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Issue 2
Community Scale Economics







Community Currencies at a Crossroads
New Ways Forward

by Tim Cohen-Mitchell

From time immemorial to the Middle Ages, from the Great Depression to the inflation-riddled 1970's, communities across the globe have put their ingenuity to work in designing their own monetary systems when existing ones falter or no longer serve their needs or values.
        Today, community currencies are again on the move. With the marked shift toward economic globalization and the decline in community cohesion has come a new generation of monetary systems created not by central bankers but by communities.
        The new generation began in 1982. In an effort to retool the widely used commercial barter association model for grassroots economic development, Michael Linton rolled out his Local Employment and Trading System (LETS) in British Columbia, Canada. Although LETS has not caught on in the United States, it inspired Paul Glover and his colleagues to develop ITHACA HOURS, a time-based paper currency system, which is now the most widely replicated model for community currencies in North America.
        HOURS also looked to the hundreds of barter and scrip systems that flourished in the United States and Europe during the depression years and in the utopian monetary experiments of the 19th century. Along with LETS and HOURS emerged the service-credit exchange system, Time Dollars, introduced by Edgar Cahn in the 1980s.

        These three main systems have been copied with varying degrees of success by communities throughout the world.
        As their largely volunteer organizers grow in experience, confidence and skill, they have begun to develop a host of hybrid systems designed to better meet local needs. An early example is Womanshare in New York City, developed in 1991 by Diana McCourt and Jane Wilson; it combined LETS and Time Dollars to form a unique skills exchange system designed expressly for women.
         Another example is the Member Organized Resource Exchange, or MORE, in the low-income Grace Hill community of St. Louis. There, in 1990, social service activist George Eberle and his team introduced the MORE Time Dollar Exchange (MTDE). MTDE has grown to include thousands of residents exchanging a wide variety of services and goods. The system has also added a store stocked with donated goods of all kinds, including food, which MTDE traders can purchase with Time Dollars; these goods are priced in fractions of the time it took other traders to operate the store itself.

Bringing Businesses, the Public, and Social Services Together
        One of the limitations of HOURS and LETS, insofar as their economic impact and broader civic participation is concerned, is their exclusion of community members who do not offer goods and services for trade. In this, these systems more closely resemble the business-to-business nature of commercial barter associations (from which LETS, in fact, drew its inspiration). This point is significant because over 90 percent of Americans of working age are not business owners, but employees. Thus, the purchasing power of local consumers is more likely to be siphoned out of the community and into the external economy than it is to be spent and recycled within the local economy. But community currency organizers are beginning to address this problem while also putting local money to work in bolstering the non-profit service sector community economies.
        The Toronto Dollar project (, launched early in 1999 in the St. Lawrence neighborhood of Canada's commercial first city, is a promising example of meeting social needs while also promoting local business. According to its organizers, the project seeks to strengthen the neighborhood's identity and autonomy, promote local trade, and provide a locally generated source of funds for charitable organizations tackling poverty and homelessness.
        The Toronto Dollar is modeled on the pioneering work of the E.F. Schumacher Society, which helped merchants in Great Barrington, Massachusetts, issue their own scrip -- the "Berk-Share." Berk-Shares were sold to consumers at a discount through local banks and then spent at full value with local merchants, who later redeemed the notes for cash at the bank. The Toronto Dollar project sells its notes to the public, but at face value. They are then spent with local merchants, who redeem them for federal notes at an exchange rate of 90¢ Canadian to one Toronto Dollar. The ten cent per dollar difference in the exchange rate is deposited into a savings account and distributed as grants to charitable organizations.
        One of the system's organizers, John Flanders, reports that over 100 businesses are now participating, with more joining every week. "So far we have exchanged about 65,000 Toronto Dollars, and have been able to generate 10 percent of that for charitable community initiatives." The participation of the CIBC, a major Canadian bank, and Toronto's First Post Office as exchange bureaus has been "a huge endorsement for the Toronto Dollar project," Flanders says, "especially among those businesses that are on the brink of joining in."
        In western Massachusetts, a trial series of the Valley Dollar will soon be issued, which will be sold to the public through local exchange bureaus (two banks, a credit union, and a visitor's center) for 95¢ (U.S.) to the Valley Dollar. Purchasers of the notes will spend them at face value ($1.00) for local goods and services. Those accepting them will, in turn, spend them at face value with others or sell them back to the exchange bureaus for 90¢, deducting the 10¢ "exchange fee" as a promotional expense. The 5¢ per dollar difference in the selling and buying exchange rate will be split between the issuing organization, in this case, the Valley Trade Connection (, and local social service groups. Grants to these groups will be apportioned through a public balloting process in which each person purchasing the local notes will cast one vote for each local dollar purchased.
        LETS creator Michael Linton has developed a new model to serve both business and community needs as well, that he calls Community Way. With Community Way, businesses donate Community Way Dollars (CW$) to local non-profits of their choice. The non-profits use CW$ to pay their employees, to offer as volunteer incentives, and to exchange for donations made to the organization in federal dollars. The CW$ are then spent by their holders at participating businesses as full or partial payment for goods and services. The CW$ may be donated back to the organizations or spent among the businesses themselves.
        Original community currencies have also made Third Sector work a priority. Ithaca HOURS participants have approved dozens of grant proposals for HOURS funding, equal to a percentage of HOURS in circulation, to community organizations. And Edgar Cahn, creator of the Time Dollars, has been actively joining Time Dollars to activities in some of the poorest neighborhoods in the nation, including peer tutoring programs in schools, juvenile justice programs, adoption agencies, elder- and child-care groups, and health organizations.

