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Politics & Government

Mayor's Roundtable: Using Glendora Bucks

Does local currency have a place in Glendora?

Glendora Mayor Doug Tessitor fields your community questions and answers them in a weekly column. In Glendora Patch’s Mayor’s Roundtable, you are invited in an ongoing dialogue about issues and concerns you have regarding your city. Share your ideas and voice your opinion.

Have a question you'd like Mayor Tessitor to answer? E-mail hazel.lodevicotoo@patch.com

This week's reader-submitted question:

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Hello,

The creation of a local currency is legal and has many benefits. It can help keep taxes within the city, its unique and in line with Glendora's downtown village character, and can help boost small business owners since big chain stores generally do not accept or process local currencies.

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The city council and shop owners should work jointly on this idea to research feasibility and hopefully put it into action. This is a growing trend around the country (and even around the world), especially with the federal reserve notes being devalued daily.

http://en.wikipedia.org/wiki/Local_currency
http://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States

You'll notice in the links above, local currencies go by various names from simple terms like "Dollars" to "Hours" which represents the value of an hour of labor. Glendora store owners could offer small discounts to those customers who use the local currency whether its name a "Glendoran Dollar" or a "Glendoran Hour,” helping solidify a shopping customer base within the village downtown.

Has local currency ever been discussed at the council level? What are your thoughts on local currency?

Answer:

I am not sure this question has much currency (pun intended) in general conversation around Glendora. Until this question was asked and I started looking into it, I was unaware of the concept. My guess is that there is little interest as a practical matter among the mainstream in Glendora for this approach.

That being said, a cursory review of the concept reveals it to be a form of barter system.  And as such it would provide a mechanism for trading of goods and services in a local area outside of the normal economy. With some negotiation, barter has worked with a degree of success in many situations.  t is usually pretty cumbersome in that each transaction involves an agreement between the parties as to the value of the medium of exchange. 

For example, a patient goes to a local doctor and inquires about the cost of a medical procedure. Told that the cost is $2,000, the patient suggests a trade. Since he is a cabinet maker, he offers to pay the doctor by building him some cabinets for his house. The complexities of this transaction are readily apparent.  Does the doctor need or want cabinets? Will they be particle board with veneer, or some exotic hardwood?  How many, etc., etc.?

The advantage to both parties of this barter arrangement is that the services are provided and paid for at a wholesale cost. And, if the parties chose, could be tax free, since there would be no traditional accounting for the trade. (The IRS and Board of Equalization would object!)

The substitution of a local currency (Glendora Bucks) as a medium of exchange would require similar considerations. Will the doctor accept “GB’s” as payment?  How many will be the equivalent of $2,000? How will we spend them?  Will some other party place the same value on them as he did? And so forth.

In order for a local currency to work, there has to be universal agreement among locals that a “GB” would be accepted as payment for “all (local) debts, public and private.”  And, anyone accepting a “GB” would want assurance that he could exchange it for a U.S Dollar at an acceptable exchange rate.

Individual businesses use a form of “local currency” when they offer discounts for repeat business. We’ve all used the cards that get stamped each time we make a purchase and on the 10th purchase, we get something free or extra. 

When I was a kid in Glendora, Venberg’s used to offer what we called “shoe money” each time a purchase was made. These were pieces of paper resembling cash in different denominations. When sufficient “shoe money” was accumulated, it could be exchanged for merchandise at the store.  Significantly, “shoe money” could only be “spent” at Venberg’s. I couldn’t take the “shoe money” to Bock’s and redeem it.

Perhaps, this idea of “local currency” could be taken to the Business Improvement District for study. There may be a way that something similar to “shoe money” could be made to work.  I wouldn’t bet my last Glendora Buck on it though!

The views and opinions expressed in these articles are those of Doug Tessitor alone.  They are not to be construed to represent official positions of the city or the opinions of any other council member.

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