure might be adopted more appropriate to such special conditions.
For instance, to the Canadian Prairie States, I have recommended two per cent biweekly. In such case, the issue would naturally run for a considerably longer period - two years or even four. Have At Least One Bank To win the cooperation of the banks one will do to start with 1 It should be provided that anyone making a deposit of scrip in the bank must pay for the stamp next due, or, what amounts to the same thing, be debited for that amount. This may be considered a service charge to be pocketed by the bank if the scrip is passed on by them before the next Wednesday. The rate, however, should be low since the guaranty fund will involve little more than bookkeeping.
Moreover, the bank should remember that it will share in the increased prosperity brought about by a well administered Stamp Scrip plan. Anything that stimulates business will stimulate business borrowing. As to the convenience of the general population, it is to be noted that the larger the population, the greater is the sub-division of functions per capita; so that the danger of clogging up certain classes of the community with surplus scrip is reduced, not merely in proportion, but per capita.
From Wikipedia, the free encyclopedia
That is, a larger town can absorb not merely more scrip, but more of it per capita. Perhaps it is better not to be too laborious over the actual figures; the main point is to begin with not too large an issue; and then prepare some agency for watching its subsequent behavior for whatever lessons may be learned. The experience of Woergl shows that it is not necessary to sign up everybody.
If some of the more important business houses accept the scrip, the rest will have to follow suit for reasons of competition. As some of the leading citizens accept and use the scrip, the others will follow automatically and soon everybody will accept it and pass it on, even though they did not pledge themselves to do so, because everybody else does. The first few weeks are the hardest, and therefore need careful preparation. As the Mayor of Woergl says, "some soft pressure from above" might prove helpful.
Cohrssen, I understand, intends to compile this material and publish it regularly in form of a bulletin. Sell the key men first. Begin on the more accessible key men and use their names fur prestige as you approach the less accessible. You cannot explain the plan without a form of scrip for demonstrations marked "sample" so as to preclude any future attempt to pass it. Also very large forms should be prepared for store windows and other exhibition points.
These specimens should be complete to the last detail, including the stamp spaces and the stamps. A form of the prospectus and the sign-up and of the petition to the city council if that method is to be used should be presented. Forms for all these are given in the appendix. With the key men, the general exposition comes first. It is vain to show the advantages of scrip before the mechanism is made abundantly clear, as in Chapter III of this hook. City Finances 1 A new sum equal to the scrip issue will be added to the city treasury.
Taxation 1 The stamp sales are the equivalent of a tax paid by the citizens out of new business created by that "tax. Local Welfare Work 1 Some of the projects for which the scrip is to be initially spent will relieve want and unemployment. There should be news items, editorials and posters.
Perhaps, in this part of the work, the local applications of Stamp Scrip should be put first before any general exposition like Chapter III , since the public wants news. Pictures, by word and cartoon, could be represented-pictures of destitution, of run-down streets, of idle machines, and "Stamp Scrip will stop this! Stamp Scrip will stop this!
One thought on “Stamp-scrip anti-money could Save Greece..Sabotage Capitalism”
By way of further exposition, literature could be left on counters, lodge tabics, hotel desks: "Stamp Scrip - Stamp Out the Depression Locally. The organized efforts of boy scouts and girl scouts may perhaps be enlisted to advantage. Sign-up agents could be planted near the aforesaid counters, lodge tables and hotel desks, etc. Prizes could be offered to sign-up agents for signatures from selected lists. Prizes could be offered for posters, slogans and school essays. The prize slogan should be put on the scrip. Have a sufficient supply of bills and stamps on hand for replacements.
Put up on walls greatly enlarged replicas of the scrip in actual use, with a brief, large-print instruction sheet. A form of instruction sheet will be found in the appendix. Leave instruction sheets, including a cut of the scrip, on counters, lodge tables and hotel desks, marked "Take One. Don't relax too soon after the scrip is in operation. Take note of all criticisms and if the critic is wrong, vouchsafe further instruction - if right, try to profit by the lesson.
