More and more communities around the world are embracing a return to local economies as a way to shield themselves against the shock of peak oil as well as an unstable global financial economic system. Local economies using local money are a way to keep trade within the boundaries and prevent wealth from exiting the community. By using local and complimentary currency systems to help regain local autonomy, communities around the world are saying no to the destructive practices of exploitative, centralized transnational corporations which cannot help but put profit ahead of both people and the environment.

Local money currencies have proven to be excellent vehicles for facilitating local economies and have a rich history. We examine a few of them below. Some stories are successes while others provide cautionary tales of what can happen when the best of intentions is compromised by greed. More links are provided in the mindmap menu above.


A. Colonial Scrip (Benjamin Franklin)

Perhaps one of the most notable examples of a successful local currency was the Colonial Scripp used in the British Colonies of the Americas and advocated by Benjamin Franklin. In the early days of the American colonies, the colonies struggled because there was a trade deficit; the colonies imported more than they exported to the Mother country (Briton). This meant that there was a chronic shortage of gold and silver coins. In addition to being a scientist and statesmen, Benjamin Franklin was also a printer and he developed a solution; printed paper money. Paper money was printed and distributed freely. It was backed by a land bank to give citizens security and legitimacy of the new currency. This comfort encouraged it’s widespread adoption and use. It served as a vehicle for trade, allowing citizens to freely exchange their goods and services with each other.  Soon, the paper money scripp became so successful that it created wealth for everyone in the colonies. Unfortunately, the British felt threatened by this and banned the use of paper money in the colonies. The British overlords created huge amounts of counterfeit bills to try to break the currency. Within a year of the ruling, the citizens of the colonies had returned to high unemployment and poverty. In spite of the challenges this created, the Scripp was very hardy and survived. Benjamin Franklin, a founding father of the United States, contended that the real reason for the American Revolution was because of Briton’s control of the money system.

Franklin was one of the pre-eminent champions of the paper money system. To see his lucid writings.


B. The Austrian Worgl Stamp Scrip (July 31, 1932 – Sept 1, 1933)

The “Miracle of Worgl” was a succesful regional monetary system experiment conducted within the Austrian town of Worgl in the midst of the Great Depression.

Silvio Gesell

This experiment applied “free money” theories developed by German economist, social activist and anarchist Sivio Gesell.   In 1887, Gesell moved to Beunos Aires, to open a branch of his brothers business. When the 1890 Argentian depression struck, the business suffered considerably and this gave him opportunity to reflect on the structural defects of the monetary system which contributed to the depression. In 1891, he released his first writing on this topic entitled The reformation of the monetary system as a bridge to a just state. He then wrote The nationalization of money

Gesell, a proponent of monetary reform, was far ahead of his time. During  his era, the fashion of scientific thought was to master and create the world after his own image again. In contrast,  Gesell believed that scientific knowledge is not power over nature but a tool to harmonize with nature,  used to rebuild human society and its economic life so that they fit seamlessly into the whole order of nature.

Michael Unterguggenberge

Michael Unterguggenberger, mayor of Wörgl,was familiar with Gesell’s work and decided to put it to the test. At the beginning of the trial, the city had 500 jobless people, with another 1,000 in the immediate vicinity and there were 200 families who were penniless. Unterguggenberger had a long list of projects which included:

  • Street repaving
  • Improving access to the town’s water distribution system
  • Tree planting along the streets
  • and many other projects

Many people were willing and able to do all of those things, but he was constrained by having only 40,000 Austrian schillings in the bank, far too little to fund all these projects. So when the mayor made the decision to perform this experiment, he decided to deposit the money into a local savings bank as collateral for issuing Wörgl’s own 40,000 schilling’s worth of new stamp scrip.   He then used the stamp scrip to pay for his first project.   A Stamp Scripp is a kind of currency where stamps must be applied to it. The stamps must be applied by certain dates or the holder is penalized. This prevents the Scripp from being hoarded and encourages circulation, hence healthy trade. Sure enough, everybody who was paid with the stamp scrip spent it quickly, ensuring circulation and guaranteeing work for others.   When the townspeople still had surplus stamp scrip leftover after they spent it on items that met their basic needs, they even decided to pay their taxes early.

