Little Tenino, Washington (population 1,884) has come up with a seemingly novel way to ease the economic pain caused by the coronavirus lockdown: Create the town's own currency.
Mayor Wayne Fournier was looking for a way to help individuals and families who were hurt when businesses were forced to close down when the idea came to him at a town meeting. During the Great Depression in the 1930s, Tenino had printed its own wooden dollars to help the local economy — why not do it again?
Fournier and city officials decided to reintroduce the wooden currency, using an old printing press to imprint thin sheets of wood with an image of George Washington and the phrase, "habemus autem sub potestate," which basically means, "We have it under control."
Here's how it works: The town set aside $10,000 to assist residents with incomes that fall under the poverty line. Those people become eligible to apply for money from that fund. Instead of receiving cash, however, they get the wooden currency, which comes in notes worth $25 each. Applicants can receive up to 12 per month, or $300, and their use is limited to Tenino merchants who provide essential goods and services, not including liquor, cigarettes, or marijuana. The merchants may then submit redemption requests to the city for real U.S. cash.
Why not just give residents the cash? Because the local currency means that the money stays in the community and is not sent out to Amazon or other online retailers.
Is It Really Money?
The authority to print money in the U.S. rests solely with the federal government, and the only legal tender in the country is the U.S. dollar.
So, while the Tenino Wooden Dollar sounds like a great idea, is it legal?
If it really were a competing currency, the answer would be no. But it's really more like scrip — a certificate that can be exchanged for goods — and scrip has been used by all manner of towns, regions, companies, and organizations for hundreds of years. As long as they are not used to avoid taxes and can be exchanged — or ultimately exchanged — for U.S. dollars, they are legal.
"No one is going to be held accountable for this because they are not actually creating money, as it's legally defined," Jesse Kraft of the American Numismatic Society told CNN in evaluating the Tenino currency. "These are just tokens that are creating an economic stimulus."
Other Towns That Have Launched Their Own Currency
Towns in other countries hammered by the pandemic have taken similar measures.
The Italian town of Castellino del Biferno (population 550) started printing a local currency called the Ducati in April.
In Mexico, the town of the Santa Maria Jajalpa (population about 6,000) has created a new currency, "jajalpesos," that residents can use to buy local food.
Historically, there's a strong connection between hard times and the emergence of "community currencies," visiting Boston University professor Jim Stodder told the Washington Post. "Any time we have a serious downturn in which people are short of money, these things tend to pop up," he said.
Usually, they stick around for a few years or less and then die out. But some live on. Most notably in the U.S. a community currency called BerkShares has been used in western Massachusetts since 2006.
Do They Have a Future?
Local currencies sound like a good way to keep the money local. In the United Kingdom, however, many that emerged with great expectations have called it quits, in large part because they haven't kept up with digital payment developments.
But some, like the Bristol Pound in England and the Calgary Dollar in Canada, are.
There are, or have been, more local currencies in the world than we realize — 3,500 to 4,500 such systems in 50 countries in the last few decades — and if the pandemic lingers, those numbers will probably escalate.
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- Make Your Own Currency, Spend 5 Years in Jail (FindLaw's Legally Weird)
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- The IRS Is Coming for Your Gains on Crypto Trading (FindLaw's Law and Daily Life)
