Healthy Money Healthy Planet - library.uniteddiversity.coop

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The city solicitor put the biggest dampener on the scheme. He came up with many
reasons why the scheme would not be legal, citing among others the Banking Act 1908,
the Municipal Corporations Act 1954 and the Local Authorities Loans Act 1956. 61
Nevertheless, by the time the proposal was finally abandoned it had gained
considerable popularity. A local radio station discovered that 36 per cent of the
population of Hamilton understood the proposed scheme, and of these 59 per cent were
in favour. As this currency had promised a reduction of rates, during the period of
discussion the level of support continued to grow. 62 If a similar scheme was proposed
today, its supporters would be able to draw on experiences elsewhere and argue that
such a local currency would create employment, avoid interest payments and support
job­rich local business.
An improvement on Beetham’s scheme would have been to incorporate Sylvio
Gesell’s principle of a negative interest rate, a 1 per cent charge levied each month to
revalidate the money (see Chapter 12). Beetham actually proposed the opposite of this for
his scheme, suggesting that when people accumulated rates vouchers in the proposed
Municipal Reserve Bank, they would be paid interest. Thus the Hamilton scheme would
have failed even if it had been given approval, because Beetham’s mechanism would
have been an incentive to keep the money out of circulation, thereby reducing its
potential for strengthening the local economy and eliminating indebtedness.
Following on from the implementation of legislation in 2002 allowing for the
devolution of some powers to local government, and the campaign by the Democrats to
persuade local politicians to ask the Reserve Bank to issue interest­free loans to councils
for essential infrastructure, some form of local authority currency could become a reality
in New Zealand in the future. It would, however, require a legislation change from
central government, revoking the monopoly held by the Reserve Bank to issue money. If
such a scheme did go ahead, in order to avoid inflation local government should issue
rates vouchers equivalent in value to the amount of rates to be levied (Beetham’s
proposal in this respect was very conservative). 63
Internet Currencies like Beenz and Flooz
The Internet is a community that is potentially able to give value to an Internet currency.
The so­called ‘netizens’ of this community are used to sharing, and e­commerce is
thriving, so why not an e­currency? In fact, the quest for a global e­currency is already
on, although at least two schemes have failed. Charlie Cohen, founder of Beenz in March
1998, believed that the Internet was like a new country, where people played, shopped
and talked. E­tailers bought Beenz with US dollars and pumped the new currency into
the virtual world as rewards to online shoppers or as gifts to websurfers. For a while the