If he stumps you, I would like to know the difficulty. In the next chapter, I suggest answers to some of the objections commonly brought out by the first propounding of Stamp Scrip. They are theoretical objections. Objections based on real experience with Stamp Scrip are largely based on experience with the undated form, or based on an illmanaged, or half-hearted, or insufficiently prepared plan of Stamp Scrip. Yet the most troublesome objections, thus far, are the initial theoretical ones, based on total inexperience. The only complete answer is, of course, a clear and connected exposition to start with, and this I have tried to supply in the foregoing chapters.
Nevertheless, specific answers are desirable, too. Answers must be softly delivered, if what you want is to win your man; and if, in the next chapter, I have supplied some answers that read like retorts, it is for the sake of a bird's-eye brevity, and for your convenience, in the course of goodnatured discussions with open-minded prospects. The scrip is redeemable in any form of legal tender. It is not even permanent - it is a temporary, emergency issue, small in amount and short in duration. Banks pay out money as fast as they take it in. If we relieve them of the next stamp and add a service charge, that is enough.
Experience shows that banks profit not only from the service charge but from increased business. Any money costing the user a stamp and a service charge at the bank is a cheat. ANSWER: What you call a cheat is a tax or a quasi-tax on new business - and the stamp made the business; without the stamp we wouldn't have the business. We all hate sales taxes. ANSWER: Call it any name you like; it comes out of new business and it gave us that business - without it we wouldn't have that business. Besides, it's two per cent divided among many transactions. You can spend it or invest it or put it in the bank.
The point is: You must do one of these things. You just can't hoard it, that's all. It is an emergency supply to relieve scarcity till other money condescends to rejoin the service. When Gresham's law is so stated it is misstated, except as applying to a period of inflation. When, the money supposedly in circulation doesn't circulate any money which drives it out and really circulates in its place is not "bad money" but "good money. Stamp Scrip has already proved that, in any or all localities, it can increase the volume of business; but, if confined to localities, it cannot raise the price level; for if prices try to go up in a locality, buyers will promptly forsake that locality.
An increased volume of business at the same low price level is, of course, good as far as it goes; but the lowered price level is really the crux of the depression; and it cannot be budged till the new buying through the new means of buying is nationwide. There should, therefore, be a nation-wide application of Stamp Scrip - still in quantities as small, proportionately to the size of the nation, as it is in the localities now using it; and still to function only as an emergency supply-substituting for other circulation which has deserted-withdrawing when the deserter returns to the service.
Complementary Currencies/BoK EN - Stamp Scrip
Those private barter exchanges which are considering a hook-up of such exchanges all over the country could effect their purpose far more easily by the use of a uniform method of Stamp Scrip, than by any scheme of miscellaneous bartering agencies and methods. I hope, too, that the states and the United States will embrace the scrip movement and thereby reduce it to uniformity. These larger governmental units can also, through their own "personal" use of the scrip, get some of the more limited advantages which first interested the small localities.
For just like the towns , the states and the United States have public works; they have payrolls; they have budgets; they have tax problems; - and the national tax problem is one of the obstacles to recovery, depleting the buying power of the consumer in order to balance the budget. But it is chiefly in order to jet the scrip spread over a maximum territory in the minimum time that the states and the nation should intervene; so that not merely local volumes of trade may grow, but the country's price level rise.
Otherwise, we must wait for this movement to spread by the slow process of town-to-town contagion. I, for one, intend to do all I can to foster that contagion; but each state might well monopolize Stamp Scrip and offer some of it to each town in the state as a bonus with each apportionment of Uncle Sam's largesse under the Reconstruction Finance Corporation - provided the town will get the necessary local pledges and also attend to putting the scrip into the local circulation and to selling the stamps locally. Or better still, Uncle Sum himself should offer to help each state to help its towns in accordance with Senator Bankhead's and Congressman Pettengill's excellent plan.
