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Educate > Local Currency

Local Currency

I. Introduction
II.What is Downtown Dollars
III. Who is Trex Proffitt
IV. Roaring Brook Market
V. Trex Proffitt: Taking Steps to Form a Currency
VI. Successful Local Currency Programs
VII. Micro Lending




Studies have shown that when you buy products from locally owned businesses instead of companies outside of your area, your money benefits your local community. One way to invest back into your community is to shop as often as possible in your own city and purchase goods produced by the residents of your city, people who may actually be your own neighbor. One method to encourage shopping in your community is to have local currency available to be used by consumers. This currency could be used in local businesses and food markets. One way to buy everyday groceries is by going to the popular large grocery chain stores and purchasing what is needed.  They have everything a person could need when buying groceries, so there is never a demand or desire to look any place else.  What many people do not know is the benefits buyers and sellers receive when more people begin to buy their food from local markets in their own communities.  Buying locally often allows the buyer to be able to receive the best quality foods available.  Fruits, meats and other foods are all grown locally and are fresh for the local buyers.  One way to improve the "buy fresh, buy local" process is to somehow begin a currency that is used specifically for the local markets as well as local businesses.  


What is Downtown Dollars


Many different areas use currencies created within their communities to buy and sell goods.  In Lancaster, PA, it's been given the name "Downtown Dollars".  These come in the form of individual five or ten dollar bills but are used more similarly to gift certificates.  They are purchased with an exchange rate of 1:1. For example, if you were to purchase 30 dollars worth of Downtown Dollars, you would be physically holding 3 separate 10 dollar bills. They look significantly different from official United States currency, but their purchasing power is equal to official federal money. They are similar to gift certificates, in that, they can only be used in specific Lancaster stores.  The website provides an option that direct people on how to find out more information on purchasing Downtown Dollars and where to use them. When people choose to buy from local merchants, they can easily purchase Downtown Dollars to be guaranteed that they are supporting local businesses. The participating businesses span the interests of people in all walks of life. Lancaster has a great number of businesses that have partnered with the Downtown Dollars program. An abbreviated list includes:


319 N. Queen St. 394-4133
* ANNEX 24
24 W. Walnut St. 341-0028
146 N. Prince St. 393-8807
112 N. Prince St. 293-0809
323 N. Queen St. 397-5360
529 W. Chestnut St. 823-6605


31 N. Queen St. 399-8898
30 W. Lemon St. 509-8686
28-30 E. King St. 393-4000
402 N. Queen St. 394-2422
415 N. Prince St. 509-6090

Entertainment and Culture-

12 N. Prince St. 397-7425
126 N. Water St. 394-8398
650 N. Prince St. 509-HITS
PO Box 1281, Lancaster PA, 17608, 291-6440
16 W. Orange St. 299-9963

Shops and Boutiques-

59 N. Queen St. 397-9147

25 W. King St. (Hager Arcade) 393-0111
146 N. Prince St. 393-8807

308 E. King St. 358-9393



Who is Trex Proffitt


Trex Proffitt, who is originally from California, has been living in the Lancaster area for the past 8 years now.  Trex is a professor at Muhlenberg College teaching business classes.  As he helped students embrace entrepreneurship, he himself began to find interest in that area of study as well. His passion is to support the locally owned business in the downtown city of Lancaster. His business concept combines the use of the local currency, similar to the Downtown Dollars, and his appreciation of supporting your community, including the farmers in the area of Lancaster and promoting the benefits of their locally grown food. He formed an idea that he feels could make a social impact on the world.  He quickly began thinking of ideas for a local food market, and in only six months the store was up and running.  His goal was to have a market that supported the local economy and to celebrate local food.  The name of his store is Roaring Brook Market.  The incoming food supply comes from a variety of local farmers.  He does his best to incorporate anyone who is making their own products such as milk, jellies and other types of food, into his store.  


Roaring Brook Market

The Roaring Brook Market, which is co-owned by Trex Proffitt, is located in downtown Lancaster on 155 East King Street.  The market features food grown by local farmers and uses ingredients provided directly from the market shelves.  Roaring Brook Market has a goal to offer their shoppers a convenient local food destination which is also easy to access for local buyers.  This is all a part of his desired goal to support the community.  Other advantages to buying locally is that the locally grown food is generally better for you and more fresh than what a person might typically buy at other grocery stores.  Those stores tend to sell more processed and packaged foods. When it comes to selling organic foods, Roaring Brook Market does not buy organic foods from other companies. Organic foods are usually more expensive to buy and also more expensive to ship. Proffitt explains that rather than working and communicating with someone long distance that he doesn't know, he would rather talk to a local farmer and discuss how to improve selling and growing food that is more organic.

In working with a local farmer, things like fruits are recently fresh right off the tree rather than being sprayed with pesticides to keep it fresh as it is shipped long distances to a grocery store. Dairy products such as milk will get to the farm stand more quickly, therefore, it will last longer in your refrigerator instead of wasting time travelling in a truck shipment. When shopping at local farmers markets, you are able to ask the farmer directly any questions you may have about the food you are purchasing. This is especially helpful if you have concerns about environmental issues such as spraying foods with pesticides. It is interesting to note that Lancaster's locally grown food is known beyond the borders of the city of Lancaster. New York City, as well as many other cities, sell Lancaster's farm fresh food and baked goods to their consumers. Although they mark up the price of these products, they sell easily because Lancaster is well known for the quality of their farm produced food and bakery items.  


