Everybody knows probably the stories about butter and eggs which have been smuggled from the countryside to the city during the war. But how were these butter and eggs paid for?
At the outbreak of the First World War the old bills from the National Bank maintained in circulation. From 1912 onwards the National Bank started to take measures in consideration of a growing armed conflict. Five franc bills were prepared to be put into circulation in case a war should break out. The threatening international conflict spread panic among the population. People no longer trusted banknotes and at the end of July and the beginning of August 1914 they hurried to the National Bank in order to exchange their bills for coins.
On top of this, a problem arose in the small money transfer. The five franc coin and the small silver coins were hoarded for their metal value and gradually disappeared from circulation. To solve this problem the National Bank brought out bills at the value of 1 and 2 francs of the current-account type. However, this would not end the problem of the scarcity of money.
The number of municipalities which suffered from financial problems kept on growing. Apart from the daily expenses they were confronted with additional war costs. The municipalities were charged with militia compensations, military demands, war contributions and they could not appeal to their financial reserves. These were partly blocked by war measures, like the suspension of deposits which limited the demands sharply.
In August some towns found a creative solution for their financial problems: they started issuing emergency notes themselves. By doing so municipalities created extra financial means for themselves and their citizens. Other towns would follow this example until eventually more than 480 towns in Belgium put their own emergency notes into circulation.
The municipalities thus regained possession of money, but did people have faith in those newly created notes? Some towns had elaborated compulsory measures in case the emergency notes would not be accepted, but they hardly made an appeal to them.
A few other problems arose which the towns had not taken into account when they started issuing emergency notes. First of all, within which boundaries were these notes valid? Local merchants could not limit their trade ties within their own town or city. Some small towns relied completely on a neighbouring city for certain products. The town of Kessel-Lo e.g., was almost completely dependent on Leuven for its food and fuel supply. It was thus very important for Kessel-Lo that its emergency notes were accepted in Leuven. To solve these problems municipalities and cities reached an agreement by which emergency notes could be used in a larger geographic area. In the province of Eastern Flanders the “Bond van de gemeenten van het Land van Waas” was founded which united the city of Sint-Niklaas with twenty neighbouring towns. The towns from the vicinity of Doornik came to a similar agreement.
Initially towns did not bother about the legal aspect of the emergency notes. Yet, there is only one institution in Belgium which has the right to put money into circulation i.e. the National Bank of Belgium. To solve this legal problem the emergency notes were considered as promissory notes of a special type, which were only used within the boundaries of (collaborating) towns to purchase indispensable products.
Finally, the emergency money from Ghent deserves some special attention. Ghent was one of the four Belgia n towns where emergency coins were struck next to emergency notes. These coins, which were made of iron, were minted with a film of copper until this was prohibited by the German occupier in 1918. From this time onwards the city issued cardboard coins.
Update 08/02/2013: The Belgian emergency notes of World War I are now online! 
- Janssens V., De Belgische Frank. Anderhalve eeuw geldgeschiedenis, Brussel, 1975, pp.155-167.
- Waerzeggers R., “Het noodgeld uitgegeven door het Leuvens stadsbestuur 1914-1918″, in: Revue belge de Numismatique, Brussel, 1978, pp.105-180.
- Het noodgeld van Oost-Vlaanderen tijdens WO I en WO II, Brussel, 1989, pp.3-9.
- “Les monnaies communales en Belgique pendant la guerre 1914-1918”, in NBB-BNB, 1953, n°2, pp.1-16.
- The ‘current account’ series also implied bills of 1000, 100 and 20 franc and was among other things developed for the payment of bank balances.; 3 Other sources mention about 600 towns.; League of the municipalities of the Waasland.