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An Arbed emergency bank note photographed at the MNHA in Luxembourg
Photo: LaLa La Photo
Imagine tomorrow your employer started to print its own money and pay you in this new currency. That’s exactly what happened in Luxembourg after WWI.
From August 1914 to 11 November 1918, Luxembourg was occupied by the German empire. By the time of the Armistice in autumn 1918, hoarding of official money, food scarcity and political wrangling over Luxembourg’s future, left the country in a state of turmoil, adding fuel to the fire of a growing communist movement.
One of the solutions to the most pressing problems came in the form of emergency money or “noutgeld”, produced by some Luxembourg communes and firms. “The notes were printed by local printers and their circulation, in general, was very short-lived,” Raymond Weiller wrote in “Cent Vingt Cinq Ans de Papier Monnaie Luxembourgeois”. The money of the Gelsenkirchener Bergwerks-Aktien Gesselschaft in Esch-sur-Alzette, for example, circulated from 21 November to 11 December 1918.
Steel manufacturer Arbed (today ArcelorMittal) was a large employer at the time and issued its own emergency money, and it appeared to have some success.
“It was higher than what communes issued because there was value behind it. The steel industry had a very high value so they could also issue higher amounts of 10 marks. That was a lot of money at that time,” Musée Nationale d’Histoire et de l’Art (MNHA) conservator François Reinert explains. Coins were still used for the purchase of things like bread. But these notes, one of which can be viewed at the MNHA, became widely accepted.
François Reinert, pictured, is a conservator at the Musée Nationale d’Histoire et de l’Art (MNHA). Photo: LaLa La Photo
Larochette was among the communes that issued its own emergency money, though the commune says no examples remain today, and Echternach and Bettembourg intended to issue their own money, according to Weiller.
Starting January 1919, the Luxembourg State issued its own bank notes, in high value denominations of 500 and 125 francs. Luxembourg left German customs union the Zollverein and in 1921 began a new chapter in the Belgo-Luxembourg monetary union.
A second emergency money
“The Belgian economy was strong but it changed,” Reinert explained. After riding the wave of a strong Belgian economy, Luxembourg began to suffer every time its neighbour’s money was devalued. The crunch came during the steel crisis of the 1970s. Anticipating further devaluation, the Luxembourg government with Jean-Claude Juncker as finance minister, began printing its own, secret money in 1993. Some 50 billion worth of independent Luxembourgish francs in denominations of 1,000 and 500-franc notes were printed but never publicly issued.
Speaking as then European Commission president in June 2019, Juncker said such actions would be deemed “irresponsible, reckless” now, but that it had been necessary to “hedge ourselves against all eventualities” at the time. The notes themselves depicted Grand Duchess Charlotte, who died in 1985. The secret notes were reportedly burned by the Luxembourg army on 1 January 1999.