Directions from Millersville University campus (1 South George Street, Millersville, Pennsylvania) to Roaring Brook Market (155 East King Street, Lancaster, Pennsylvania) is as follows:

Start out going north on S George St towardE Frederick St.
0.7 mi

Turn right onto Manor Ave/PA-999. Continue to follow PA-999.
* PA-999 is just past Colonial Ave
* Nino's New York Style Pizza & Italian Restaurant is on the corner
* If you reach the end of Shertzer Ln you've gone about 0.2 miles too far
3.2 mi

Turn right onto W King St/PA-462 E.
* United States Postal Service is on the corner
0.6 mi

155 E KING ST is on the left.
* Your destination is just past N Duke St
* If you reach N Lime St you've gone a little too far



Trex Proffitt: Taking Steps to Form a Currency


Trex Proffitt's plan for his local market, and hopefully to be used by the rest of Lancaster, is to form a local currency separate from Downtown Dollars. Local currency would offer another form of payment choice for the locally owned stores. This currency would be used in the Lancaster area and could only be used for people to buy from the local markets. The advantage to this choice of payment, unlike Downtown Dollars, is it offers a favorable exchange rate by providing a discount. For every ten dollars of US money, the purchaser receives eleven dollars of the new currency.  Knowing people love discounts, this program would hopefully generate a great deal of interest to various groups of people. An additional aspect of this plan is to have this money used in additional areas of people's lives, which might include using it for paying bills or shopping at larger area stores.


One of Trex Proffitt's passions is supporting the locally owned businesses in downtown Lancaster City. Proffitt is aware of the already made, "Downtown Dollars" option for customers to buy and sell with. He thinks that is a great thing for people to be involved with and is excited to see how much it is growing. However, Proffit knows that forming a local currency within the locally owned stores can have an even larger positive impact on the buyers and sellers. One way Proffitt will know whether an area will have success with forming a local currency is by the population in that specific targeted area. If the area has a large amount of people the chances of success are much greater than if the population is not as large. Trex talks about the importance of the downtown stores accepting this new version of local currency into their stores. It is important to educate the owners on how this expanded type of currency will help make their store more successful so that they will have more of a desire to get involved. The bank is one of the most important parts when forming a local currency. Someone needs to agree to be a local banker so that people can come in to exchange money. They need to be able to keep track of how much money is coming in and how much of the local currency would be going out. When a local currency is established for a specific area a lot of people ask questions about what type of change you would be getting back after your purchase. Usually what stores would do is just treat the local currency just like U.S. money. You would pay with the local paper money and receive your change in U.S. money. The United States has a law about copying money. The law says that making a local currency is legal but only if it is paper form. The making of a local currency cannot be made with any type of coins.



Also the banker would have to have large amount of the local currency in case someone makes a big withdraw. The bank would have to have a separate register that is full of this local currency. The bank is usually a small local bank and not a nationally owned bank. Local banks are more accepting of the idea because the owner is usually also local.


In order for Lancaster to form a successful local currency, three functions are needed. The first function needed is reaching out to the local businesses. Someone would have to be in charge of getting businesses to accept the local currency as a part of their business structure. They must be willing to go to distribute the local currency and be able to exchange it with the U.S. money. Another function needed would be having someone market the idea to the community, targeting specific groups such as, senior citizens, schools, charities, churches and perhaps even young children. Their job would be to educate the people and make sure that they understand the advantages and the long term effects of using local currency to support their community. The last function that would help begin a local currency would be someone volunteering to act as the banker to distribute and exchange the currency. Besides these three things that are needed, another valuable function would be to designate a person to apply for a government grant that would help provide money to get the program off the ground and to research additional opportunities available that might access more money available for use. Proffitt's ultimate goal is to rejuvenate locally owned downtown Lancaster stores.


For local currency to be successful in any area, the community has to contribute. The main group of people that would have the biggest impact is the business owners. A critical amount of businesses is needed to accept the idea of a local currency, and they must be willing to use the local money throughout the store. To improve and make sure the idea of a local currency is successful the buyers must get involved and they also must be passionate about the idea as well. The consumer's participation is the biggest part in what makes local currency successful because of their willingness to buy local.



Successful Local Currency Programs


During my interview with Mr. Proffitt he described to me a city that has been very successful in using a local currency program. It is located in Berkshire, Massachusetts. Berkshire is made of farming areas and numerous farmers' markets. It is a small town so there are no major cities in the vicinity. Berkshire is unable to support large businesses because of the small population so everyone's food is based off the farmer's markets. Because of this scenario the people already want to buy locally. The idea of buying locally was advertised well, and the people were educated as to how local currency would be a benefit. As a result, the citizens of Berkshire are receiving fresh, locally grown food and money is recycling back into the population of friends and neighbors. The banks in Berkshire want to help fund the local currency program because the banks are also locally owned. To me, it seems like this city is a great example of a community that works together, which also includes local currency, can be a benefit to all involved.