Community Currency and Public Works
        Community money can be put to work for many uses, including public works. The government of Curitiba, Brazil, for example, has been issuing bus tokens to residents in its poorest districts, in exchange for recyclable garbage. Developed in the 1980s by Jaime Lerner, the city's former mayor, the bus token program not only keeps the city clean at a low-cost, but also helps residents gain access to jobs and business opportunities beyond walking distance from their homes. The program pays for itself through the sale of the recyclable garbage to large recycling firms.
        Another example of how community-issued money can be used for the public good is told by Alexander Kim, organizer of Mo, Money in Louisiana:

In Ireland around the middle of the century, villagers wanted to erect a common indoor market center. However, they did not want to issue a municipal bond because of the interest they would have to pay over the years, and because of the potential lack of large investors. The community leaders decided to issue coupons, which were essentially a local currency that depicted the name of the town and the marketplace. By selling these notes, the town raised enough money to pay for the building. After the building was completed, the residents of the community could spend the coupons with any of the merchants in the market center. The merchants, in turn, were allowed to use those same coupons to pay their rent at the market. Eventually, all the coupons were redeemed. The town did not have to pay interest on the capital. In the end, the community enjoyed a powerful sense of ownership of the public market.

        Thomas Greco, author of New Money for Healthy Communities, writes [in chapter 9] of an Argentine province, Salta (, that in the 1980s issued four-year bonds as payment to employees for completing infrastructure projects. The notes effectively began to circulate as currency, with the unanticipated benefit of proving more inflation-proof than the national currency.

One Berk-Share     10 Berkshire Farm Preserve Note

Local Employment & Trading Systems

The "LETSystem" was developed by Michael Linton and other residents of the Conrox Valley of British Columbia in 1982. The group borrowed the basic architecture of commercial barter associations and re-scaled it to the grassroots level in an attempt to tackle unemployment in the region. The model has since spread to other parts of Canada, as well as to Europe, Australia, New Zealand, Asia, and Africa, [and the United States] where it is being used, with varying success, by over 2000 communities.
        LETS operate differently according to local conditions, but their basic objective is to create a supplemental currency to stimulate a greater volume of local trading activity. Traders list their goods and services in a trading directory. When they trade, they write cheques to one another, and their resulting credits and "commitments", or debits, are recorded in a central bookkeeping system that later generates statements of account for each member. LETS is also a system of instant and interest-free credit. A new member can begin trading immediately and existing members have access to self-issued, no-interest loans. Only members can trade in a LETS as only they have access to the system's bookkeeping system. This boundedness creates the space within which members can develop new patterns of trade that keep the full value of what is exchanged within the community. Some LETS, such as Meiteal na Mart in Westport, County Mayo, Ireland, have introduced scrip alongside cheques to expedite smaller transactions. Like their progenitors, commercial barter associations, LETS in the U.S. are required to issue their members IRS Form 1099 and must themselves file tax returns, Contact: Michael Linton, Landsman Associates, 479 - 4th St., Courtenay, BC V9N IG9, CANADA, (604) 338-0213,,

