Healthy Money Healthy Planet - library.uniteddiversity.coop

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payment of taxes. When the mayor of Curitiba paid people to bring in sorted
garbage, he had to honour his side of the bargain by accepting the tokens he issued
as bus fares (see page 000). If he had not, the system simply wouldn’t have worked.
It is also important to understand the concept of seigniorage, which is the
profit made by issuing a currency. The best way to explain it is to look at our notes
and coins. The Reserve Bank of New Zealand prints ‘money’ at low actual cost and
sells it to the banks at its face value. This profit is called seigniorage. The annual
seigniorage raised in New Zealand for distributing NZ$2 billion worth of notes
and coins is about NZ$150 million. 2 As it costs NZ$30 million to run the Reserve
Bank and the rest of the profit goes to the government, the government’s coffers
swell by NZ$120 million a year. 3 This process has full public approval because it is
backed by legislation and the people know that the Reserve Bank is genuinely
acting on their behalf.
So what is occurring when money, in the form of notes, is distributed by an
organisation to its members to spend within the system? In the case of Ithaca
HOURs, at first each new member was given a certain amount of HOURs to
spend; this amount was later reduced and, later still, it was issued as a loan. The
Ithaca HOUR user spends the money into existence. What the system’s organisers
didn’t realise early on was that not all those who spent Ithaca HOURs would be
honest enough to accept them for payment in return, which is why they changed
the original gift to a loan.
In the case of commercial trade barter schemes, an interest­free overdraft is