Frequently Asked Questions

What is local currency? Why create a local currency? Why use a local currency? Where does the idea for RiverHOURS come from? Are RiverHOURS legal? What examples of local currency systems are in use today? How do I get RiverHOURS? What gives RiverHOURS value? Who can benefit from RiverHOURS? What about Taxes and RiverHOURS? How do I handle accounting for RiverHOURS? What about inflation or deflation?

What Is local currency? Local currency is a system of trade where paper notes (scrip) can be used for formal and informal commerce within a specific geographic region. Our local currency is called RiverHOURS. Imagine a local currency just for the Gorge! Local currencies are supported by real labor, real goods and real services in our own community. One RiverHOUR is equal to ten Federal dollars ($10.00). The scrip we issue acknowledges the value of local labor and goods and highlights the time and effort invested by the seller. Imagine at least $10.00 of spending power per hour! Why create a local currency? As Susan Witt of the E.F. Schumacher Society explains, By favoring regionally based economies, local currencies are a tool for bringing a human face and sense of place back into our economic transactions... This interweaving helps bring the community together in all its mutuality - ecological, economic, social, and cultural. Local currencies are a practical way to act locally in the face of globalization. Why use a local currency? Local currencies can only be spent on goods and services locally, so the purchasing power stays within the community and boosts the local economy. Local currencies create opportunities for people who have skills to trade but are not employed in the current job market. Local currencies create opportunities for people to earn income doing the things they really enjoy. For example, a person may love making quilts, but find it difficult to earn money form that hobby in the regular job market. Local currencies create new avenues for earning more income from this type of skill. Local currencies bring publicity and tourism to the regions using them, and thereby, more federal money. Because local currencies can not be hoarded in a savings account, they always encourage local spending of both federal dollars and the local currency. Local currencies build and strengthen community relationships and self-reliance. Top of Page Where does the idea for RiverHOURS come from? The first Hours-based currency system was created in 1991 in Ithaca, New York. The Ithaca Hours system now has over 2000 individual and 300 business participants. There is the equivalent of about $70,000 in circulation, and about $2 million in transactions have been generated to date. Ithaca Hours serves as a model for RiverHOURS and for the dozens of similar local currencies established over the last decade around the United States. For a list of all the local currency systems registered in America operating today, go to E.F. Schumacher Society's web site http://www.smallisbeautiful.org/. Top of Page Are RiverHOURS legal? Absolutely. RiverHOURS are just getting started, but similar currency systems thrive in over 30 communities around the United States. The printing and use of local currencies like RiverHOURS has been declared legal by the IRS, FBI, US Secret Service, Federal Reserve and the Treasury Department. Top of Page What examples of local currency systems are in use today? There are currently local currency systems in use in Canada, Austria, Mexico, Australia, The United Kingdom, and all of the United States of America.  Some local currency systems in use today in the United States include: Ithaca Hours in Ithaca, New York Kettle Falls, Washington Boise Hours in Boise, Idaho Skagit County, Washington Cascadia Hours in Portland, Oregon. Bainbridge Island, Washington  In Ithaca New York, people can even pay their mortgage fees with local currency at Alternatives Federal Credit Union! Top of Page How do I get RiverHOURS? The main way to get RiverHOURS is to become a goods or service provider, and advertise in the RiverHOURS trade directory and on our web site. When you advertise in the trade directory, you will be issued four RiverHOURS, the equivalent of forty federal dollars. To become an advertiser in the GLCC trade directory click here. Other ways of getting RiverHOURS is to purchase them directly from the GLCC, or accept them in payment for your labor or goods. You could also ask your employer to consider accepting RiverHOURS by agreeing to accept RiverHOURS as a percentage of your regular pay. RiverHOURS are issued into the community by the GLCC through the process of traders advertising in the barter paper or purchasing the currency directly from the GLCC. Top of Page What gives RiverHOURS value? The same thing that gives U.S. dollars value: the faith and support of the people who use them. RiverHOURS have a much smaller geographic and economic base than dollars, but the principle is the same. The more people there are who see them as useful, the more useful they will be. The RiverHOURS focus region is a thirty-five mile radius from the center of the Hood River bridge. Top of Page Who can benefit from RiverHOURS? Local merchants, who will draw in more customers with RiverHOURS Full-time employees who want a second job Part-time employees Under-employed workers who seek income from their skills The unemployed The housebound Seniors Children and teens with skills to offer Entrepreneurs developing a part or full-time business doing something they enjoy Business people who want more customers Those who need to pay informal debts faster All trying to save federal dollars for travel or other goals Top of Page What about Taxes and RiverHOURS? As far as Uncle Sam is concerned, treat RiverHOURS like federal cash. Each RiverHOUR is assigned a clear specific conversion value. Since the federal government considers them to be a cash equivalent, you must pay taxes on Hours income just as you would for cash income. One RiverHOUR is equal to ten Federal dollars. It is unnecessary to file any special IRS forms for your local currency activity. When you receive a RiverHOUR, ask yourself, "If this were a $10 bill, would I report it as taxable income and pay tax on it?" If the answer is "yes," then add $10 to your business income and pay tax on it. If the answer is "no," then ignore it on your tax return. Top of Page How do I handle accounting for RiverHOURS? Treat RiverHOURS just as you would Federal Reserve cash. Since the government views local currencies as a cash equivalent, no special accounting procedure is needed. However, because RiverHOURS are not yet accepted for deposit at any area banks, you will need to total them separately from your U.S. currency. Top of Page What about inflation or deflation? The GLCC steering committee monitors the flow of RiverHOURS in the community. GLCC members will occasionally be asked their opinion concerning the amount of RiverHOURS in circulation. Based on these reports, the GLCC may alter issuing policy to keep RiverHOURS a strong stimulant to our local economy. There are many factors which determine how much money is put into circulation. Just as with federal currency, if too much money is in circulation, we will experience inflation. If there is too little money in circulation, the trading of goods and services will be stifled. Top of Page

2004 Gorge Local Currency Cooperative Columbia River Gorge, USA updated 26 Nov 04