Technology-driven Innovations
        A number of innovations were presented at the 2nd Annual Conference on Community Currencies in Chicago in 1999, including how the latest technologies can be used to improve and expand the impact of community currency.
        Michael Linton demonstrated a new palm-sized, battery-powered "smart-card" reader. The reader, which looks like a calculator, can move multiple local and federal currencies from the microchip-embedded credit and debit card of one trader to another. The device, the work of an international team, is a relatively inexpensive solution to the administrative burden LETS places on organizers and enables traders to trade with members of other systems, even internationally. The readers, Linton says, cost roughly $50 (US), with the cards costing about $2 each. Some of the cost may be offset by negating the need for printing and processing the traditional scrip and cheques used in scrip and LETS systems.
        Another conference attendee, Sergio Lub, introduced a new web-based exchange system called Friendly Favors (, in which anyone, anywhere, once sponsored into the system, can trade. Traders -- now found in at least 12 countries -- use barter, the system's currency, or currency of their choice to make transactions. Each participant receives an ID card on the web, which features their color photo, their needs, offers and interests, their sponsor and a map showing their geographical location. Lub describes it as "a friendly way to account for the favors we do for each other."

Critical Issues
        With the exception of Time Dollars and Womanshare, which are currencies based on hour-for-hour labor exchanges, most local currencies are inextricably linked to national currencies. This leaves them susceptible to policy- or market-driven currency devaluation and inflation in the non-local economy. It was the acute shortage of federal currency during the Great Depression years that spurred hundreds of communities across America to issue their own notes. Later, in the 1970s and 80s, it was inflation that prompted further experimentation with community currencies.
        Theoretically, participants in community currency systems could denominate their prices in local currency, as has been suggested by Paul Glover among others. This would be somewhat akin to the current two-price system in place in the European Union, where prices are marked and quoted in national currency and in the new common unit, the Euro.
        A more radical solution has been proposed by Dr. Ralph Borsodi, who designed a currency that itself is immune to inflation. He tested his currency, the "Constant" in Exeter, New Hampshire in 1972. There, Borsodi and community land trust pioneer Robert Swann sold the scrip, coin, and cheque currency into circulation through a local bank. People purchased Constants with dollars at a 1:1 exchange rate. The Constant's value, however, was not tied to dollars, but to the value of a "basket" of 30 commodities including gold, soy beans, rubber, barley, hides, and jute. In theory, the notes could be redeemed for quantities of any of the commodities listed on the notes. In practice, Borsodi stocked only gold and silver to satisfy possible redemption demands and had arbitrage agreements to purchase the others if necessary.
        In choosing commodities with which to back the Constant, Borsodi tracked the values of a wide range of commodities over a period of years and selected those that had held their value best. His assumption was that the changes in the value of each commodity in the basket would, over time, cancel each other out, thus maintaining overall equilibrium in the value of the basket and thus of the currency. The value of the Constant could also be compared to the value of the national currency, enabling the exchange rate and prices to be adjusted on a daily or weekly basis. The Constant system was tested for one year and proved, it is claimed, Borsodi's hypothesis.
        In the late 1970s, Robert Swann revisited the Exeter experiment with a community-based group in the Berkshire Mountains of Western Massachusetts called SHARE, or Self-Help Association for a Regional Economy. SHARE attempted to tie local scrip, Berk-Share Cordwood Notes, to cordwood, a locally produced commodity. In the case of Cordwood Notes, however, the price of cordwood experienced wide fluctuations in tandem with the price of domestic heating fuel, a product whose price was set outside the community. The currency was thus even more vulnerable to external economic fluctuations than it would have been had it tied itself to the U.S. dollar.
        Pegging a currency to a diverse basket of strictly local commodities is one system that has yet to be tested. This may constitute a way to make a community currency less vulnerable to fluctuations and breakdowns in the wider economy and to the monetary policies of distant central bankers.
        In the meantime, a few systems, such as the Valley Trade Connection (VTC), have devised other means of backing their currencies. When traders join VTC, for example, they receive between 10 and 50 Valley Dollars (V$) in exchange for non-expiring gift certificates of equal value in the trader's goods and services. The VTC holds the certificates, which effectively back the issued currency. If traders leave the system, they are required to buy back their certificates in V$, ensuring a balanced amount of currency in circulation relative to the goods and services it may purchase. Should some traders accumulate more V$ than they are readily able to spend -- an all too common experience for retailers in most scrip systems -- they have the option of purchasing certificates at 100% V$, thus removing from circulation their surplus currency.

