Healthy Money Healthy Planet - library.uniteddiversity.coop

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All the following examples of complementary currencies in this chapter are types of fiat
money issued by communities – in other words, money that is issued with no backing,
but is simply a promissory note by the issuer to accept it for payment at some time in the
future.
Ithaca HOURs
In 1991, Paul Glover led a team in Ithaca, a small town in upstate New York, in creating
its own special money, Ithaca HOURs. According to David Boyle in his book Funny
Money, Glover’s background was as an advertising and marketing graduate, draftresister,
graphic designer and community activist. 22 The local LETS scheme in Ithaca had
closed down, and Paul wanted a hand­to­hand currency that avoided computers. Ithaca,
a town of 30,000, is the home of Cornell University, so Glover consulted an economics
professor there and dreamed up a scheme that would not alienate the Inland Revenue
Service. Then he went out persuading local businesses to list their services in the
directory.
At the start of the scheme the team issued more than US$60,000 of its own paper
money in five denominations to over 1200 participants. These participants can hire each
other and buy each other’s products, and each month the management publishes a
directory listing the names of all the traders who belong to the scheme. David Boyle says
that when he visited the town in 1999 they were on issue 29 of the directory and 5700
HOURs, representing US$57,000, was in circulation. ‘The amount of money traded in the
five and a half years since the launch was estimated to be somewhere in the region of
150,000 HOURS or $1.5 million.’ 23 And the only thing backing the notes is trust. Glover
says that while federal dollars are backed by US$ 5 trillion worth of debt, HOURs are
backed by the belief in the local community. 24
Each participant was given US$40 worth of local scrip, which came in four
denominations printed with pictures celebrating the town’s natural wonders and famous
people, and inscribed with the words ‘In Ithaca We Trust’. To prevent counterfeiting, the
notes were printed using heat­sensitive ink, high rag­content paper, serial numbers and
embossing.
The Ithaca unit is the HOUR, where one hour is worth US$10, the average wage in
the county when the scheme started up in 1991. Ithaca HOURs buy plumbing, carpentry,
electrical work, roofing, nursing, car repairs, chiropractic, childcare, firewood, and
thousands of other goods and services. In 1999, Glover told Flemming Funch’s good
ideas website: