Local currency can be used in small communities to promote economic strength and community self–reliance. The currency is usually not backed by the national government and is intended for trade only within that small area. Local currencies are usually introduced during economically trying times, especially when they involve banking systems and national currency. The local currency also allows for a lower interest rate than the national currency.
Proponents of the local currency believe an economically depressed region can “pull itself up, by giving the people living there a medium of exchange that they can use to exchange services and locally-produced goods. In a broader sense, this is the original purpose of all money. Local currencies also tend to operate in relatively small geographic regions and encourage recycling, reducing the amount of carbon emissions from the transportation and manufacture of goods. As a result, they are part of the economic strategy of many green and sustainable living groups (…)." source
A good example of local currency at work is an experiment done in 1930’s in the city of Worgl, in Austria. It was time of the Great Depression; the small town of 4000 people had unemployment of 30%, with huge local government debt. In 1931, the city major ordered printing of 32,000 labor certificates, that carried a negative 1% monthly interest rate and could be converted into the Austrian currency at 98% face value. The new currency restarted a number of public projects mostly involving infrastructure and within a year the revenue of the local government rose from 2,400 AS (Austrian schillings) to 20,400, while the unemployment was virtually eliminated, all with no increase in prices. With the rest of Austria still gripped by the economic downturn, other communities followed with installing local currencies.
Naturally the socialist party of Austria wasn’t satisfied with the program and neither was the Austrian central bank, afraid of losing power over currency. As a result, the experiment was shut down, the unemployment went back up and the local economy caught up in deterioration with the rest of the country.
Local currency, on a much larger scale, is currently at work in the European Union. There are several countries within the Union that still use their own national currencies instead of Euro – the official currency in EU.
There are also a few communities in America that already use local currency:
\ CALIFORNIA
Humboldt Exchange Kaitlin Sopoci-Belknap P.O. Box 858, Eureka, CA 95502 info@humboldtexchange.org http://www.humboldtexchange.org First issue: January 2003. Currency: "Humboldt Community Currency" is a paper local currency in Eureka. Individual participants agree to accept half payment for their goods and services in a local currency made just for Humboldt. Many local businesses also accept Community Currency. Participation: 67 businesses. Information updated March 26, 2009
\ MASSACHUSETTS
BerkShares, Inc. Asa Hardcastle, President of board Susan Witt, Administrator P.O. Box 125, Great Barrington, MA 01230; (413) 528-1737 info@berkshares.org http://www.berkshares.org First issue: September 29, 2006. Currency: BerkShares are a paper currency printed in denominations of 1, 5, 10, 20, and 50 and are traded in the southern Berkshire region of Massachusetts. They are distributed by local banks and are backed by federal dollars. They are purchased at $0.95 per BerkShare from the bank, spent at a value of $1 per BerkShare with participating individuals or businesses, and traded back for federal currency at $0.95 per BerkShare, providing a financial incentive for both individuals to get and spend them in the first place and for someone who has received BerkShares in a transaction to spend them again rather than return them for federal currency. Participation: Approximately 350 regional businesses are formally participating and an additional 200 accept BerkShares on occasion. A total of 2.3 million BerkShares have been issued through 12 branches of five local banks since the program's launch. Approximately 180,000 BerkShares are currently in circulation. Information updated January 2009.
\ MICHIGAN
Bay Bucks Stephanie Mills, President Bill Palladino, Vice President P.O. Box 1951, Traverse City, MI 49685-1951(231) 995-9680 www.baybucks.org info@baybucks.org 1st issue: November 7, 2005. $300 “limited edition” issue at the Great Lakes Bioneers Conference in Traverse City on October 14-16th 2005. Currency: Bay Bucks are paper scrip tied to the dollar, in denominations of BB1, BB5, BB10 and BB20. Approximately $13,000 disbursed as of January 1, 2007. Six Membership levels (individual, nonprofit, government, biz I, II & III) are available, with Membership fees range from $20 to $150. All members but individuals receive 2:1 Bay Bucks. Participation: Bay Bucks has 125 members, including 95 businesses. Outreach: Bay Bucks has a quarterly newsletter, and is hoping to fund a part-time outreach director. Background: Bay Bucks are a project of the Traverse Area Community Currency Corporation, a non-profit created for the purpose of providing trustworthy tools for local exchange. A team of volunteers worked for four years before seeing the first bill come off the press. Information last updated March 9, 2007
\ NEW YORK
Ithaca HOURS Steve Burke P.O. Box 6731, Ithaca, NY 14851. (607) 272-3738; info@ithacahours.org www.ithacahours.org 1st Issue: October 1991 Currency: The “original” Hour-based scrip, one Hour is the equivalent to $10. To date, approximately $100,000 in Ithaca Hours have been put into circulation, facilitating several million dollars worth in transactions. Participation: Ithaca Hours has approximately 600 members (among a county population of 50,000), mostly individuals, but also large local businesses (such as food co-op, credit union, public library, hospital, bookstores, CD shop, farmer's market, beer retailer, wine shop, bowling alley, computer store, clothing stores, health club, internet service providers, graphic designers, landscapers, office supplies, printers, photographers, and many restaurants and coffeehouses). Membership costs $10 annually. Benefits include a listing in the annual Directory (10,000 copies circulated county-wide throughout the year) and an annual disbursement of two Ithaca Hours. Outreach: 5000 copies of annual directory, with 1500+ listings, web site, festivals, personal visits, media coverage. Outreach programs include a grants program to community organizations and interest-free loans to businesses. Background: Ithaca Hours is one of oldest and largest local currency systems in the world. It is recognized and utilized as an information resource by academics, journalists, and currency organizations worldwide. Information last updated March 9, 2007.