Service Credit Programs

Time Dollars

Edgar Cahn, a retired lawyer and professor, developed Time Dollars in the late 1980s to encourage and account for the help neighbors provide to one another. Participants in Time Dollars systems exchange neighborly, nonprofessional services, with those providing services matched with those in need by a coordinator -- often based at a social service agency using a database. Volunteers receive "payment" in the form of a computer-based currency, the Time Dollar, which may be used to receive services from other participants. Those receiving service are debited an equal number of Time Dollars, which they agree to pay back by providing services to others in turn. Participants earn Time Dollars at the same rate of "pay": one Time Dollar for every hour of service provided, regardless of a volunteer's professional qualifications or usual monetary pay scale. They are spent on the same basis: one hour of service for one Time Dollar.
        Those who are unable to earn Time Dollars but are still in need of them are typically provided for by Time Dollars donated into a special fund by other volunteers, and even, for example, by schoolchildren who earn them through community service work. In fact, Cahn estimates that members spend only 20% of the Time Dollars they earn; the other 80% are saved, given to friends or relatives or donated into the general pool. Backed by time and exchangeable only for services offered at the same, unchanging "price," Time Dollars offer participants the added security of an inflation-proof means of exchange, as one hour earned today will be worth the same one hour 100 years from now. And since Time Dollars are units of time spent in service to others, and are not considered as regular income by those earning them, they have been declared exempt from income tax in the U.S. Contact: Edgar Cahn, Time Dollars Institute, Box 42160, Washington DC 20015, (202) 537-5033,,


Womanshare is a skill exchange system in New York City developed in 1991 by Diana McCourt and Jane Wilson. Womanshare's founders say that "... time is our most valuable resource -- our real wealth -- and so time is Womanshare's currency. All work time is valued equally, one credit for every hour worked whether the skills are professional or life skills." Some 200 offerings and needs are printed in a directory together with a newsletter. Womanshare members -- exclusively women -- report time worked to the Womanshare "bank" and may spend their "credits" on the services of any other Womanshare member. Statements are issued regularly so that all members know what level of trade is occurring and what each member owes and is owed.
        Womanshare is purposely limited in size to 100 participants so that close relationships between participants can develop. There are regular social and business gatherings at members' homes, and it is not uncommon for members to participate in work parties, workshops on tax issues and small business skills, and collective food-buying from a community-supported agriculture program which links urban consumers with rural food producers. According to McCourt and Wilson, members "are from diverse cultural backgrounds, ranging in age from 30 to 80, including single and married women, some with families, some professional women, as well as retired women living on low fixed incomes." The organization functions informally, and is cooperatively operated by volunteers, with each member committed to working a set number of hours each year on Womanshare administration. An annual membership fee covers the material costs of running the system. Contact: Diana McCourt, Womanshare, 680 West End Ave., New York, NY 10025, (212) 662-9746,;

Monetary Policymaking
        Unlike LETS, with its central bookkeeping system that creates currency only when a trade is made and in exactly the amount needed -- every debit matched by a corresponding credit -- currency issuance in scrip systems is an inexact science. Organizers rely on anecdotal information to determine if the amount of currency in circulation is in proportion to the level of trading activity and the goods and services which back it. Some systems, such as the Tlaloc system in Mexico City (, have attempted to get a firmer handle on their monetary policymaking. There, Luis Lopezllera and fellow organizers issue notes on an annual basis, with traders required to cash in their old currency for new each year. Tlaloc traders, similar to fellow traders in the Community Cash Program in Durango, Colorado, are encouraged to "endorse" their notes during every transaction by recording their initials or name and the date in space provided on the back of each note. These policies help organizers assess the true impact that their system is having on the local economy and to make better monetary policy decisions by gauging the velocity, circulation and supply of their currency more precisely. More of these tools are needed.