Reflation may be defined as that degree of controlled inflation which is needed to compensate for recent, fast, and big deflation. Reflation is not inflation starting from the threshold and aiming at the sky - it is inflation starting at the bottom of the pit and aiming back at the threshold. It is a corrective process, like the turns of the steering wheel that keep you on the road. Most of the historic cases of inflation, however, have not been corrective - they have started at the threshold and aimed at the sky. They have been "get-rich-quick" devices and have made depressions instead of curing them.
Nobody has pitched into such inflations more hotly than the present writer. If you call anything any kind of "flation," some people will see "get-rich-quick" written all over it, because they don't stop to think that a thing may be good or bad according to where it starts - and aims. But I would like to review briefly the series of remedies applied up to now to overcome the depression, so as to see just where Stamp Scrip comes into the scheme of things.
Hoover's relief program was very promisingly based both on debt scaling and monetary reflation; and the reflation was as it should be the chief item. To compel this huge creature to pour out its crystal treasure was no easy task for a small boy. It always involved a preliminary period of exercising the lofty handle, and sometimes quite without results, until an older person pointed out a bucket which stood near with a small side-supply of water. It was kept on hand for just such emergencies. Then the small boy would run to the side-supply scoop up a dipperful, climb upon any convenient object and empty the clipper into the open top of the pump.
When he returned to his exertions they were no longer in vain. One scoop of side-supply had connected the big subterranean supply with the means of jerking it out of hiding. The strategy was called "priming the pump. Such is the office of Stamp Scrip - to prime the pump, which has thus far been unable to connect the great supply of credit currency with the thristy world. The small scoop of water is the customer walking with his stamp scrip. To affect not merely local production but the country's pricelevel however, Stamp Scrip must be applied all over the country. Then it will retire automatically - a result already provided for in its terms - it will retire by not being renewed.
Sweden did not try to reflate, but her stabilization has kept her price level steady since September , while America's price level, since that same date, has kept foundering worse and worse. Yet many of us ignorant, I fear, of Sweden's case are still denouncing all reflationary principles as too radical. Evidently we need some reflationary force more radical than Sweden applied. But not without safeguards.
Even Sweden has a safeguard. Indeed, the safeguard is an integral part of the whole reflation-stabilization method. The safeguard consists of the average price of all commodities, the index number of prices. This index number and the level to which we want to raise and maintain our American price level are duly provided for in Senator Bankhead's proposed legislation.
His goal for the price level is fourfifths of the price level of This, in the Senator's opinion, will give to both debtors and creditors a practical average of justice, and will restore the rank and file of business debtors to a degree of activity. At that precise point four-fifths of the price level of Stamp Scrip is to retire. Thus, instead of threatening us with uncontrolled inflation, Stamp Scrip would improve the control by enabling it to operate faster. There are also some of us who believe Stamp Scrip to be more than a temporary auxiliary currency for the present emergency, believing that if its volume and stampintervals were regulated according to varying conditions it would be the best regulator of monetary speed, which is the most baffling factor in stabilizing the price level.
I close this little volume with a report of some of the goodnatured and openminded give-and-take which occurred between Senator Bankhead and his colleagues when he introduced his and Congressman Pettengill's proposed stamp scrip legislation. President, the Bible says, 'The love of money is the root of all evil. We hear at all times nowadays discussion of the money question. We know the very great and difficult problems that are confronting our country, growing out of our situation with reference to money.
Nearly every day information comes to us about the condition of banks in the various sections of the country. It is not my purpose, Mr. President, to make any statement here that will tend in any way to aggravate the situation or to increase the state of alarm that so widely exists throughout the country, but we do know, without going into detail, the money condition in this country.
