I have mentioned this here and elsewhere, but for the last year, I have been involved with a local effort to create a hometown currency. The advantages to money that cannot circulate away from home involve keeping your wealth local. Among the websites that open some doors to this area of study are: www.schumachersociety.org and www.communitycurrency.org We numismatists usually just study the works of others. To be involved in the design and creation of a new money medium has been an exciting opportunity for me. Here are some images of preliminary designs. I headed the committee, but did not do the work. Instead, we found three Visual Communication majors from the local college.
I've looked at a few of these projects over the past few years. Some are quite successful in meeting their goals. One has even had great success in selling their notes to collectors and thereby trading paper for "cash". A question comes to my mind. What are the ramifications of counterfeiting relative to local currencies. It certainly is not a Federal crime and in fact, I'm not sure that it would be a crime at all. I'm sure the issuing body could take legal action, but... Any thoughts or info you'd like to share?
There's a good point there Art, one i didn't think of but i should have. We used to get alot of £20 note forgeries and forgeries are also the reason why no one likes or uses fifties. Bank cashiers look at you gone out when you ask for a £50 note. "are you sure you want one?", "you know you can't spend them don't you?".
It is indeed a Federal crime to counterfeit any money medium: US Code Title 18 Chapter 25 secs 472, 473, 475, and 491. You can be charged separately with additional crimes involving the tools and other media of counterfeiting under 18 USC 25: 474, 476, 477. Note also that 18 USC 25: 473 makes it illegal to "deal" in counterfeits, which includes transfering them with the intent of their being used as genuine. So, basically, there are three Federal crimes: counterfeiting, spending counterfeit money, and possessing the tools to do the work. (These are also the range of laws violated by sellers of fake Seated Dollars in electronic auctions, another topic entirely.) The Federal government recognizes community currency as taxable money. Income in community currency must be reported as such. Technically, like any designer of currency, I worked with the artists to incorporate active and passive security features. One of the inherent protections is the fact that these money media (Toronto Dollars, Ithaca Time Dollars, Madison Money, etc.), tend to circulate in only a few dozen shops at most. As an ADJUNCT medium -- and one not good outside of town -- community currency tends to be intertwined with the people who use it. All of that being as it may, the designers started by looking at foreign banknotes I gave them, especially the cool ones from small countries. I lent them The Art of Money and other references. It took them about three months and five or six meetings to hammer out the details. Just stippling the Petoskey Stone border took one artist about 100 hours. Then there were the ideological arguments among the currency board members (not the artists) over whether cherries are an evil monoculture. It was an experience, I assure you!
Mike, Not to start a debate on counterfeits. I think the Federal law is broad and the profits may be recognized as income, but the right to product money is strictly limited by law. So if I copied some Ithaca dollars and spent them, could I be charged under Federal statutes with counterfeiting. PS - Just a question. I'm not planning to do any such thing. Wondering how this is addressed by the suppliers of this "money".
I do not know how to make it any plainer. I cited the US Code. It is a violation of federal law to counterfeit _ANY_ form of money. That means federal paper, bus tokens, foreign bus tokens, and anything else you can imagine. If it is money in any way, shape, or form, it is a violation of US Federal Law to counterfeit it. You seem to think that only the federal government can make "money." The economists at the Federal Reserve track over 15 different kinds of "money" in our economy including "Degree Heating/Cooling Days" which energy companies buy and sell as a hedge. If you make a fake instrument for the purchase or sale of a Degree Heating or Cooling Day, you have violated 18 USC 25.
Art - I think the point you are missing here is that the local currency being referred to is not counterfeit. In order for a coin or note to be counterfeit - it must be a copy of a legal coin or note. Local currency is not a copy of anything - it is merely a different form of money with a value assigned by the local community and that has no value as money outside that community. Therefore it does not violate any law. But I do believe you are correct in that if you copied the local currency and then spent it in the community that issued it - yes - you could be charged with counterfeiting.
It is accepted as an axiom of economics that most people prefer the present to the future. This is the source of "ordinary interest" and the time value of money. Most people would rather have a dollar today than $1.05 in a year. However, if you reverse that, if you say that you prefer $1.05 tomorrow to $1 today, you are in the position of a money LENDER. Similarly, one of the basic attributes of money is "acceptability." It is "universal" or at least transferrable. By that standard, the best moneys are those that travel the easiest. The US Dollar is the world's preferred currency. USDs travel globally. What if you reverse that? What if you create a money that does not travel well, but that has only a local acceptance? You create an economic cul de sac, a little localized pool of wealth. Values come in and values go out, but with a local currency, some values always remain in the community once they arrive. Thus, the community builds wealth.