In Ithaca We Trust: Town Builds Spirit With Cash

Stroll through the downtown here, past the vegetarian Harvest Deli, Heads Up Hair Care, and the shelves of used books at Autumn Leaves, and you can't miss the mustard yellow signs taped in the windows: "We accept Ithaca HOURS."

Ask about the origin of these signs, and it's like following a yellow-brick road; sooner or later you will be led to Paul Glover, Ithaca's self-effacing "wizard of HOURS."

Mr. Glover almost single-handedly created Ithaca HOURS, an alternative paper money system, which shares some of the same goals as bartering. It's aimed at encouraging residents to support local merchants - rather than chain stores - to build community cohesion, and it often triggers discussions about the purpose of money.

Critics regard HOURS as, at best, an unnecessary novelty or, at worst, a crutch for uncompetitive local retailers.

But since HOURS began here in 1991, it has flourished and spread to some 65 other cities in the US and around the world that are now using a similar local-money system. Cities like Madison, Wis., Brooklyn, N.Y., and Remollon, France have joined the movement.

"Ithaca HOURS are more than an economic tool," Glover says, leaning on the scuffed bicycle he rides everywhere. "The system is a cultural tool which reminds people that we are members of a community. The prevailing economy would have us believe we are on a treadmill that only a few can survive. Ithaca HOURS make it easier to help each other."

Here In Ithaca, the home of Cornell University and Ithaca College, over $65,000 worth of HOURS (one HOUR bill is equal to $10) have been issued. The currency is used by 370 businesses, ranging from lawn care to carpet laying.

It is not designed to be a tax dodge. The millions of dollars in legal transactions here alone have created plenty of estimated taxable income to be declared on state and federal tax forms.

Ithaca, a town of 30,000 residents and 20,000 students, is cited by the Utne Reader as the "very model of the word alternative." And the community is embracing the HOURS concept like Dorothy finding Toto and Auntie Em. Besides a deluge of media attention, the HOURS are also triggering interest by some economists in the new/old idea of alternative money.

Glover, an environmentalist with a background in urban planning and advertising, views capitalism as too inclined to encourage big business and its narrow profit goals at the expense of small businesses, natural resources, and low-wage workers. He says that Ithaca HOURS help people to view commerce and their community in a different light.

"A local currency-trading process," Glover explains, "reinforces the concept that we are surrounded by people who are potential resources rather than mere competitors. To the extent that we can take social satisfaction from people as resources, I think it reduces social desperation that leads people otherwise to compulsively consume, which in turn is bad for the environment." (Web site: www.lightlink.com/ithacahours)

But leaping from the rhetoric of alternative economic theory to daily practice, how would the HOURS system work if Oz's Dorothy were suddenly blown into Ithaca?

Dorothy is hungry, needs a new pair of ruby slippers, and is looking for an apartment in a community self-described as "laid back, and post-hippie." What to do?

First, she might look for the Cayuga Street Outlet, which sells shoes. Or she could pick up a copy of HOUR Town, a tabloid-size, 12-page, bimonthly paper that lists 1,500 Ithaca businesses and services that accept HOURS. Glover compiles and distributes the publication to businesses around town.

To acquire her HOURS, Dorothy could go to the Alternative Federal Credit Union on State Street for a loan. Or she could drop by the GreenStar Cooperative Market at the corner of Seneca and Fulton to exchange some US greenbacks for HOURS.

If Dorothy wanted to list her own business in HOUR Town - maybe weather forecasting or repairing tin men - she would receive two free HOURS for a new listing, a decision rewarded because it puts more HOURS into circulation.

Dorothy would also learn that there are five HOUR denominations: 2 HOURS($20), 1 HOUR ($10), a half HOUR ($5) a quarter HOUR ($2.50) and an eighth of an HOUR ($1.25). A $10 value for one HOUR was established because $10 is the average hourly wage in Tompkins County.

The multicolored HOURS are smaller than dollars and printed on locally made, watermarked, cattail paper or hemp paper. Some come with thermal ink. Rub the pink box and color seems to disappear only to reappear seconds later, which makes counterfeiting nearly impossible. All HOURS have serial numbers.

When to print more HOURS, and other decisions, is decided by volunteers at a monthly Ithaca HOURS potluck dinner. Glover calls it the "Municipal Reserve Board."

If Dorothy goes to eat at Viva Taqueria, a Mexican restaurant here, co-owner Peter Browning is likely to tell her that there is a small core of regular customers who use HOURS. "It makes you notice who really cares about the community," he says. "You get to know them, and they spread the word about HOURS."

In turn Mr. Browning uses HOURS to buy vegetables at the local farmers' market and to pay day workers for light jobs like washing windows.

Not all Ithaca businesses accept the higher denominations of HOURS. Some retailers, like grocery stores, limit the amount of HOURS they will accept on certain days. Unlike federal dollars, retailers can't turn around and pay all their suppliers or workers with HOURS.

"One byproduct of HOURS is that people get into discussions about the nature of money, where it comes from, and where it goes in a community," says Glover.

In the last few years, more HOURS have been spent on food than any other item. "I use my hours to buy bread every week," says Tom Kozlowski, owner of Toko Imports, which sells drums and international merchandise. He also uses HOURS to pay off a loan at the Alternative Federal Credit Union, but is disappointed that more customers aren't using HOURS in his store.

The Ithaca HOURS Advisory Board has already provided interest-free HOUR loans or grants to 40 community groups. "It's very hard for us to get cash assistance for women," says Bammi Herath, director of the Displaced Homemakers of Tompkins County, "so our grant of 100 HOURS provided us with child care and other necessities."

But if Dorothy should bump into Robert Frank, a Cornell professor of economics, she would hear little enthusiasm for HOURS. "We don't need a barter system to hire people," Mr. Frank says, "and if somebody makes a better product outside of Ithaca, why should we buy the one in Ithaca?"

He also questions what he says is "the sense that users of Ithaca HOURS seem to think they are occupying a morally superior position to others who use US currency to transact their business."

The biggest difference between HOURS participants and nonparticipants, says Glover, is that HOURites see the marketplace differently. And they see HOURS as a way of connecting with like-minded community members.

"The standard thing is to save money, not spend too much, and be frugal," says Neil Golder, a teacher of English as a second language, "I still believe that, but when I spend HOURS I am contributing to the community and not just getting something for myself."