We shall either have to take some positive, affirmative action on that subject, or decide that we will go through the painful, distressing, heart-breaking process of complete liquidation in this country. If we are going to let the farmers lose their farms, if we are going to let the town people lose their homes, if we are going to let bank after bank continue to fail, if liquidation is to be the ultimate result, why not abolish the Reconstruction Finance Corporation?
Why not quit pouring money into various institutions like pouring water into a rat hole? Why further involve the credit of the nation and 33 Senator Bankhead's proposed legislation will be found in the Appendix, also Congressman Pettengill's speech in the House of Representatives. President, if there is to be liquidation, I want to point out to the gentlemen who are coming here and telling us to balance the Budget and to save the old standard - and I favor both if it is possible to do so - that if liquidation goes to its ultimate end, not only will the farmers and the small business men in this country be liquidated, but inevitably the cities, the States, the counties, and the Government itself will be liquidated; and the time will come when it will be impossible to collect enough taxes from the taxpayers of this country, after having lost their property, to pay the interest or the sinking fund upon the bonds of our cities, counties, States, and the United States.
The Senator, of course, is aware of the fact that what he is now saying is blasphemy to the worshippers of the golden calf. Yes, I think the Senator realizes that, from the way I have talked. I hope it may be maintained. I hope that consistently with humanity it may be maintained; but, Mr. President, I am more concerned in saving our social fabric. I am more concerned in saving our representative form of government. I am more concerned in preserving respect for the law and obedience to the law. I am more concerned in avoiding resistance by force to our Government than I am in maintaining a standard which, since it first was used, has acted like a drunken man.
It has staggered, it has stumbled, it has fallen from time to time, and has proven itself to be, instead of a measure of value, nothing but a. President, I have heard the statement made frequently that the trouble is not the lack of a sufficient circulating currency. It is said that the trouble is a lack of velocity in circulation of the currency, and that is true.
Nobody doubts that there is a paralysis in the matter of circulation. The velocity has almost disappeared. It is contended that that lack of velocity in the circulation of money is the main trouble. Then I point out to those interested in the subject that, if that is the sore spot in our present currency system, here is a plan which would absolutely remove and eliminate that objection and that difficulty.
It may turn over five or more times a week. I paid 2 cents for each of the stamps. But the Senator paid to get the money, besides the stamps. What, in addition? How did the Senator get the money? As I understand it, under the Senator's measure I secure these money certificates at the post office. That is where the Senator is in error "MR. I should like to have the Senator advise me.
The plan contemplates the use of half of this money and its distribution, for emergency unemployment relief, for giving employment in any form of public works that are available, in the purchase of goods, food, clothing, and other necessary supplies. If he were on the unemployed list, he would not have as many as dollar bills, and whatever number he did have, he would get them in a legitimate way, and not primarily as a gift.
But when they pass on out through this unemployment relief program, when they get into the hands either of the merchants who sell supplies to the unemployed, or when they get into the hands of laborers who do work upon public-works programs which are contemplated here, into whosesoever hands they get, they will then go to the stores in the purchase of goods, they will go from the merchant to the jobber, from the jobber to the wholesaler, from the wholesaler to the manufacturer, and the manufacturer will buy raw materials. If it has any benefit, if it furnishes a medium of circulation for the purchase of the necessities of life and for the payment of debts, then I submit it is reasonable to assume that a new confidence will be established.
If prices are stopped in their constant decline and perhaps started upward, people will main begin to buy with the money that they have, because we all know they postpone purchases so long as it looks like prices may continue to decline. I have studied most sympathetically the entire proposition for some time and I have come to the conclusion that it is thoroughly practical, for instance, within a municipal unit on the basis of municipal offices and dealing with municipal pay rolls, and so forth.
Let us assume. I will say, in the first place, that if the Senator is so fortunate as that, he could well afford to lose them, but he would be in a lonesome company. But suppose I am not desirous of making any purchases? Very seldom. Well, if the Senator is that kind of an animal, I cannot place him. President, I am interested in the Senator's proposal, and I am directing these inquiries to him because I want to be fully advised in regard to the matter.