\ OREGON
Cascadia Hours Portland Cascadia Hour Exchange John Poling P.O. Box 8608, Portland, OR 97207 (503) 810-8382 www.cascadiahourexchange.com 1st Issue: 1994 Participation: 100+ members (professional/business/hobbyists). Each new participant is issued 5 CHE hours. Outreach: Monthly directory for members only, 100+ listings; monthly events such as auctions; and a web site, updated almost daily, which provides a copy of the CHE Directory and calendar of events. Background: Cascadia Hours originated as barter-club in Eugene in 1993, branches developed and have operated independently in 3 different areas, including Portland. Portland acts as a cooperative, and has developed and expanded with no Federal Reserve cash budget.
Corvallis HOUR Exchange Christina Calkins, Program Coordinator P.O. Box 1534, Corvallis, OR 97339?(541) 753-0595 www.hourexchange.org hourexchange@peak.org Press about Corvallis HOUR Exchange 1st issue: May 2002 2nd issue: May 2004 Currency: HOURS come in four denominations: 1 HOUR = $10, 1/2 HOUR = $5,?1/4 HOUR = $2.5, 1/8 HOUR = $1.25. Over 1,122 HOURS are in circulation as of Spring 2007. Each member is issued two HOURS for listing (in a quarterly newspaper directory), plus one HOURS for an annual renewal. Participation: HOUR Exchange has 110 members, including 10 storefront businesses, 19 home businesses, and 6 farms. Outreach: HOUR Exchange holds quarterly potluck gatherings and events and uses word of mouth and media coverage to spread the word. Background: The HOUR Exchange is an Oregon Non-profit organization operated by a member elected Board of Trustees. Information last updated March 12, 2007 Gorge Local Currency Cooperative (GLCC) Theresa North, Steering Committee 993 Tucker Road, Suite A Hood River, OR 97031 http://www.riverhours.org info@riverhours.org (541) 387-3956?1st Issue: September 2004 Currency: RiverHOURS are primarily based on the Ithaca Hours system, and have three denominations: 1 HOUR = $10, 1/2 HOUR = $5, 1/10 HOUR = $1. The GLCC chose the Hours system for its local currency to emphasize the value of a person’s time. The GLCC focuses on the Columbia River Gorge region within a 35-mile radius from the center of the Hood River (Oregon) bridge. It contains portions of five counties in two states. Outreach: The GLCC provides informational presentations for interested community groups and booths at numerous community festivals. Hispanic outreach is a top priority. There have already been articles in several local media outlets, both print and broadcast. In 2005 GLCC published its first trade directory with listings of all paid members. Background: RiverHOURS began in fits and starts in 2001, and finally became a group dedicated enough to meet week after week and hammer out all the details beginning in August 2003. By the spring of 2004, the GLCC had written and adopted its bylaws and began soliciting members of the community to participate. RiverHOURS will be officially launched as soon as the GLCC reaches at least 100 members. The GLCC's mission statement is, "The Gorge Local Currency Cooperative (GLCC) seeks to create and sustain a local currency system in order to build community, promote regional economic independence, support local business and trade, encourage entrepreneurship, honor diversity and enhance the local minimum wage in the Mid-Columbia region."
\ PENNSYLVANIA
Equal Dollars Deneene Brockington Resources for Human Development, Inc. 4700 Wissahickon Avenue, Suite 126 Philadelphia, PA 19144 (215) 951-0300 deneene@rhd.org www.equaldollars.org Equal Dollars on NPR 1st Issue: October 1996 Currency: Equal Dollars are issued on par with federal dollars. To date 96,400 Equal Dollars have been issued by the program. Participation: 864 members, 298 businesses. Outreach: Equal Dollars' outreach includes a quarterly newsletter with 2,400 listings, membership cards, participating in Flea Markets, and operating a Tool Rental Center and Micro-Loan Fund. ?Background: Equal Dollars was started by $78 million non-profit Resources for Human Development, Inc., which maintains 150 diverse human service programs. To date, more than $100,000 has been put toward this currency (mostly discretionary funds of Resources, with some foundation, corporate, and anonymous donor funding). Funds have supported a full-time project director, technical and financial counselors, business development training, marketing materials, etc. Equal Dollars is currently applying for state money and hoping to expand to 5000 members. It utilizes both scrip and checking systems. Information last updated 02/09.