Wörgl became the first town in Austria to successfully lower extreme levels of unemployment.   The new stamp Scripp was so successful that it not only allowed the mayor to complete all his projects on his list, but even take on new projects such as building new houses, a ski jump and a bridge with a plaque that said ‘This bridge was built with our own Free Money’.   The success of the system quickly spread;  it was replicated, first in the neighboring city of Kirchbichl in January of 1933.  Subsequently, six neighbouring villages emulated the system, one of which built the municipal swimming pool with the proceeds.  The success also attracted the French Prime Minister, Édouard Dalladier, who made a special trip to witness first hand the “miracle of Wörgl.” Inflation and deflation were said to have been non-existent for the duration of the experiment.

The  majority of this additional employment was not due directly to the mayor’s projects but rather from the effective circulation of the stamp scrip after the first people contracted by the mayor spent it.  In fact, every one of the schillings in stamp scrip created between 12 and 14 times more employment than the normal schillings circulating in parallel.  The stamp scripps anti-hoarding device was extremely effective in generating new work.

In June 1933, Unterguggenberger spoke at a meeting with representatives of 170 other communities.  After this presentation, 200 townships in Austria wanted to replicate the Worgl monetary system.  It was then that fate entered the picture and played a role that would change the course of history. History teaches us over and over again that when power structures are threatened, they will do everything within their own self-interest their to squash their opponent. The central banks saw their power and control potentially slipping away and panicked. They reacted by asserting their monopoly rights to prevent the Worgl system from spreading.  The citizens sued the central bank, but lost the case in November 1933.  The case then went to the Austrian Supreme Court, but was again defeated.  After that it became a criminal offence to issue “emergency currency.”

Similiar to what happened in Pennsylvania hundreds of years earlier, history showed once again that a regional free monetary system, one without bankers in control of printing the money supply, when applied to a community that has human and natural resources and mechanisms to ensure continued circulation will encourage trade to flourish and poverty to be eliminated.


C. The BerkShare Complimentary Currency

E. F. Schumacher Society and the New Economics Institute are a US based research institute dedicated to developing new and just regional monetary models. Their most successful model is the BerkShare Scripp which is a monetary scripp that operates in the BerkShare municipal region of Massechusetts, USA.


BerkShare Money (source: BerkShare website)

“BerkShares are a local currency currently being successfully used in the Berkshire region of Massachusetts. Dubbed a “great economic experiment” by the New York Times, BerkShares are a tool for community empowerment, enabling merchants and consumers to plant the seeds for an alternative economic future for their communities. Launched in the fall of 2006, BerkShares had a robust initiation, with over one million BerkShares having been circulated in the first nine months and over 2.7 million to date. Currently, more than four hundred businesses have signed up to accept the currency. Five different banks have partnered with BerkShares, with a total of thirteen branch offices now serving as exchange stations. For BerkShares, this is only the beginning. Future plans could involve:

  • BerkShares checking accounts,
  • Electronic transfer of funds,
  • ATM machines,
  • Loan program to facilitate the creation of new, local businesses manufacturing more of the goods that are used locally.”

(Source: BerkShares website

What is the purpose of BerkShares or other local currencies?

  • To function on a local scale the same way that national currencies have functioned on a national scale
  • To build the local economy by maximizing circulation of trade within a defined region
  • Widely used in the early 1900s, local currencies are again being recognized as a tool for sustainable economic development
  • The currency distinguishes the local businesses that accept the currency from those that do not
  • It builds stronger relationships between the business community and the citizens of a particular place
  • The people who choose to use the currency make a conscious commitment to buy local first
  • The Berkshare users are taking personal responsibility for the health and well-being of their community
  • BerkShares are not intended to, replace federal currency
  • Their use strengthens the regional economy, favoring locally owned enterprises, local manufacturing, and local jobs, and reducing the region’s dependence on an unpredictable global economy
  • By accepting BerkShares, local 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

How are BerkShares placed in circulation?