I think the suggestion has a great deal of merit, to be perfectly frank "MR. In that spirit I will be glad to answer any question which the Senator may submit. That is true, is it not? Yes; and I am glad the Senator brought out that point. I wish to say that I think in the Senator's plan there is a great deal of merit, and I want to repeat that I am directing these inquiries to him because I am initially interested in his plan. I should like, therefore, to take the liberty of answering one of the difficulties which were raised by the Senator's colleagues: At any time before the expiration of the scrip, the holder who can think of nothing to buy with it is entirely free to seek the investment market or the bank.
These have hundreds of ways for continuing the circulation of the stamp currency. The Secretary of the Treasury shall cause to be engraved and printed currency of the United States in the form of stamped money certificates. Said certificates shall be of a suitable size to provide space on the backs thereof for affixing postage stamps. The backs of said certificates shall be prepared in such manner as to indicate clearly the proper place for affixing each stamp contemplated herein, to the end that on the second Wednesday after the issuance of said certificates from the Treasury the first stamp shall be affixed, and thereafter on each Wednesday until a total of 52 stamps shall be affixed; and said certificates in the spaces designated for affixing said stamps shall set forth the day of the month and year when each such stamp shall be atfixed, as for example: "On April 5, , affix 2-cent stamp here.
After affixing the first stamp said certificate shall be legal tender as aforesaid for the payment of all debts until the following Wednesday when another 2-cent postage stamp of the United States shall be affixed by the person holding the same prior to o'clock antemeridian of such Wednesday, and thereafter for 50 consecutive additional Wednesdays like postage stamps shall be affixed by the holders.
When fifty-two 2-cent stamps shall have been affixed on the back thereof the holder may present the same to any post office in the United States for redemption, and the same shall be redeemed by such post office in any present lawful money of the United States. All post offices in the United States are hereby charged with the duty of making such redemption and of forwarding such certificates for cancellation to the Secretary of the Treasury.
This amount is made available as herein provided in addition to the amount made available to the States under section 4 a of this act. The amount so apportioned to the States shall be delivered to the governor of the State applying for the apportionment made to his State, upon application being made therefor by the governor. The amount apportioned to a State shall be administered within the State under rules and regulations adopted by the governor thereof and through such agencies as he may establish. Afterwards these amendments with some changes and additions were made into a separate bill S.
Still later, in the present 73rd congress, Senator Bankhead reintroduced this bill as S. As finally drawn the bill aims to use the stamp feature not only for emergency relict but also for stabilization purposes. Congressman Pettengill's speech on his bill is referred to in the appendix. Here I consider its advantages for achieving the proposed country-wide hook-up of barter exchanges.
Getting Organized Instead of the rather intricate job of organizing a complete set of systems within the country-wide system, the Exchange's work will concentrate on issuing Stamp Scrip, and doing the necessary publicity work to get it accepted, which simply means betting it started. Once started, it will keep going without much further attention.
Local and mutual exchanges will receive all literature and material for a "campaign" and will act as sub-agents in grant loans or making payments to its members in Stamp Scrip. Getting Spread Being redeemable in legal tender, the scrip will the more readily enlist outsiders not specifically enrolled in the exchange. It automatically enforces the steady and active cooperation of all, and particularly of the unemployed who receive it as relief. They must circulate it, and in many cases will do pioneer work to get it accepted. Thus, because the needs of the individuals are so varied, the scrip will spread over a great area, and this will automatically eliminate the necessity of setting up special rosters of trades and professions.
This self-perpetuating action of the dated type is quite different from that of ordinary scrip money which would tend to circulate only within smaller circles. Getting Financed Each store accepting and circulating Stamp Scrip would automatically become a contributing member of the "exchange". It would help to circulate the scrip and would contribute to the expense of the hook-up by affixing stamps. Financing and operating new manufacturing units is also done more quickly and more easily with Stamp Scrip, as its use provides for a market.
