the plan for the future

Scrip / France

Taken from: - Scrip / France

Stamped scrip was issued in the small historic French town of Lignieres-en-Berry in August 1956 in an effort to generate more business and thus counteract the town’s decline: its population had halved to 1,700 in the previous fifty years and of those who remained, 300 were over seventy. Initially, the scrip, which was issued by a group of the town’s traders, was exactly like that in Wörgl. It was backed by national currency into which it could be converted at 98% of its face value and had to be revalidated each month with a stamp costing 1%.

The early results were encouraging but the project started to enjoy real success when, in April the following year, wage earners were told that if they converted their money into scrip, they would be given 5% extra. Naturally, it was necessary to stop people who bought scrip this way immediately converting it back for a quick profit and the new notes were stamped with their date of issue so that they could only be changed into francs at the 98% rate after four months: if converted earlier, a bigger discount applied.

This deal proved very attractive to the people of the district because, if they converted their cash into scrip and spent it immediately, they were effectively getting a 5% discount from the traders. However, if they simply held on to the scrip for four months and then stamped it to bring it up to date, they could convert it back to cash and earn a 3% rate of interest for the period. As a result, the new money was widely used in the town and tended to circulate for at least four months before being cash in.

Many communities moved to copy the system, alarming the Bank of France so much that in July 1957 it sent a team of police specialists to investigate what it saw as a virus about to contaminate the whole country. Laws carrying penalties of up to two years’ imprisonment and a 20 million franc fine were passed to frighten off people planning similar systems but Ligniere’s scrip continued to circulate at least until the early 1960s and another small town, Marans, introduced a variant of it in March 1959 without anyone being prosecuted.