Funding and Organizational Issues
        Most community currency systems operate thanks to the tireless efforts of volunteers working with shoestring budgets comprised of small donations and membership dues, and, if fortunate, perhaps grant funding. They also tend to begin as informal efforts or under the umbrellas of a sponsoring organization. Most share common challenges in sustaining the systems over time.
        Organizer burnout is a risk because, unlike traditional issue-oriented organizing, a wide range of skills is necessary and a long learning curve is required. Creating and growing a grassroots economy from scratch is an enormous commitment that does not always lend itself to simple delegation and job-sharing. Work at the start-up stage tends to be distributed more evenly among members, but as time passes, becomes more the labor of a few individuals.
        The burden is increased by lack of reliable funds to pay operating costs, let alone staff salaries. Some systems have paid organizers with their own currency, but typically this is a short-term strategy, as spending money freely into circulation can be inflationary. Many turn to grant funding for support, but this requires tax-exempt status and specialized talent, and, at best, usually brings small returns. Donations, another source of funds, must be solicited. Dues are a more reliable wellspring, however, they must be kept modest enough to allow for broader initial appeal and to include lower-income members of the community. The regular collection of dues is costly and time-intensive and a renewal rate of more than 50% is uncommon.
        Most systems begin as informal associations or individual enterprises (such as Ithaca HOURS), though a good number have found it necessary to have their activities sponsored by an existing non-profit organization. Some examples include Cape Ann Dollars, sponsored by the Gloucester, Massachusetts-based Wellspring House, Inc., an educational and social service agency; Summit HOURS, in Akron, Ohio, a project of American Friends Service Committee; and California's Berkeley BREAD, sponsored by the International Society for Ecology and Culture.
        Valley Trade Connection began as a university-sponsored project and then moved under the umbrella of the Franklin County Community Development Corporation when it expanded into the wider community. The benefits typically include liability insurance, tax-exempt status, and in some cases, office space and administrative assistance. However, as a system grows, it may diverge in mission from its parent organization or become one more burden for it to handle.
        Consensus appears to be building that community currencies should strive to incorporate as independent non-profits with elected boards of directors and member-approved bylaws, and find funding, especially income generated from program activities, such as advertising, to retain at least some paid staff. This will mean taking a more business-like approach to operations and risking the grassroots ideals of volunteerism and informality held by most systems. In the case of Ithaca HOURS, this recent shift toward a more formal structure seems to be serving the community well, with more people stepping forward to take ownership of the program and lifting some of the burden from the shoulders of its primary organizer, Paul Glover.

Quarter Ithaca Hour     Time Is Money     Two Ithaca Hours

Scrip Systems

Scrip systems enable community members to exchange goods and services by means of a locally printed paper money, which is typically used alongside federal currency and barter. Membership in such systems is generally open to any resident or business of a given locale who agrees to accept the local scrip as full or partial payment for the goods and services they offer. Those who join become listed in a printed directory of goods and services offered and needed and receive a given amount of local scrip to begin participating in the system. In most systems, policies regarding scrip issuance and trading are set by their memberships.
        The most widely replicated scrip system is Ithaca HOURS, created by planner and journalist Paul Glover and others in 1991 following the failure of Ithaca's short-lived LETS. As the name implies, the HOUR is a currency unit denominated in time. The philosophy underlying the use of time versus dollars to measure value is to equalize the value of each participant's time and talents by reducing wage and income disparity.
        The primary objectives of HOURS, as expressed by Glover, are to enhance the quality of life of members by increasing their buying power and to increase the community's resistance to outside economic forces by fostering increased self-reliance. Glover has estimated that at least 1,000 communities in the United States and overseas have considered issuing their own scrip since Ithaca HOURS were introduced. Approximately 100 scrip systems are currently in operation or in active development. In addition to hosting an email listserve for organizers, Glover has published the Hometown Money Starter Kit, which retails for $25. Contact: Paul Glover, Ithaca HOURS, Box 6578, Ithaca, NY 14851, (607) 272-4330,,