  • BerkShares are placed in circulation when citizens exchange normal currency for BerkShares at any of the certified BerkShares Exchange Banks.
  • Citizens may exchange federal dollars for BerkShares at any of the BerkShare Exchange Banks during normal bank hours (some restrictions may apply)
  • The exchange rate is ninety-five cents per BerkShare. Ninety-five normal dollars =  one hundred BerkShares
  • BerkShares are printed in 1, 5, 10, 20, and 50 denominations of BerkShares
  • Federal dollars remain on deposit at the BerkShare Exchange Banks to redeem excess BerkShares at a five percent discount. 100 BerkShares would be exchanged for ninety -five federal dollars

How does the 5% discount work? Where does that 5% go?

The five percent discount is part of the exchange rate, not a discount given at the point-of-sale. That 5% doesn’t “go” anywhere – no one is making a percentage on BerkShares transactions. To explain more clearly, let’s follow 100 BerkShares through a common transaction:

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 95 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 95 federal dollars and received a $100 meal – a five 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 $95 federal dollars, the same 95 dollars that you had originally exchanged for BerkShares. The end result? You receive a five percent discount because of the initial exchange, but the same $95 you originally traded for BerkShares all goes to the business where you spent those BerkShares.

Who participates?

  • Participating shops have “BerkShares Accepted Here” sign in store windows
  • There is a  BerkShares Directory.
  • BerkShares are accepted at face value for goods and services—10 Berkshares for a $10 purchase, though some restrictions may apply.
  • Every business listed in the BerkShares Directory and displaying the BerkShares sign commits to taking full or partial payment for its goods or services in BerkShares.
  • Most listed businesses accept BerkShares for the full value of an item, but some find they cannot and so it is important to ask about store policy before making a purchase.
  • BerkShares provide a flexible and adaptable tool to meet the needs of differing business.
  • Change for purchases in BerkShares will be made in BerkShares. Customers paying with normal currency may ask for BerkShares in change.

How do BerkShares benefit the local economy?

  • Everyone benefits from using BerkShares.
  • Consumers benefit from receiving a 5% discount on purchases.
  • Businesses benefit from increased patronage.
  • Local non-profit organizations can also benefit by purchasing BerkShares at the 5% discount rate and selling them at full face value to their supporters.
  • It will take citizens working in their own communities, region by region, to create the kind of systemic change that will lead to sustainable economic practices—practices that foster ecologically responsible production of goods and a more equitable distribution of wealth. Local currencies are a tool to bring about such change. BerkShares are about building community while building the local economy.

How does a business get involved in  trading in the BerkShares?

Using the sign-up page.

What is the future for BerkShares?

  • In the summer of 2007, BerkShares, Inc., conducted a survey about use of BerkShares
  • The survey was very positive due to the vibrant use of the currency and increase in local business
  • The board of directors decided to continue the program indefinitely


D. The English Island of Guernsey 

The small island community of Guernsey is located among the British Channel Islands just south of Great Britain. It’s small size means it has been able to stay under the radar of the international banking cartel long enough to try out its own monetary experiment. Just like the Central Banks, when the Guernsey government needs funding, it simply issues the money it needs.

In 1994, Dr. Bob Blain, Professor of Sociology at Southern Illinois University, wrote::

In 1816 its sea walls were crumbling, its roads were muddy and only 4 1/2 feet wide. Guernsey’s debt was 19,000 pounds. The island’s annual income was 3,000 pounds of which 2,400 had to be used to pay interest on its debt. Not surprisingly, people were leaving Guernsey and there was little employment.

Then the government created and loaned new, interest-free state notes worth 6,000 pounds. Some 4,000 pounds were used to start the repairs of the sea walls. In 1820, another 4,500 pounds was issued, again interest-free. In 1821, another 10,000; 1824, 5,000; 1826, 20,000. By 1837, 50,000 pounds had been issued interest free for the primary use of projects like sea walls, roads, the marketplace, churches, and colleges. This sum more than doubled the island’s money supply during this thirteen year period, but there was no inflation. In the year 1914, as the British restricted the expansion of their money supply due to World War I, the people of Guernsey commenced to issue another 142,000 pounds over the next four years and never looked back. By 1958, over 542,000 pounds had been issued, all without inflation.1


Guernsey has a relatively low (flat 20%)  income tax which is simple and loophole-free. It has:

  • no inheritance tax
  • no capital gains tax
  • no federal debt

When it wants to create some public work or service, the government simply issues the local currency it needs to pay for the work. It has been doing this successfully for nearly two centuries. In that time, the money supply has increased 25 times its original size; yet there has been no inflation, and the town has remained prosperous and stable.2

