This is the third post in a series on non-governmental initiatives to improve a local community.

We live in a time of tremendous economic uncertainty.  Newspapers shout about what the government is doing (or should be doing, or should not be doing…) to fix the situation.  But surely there is something that the average Joe (or Joanne) can do, too.  We have empowered our government to spend trillions on our behalf, but have we, in the process, disempowered ourselves?

Here, then, is a link to the history of local scrip — currency printed, circulated and traded like dollars, but backed only by the good faith and credit of the local townspeople.  The purpose of the scrip is to keep transactions local, stimulating the local economy. 

Move The Deli

My favorite story occurs in 1989 when a deli owner in Great Barrington, Massachusetts wanted to move his store, but the bank wouldn’t loan him the money.  So he printed $10 notes with a catchy cartoon and sold them to his customers for $8.  Each note had a “not redeemable until” date, so he could space out the repayments.  The cartoon is cute enough, that I might have bought one to keep, and with a 25% return on your investment($2/$8), I might have bought a lot more.  Enough customers purchased the notes, the store was moved, and the customers repaid (in dollars and in deli).

Another good example is the Ithaca Hours scrip used in Ithaca, NY.  I would swear that I remember discussing it when I was a student at Cornell, but the website states that the Hours began in 1991 — well past my graduation.  Perhaps another form predates it.   My recollection is that you could earn some by volunteering at certain social services centers, and they were redeemable at a number of places in town, though I believe that at most stores, you could only pay for a percentage, e.g. 20%, of the purchase with scrip, and the rest would have to be greenbacks.  In this manner, they function like a coupon but also reward social programs.  I remember discussing whether there would be tax on the transaction (there isn’t), and why would the state let it go untaxed (small potatoes was our best guess).

There are several other examples of local currencies:  BerkShares, Thread City Bread, and Philly’s Equal Dollars.

Other stories in this series:

• Alabama pharmacist distributes $2 bills with the request that the recipients try to spend them locally.
• Depression-era financier creates make-work project to employ local stone craftsmen.

Tags: economic stimulus, local initiatives, local scrip

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