Scale, Size, and Composition
        Community currency systems come in many shapes and sizes. Some are limited in area to include just a few households, an apartment complex, a city block, or a neighborhood. Others span a town, a county, or several counties. Geographic scale is determined by organizers and participants based on equally diverse criteria: a women's group within a university, a child care cooperative of mothers who work together, a public housing project, a neighborhood of several blocks, an industrial district, a downtown, a business association, or a bio-region, determined by natural boundaries.
        Several key factors determine the scale of systems: diversity, relations of proximity, and relations of affinity. Diversity refers to the variety of skills and resources among participants. If there is an imbalance of availability and demand for participants, offerings, currency tends to lose value or become prohibitively concentrated in the hands of those whose services are in high demand.
        Relations of proximity include such factors as "social friction," or personal contact among participants by virtue of shared space. This, it could be argued, is a key determinant in the amount of trading activity that takes place between participants and the quality of their trading interactions. Repeated exchanges build trust, predictability and accountability into trading behavior. If a system has only one member offering haircuts, for example, and that member is located far from the bulk of the membership, it is less likely that people will travel a long distance for a haircut just so they can use community currency to pay for it.
        Relations of affinity refer to relationships based on shared goals, interests, needs, beliefs, membership, or identity that are not necessarily bounded by proximity. Today, it is common to find people who are closer in affinity to a 12-step group, a martial arts studio, or "regulars" at a bar, than they are to their next-door neighbors.
        Membership size is also an issue. Womanshare in New York has purposely limited membership to 100 members for the above reasons, and prefers Berkeley Bread to have a waiting list, rather than risk losing the intimacy its members share. GuruNam Kaur Khalsa, a founder of the Valley Trade Connection, decided to take the risk in expanding the system beyond its university-based membership of nearly 70 women, to the wider 1,200 square mile region. She later lamented that "I used to know everyone [in the system], but now I don't know even half of our members." Thomas Greco believes that there should be a minimum membership size of approximately 35 people, while Paul Glover in Ithaca sees the benefits of having a membership of over 1,000, noting, in particular, the diversity of goods and services offered among them.
        Using these criteria, the ideal configuration for a local currency system, it seems, would be a limited geographic region and a relatively small, but diverse membership offering a range of goods and services, and with members enjoying relationships of both proximity and affinity. A wider cachement area can be possible, but only if there are embedded communities within it, in which these elements are present.
        Most systems of this generation have tended to be college town phenomena, taking root in communities of relative prosperity, high education levels, and populated by "cultural creatives." In response, organizers today are working to address issues of cultural and class diversity. In Calgary, Canada, Bow Chinook HOURS has formed a linkage with the Calgary Centre for Newcomers, "Calgary Works" program that assists refugees and immigrants in enhancing their skills and finding employment. The services of these community members are listed in a section of the system's directory where other Bow Chinook traders may contact them through a central contact who arranges translators or terms of trade on their behalf.
        Another example of working with diverse and economically-challenged community members is Equal Dollars in inner-city Philadelphia. This innovative LETS-HOURS-Time Dollars hybrid trading system, operating with a substantial budget under the auspices of a large community action agency, has been very proactive in including young people, single parents, and those on public assistance in the neighborhoods they serve. One of the keys in including low-income participants is having a sufficient mix of basic goods and services, a weak point in many current generation systems in which more luxury types of offerings are over-represented.


"Buy Local" Scrips

For several summers in the 1990s, 70 merchants in the southern Berkshires of Western Massachusetts issued a currency to promote local shopping. The group sold their "Berk-Shares" through local banks during several weeks each summer at 90¢ (U.S.) to the Berk-Share, valued at one U.S. dollar. The notes were accepted at face value by participating merchants as payment for goods and services during specified periods later in the summer. The merchants, in turn, spent the notes with other merchants or redeemed them at the banks for 90¢ (U.S.). Berk-Shares were so successful at stimulating commerce that the group, together with five local banks, the Chamber of Commerce, and E.F. Schumacher Society, is seeking funding for a year-round Berk-Shares program. Contact: Susan Witt, E.F. Schumacher Society, 140 Jug End Road, Great Barrington MA 01230, (413) 528-1737,,

Tourism Scrips

In recent years a new generation of company scrip has been issued by large retailers and tourist attractions. The incentive for these schemes is three-pronged: 1) to provide a novel attraction to visitors and customers; 2) to ensure that a maximum amount of visitors' legal tender is "captured" and spent locally to benefit retailers, and 3) to reap the U.S. dollars which are never claimed by scrip-holders, who may keep the scrip as a souvenir, destroy or lose it, or simply forget or be unable to redeem it when leaving the area.
        For example, Colonial Williamsburg, a non-profit tourist attraction in Virginia, has its own scrip, which it sells to local hoteliers. The hoteliers give the scrip to visitors -- some of whom unknowingly pay for the premium as part of their room rates -- who then spend it at face value for purchases made with local merchants. The merchants then redeem the scrip for U.S. dollars at Colonial Williamsburg. Many visitors leave the area without spending the local scrip. The dollars thus become souvenirs or are saved for future, though limited, use due to expiration dates on the scrip. Of the $300,000 of scrip issued by Colonial Williamsburg in 1996 (all in $5.00 notes), only some $200,000 was redeemed, generating $100,000 of gross income for the issuer. Contact: Colonial Williamsburg Foundation, P.0. Box 1776, Williamsburg, VA 23187-1776, (800) 447-8679,,