It may seem paradoxical that the money supply can increase 25 times without creating runaway inflation but there’s another much larger example of the same effect, China.  The Chinese have been stabilizing  inflation for thousands of years, in spite of the money supply continually being flooded with the world’s gold and silver, and dollars to pay for China’s cheap goods.3  Price inflation occurs when “demand” (money) increases faster than “supply” (goods and services).  British economist John Maynard Keynes pointed out that adding new money to the economy will not drive up prices AS LONG AS the new money goes towards producing new goods and services. In that way, supply will increase proportionally along with demand. The ratio of supply to demand is therefore preserved.


 E. The Italian SIMEC and the experiment of Professor Giancinto Aurit

The Wall St. journal reported in October 2000, that a wealthy Italian Professor, Giancinto Auriti wanted to show that central banking is the biggest con artist in modern history.   He claimed that when money is loaned out at interest by banks, it has roughly half the purchasing power than if it were divided among the people for free. Auriti’s findings corroborate German researcher Margrit Kennedy’s research finding.

Auriti acted on his theory. He decided to test his it in his small hometown of Guardiagrele, Italy. He issued a debt-free alternative currency, called the Simec, and offered it at an exchange rate of 1-to-1.

Soon, people discovered that one simec had the purchasing power of two lire and goods started flying off the shelves. Participating merchants were busy while stores that didn’t accept simec remained empty. 2.5 billion simec circulated rapidly. Due to its success, local merchants eventually formed a committee, with the Professor as the head, to keep the program going.  This program needed a wealthy benefactor to get it started (which the government could easily do itself), but it still shows the great potential of debt-free currency to facilitate economic growth and prosperity.

Giancinto Auriti’s decree of the Simic:

Let’s reclaim ownership of our money
MONEY TODAY OUR PROPRIETARY born ‘that the bank issue loans
We want to be born PROPERTIES ‘of citizens and which is credited to each person as “citizen’s income” To write this sentence, which is valid for all the coins in circulation it took 36 years of university studies (theses, conferences, etc..) of Law at the University of Teramo and “La Sapienza” of Rome. SOVEREIGNTY The ‘MONETARY be attributed to the State, as the fourth constitutional power, and removed to the central bank. The PROPERTIES ‘of COIN is attributed to the People, which, by convention attributes to the social value: it accepts each currency in anticipation of being able to spend in turn. It is thus implementing the universal social rights, as provided by Catholic Social Teaching and the 2 nd co. Of ‘art. 42 of the Constitution. Acknowledging the currency of property of citizens, the state must retain all ‘home, right from’ issue, what is necessary for reasons of public utility, 100% of ELIMINATING TAX LEVY. should be made ​​a MINISTRY FOR DAMAGES TO WEAR (such as war damage) and COURT AGAINST ‘WEAR.The people must not only have political sovereignty, but also the monetary, in a FULL DEMOCRACY, otherwise CONTINUES THE ‘PRESENT SYSTEM USUROCRATICO, that paying the dovutoci, transforms us from owners debtors in our money. “Once people found a gold nugget he appropriated without borrowing from the mine. Today, instead of the mine is the central bank, instead of a nugget, a piece of paper, instead of the property the debt, because the bank issues money Loan Only. So we were PROCESSED BY BORROWER IN THE OWNERS OF OUR MONEY because we owe a debt of the Central Bank all the money in circulation and this DEBT SHOULD NOT pay him unconsciously with taxes and bank interest. ” WHEREAS…



F. The Credito 

 Barter clubs that were originally “a complementary social and fair economy”  had become a charity business, a stopgap measure to the crisis. The ‘creditos’ that were meant to be a’ currency for social transformation’ had become poor people’s currency, a sort of transitional money before better days. Then, as soon as money reappeared again, with State subsidies (plan) and formal economy got going again, many left the clubs and the system collapsed within a few months. 


Perhaps one of the largest recent experiments in local currencies was the Credito (later called the “Arbolito” as it became widely adopted across the country). In 1995 , Ruben Ravera, Carlos de Sanzo and Horacio Covas open the first “barter club” in Bernal, south of the district of Buenos Aires.