All stores and jobbers accepting scrip will purchase their goods from the factories where they can use it for payments. One of the main advantages is that the initial capital need, be only a very small sum and most of it does not even have to be paid out, but can remain in a bank on deposit against any premature redemption requests. And as payments for stamps come in, this initial capital might successively be paid back to the lenders who helped start the hook-up.
Simpler Accounting There will be no need for special accounting between "outsiders" and "insiders" of the exchange. Whoever uses Stamp Scrip becomes thereby an "insider. The balance among these will be established almost automatically, as in ordinary trade in normal times. Middleman Not Restored The benefits of using a "system within the system" in eliminating the profit taker are not lost. Fair wages, material and cults of distribution will, of course, have to be paid for in any case. More Like Modern Life Barter is primitive. With scrip you feel less primitive, hence less reactionary, hence less discouraged.
And that counts. Parmelee, Fort Smith, Ark. The Stamp Scrip Plan Stamp Scrip is originated and put into practise for the purpose of providing unemployment relief, and to stimulate trade. As a new, painless tax paid from new, additional profits it affords a means of relief from other forms of taxing for unemployment relief purposes, and distributes such tax payments over a wider area. The Stamp Scrip plan is put in effect as a number of people-grocery stores, drygoods stores, clothing stores, butcher shops, hardware stores, mechanics, garages, bakeries, doctors, lawyers, dentists, beauty parlors, real-estate owners, farmers, plumbers, laborers, lumber-yards, etc.
Stamp Scrip wail resemble an ordinary bank bill. It will have the denomination stamped on its face. On the back of the bill, however, will appear 52 small squares. Each square will have a date on the inside. These dates will be for some particular day of the week say Wednesday for 52 weeks of the year. Suppose you were to receive one of these new dollars on Thursday.
By reason of the agreement already made, you could spend this dollar for anything you needed with any of the dozens of people previously mentioned. It would pass for a full dollar on every day up until the following Wednesday, which is, let us say, February 8th. On that day you must purchase from the central office, or elsewhere where offered for sale, a special stamp put out by the central office. For this stamp you must pay 2 cents in legal tender. If you do not this, the next man need not accept your scrip dollar for more than 98 cents. Whoever holds the scrip dollar on Wednesday must put on of these special 2cent stamps.
This money has been kept in a special fund. Now the man who receives the dollar with 51 stamps on it may place a 2-cent stamp in the last square, take it to the central office and receive a legal tender dollar in place of it. Thus it is self-redeeming because as it travels from week to week, it accumulates each week 2-cents which, multiplied by the weeks of the year, will provide cents in legal tender money to take it up - with 4 cents left over.
The stamp needs to be put on but once a week. During the week the dollar may enable 10 or 20 transactions to take place. The tax for that week would be only 2 cents divided by the number of times it changed hands. You cannot hold the Stamp Scrip bill, unless you pay 2 cents each week. On the contrary, money should depreciate over time, just as the goods it represents. By implementing a demurrage, the circulation of money is increased as possessors are inclined to spend the money as soon as possible or to lend it in order to pass the demurrage onto the debtor.
The ideas of Gesell show similarities with his colleague on the other side of the Atlantic. According to his equation the quantity of Money multiplied by the Velocity of circulation equals average Price levels multiplied by Trade volume. The stock market crash was followed by economic distress and unprecedented rates of unemployment. The Weimar Republic and the United States were hit hard by the recession. In an attempt to wipe out war debts, the German government deliberately printed money creating a loss of confidence in the Mark. The notorious hyperinflation of that resulted from this policy, expressed itself in employees needing wheelbarrows to collect their payment.
