UsuryFree Community Currency Defined and How Used

By Tom J. Kennedy

As more and more people complain about a shortage of Canadian dollars (federal cash) in the marketplace it is becoming clear that interest - which ought to be correctly called usury - has become problematic as we progress into this 21st Century.

The average rate of interest (usury) on credit cards issued by the giant retail corporations is 28.9 % and for may of these transnational corporations, their finance department is the most profitable arm of their business.

It is noteworthy that during 2010, more families than ever before put second and/or third mortgages on their family homes to pay off credit card debt.

The good news is that people are understanding that how we spend our money is more important than how we vote. More and more consumers are ready and willing to spend their money locally instead of continuing to spend it all with the giant transnational corporations.

In support of this shift towards shopping locally, numerous communities all across Canada (and elsewhere) are launching community currencies with a goal to re-build the spirit of community. Each of these community currencies is created by the participating traders and therefore bears ‘no interest.’ These community currencies are commonly called usuryfree community currencies since they are ‘interest free.’

A usuryfree time currency called Tamworth Hours was launched in the fall of 2004 in rural, eastern Ontario. From 21004 until 2008, Tamworth Hours were accepted by a number of home-based enterprises and various small to medium-sized businesses north of Hwy 401 and along the 401 corridor from as far east as Montreal extending as far west as Kitchener-Waterloo.

In 2006, a usuryfree dollar currency was launched in rural Ontario west of Ottawa and north of Hwy 7. This local currency is referred to as The Unity and is traded within a growing network of small to medium-sized businesses in Bancroft, Maynooth, Barry’s Bay, Combermere, Killaloe, Golden Lake, Eganville and other small towns in the Ottawa and Madawaska Valley.

Tamworth Hours was a time-based local currency and The Unity was a dollar-based local currency. The traders enroled in both groups used these paper notes in their respective communities. Additionally, there was evidence of inter-group trading whereby each other’s paper notes of usuryfree community currency are accepted at par. Most trades were negotiated with a percentage of usuryfree community currency being accepted as a complement with Canadian Funds. Business owners learned to cover their wholesale cost with Canadian Funds and accept a portion of the retail mark-up in the community currency of their choice.

Many people refer to these paper notes of usuryfree community currency as: barter notes, gift certificates, coupons, paper chits, time tokens or dollar tokens, and ‘just like Canadian Tire money.’

It is interesting to note that in 2002, officials/authorities speaking on behalf of the federal government’s Bank of Canada carefully crafted the words ‘gift certificate’ to define the new community currency that had just been launched at Salt Spring Island at that time.

In an article on page 4, of the National Post, Tuesday, April 4, 2002, Denis Abbott, spokesman for the Bank of Canada made the following statements: “There appears to be an increasing number of groups and companies issuing their own private currency, Canadian Tire money is best known. As long as these groups don’t use Bank of Canada artwork or our logos of the prime ministers and things like that, there is typically not a problem. In the eyes of the government, the island (Salt Spring Island) money is merely a gift certificate and not currency.”

In recent years, ‘gift certificates’ have become one of the most popular ways of accepted gift giving for birthdays, anniversaries and Christmas and other celebrated holidays. It seems reasonable that most people who spend ‘gift certificates’ treat them just like Canadian dollars which are defined as ‘currency.’ Therefore, it is quite acceptable that some people like to refer to usuryfree community currency as ‘gift certificates.’

Regardless, of the reluctance of any level of government to yet correctly define a usuryfree community currency as ‘real capital,’ it is prudent for all traders within the usuryfree community currency movement to know that any usuryfree community currency is real and spendable locally - and beyond local boundaries.

Traders with the usuryfree community currency movement often view the various paper notes as simple tokens (time or dollars) to be used as a complement with their federal cash when making purchases of products and/or services. A government bulletin issued in the late 1980's instructs business owners to treat any usuryfree community currency like federal cash and pay the appropriate taxes. It has often been said: “Whatever you can do with cash, you can do with usuryfree community currency.” It is obvious to any astute thinker why there is a government agenda to take away our paper notes of federal cash and make us subservient to debit cards and credit cards. Think about it.

