Monday, December 8, 2008

LOCAL CURRENCY SHOWS UP IN MILWAUKEE

Erika Slife,Chicago Tribune - Residents from the Milwaukee neighborhoods of Riverwest and East Side are scheduled to meet to discuss printing their own money. The idea is that the local cash could be used at neighborhood stores and businesses, thus encouraging local spending. . .

"You have all these people who have local currency, and they're going to spend it at local stores," said Sura Faraj, a community organizer who is helping spearhead the plan. "They can't spend it at the Wal-Mart or the Home Depot, but they can spend it at their local hardware store or their local grocery store."

Incentives could be used to entice consumers into using the new money. For example, perhaps they could trade $100 U.S. for $110 local, essentially netting them a 10 percent discount at participating stores.

It's not a new concept-experts estimate there are at least 2,000 local currencies all over the world-but it is a practice that tends to burgeon during economic downturns. During the Great Depression, scores of communities relied on their own currencies.

And it's completely legal. As long as communities don't create coins, or print bills that resemble federal dollars, organizations are free to produce their own greenbacks-and they'd don't even have to be green.

Sam Smith, Shadow of Hope, 1993 - During a recession, the lease for a restaurant in Great Barrington, Mass., expired. The local bank wouldn't lend restaurateur Frank Tortrello money to move across the street. So Frank decided to print his own. He called them Deli Dollars. Each sold for $9 and could be redeemed for $10 worth of food after six months. Not only did the idea provide Frank with enough money to make his move, but it spread throughout the community. A local farm issued notes with the slogan "In Farms We Trust," featuring the head of a cabbage instead of the head of a president. New restaurants followed with their own currency and the local bills started showing up everywhere, including in church collection plates.

Alternative currency has cropped up in Ithaca NY and is being used by 700 individuals and business. In Seattle, some have devised cardboard money. In another town, wooden coins.

Then there's Daisy Alexander, a retiree from Montclair, New Jersey, and Pepe, a recent immigrant from Havana, Cuba. They both live in a low-income senior housing development section of Miami, Florida. At first glance, Daisy and Pepe seem to have little in common. But they are bound to each other -- in friendship and through the common bonds of a new economic system called time dollars or service credits.

Time dollars, described in the book Time Dollars: A Currency for the 90's by Edgar Cahn and Jonathan Rowe, operate like a blood bank. People help others in their community and get credits in a computer data base that they can draw upon in times of need. Cahn and Rowe describe how time dollars have trans¬formed over 100 communities and how grass-roots groups built the new currency.

Here's how it works for Daisy and Pepe: Daisy volunteers three days a week tutoring first graders at the elementary school across the street from her home. Every week Pepe comes to her house and takes her grocery shopping. An amputee with a cane, Daisy is dependent on Pepe to provide this service for her. But no money changes hands. Daisy simply "cashes in" the time dollars she earns tutoring to "pay" for Pepe's shopping help. In turn Pepe earns time dollars to buy services he needs. But Daisy and Pepe gain in other ways as well. Both are renewed and enthused about the opportunity for helping, and inspired by the social activities that the sense of community has produced.

"The potential benefits of the time dollars concept are limitless. It can touch every life in every community, ranging from an apartment complex to an entire nation, every facility, from a nursing home to a university campus," says au¬thor Cahn. "It fosters a sense of financial independence, camaraderie, community spirit, harmony among age groups, races, religions, in¬come levels, and even political adversaries."

In each of these cases, citizens have come to understand that money is just a way that we translate the value of products and services. Just because one may not have money does not mean there is no value to be exchanged. It is simply a matter of coming up with a way to keep track of it without the services of the Federal Reserve.

Sam Smith, Great American Political Report Manual, 1997 - Says Barbara Brandt in Whole Life Economics, in the 1860s there were more than ten thousand different kinds of locally issued bank notes in use in the US simultaneously, including that issued by state banks.

After the creation of federal banking during the Civil War and a federal reserve system in the early 1900s, the variety of money in this country contracted. But in the 1930s, when communities found themselves with products, needs, skills and labor but little money, local currencies made a comeback. Writes Brandt:

In numerous communities, local governments, business associations, or charitable groups began to create their own money systems for local use. Local depression money came in many variations: vouchers that could only be traded in specific stores, or for specific items, and printed currencies (often called 'scrip') on paper, cardboard, or even wood, which had to be spent within the community a certain number of times or before a certain date. By 1933, the New York Times reported that one million Americans in three hundred communities were using barter or scrip system to keep their economies going.

In 1983, Michael Linton developed a 'local exchange trading system' on Vancouver Island that created $350,000 worth of trading in its first four years. LETS is as close to a biological organism as an economic system can be. Low administration fees pay for daily operations entirely in green dollars. Federal dollar expenses like telephone and postage come from nominal annual fees. . .

In Ithaca NY, some half million dollars worth of local trade has been added to the economy through Ithaca Hour notes. An Ithaca Hour is based on the average local wage, about $10 an hour. Ithica Hours have been used to buy plumbing, child care, car repair, and eyeglasses. They are accepted at restaurants, movie theatres, bowling alleys, and health clubs. As Paul Glover explained in In Context, "We printed our own money because we watched federal dollars come to town, shake a few hands, then leave to buy rain forest lumber and to fight wars. The local money, on the other hand, stays in our region to help us hire each other."

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