Detroit Cash Keeps the Hometown Humming
The Detroit News - Louis Aguilar - During the Great Depression eight decades ago, confidence in the national economy was so shattered, and people's ability to earn cash so limited, that thousands of communities created local currencies to save hometown commerce.
Provincial dollars allowed businesses and their customers to exchange goods and services with currency that had regional worth.
A Detroit trio of small-business owners are reviving the idea, following an emerging national trend. The businesses are creating a currency called Detroit Cheers, and more than a dozen city merchants have already agreed to accept it as real money. "The world is just now reeling from economic chaos; in Detroit, that's how we always roll," said Jerry Belanger, 49, a backer of the currency, as he watched the initial run of Cheers bills roll off the presses last week.
In Detroit, the jobless rate is 22.2 percent. The median sale price of a home is cheaper than a Chevrolet Aveo. Two of Detroit's Big Three automakers are surviving on federal loans amid the global recession.
"That doesn't mean you can't do business in Detroit -- you can. But, man, you have to support one another or you will die," said Belanger, who owns the Park Bar and Bucharest Grill and the building that houses the Cliff Bells jazz club near the Fox Theatre and Comerica Park.
Detroit Cheers joins an estimated 75 local currency systems that have sprung up recently in the U.S., said Michael Shuman, author of "The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition."
That includes Traverse City, where more than a 100 businesses and institutions accept "Bay Bucks" as currency.
Local money is a direct response to the national economic crisis, Shuman said.
"The federal government is desperately trying to restore consumer confidence. This is a community doing the same thing, only in miniature. They are trying to pump up local demand and revive their community's health."
Legal scholars say local currency is permitted as long as it doesn't resemble federally issued money.
Belanger's partners in the Detroit experiment are John Linardos, owner of Motor City Brewing Works, and Tim Tharp, owner of Grand Trunk Pub, formerly Foran's Irish Pub.
The three are backing the Cheers money -- which will come in $3 denominations -- with 3,000 U.S. dollars, and they put the federal money in an escrow account.
Those who have agreed to accept the Detroit money include a building and furniture design firm called Dormouse, the Canine to Five dog day care center, a graphics designer, a carpenter, a nonprofit and several restaurants and bars.
And this is just through word-of-mouth: The three Cheers backers have not formally begun to pitch the idea to others, to see just how much it can grow.
The goal is to keep business flowing in their hometown and not have it be ferried off to suburbia or some corporate headquarters in Arkansas or Tokyo.
The business owners intend to give the Detroit currency to businesses and individuals they know will spend it at participating businesses.
If anyone wants to cash in the Cheers bills for U.S. dollars, one of the founders of the Detroit currency will give the person the real thing.
"There's no question in my mind this has real value," said Billy West, a co-owner of Dormouse.
With the currency, he said, "I can get a good meal, I can get a beer, I can help another Detroit business. That is money to me. To keep commerce in Detroit, I totally support that goal."
Traverse City's Bay Bucks program started four years ago. Today, there's more than $13,000 worth of the currency circulating in the community, said Stephanie Mills, one of the creators of the program.
Beyond restaurants and bars, a local grocery store accepts the Bay Bucks; so do a bed and breakfast inn, a winery, a physician, an attorney, an accountant and tarot card readers, Mills said.
Among the largest of local currencies is BerkShares, launched three years ago in the rural Berkshires area of southern Massachusetts.
Nearly $2 million worth of local currency is circulating among businesses and private individuals, said Susan Witt, who sits on the board of the BerkShares program.
"It reformed the way many business owners and residents think about their local economy and helped educate the community on why shopping locally matters," she said.
"The current national economy has only increased the use of BerkShares."