The Ithaca Money System

by Linda Pascatore

©1993 The Gobbler: Autumn Blaze


In a current article, "A Tonic for the Local Economy", we explored the idea of alternative currency. At times through history, some communities have developed their own currency systems which were used locally. There has been a recent revival of this practice.

We recently found someone who is actually operating an alternative currency system in Ithaca, New York. My husband and I met Paul Glover, the founder of Ithaca Hours. He is an ecological urban designer with a background in advertising and city management. He was presenting a workshop on bioregional currencies at the National Green Gathering in Syracuse, New York. The Greens promote sustaining the environment and building grassroots democracy (see related article, "Ten Key Green Values").

Paul Glover explained his currency system, Ithaca Hours. The value is based on the average hourly wage of the community, which is ten dollars an hour. An Ithaca Hour is equal to ten U.S. dollars and is equated to one hour of time. The idea is that everybody deserves to be paid at least the average wage, regardless of education, age, sex, or race. Ithaca's money sports images of local features like waterfalls, flowers, crafts, farms, and children; and reads, "In Ithaca we trust" (see illustrations). It comes in four denominations; two Hours ($20), one Hour, Half Hour, and a Quarter Hour. They are printed in different colors and some come on locally made watermarked cattail paper. All have serial numbers and are harder to counterfeit than dollars.

Paul publishes a newsletter called "Ithaca Money" which presents both offers of goods and services and requests for them. Each listing costs one dollar. By listing, you become a member and agree to accept Ithaca Hours in payment. You also receive four Hours upon joining. Offerings in the newsletter include plumbing, nursing, chiropractic, child care, car or bike repair, eyeglasses, firewood, farm produce, restaurant meals, and movies. A local credit union accepts Hours for mortgages and loan fees. Some people even pay their rent with them.

A governing body called the Barter Potluck, open to all members, controls the currency. They are a kind of local counterpart to the Federal Reserve Board. Monetary policy is set over a potluck dinner twice a month. Since October, 1991, over 700 businesses have been issued currency, which has been recycled through the community countless times. The Barter Potluck also award grants in Ithaca Hours to community organizations. An Ithaca Hour Store is now in the planning stages. This system is legal under prescribed conditions. Hours must be used within state lines and may not compete with dollars as interstate currency. Denominations must be at least one dollar. Hours are taxable income when traded for professional goods or services.

Since they can only be used in Ithaca, Hours also promote the production of locally-made goods and the hiring of local services. The income generated circulates through the economy of the community, rather than being siphoned off to some national or international corporation. Paul Glover said, "Dollars come to Ithaca, shake a few hands, then leave. But Hours stay in the community and help us hire each other."

This system not only stimulates the local economy, it also builds a true sense of community. People put faith and trust in their neighbors. Farms have benefited from this system, with the highest farm wages in America ($10.00 per hour) being paid in the Ithaca area. Lumber mills and woodcutters produce a sustainable yield for the local market. Crafts people have better access to local materials and local markets. Services not usually valued much, like babysitting, odd jobs, or running errands earn a fair wage and give people who are usually cash-poor more access to the marketplace. At the same time, merchants make sales and get spending power they otherwise would not have.

Could you institute such a system in your community? Paul Glover makes it sound easy! You can get his Hometown Money Starter Kit ($25), video ($15), or both ($40) by sending a check, money order, or credit card number, name and expiration date to:

Ithaca Money

Box 6578

Ithaca, NY 14851

(607) 272-4330