To simplify the process, many business owners are balancing their tills at the end of the day by removing any usuryfree community currency and replacing it with an equivalent amount of federal cash from the petty cash float. This action allows the business owners to close the till without any complications. At a later time they spend the usuryfree community currency locally by finding products and/or services listed in the various Directories.

Some farmers in rural Ontario prefer to call this usuryfree community currency ‘barter money.’ They simply view these paper notes of usuryfree community currency as a useful tool to help them keep track of their ongoing barter deals. Farmers seem to catch on real quick to the idea of embracing any usuryfree community currency as a ‘barter money’ to help them keep track of their trading scores.

A few home-based business entrepreneurs like to use the paper notes of usuryfree community currency as coupons. These creative entrepreneurs realize that when treated as coupons there is an added savings/earnings value. The amount of any coupon is deducted from the suggested retail price before any taxes are calculated and added to the final bill. Indeed, the final bill can be lessened when any usuryfree community currency is treated like a coupon. Bravo for such creativity

The most common response received when a new enrolee learns about any usuryfree community currency is: “They are just like Canadian Tire money.” People don’t need to be told how to spend Canadian Tire money, neither do thrifty, local traders need to be told how to use any usuryfree community currency.

While Canadian Tire money is supposedly only spendable at Canadian Tires stores it is interesting to note that it is often accepted at gas bars, corner stores, garage sales and within community currency groups. It is likewise noteworthy that there is currently underway a mission to replace the paper notes of Canadian Tire money with ‘electronic bleeps’ on a plastic card - which are not transferable.

It is recommended that any new and innovative, networking entrepreneurs of this 21st Century carefully examine how they can adapt the usuryfree community currency model and apply it to any sales and marketing concept whereby commissions are paid to networks of distributors or associates. It would be optimal if dual accounts (a cash account and a usuryfree community currency account) could be established within an online database whereby listings of ‘offers’ and ‘requests’ of all participants would be displayed.

Any currency that can be looped from the company source to the distributors and back again and all who participate will win - simply because the banker (which exacts usury) will be cut out of the equation. The first networking company to implement this idea will lead the way and other companies will beat a path to their door asking: “What are you doing and how are you doing it?”

For example, when a product is sold a small percentage of usuryfree community currency can be accepted as payment and when the commissions as paid a similar amount of usuryfree community currency can be paid as commission.

Experience in the free market reveals that one hour of time worked by a professional is deemed to be of a higher value than one hour of time worked by an unskilled labourer. Therefore, in the interest of fairness, each trader using a time-based currency such as Tamworth Hours is invited to set his/her hourly rate based on the free market and negotiate any ratio of time-currency and federal cash accordingly for each exchange.

Since the federal government counsels us to treat our usuryfree community currency like federal cash when we earn it, we insist that the government treats it like federal cash when we donate it to any charity. So any time that a usuryfree community currency is donated to a charitable organization, a receipt should be requested which can be filed as a deduction against any income earned.

Likewise, when any usuryfree community currency is donated to a political party, a receipt should be requested and filed as a tax credit against any income earned.

In further reference to politics, it is recommended that municipal politicians examine closely the various working models of usuryfree community currency and design a plan whereby the municipality will agree to accept a small portion of any usuryfree time currency as partial payment of municipal property taxes. This recommendation can be easily implemented as each municipality has contracts with local businesses and has local employees. As long as the municipality can spend the usuryfree time currency, it can be accepted as partial payment of property taxes. Again, all who participate will win, except the bank.

In summary, it is recommended that each trader enroled with any usuryfree community currency group become fully aware of the various possible definitions assigned to any usuryfree community currency. Consequently, any trader can apply any given definition for any specific negotiated trade and exchange. Feedback, testimonials and new ideas welcomed.

Note: Forward any feedback, testimonials and new ideas to: tom@cyberclass.net