\ WISCONSIN
Madison Hours Jon Hain 1202 Williamson Street Madison, WI 53703 (608) 259-9050 postmaster@madisonhours.org www.madisonhours.org 1st Issue: May 6,1996 Currency: One Hour is equivalent to $10 federal dollars. Currency is issued in denominations of 1/4, 1/2, and 1 Hours. To date the program has issued 3600 Hours. Participation: Current membership of Madison Hours Cooperative is roughly 120, including 35 business members. Outreach: The Hour Community Newspaper, is distributed quarterly throughout community, each featuring around 500 listings. Members can make listings in the newsletter and on the website. Madison Hours also sponsors a monthly potluck and a monthly pancake breakfast fundraiser. Background: The Madison Hour planning committee received excellent media coverage and was initially overwhelmed with press response. Originally fiscally funded by Housing Co-op, it is currently supported mainly by grants, ongoing fund raising, membership fees and directory advertisement. They have started offering web hosting to their members as another source of income. Madison Hours is incorporated as co-operative, broad-based group administration. Information last updated March 9, 2007
Comments
Alternative currencies take a lot of extra work, often by volunteers, but they can work. Also, they are consistent with the future Single Global Currency, which will necessarily be part of future international monetary reform.
Despite the initial U.S. demurrals, China is correctly leading the way to a Single Global Currency, which necessariy will be managed by a Global Central Bank within a Global Monetary Union. As China requests, this next global currency will not be the responsibility of just one country. This proposal is similar to the pending proposal from the U.N. Task Force on Financial reform, let by Joseph Stiglitz. The U.S. should join that panel and China in urging the G20 to begin planning for a Single Global Currency.
The success of the euro shows that monetary union is the best way to ensure monetary stability. The primary problem with the euro and currencies of other monetary unions is that they still must co-exist within the international multi-currency system itself where the value of those common currencies must still fluctuate in value against each other.
With a Single Global Currency, there are no such fluctuations, by definition.
If 16 countries can use the same currency, why not 192?
In addition to eliminating currency fluctuations, the use of a Single Global Currency would eliminate the current foreign exchange trading expense of $400 billion annually, eliminate currency risk, eliminate
current account imbalances, eliminate the need for foreign exchange reserves (now totaling more than $3 trillion); and bring other benefits worth trillions, such as reducing the impact of global financial turmoil such as
we are now experiencing.
The Single Global Currency Assn. (www.singleglobalcurrency.org)
promotes the implementation of a Single Global Currency by 2024, the 80th anniversary of the 1944 conference. That’s only 15 years away.
The world is moving toward a Single Global Currency through the creation, expansion and merger of regional monetary unions. Anoth route
is through international monetary conferences proposals and agreements, such as were seen at Bretton Woods.
The challenge now is to reach that goal planfully, as soon as possible with as little cost and as few crises as possible.
See the book, "The Single Global Currency - Common Cents for the World."
Morrison Bonpasse
Single Global Currency Assn.
Newcastle, Maine, United States
This seems to be a growing trend. I saw news about it yesterday on USA Today and then this morning on Fox News.
I'm curious what the affect will be upon gold and silver? And if states or local governments could issue their own coinage in gold or silver? Seems to I remember there being something about that being possible under the constitution.
What surprises me that all this currency talk and the problem with the dollar isn't affecting gold and silver like I would think. I track them with the free widget www.learcapital.com/exactprice and they pretty much have remained in steady with a few bursts up and down but always recovering.
Community currencies are growing in popularity. Just in the past two months I have seen 6-7 news ones such as Michiana Money, Detroit Cheers and the Southampton Pound. Saving money and keeping your spending local is a nice trend.
Mark (editor Community Currency Magazine)
editor@ccmag.net
Skype IM 'digitalcurrency'
Jct: Best of all, when the local currency is pegged to the Time Standard of Money (how many dollars/hour child labor) Hours earned locally can be intertraded with other timebanks globally!
In 1999, I paid for 39/40 nights in Europe with an IOU for a night back in Canada worth 5 Hours.
U.N. Millennium Declaration UNILETS Resolution C6 to governments is for a time-based currency to restructure the global financial architecture.
See my banking systems engineering analysis at my kingofthepaupers channel at youtube.com with an index of articles at johnturmel.com/kotp.htm
It is important to understand that these aren't alternative currencies. These are gift cards by another name. Everything is denominated in dollars. In fact, it would be virtually impossible to introduce a bran new fiat currency out of thin air. To understand this, read Ludwig von Mises regression theorem. Even the dollar was originally backed by gold.
Furthermore, we don't suffer from a currency shortage, but from fiat currency. The only real alternative is to return to sound money, i.e., a classical gold standard.
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