Losing currency

The sign continues to hang at Briarpatch Community Market in Grass Valley: “We accept Hours at this checkout—1/5 hour per person per day. $5 minimum purchase.”

But checkers receive few Gold Country Currents (GCC), a local currency that originated in Nevada County in 1999 in response to the perceived threat of a Y2K economic meltdown. “It’s struggling,” Briarpatch employee Anje Waters says of GCC as another worker searches in vain for a single GCC bill in the cash drawer.

That’s an understatement. Recently Ames Gilbert, the last of the core group of Gold Country Current volunteers, threw in the towel.

“It’s defunct,” he said. But the money is still circulating. Lamenting that nobody else was putting any energy into the project, he said, “I felt like I was imposing my personal vision on the community if I was the only one interested.”

Although alternative currency has worked well in other areas, he theorizes that our local “economy is too good. It’s too easy. There wasn’t a need.”

Perhaps the strength of the economy contributed to the lack of interest, but Lu Mellado, one of the founders of the Gold Country Current, felt the “fear element of Y2K” was not a good foundation for the project. Mellado had been researching alternative currencies and was asked to help create GCC.

“I would have taken more time, reached out to the community,” he said, but others were focused on the looming deadline of Jan. 1, 2000. Feeling that the project was inadequately conceived and rushed through development, Mellado dropped out of the program weeks after it had begun.

Other volunteers soldiered on. Basing GCC on a rate of $10 per hour, the average hourly income in Nevada County, they invited community members to register products and services in a directory with the hopes of replicating what Paul Glover had created in Ithaca, New York.

Going local
Glover, the patron saint of the local currency movement, founded a flourishing alternative economy in 1991 that continues to grow. Ithaca Hours are used by thousands of residents and more than 370 businesses, including restaurants, plumbers, the farmer’s market, and a hospital.

But GCC never thrived like Glover’s program. Mellado thinks Ithaca’s success is partly due to its origins during a time of local “economic hardship.” Despite fears of a looming Y2K financial crisis, few joined Gold Country Current.

When Briarpatch Community Market signed on, volunteers hoped that other businesses would follow suit. Only a small number did, and mostly they were service providers such as massage therapists, artists, tarot card readers, astrologers and feng shui consultants.

The surplus of service providers outweighed what Mellado calls the “goods and services that people need, rather than have a good time with.” Luxuries are fun, but “food, shelter, clothing and tools are what people need to survive,” he said.

According to Gilbert, when they saw that services comprised the bulk of the listings, “people who make things [weren’t] interested.” One by one volunteers dropped out, their idealism not adequate to sustain a project that never got past infancy.

Local currency is not a new idea. During the Great Depression, some cities couldn’t pay employees and began minting “chits,” which were accepted at neighborhood stores and could be used to pay taxes.

As a medium of exchange, Mellado says money can be “whatever we agree it to be … puka shells, [porcupine] quills, gold or precious gems.”

Predating coins and paper currency, barter is a useful means of exchange.

Proponents of local currency ask why bother using U.S. dollars when it’s possible to directly trade goods and services within a limited geographical radius? They claim local currency helps people get paid for doing what they enjoy, encourages community instead of competition, keeps wealth local, promotes self-reliance and reduces vulnerability to global economic cycles.

Currently, more than 60 communities within the U.S. trade in local dollars and the concept is well established in Europe, New Zealand, South America and Mexico.

Past efforts
Years ago, the Sierra foothills did have a successful local currency. Beginning in 1975 and lasting until the mid-’80s, foothills residents participated in “the G-plan.”

Its philosophy was that “the more we can furnish each other [with] items such as food, carpentry, mechanical skills, clothing and services, the less money we will need.”

Whether it was the reduction of unemployment from a high of 12 percent or problems in determining the relative worth of tradable commodities and services, the G-plan quietly slipped away during the Reagan years.

Rather than using currency, the Sierra Intergenerational Time Exchange (SITE), launched in Grass Valley in 1992, runs on non-taxable, time-dollar volunteer labor, tracked by debits and credits.

According to Zaida Petievich, most volunteers are retired, but some are kids who do tasks in exchange for tutoring. Volunteers do yard work, provide transportation, do minor repair projects and laundry, write checks and read letters for those suffering from macular degeneration and provide “caretaker relief.”

“It doesn’t work completely well,” Petievich admitted. “Lots of elderly people can’t do much in the way of payback …”

No matter how successful the trading program, all agree that there will be operating expenses. GCC’s Gilbert said, “Paul Glover got a grant of $14,000 a year. He makes $6,000 a year for advertising.” Glover lives simply, riding his bicycle around the community and selling the program.

With jittery stock market prognostications and several key economic indicators predicting a recession, perhaps GCC was a noble idea ahead of its time and will reincarnate if the economy does a nosedive. But for now, unemployment continues to be low and Mellado believes there’s still “faith in the dollar.”

“If the dollar crashed,” he said, “maybe we’d have more faith in each other.”