BerkShares - Local Money

LA Chronicle - Mark Herpel - "By accepting BerkShares merchants are helping to establish markets for
locally made products, providing an incentive for the growth of home-based
industries and creating opportunities for those underemployed and unemployed
to turn latent skills into business ventures." *

What are BerkShares?

BerkShares is a local currency for use in the Southern Berkshire region of
Massachusetts. What feature is allowing BerkShares to become the most
successful complementary currency in the United States? Their Exchange

A non-profit organization determined to support local businesses,
BerkShares, Inc., has organized and created an exchange system with local
banks. This system maintains a liquid primary market for any exchanges
between BerkShares local currency and national dollars. As a local merchant,
if you accept BerkShares and take in more than you can spend with your local
suppliers, you have the option to easily turn the local currency back into
national currency. This liquidity allows for happy uninterrupted acceptance
by local merchants. This convenient liquid exchange market exists each day
between national currency and BerkShares. Here is the list of participating

Berkshire Bank {Great Barrington Main Street, Great Barrington Stockbridge
Road Branch, Sheffield, Stockbridge & West Stockbridge Branches]

Lee Bank [Great Barrington & Stockbridge Branches]

Salisbury Bank [Sheffield & South Egremont Branches]

Pittsfield Co-op Bank [Great Barrington Branch]

Lenox National Bank

How Does An Exchange Work?

When you spend national currency and buy BerkShares, you put the local
currency into circulation. A one BerkShare note will cost you .90 cents but
you spend them for face value. You gain a 10% shopping discount as you spend
them. When BerkShares are removed from circulation, you lose 10% on the
"out-exchange" back to national currency. Exchanging a $10 BerkShare note
will get you $9 in USD. From their web site, here is a great example of how
it works.

One day, you decide to go out for a nice dinner. You go to the bank to
purchase BerkShares to spend at a local restaurant. You go in with 90
federal dollars and exchange them for 100 BerkShares. You go to dinner, and
the total cost comes to $100. The restaurant accepts BerkShares in full, so
you pay entirely in BerkShares. Therefore, you´ve spent 90 federal dollars
and received a $100 meal - a ten percent discount for you. The owner of the
restaurant now has 100 BerkShares. They decide that they need to deposit
them for federal dollars and return them to the bank. When they bring them
to the bank, the banker deposits the 100 BerkShares you spent on dinner and
gives the restaurant $90 federal dollars, the same 90 dollars that you had
originally exchanged for BerkShares. The end result? You receive a ten
percent discount because of the initial exchange, but the same $90 you
originally traded for BerkShares all goes to the business where you spent
those BerkShares.

This process of allowing exchanges in both directions, creates guaranteed
liquidity through the banks. This provides an incentive to buy the local
currency and put it into circulation and requires a small penalty when you
´retire´ the currency at one of their exchange banks. Brilliant !!!

Membership in BerkShares, Inc. costs $25.00 annually. These proceeds go to
support the organization and its efforts to make this local currency a
successful option for area businesses. Any business or individual may accept
BerkShares as payment and then spend them as they choose (you don´t have to
be a member).

The Berkshire area has had earlier versions of local currency. In 1991 a
local restaurant issued Deli Dollars, there were also Berkshire Farm
Preserve Notes and even Monterey General Store Notes. However, BerkShares,
is truly the largest and most advanced of the local currency.

BerkShares was first launched in 2006 by a group of local business owners
and community activists. Their goal was to strengthen the local community
and encourage commerce. It worked.

There are an estimated 300 area merchants now accepting BerkShares and it is
reported that around $1.5 million are in circulation. However, as with all
local currencies, these notes are continually circulated back and forth
between users, even more than national currency. There is no precise method
to determine the total annual dollar figure of transactions, but, one can
conclude from their professional operation that the number is indeed very

Shopping with BerkShares, a paper currency, is a face to face economic
transaction. These consumers are building a solid foundation of local
commerce and a stronger economy. National economic problems will have less
of an effect on any local self sustaining community.

BerkShares were never intended to replace U.S. dollars, they operate
alongside the dollar as a complementary currency. Using BerkShares creates
local jobs and strengthens family owned enterprises. The notes currently in
circulation are $1, $5, $10, $20, and $50 denominations. Rumored to be on
the drawing board are BerkShares checking accounts, debit cards, and ATMs.

Where to spend your BerkShares?

Just look locally for the ´BerkShares Accepted Here´ sign in any store
window and there is also a fine directory online.

When a customer makes a purchase using this local currency, the merchant
will make change in BerkShares. Additionally, customers paying in USD may
request BerkShares as change.

Local currency merchants are helping to establish markets for locally
produced items, providing incentives for the growth of home-based industries
and creating opportunities for those underemployed or unemployed. The
operation turns latent skills into business ventures.

Citizens working in their own communities using local currency create a kind
of systemic change that leads to more sustainable economic practices. The
end result of using BerkShares is a local community that fosters a more
ecologically responsible production of goods and a more equitable
distribution of wealth. Using a local complementary currency is a
significant tool for positive economic change.