Money
12:00 pm
Thu October 11, 2012

Tough Times Renew Interest In Local Currencies

Before the U.S. Dollar was created in 1791, a variety of state-issued paper currencies and foreign coins comprised the US money supply. Fast forward to the 21st Century, where many modern communities are turning to "local currencies" as both a way to deal with tough economic times and boost local business. Hudson Valley Bureau Chief Dave Lucas reports.

The U.S. dollar came into being in 1791, when Congress adopted recommendations made by Alexander Hamilton’s Mint Report submitted that year. The report defined the dollar in terms of weights of both gold and silver... by 1795 the dollar was a firmly established, accepted currency.

Prior to the US Dollar, a variety of state-issued paper currencies and foreign coins comprised the US money supply. Fast forward to the 21st Century, where many modern communities are turning to "local currencies" as both a way to deal with tough economic times and an alternative to federal legal tender.

Issuing an alternative currency is perfectly legal, as long as it is treated as taxable income and consists of paper bills rather than coins. The sour economy has generated interest in establishing regional currencies...

Liz Pohlmann is a member of the Initiating Group of Transition Troy, where there’s talk of establishing “Troybucks”. She believes communities should be resilient, good places to live and be able to meet local and regional needs and that a local currency would help in that regard.

Dr. Glen Culbertson has studied local currencies and local economies - he says there a number of options to be considered, including where to draw the borders of a region the local money could be used in. He sees alternate currency serving as an economic spark-plug, helping power local economies, where more of what people need is produced closer to home. He says it is not out of the question that such currency could be card-driven - such a system already exists in San Francisco.

Culbertson envisions a local currency that would circulate from Saratoga to Southern Albany County, where money traders would serve as agents between citizens in the Capital District who might want to exchange their local currency for one accepted in the mid-or-lower Hudson Valley. And given Troy's proximity to Massachusetts, there could also be an opportunity to trade Troybucks for BerkShares: that 6-year old program has established alternative currency in the Berkshires - Alice Maggio is co-ordinator of the BerkShares program at the New Economics Institute - she explains BerkShares are backed by US dollars.

Go to one of several banks in Western Massachusetts, hand a teller $95 and get back $100 worth of BerkShares... Maggio explains one of the goals is to develop a loan program where BerkShares could be used to establish new businesses - without US dollar backing.

The loan program could get underway as soon as next year. Liz Pohlman points out there are around 150 "transition communities" in the United States. This Friday evening 7:00pm - 9:00pm at the Oakwood Community Center, 313 10th St (corner 10th and Hoosick Streets), Troy, NY - there will be a public discussion about exploring how a local, independent currency can complement national currency.

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