Two Milwaukee Neighborhoods To Issue Own Currency

Hobo · 12-05-2008, 03:47 PM

Milwaukee neighborhoods could print own money

Quote:

2 neighborhoods consider printing own currency for exclusive use in local stores

They may be talking funny money, but it's not funny business.

Residents from the Milwaukee neighborhoods of Riverwest and East Side are scheduled to meet Wednesday to discuss printing their own money. The idea is that the local cash could be used at neighborhood stores and businesses, thus encouraging local spending. The result, supporters hope, would be a bustling local economy, even as the rest of the nation deals with a recession.

"You have all these people who have local currency, and they're going to spend it at local stores," said Sura Faraj, a community organizer who is helping spearhead the plan. "They can't spend it at the Wal-Mart or the Home Depot, but they can spend it at their local hardware store or their local grocery store."

Incentives could be used to entice consumers into using the new money. For example, perhaps they could trade $100 U.S. for $110 local, essentially netting them a 10 percent discount at participating stores.

. . .

And it's completely legal.

As long as communities don't create coins, or print bills that resemble federal dollars, organizations are free to produce their own greenbacks—and they'd don't even have to be green.

That seems to fly in the face of the Constitution:

Article I, Section 10, Clause 1

Quote:

No State shall . . . coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

**RickieB** · 12-05-2008, 06:09 PM

HoBo...

There is a Town in western Massachusetts that is already doing this....
The local Banks support it as well and will trade the local $$ fro 90 cents on the dollar!

RickieB

CamaroDMD · 12-05-2008, 06:15 PM

Interesting, I have never heard of such a thing in the 21st century.

chrlduck · 12-05-2008, 06:20 PM

didnt they already rule that such was illegal.
it was about the "liberty dollars"

Numbers · 12-05-2008, 10:38 PM

Quote:

Originally Posted by chrlduck

didnt they already rule that such was illegal.
it was about the "liberty dollars"

The problem with the Liberty Dollars was that (a) they were coins, which fall under a different and more restrictive section of the law than paper; and (b) there were many cases in which the individual spending them apparently claimed or implied that they were U.S. currency--and the design of the Liberty Dollars seemed to encourage this, despite the issuers' strenuous claims to the contrary.

Local currencies are used in several cities in the U.S.; as someone has already pointed out, they're legally no different from gift certificates. As long as they look different enough from U.S. currency that nobody could reasonably confuse the two, the Treasury has no objection to them.

Yes, it would be unconstitutional for a state government to issue such notes, but there's no law prohibiting a private coalition of businesses from doing so.

chrisild · 12-06-2008, 09:06 AM

Quite a few places in Europe have been using such local "complementary currencies" for several years; some are successful, some have failed. In some cases here in DE you get a discount by using such notes, some models include a slowly decreasing value of the notes (an an incentive to spend the notes), in other cases the value does not change but you get only, say, 95% of the value back if you change the money back into euro cash.

The biggest German project of that kind is the Chiemgauer, in SE Bavaria. It was launched in 2003; about 280,000 Chiemgauer notes are in circulation, and about 600 businesses in that area accept them. Are they "legal"? On one hand only the central bank (ECB) may issue paper money; on the other hand merchants are free to accept pretty much everything they want as a means of payment ...

Christian

gatzdon · 12-05-2008, 07:25 PM

As far as I can tell, this is nothing more than gift cards (aka gift certificates). Nothing new here and many Chambers of Commerce already sell gift certificates.

The town and media are just trying to sensationalize the story.

Hobo · 12-05-2008, 07:50 PM

Quote:

Originally Posted by gatzdon

As far as I can tell, this is nothing more than gift cards (aka gift certificates). Nothing new here and many Chambers of Commerce already sell gift certificates.

The town and media are just trying to sensationalize the story.

I think you're right. Thanks for putting it in perspective.

**RickieB** · 12-05-2008, 08:28 PM

http://www.berkshares.org/press/08Sept09.htm

Here is the link on the Berkshares!! Enjoy!!

RickieB

jeankay · 12-06-2008, 04:21 PM

(((That seems to fly in the face of the Constitution:
Article I, Section 10, Clause 1
Quote: No State shall . . . coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt)))

Hmmmm... doesn't that mean our government is breaking the constitutional law by issuing non precious metals to us for paying our debts?

Just a thought.
jeankay

Numbers · 12-06-2008, 09:29 PM

Quote:

Originally Posted by jeankay

(((That seems to fly in the face of the Constitution:
Article I, Section 10, Clause 1
Quote: No State shall . . . coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt)))

Hmmmm... doesn't that mean our government is breaking the constitutional law by issuing non precious metals to us for paying our debts?

No, the federal government is not a state. The point of the quoted clause is that the *states* aren't allowed to issue their own coins or paper money, or make their own decisions about what's legal tender. Other clauses explicitly give the federal Congress the authority to do both those things.

(Well, it's not really all that explicit whether the Congress is allowed to issue paper money. There was quite a debate over this when paper money was first made a legal tender in the 1860s, but the Supreme Court upheld that law, so that's how the Constitution has been read ever since.)

jeankay · 12-06-2008, 04:27 PM

Something I forgot to mention.
There is a little town in California where you can purchase 'chits' from the public school to use around town for buying items. When used at local shops the school gets back 10% which they can use to enhance the school budget. I do not believe it is wrong to support the local merchants as well as the school.
jeankay

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