The idealistic principles of the barter system were:

  1. To be an authentic human being and NOT be enslaved by money
  2. Not to promote articles or services, but rather to help each other to give deeper meaning to life,  to work together cooperatively for mutual understanding and fair trade
  3. To replace fruitless competition, profit and speculation by reciprocity between people.
  4. Acts, products and services of a Barter system can follow moral and ecological norms rather than consumerism and short term profit
The Bernal group issued the Credito as a form of local currency to promote local trade. It enjoyed local success and the success spread and soon many other clubs, called  “Nodos” began springing up across the country. Exchange between members of various clubs was inevitable and this led to the creation of the global Barter Network (RGT). Barter Clubs grew amazingly quickly:

  1. 80 members in 2000
  2. 800 000 members in 2001
  3. 2 500 000 members in 2002

The 3 founders played the role of a monopolistic central bank, creating:

  1. an inter-zone organization
  2. a centralized information system
  3. the obligation to have and communicate statement of accounts in each zone

Gradually they eliminated the original collective decision-making commissions and replaced them with a hierarchical organization in which they controlled everything. At its pinnacle, the Credito and Arbolito reached 7% of the Argentine population before lack of sound fiscal management, corruption and malpractice lead to over-issuing and  hyperinflation.

Carlos Perez Lora ( Red Mar y Sierras)  explains how the three operated the scheme:

  1.  Bernal would send a box of 10 000 creditos to a coordinator willing to start a new Barter Club, a Nodo.
  2. The coordinator would sell 50 creditos for 2 pesos to every newcomer
  3. It was good deal, since in barter clubs, the prices of the products conformed to the prices of the conventional market. So 1 credito = 1peso = 1 dollar (exchange rate parity dollar/peso in Argentina)
  4. For 2 pesos, you made 50 dollars; Bernal effectively sold Credito money for Peso money
  5. The coordinator would send back 400 pesos (10 000/50×2) to Bernal; equivalent to 400 dollars
  6. Bernal opened thousands of nodos all over the country, multiplying the sales of creditos

Diego Garris (Red de Cordoba) explained the irresponsible sales’ practices in the last 6 months before its collapse:

  1. Bernal opened thousands of short-lived nodos
  2. They sent sales rep all over the country to sell boxes of notes, effectively flooding the market with credito notes
  3. To join a nodo, members had to buy creditos without being obliged to bring quality products to barter
  4. Consequently, the nodos were empty of any real useful goods or services
  5. Members were left with massive amounts of paper money but no products and services to exchange them for
  6. This hyperinflation caused them to close down rapidly

Diego Garris suspects that this unethical scheme produced a number of millionaires.

In summary, the 3 in Bernal abused the important positions of power they have created for themselves. They became obsessed only with personal gain and granted themselves the authority of a central banking, the right to issue currency and print money, making profit, regardless of the consequences. Men without conscious controlled a system and their reckless profiteering caused their own notes to become worthless, but not before ruining many Argentineans. The whole thing crumbled in a matter of months after the state made state currency more available.

Barter Clubs were originally based upon an idea of Solidarity. If the solidarity is superseded by profiteering, however, as was the case in Argentina, the system can easily become corrupt and revert to another form of capitalism. This reckless profiteering ultimately played a major role in the collapse of the system. Carlos Perez Lora ( Red Mar y Sierras) pointed out that the unfortunate fate of the barter system experiment was already there at the very beginning. One of the founders, Horacio Covas, came from a multi-level marketing company whose pyramidal organization inspired the movement and, sadly, led to its demise when dormant capitalism unleashed itself and the organization’s profit making side took over.


Information of Silvio Gesell can be found here:


Information on the Worgl Experiment can be found here:

Regional currency in Wörgl (1932)


Information of Stamp Scripp can be found here:


1. Bob Blain, “The Other Way to Deal with the National Debt,” Progressive Review (June 1994).

2. David Kidd, “How Money Is Created in Australia,” (2001); Michael Rowbotham, “How to Cancel Third World Debt,” in Goodbye America! Globalisation, Debt and the Dollar Empire (Charlbury, England: Jon Carpenter Publishing, 2000), pages 188-89.

3. Keith Bradsher, “From the Silk Road to the Superhighway, All Coin Leads to China,” The New York Times(February 26, 2006).