Working Capital Scrips 10 Deli Dollars

When Frank Tortoriello, owner of a popular deli in Great Barrington, Massachusetts, was forced to move his business when his lease expired in 1989, he raised the capital he needed by issuing his own discount scrip, `Deli Dollars'. He printed Deli Dollars in $10 denominations, which he then sold to his customers for $8 each. The customers agreed to wait six months before redeeming them at the deli for sandwiches and other items. Tortoriello raised the $5,000 he needed in one month. This enabled him to relocate the deli to a larger location downtown and to generate enough capital to cover the $2 per note discount he would give his customers when they redeemed their Deli Dollars. Tortoriello continued to sell Deli Dollars to finance a $2,500 addition on the deli. Deli Dollars inspired other local scrips, including Monterey General Store Notes and Kintaro (restaurant) Notes, and Berkshire Farm Preserve Notes, whose issuers, local farmers, used Tortoriello's time-delay redemption model to raise capital for their farms in the off-season which they could repay in produce during the harvest season. Contact: Susan Witt, E.F. Schumacher Society, 140 Jug End Road, Great Barrington MA 01230, (413) 528-1737,,

Movement Building
        Similar to the early days of the computer software industry, when tireless tinkerers were collectively pushing the technological boundaries, the community currency movement has been a relatively cooperative phenomenon. Notwithstanding the inevitable pitched battle over which model is superior, most organizers share ideas and tools freely and openly. The recent growth in knowledge and experience has only added to the richness and productivity of their exchanges.
        Various email listserves, websites, and postal mailing lists help keep organizers in touch. Conferences have also played a key role. Over the last few years, the E.F. Schumacher Society has sponsored two major gatherings, while the Center for Community Futures has hosted two national conferences focused exclusively on community currencies. Recently, a National Organizing Committee for Community Currencies has been formed, sponsored by the Center for Community Futures (, to sustain the momentum by planning regional gatherings, collective research, and lobbying efforts. This should only help to strengthen the work of organizers and better make the case for the effectiveness Toronto Dollars (and seriousness) of community currencies in the eyes of policymakers, funding agencies, academia, and organizers working on related issues, who have tended to dismiss or diminish the role of community currency in community economic development. While it may seem at cross-purposes with the mission of community currency -- fostering greater local self-reliance -- the movement may never reach its potential without the financial support and backing of external sources. The work of creating an economy from the basement up is no quick or easy task and requires long term commitment of every kind to prove its mettle.
        The rest of the world seems to be much further ahead of North America in recognizing this. Ironically, even the recent creator of a centralized currency itself, the European Union, has budgeted millions of dollars over several years to implement and evaluate the effectiveness of various community currency models in a variety of settings in its member nations. Other efforts are the International Journal of Community Currencies (, an Internet-based publication which compiles the work of a wide range of academic researchers, and the International Development Research Centre-funded research project on community currencies in Asia, Africa and Latin America (, coordinated by a former Canadian LETS organizer, Stephen DeMeulenaere (

New Directions
        According to Bernard Lietaer, a former Belgian central banker and businessman who writes and lectures extensively on money, we are beginning to see a plethora of new transaction vehicles being introduced, especially on the Internet. These include e-cash, e-gold, and others. He believes that, in general, the trend is toward trade utilizing multiple currencies -- local, national, and international.
        This development coincides nicely with the maturation of today's community currency systems. This may help mainstream the movement and increase participation beyond the relatively small, selective memberships of most current systems. One would also expect to see the shift toward hybridization continue, with new technologies providing convenience for traders and relief for administrators and organizers. And, the question of resources for system operation and development is one that will have to be dealt with.
        The question of which systems are superior is really a non-question -- a community should have all of them, or at least a mix, as each satisfies different needs. One can imagine earning and spending scrip for odd jobs and everyday purchases, writing a LETS cheque when we need interest-free credit, or spending Time Dollars earned by helping others in a pinch for the services we need when we're in one. In the meantime, as Paul Glover so succinctly puts it, "we're making a community by making a living."

Tim Cohen-Mitchell, M.Ed., CET, is co-founder of the Valley Trade Connection in rural western Massachusetts. He is co-author of Local Currencies in Community Development, and a charter member of the National Organizing Committee for Community Currencies. He is also founding director of the Young Entrepreneurs Society (YES).



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