With the introduction of the Rentenmark by Hjalmar Schacht as new president of the Central Bank, the hyperinflation eventually halted. Then by , US loans to Germany were suspended with the outbreak of the financial crisis. German obligations to pay for WW I reparations were only suspended by at the Lausanne Conference. With more protectionist policies e. Smoot-Hawley Tariff Act global trade, and German exports in particular, decreased. With decreasing demand, prices fell and deflation became fact. In the early s, money was hoarded and in short supply Greco Again economic prospects looked grim.
Nordwell Wikipedia a; b. The village of Schwanenkirchen was confronted with massive unemployment when the local coalmine ceased operations in as result of the great depression. After two years, Max Hebecker, the owner of the coalmine, got a loan of Local stores were initially hesitant to accept a new type of currency as well. Nevertheless, the shopkeepers, confronted with the reality that merchandise was consequently bought at shops that did accept the new currency, eventually started to accept the currency too. Ironically it was the success of the experiment that also caused its end. In October , the German Government passed a law prohibiting the issuance of stamp scrip.
The village of Schwanenkirchen consequently returned to economic stagnation. Nevertheless, the miracle of Schwanenkirchen soon found its successor in neighboring Austria on 5th of July At the same time, the municipality, with merely The miracle of Schwanenkirchen also received attention through numerous publications in newspapers. Fisher perceived stamp scrip as the ultimate means to alleviate the chronic shortage of money and to solve the economic and financial crisis.
On behalf of his efforts and expertise he tried to convince Franklin Delano Roosevelt and the Congress to have the government introduce stamp scrip nationwide Lietaer ; Champ This might be surprising, but it should be noted that the Americans had quite a lot of experience with complementary currencies several times in history; during the civil war and the panics of , , and Gatch 4.
The Hawarden stamp scrip became a precedent for subsequent stamp scrip in other regions of the USA. Winfield H. Although the charismatic Caslow succeeded to make his Recovery Certificates widely accepted, the project eventually failed. Greco 60 and Gatch both point to the over issuance of scrip approximately 1 million dollar worth of scrip and the fact that Caslow was unwilling to redeem the issued scrip or to spend stamp revenues on the redemption of scrip.
That means that Caslow actually created money out of nothing and received labor without providing anything in return. The Larkin Company owned multiple chain stores in New York. It used merchandise bonds to pay its employees with a guarantee they could spend them at any Larkin outlet in the US. The scrip only disappeared after ordinary currency became more widely available by the end of the crisis. Stamp scrip in Germany and Austria however was short-lived when the central bank prohibited the issuance of stamp scrip and emergency currencies altogether.
Actually hundreds of stamp scrip programs were active in the US between Gatch 8. The Bureau of Foreign Affairs estimated that over emergency currencies were in circulation by February Lowd ; Ch3. As all banks were closed, no one was able to access their bank accounts. In most cases the number of participants ranged from a few hundred to a few thousands, usually a substantial segment of the inhabitants of small towns and villages. Nonetheless, many stamp scrip programs suffered problems as well, with the result that many if not all of them had difficulties to survive.
Gatch 31 describes how in the US, the most significant problem had to do with the exchange of scrip for goods and services. Many vital commodities could only be bought using ordinary currency. The demand, and worth of the scrip tended to depreciate as result of the ability to spent scrip only on a limited variety of products Gatch There was however a more important additional factor responsible for the vanishing of stamp scrip projects. This was essentially the slow recovery of the economy in the wake of World War II.
Yet they also abandoned local money when the standard monetary economy revived. Even well run enterprises … entered rapid decline when employment for money—either in the private economy, or through government support programs—became available to their members.
The idea of depreciating money only shortly revived after World War II. Central to the Bancor would be the taxing of national account surpluses to stimulate international trade. The proposal was notwithstanding, widely neglected and an alternative monetary order was created with the Bretton Woods conference of making the dollar the world currency. So, despite astonishing growth and emergence of stamp scrip in a short period of time, most stamp scrip came abruptly to its end as result of a prohibition on the issuance of stamp scrip. Nowadays, stamp scrip in its traditional form barely exists.