Local Currencies: Theory, History and Practices


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Local Currencies: Theory, History and Practices was presented in 2008 in Abingdon, VA by Derek Douglas at the Appalachian Community Economics Conference. Douglas introduced a community currency called "Woodland Hours" into the Roses Creek, TN neighborhood for a course he taught in Local Sustainable Economics (LSE) for the Living Learning Center at Woodland Community Land Trust in 1993-1994..

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  • Over time Colonial Governments, merchants and private citizens began to mint their own coins.
  • In 1775 the Continental Congress authorized the issuance of paper money to finance the American War for Independence. Congress did not have the authority to levy taxes, and it had difficulty borrowing since the 13 loosely knit colonies were not a sound financial risk. These notes, known as "Continentals," would be redeemable only after the colonies won their independence. Overprinted and distrusted by the public, they declined rapidly in value, giving rise to the popular expression "not worth a Continental." Jonathan Carver in Travels in America (1778) comically stated, "The Congress paper dollars are now used for papering rooms, lighting pipes and other conveniences.
  • 1865 1/3 half of all money was counterfeit. The secret service was started to investigate.
  • As many people already know, Barter Theatre got its name through the practice of bartering. Robert Porterfield brought a team of actors to Abingdon during the Great Depression. These actors were starving in New York while the farming people of Southwestern Virginia had an abundance of food they could not sell. So, Porterfield gave these Virginians something valuable to spend their spoiling vegetables on—a good laugh. Now you can experience part of the rich history of Barter Theatre by bartering your own admission. More importantly, you can help your community.
  • Local Currencies: Theory, History and Practices

    1. 1. Local Currencies: Theory, History, and Practice Local Currencies Theory, History, and Practice
    2. 2. What is Money? What is Money?
    3. 3. <ul><li>a generally accepted means of exchange and measure of value. </li></ul><ul><li>the official currency issued by a government or national bank. </li></ul><ul><li>legal tender. </li></ul>
    4. 4. Theories of Currency
    5. 5. Theory of Mercantilism <ul><li>1500-1750 </li></ul><ul><li>Land, labor, and capital began to be bought and sold in market </li></ul><ul><li>Rise of nation state </li></ul><ul><li>Zero Sum Game </li></ul><ul><li>Favorable balance of trade </li></ul><ul><li>Accumulation of bullion </li></ul><ul><li>Government control </li></ul>
    6. 6. Theory of Classical Economists The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consists always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.
    7. 7. Classical Economics <ul><li>Adam Smith promotes “Laissez Faire” and unequal distribution of income. </li></ul><ul><li>Labor as the source of wealth of nations. </li></ul><ul><li>John Locke demonstrates ecomomic activity depends on quantity of money / velocity </li></ul><ul><li>David Hume describes interrelationships among balance of trade, the quantity of money, and the general level of prices. </li></ul>
    8. 8. History of Currency
    9. 9. Colonial Farms Self Sufficient
    10. 10. Country Pay Hides Pork Corn Tar Hemp Wheat Pitch Flax Bullets Pork Fish Hemp Tobac Cotton Corn T.Note Maize Tobac Rye Tobac Tobac Tobac Peas Flour Wheat Ga. N.C. Va. Del. Md. Pa.
    11. 11. Early American Money <ul><li>Wampum </li></ul><ul><li>Spanish Silver Dollar </li></ul><ul><li>Massachusetts: Pine Tree, Oak, Willow Shilling (1652) </li></ul>
    12. 12. “ Not worth a Continental”
    13. 13. Central Banking in USA <ul><li>1789 Constituional Convention </li></ul><ul><li>Whiskey Rebellion (1791-1794) </li></ul><ul><li>1791-1811: First Bank of the United States </li></ul><ul><li>1811-1816: no central bank </li></ul><ul><li>1816-1836: Second Bank of the United States </li></ul><ul><li>1837-1862: Free Bank Era </li></ul><ul><li>1863-1913: National Banks </li></ul><ul><li>1913-Present: Federal Reserve System </li></ul><ul><li>“ Between 1781-1863 there were 30,000 different currencies in circulation” </li></ul>
    14. 15. The Practice of Local Currencies
    15. 16. LETS <ul><li>Local Employment and Trading System </li></ul><ul><li>local, non-profit exchange networks </li></ul><ul><li>“Mutual or community credit” </li></ul><ul><li>Debit / credit ledger system </li></ul><ul><li>Popular British Colombia / England </li></ul>
    16. 17. Ithaca Hours <ul><li>Inspired by 19 th century R. Owen’s Hours </li></ul><ul><li>each Hour would be worth the equivalent of $10 (average wage in county). </li></ul><ul><li>Several million in circulation </li></ul><ul><li>Loans and Grants. </li></ul>
    17. 18. Berk-Shares <ul><li>Self-Help Association for a Regional Economy </li></ul><ul><li>Tied scrip to a local commodity—cordwood </li></ul><ul><li>BerkShares are placed in circulation when citizens exchange federal dollars for BerkShares at any of the BerkShares Exchange Banks. (Exchange rate: .90 per Berkshare) </li></ul>
    18. 19. Other Models <ul><li>Womanshare </li></ul><ul><li>Time Dollar </li></ul><ul><li>BBC Timebank </li></ul><ul><li>Barter Groups </li></ul><ul><li>Virtual exchanges </li></ul><ul><li>Deli Dollars </li></ul><ul><li>Woodland CLT Labor Certificates </li></ul><ul><li>CCI Community Investment Certificates </li></ul>