Don Marti

Mon 06 Apr 2009 03:13:10 PM PDT

Alameda CLAMS: a simple local currency

Even in Depression 2.0, Alameda citizens are willing and able to do all kinds of productive economic activity, from home efficiency upgrades to video production. A credit crunch doesn't fit Alameda. So we need an additional medium of exchange—not to print paper wealth, but to account for the wealth that's already here, in the form of the products we're capable of making and the services we're capable of providing.

Alameda CLAMS (Certificate for Local Alameda Merchandise and Services) is a local currency system with a simple objective: free up the productive potential of Alameda people by enabling more mutually beneficial transactions within Alameda, or in economic terms, increase the velocity of money locally.

In the January 24th, 2009 issue, The Economist asked, Will old-fashioned scrip make a comeback? European regions and cities boosted their local economies with alternate currencies during the Great Depression. The Bavarian village of Schwanenkirchen introduced a local currency in 1931, and, according to economist Irving Fisher, "provided work, profits, and better conditions for the whole community."

USA Today reports that western Massachusetts; South Bend, Indiana; and Pittsboro, N.C are starting local currency projects.

A dollar spent at a multinational corporation may be tied up in paying down debt, or sent outside the country. But since there are no interest-bearing accounts available in Alameda CLAMS, the only thing to do with an Alameda CLAMS note is to pass it on by spending it or donating it in Alameda.

Alameda CLAMS are not affiliated with the City of Alameda. Any person or company may accept Alameda CLAMS for part or all of any transaction. Companies that agree to accept 100% Alameda CLAMS for any transaction in Alameda have a few special privileges, including free conversion and, in the future, interest-free Alameda CLAMS loans.

Local currencies are legal and in use in the US. The Ithaca, New York HOUR is the best known. Any local currency that you earn is income for Federal and State tax purposes, and should be treated like US dollar cash.

The initial run of Alameda CLAMS will be 100% backed with US dollars invested in a local Alameda financial institution. Therefore, the Alameda CLAMS dollar account will also help to support conventional bank lending within the city of Alameda. New Alameda CLAMS will enter circulation when a merchant deposits US dollars in the Alameda CLAMS account, obtains Alameda CLAMS notes, and issues them as part of a promotion for customers or as an incentive for employees.

Unlike other local currency projects in the US, Alameda CLAMS will be convertible to US dollars, to reduce the risk to and motivate businesses to participate. In order to protect companies with payables in US dollars, any Alameda individual or business who accepts 100% Alameda CLAMS on the same terms as US dollars will be allowed to exchange them for their full face value as a check in US dollars. At the beginning, the minimum conversion amount will be $100. In general, conversion is only a good idea if absolutely needed to pay a US dollar obligation. In general, a holder of Alameda CLAMS can realize their value faster by spending them.

Opportunities

Alameda CLAMS needs:

Resources

PRINTING MONEY, MAKING CHANGE: The Future of Local Currencies by Susan Witt

Time to Rekindle Local Currrency Concept by Susan Witt