BerkShares, hot off the press

When those dead presidents start getting really weak, local communities start printing their own money -- often at an exchange rate that beats the buck.

It happened during the Great Depression, when U.S. currency became scarce.

Now, it's happening during the Great Recession as the value of the U.S. dollar shrinks.

While not really a new phenomenon, the number of communities printing their own money -- under tight federal monetary restrictions -- has grown recently to more than a dozen, according to the E. F. Schumacher Society.

The society served as the research and development center for the leading home town money maker, the Great Barrington, MA-based BerkShares program. The society also tracks other local currency action.

Michael Shuman, author of "The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition" ($24, Berrett-Koehler Publishers), says the practice is bigger. He estimates that 75 different currencies have been created recently at local mints in direct response to the national economic crisis.

It's simple home economics. When times are tough, the idea is to make "the buck stop here" and keep money within a community to support local business, employment and the area's general economy.

Businesses and individuals form networks to print currency, which is exchanged for legal U.S. tender at participating banks. The 'chummy money' is then spent only at participating community retailers for goods and services.

The visage of Philadelphian Alain LeRoy Locke (1885 - 1954), called "Father of the
Harlem Renaissance," adorns Philadelphia, PA's Equal Dollars Community Currency.

In some cases, local money is exchanged, local dollar-for-U.S. dollar, but other local currencies' exchange rates effectively create a discount from participating merchants.

For example: BerkShares are available at the rate of $0.95 per 1 BerkShare to be used in the Great Barrington and Lenox, MA area. North Carolina's Piedmont region is relaunching The Plenty (for Piedmont Local EcoNomy Tender) at the rate of $0.90 per 1 Plenty to be spent in the counties of Orange, Durham and Chatham and parts of Alamance, Wake and Lee Counties.

Those discounted exchange rates also work in reverse.

Once the merchant or customer decides to take the chummy money out of circulation and back to the bank, he or she gets what was originally shelled out for the paper -- $0.95 for one BerkShare or $0.90 for a Plenty.

Again, the idea is to not return the cash to the bank, but keep it circulating in the needy community.