password authentication failed for ..

Hi

I have the data base "test" and two users "test1" "test2". I added the following record to pg_hba.conf

local test password passwords

I then created the "passwords" file in $PGDATA using pg_pasword and added entries for the two users "test1" and
"test2". 

But when i tried to connect "test" using

psql test -U user1

i am always getting the message "password authentication failed for the user user1"

I enterd the password correctly.

How can i remove the problem?

thanks