A very po pular large corporation that uses local currency is the Walt Disney World Resorts. Walt Disney World created Disney Dollars which was designed by illustrator Matt Mew. The original idea of Disney Dollars actually came from a man, Harry Brice, attending a Disney collector's convention. According to Mr. Brice, "I couldn't believe that people were paying money for anything with Disney on it. So I began to wonder, why couldn't Disney make something just for the collector?" As the idea by Brice progressed, initial suggestions were to have a three dollar bill with a picture on it of the Three Little Pigs, as well as a seven dollar bill that had a picture of the Seven Dwarfs. The first official Disney Dollar was presented to advertise the Star Tours attraction. It then was developed to be the start of what is used to this day. They are similar in size and shape to United States currency and are available in the one, five and ten dollar denomination. A special fifty dollar denomination was available during the Fifty Year Anniversary of Walt Disney World. The pictures that rotate on this currency throughout the years usually include Mickey Mouse, Minnie Mouse, Donald Duck, Daisy Duck, Goofy, Pluto or a drawing of one of the landmarks of the Disneyland Resort. Disney Dollars were first used in May of 1987 in the Anaheim, CA Disneyland Resort. They produced 870,000 bills for the initial release of the bills in the California location and Orlando, Florida location in the Walt Disney Resort. New Disney dollars have been produced every year since 1987.

The available locations for purchasing the Disney dollars are:
* Food and beverage venues
* Merchandise locations
* Recreation areas
* Your Disney Resort hotel Front Desk
* Your Disney Resort hotel concierge

The following parks are available for the use of the Disney Dollars:
Walt Disney World Resort in Florida-
* Magic Kingdom
* Animal Kingdom
* Hollywood Studios
Walt Disney Land in California-
* Disneyland Park
* Disney California Adventure Park
* Guest Relations at Disney theme parks and water parks

Unlike local currencies being formed in town communities, Disney Dollars have no discounts attached to them. This means that one regular dollar will equal one Disney dollar. Although there's no financial advantages to replacing U.S. dollars with the Disney Dollars, visitors still really seem to enjoy the idea of them and continue to purchase them to use throughout the parks. Obviously, because of the pictures and being at such a fabulous resort, this currency is strongly appealing to children of all ages. However, people of all ages, adults included, love Disney World and also are attracted to the use of Disney Dollars. Parents and grandparents love purchasing these and giving them to children who love using them when buying items at the Disney resorts. Personally, I have to admit, that although I am now older, when I was younger I also thought it was pretty cool being able to use my Disney Dollars.


Throughout the country, multiple college universities use their own form of currency. Each school provides the students with a set amount of money in their school account that allows them to purchase a variety of foods on campus other than their every day breakfast, lunch and dinner. At my school in particular, they call this Marauder Gold. This works by granting each student who has a meal plan an extra 200 dollars. This money is to be used on campus cafeterias as well as a few off campus locations. Trex Proffitt mentioned in our interview a few of his thoughts on Marauder Gold. He expressed how he feels it can be a positive aspect but, at the same time, the exchange rate is not easily accessed. For example, a student can put U.S. dollars onto their account for Marauder Gold money, but once it is on the card, the students are not able to have any money from the account returned to them as cash. The difference between college currency and local currency in the community is that the college currency is not benefitting the college community. In other words, the local currency gives back to the college students by creating more jobs. Therefore, if students got involved in using the local currency then they would be giving back to the community in which their college is located, as well as benefit from the discounts in the local currency exchange. Mr. Proffitt envisions incorporating Millersville University's Marauder Gold program with the Downtown Dollars idea, thus benefitting the local community and allowing the college students to gain some discounts at the same time. This would create an interaction between the local residents and the students which would ultimately benefit both groups.



Although the above examples use paper currency, numerous establishments with indoor arcades use a type of local currency. Places like Chuck E. Cheese, mall arcade centers, boardwalk arcades and local city arcades, such as my local one called Happy Tymes in Warrington, Pennsylvania. These places certainly are limited but still follow the same concept. Tokens are given in equal exchange value, but often times, there are discounts offered. This varies from place to place. Once the tokens are used to play a game, tickets are rewarded and then used to purchase items. These include levels of value, such as pieces of candy, stuffed animal, souvenirs, or more valuable items such as basketballs, radios and ipods. The currency can only be used at the establishment (community) where it is purchased and remains within the business.



Micro Lending


Some people are able to get grants from the government to help support the local idea. However when most people try to appeal for a type of grant, they usually are denied because the banks exclude smaller loans. What micro lending does, is it gives the people with less money or bad credit a small loan to help them get started. In this case a loan would be given to the person who is having trouble starting a local currency. This works instead of going to a bank asking for a loan. Micro lending offers people a year repayment plan so they can have enough time to get the local currency up and running. Micro lending acts as a bridge between the bank and the people.

Jonathan Coleman works with a lending company called ASSETS in Lancaster, Pennsylvania. This would be a great example of micro lending. According to him, when forming a local currency, one of the main things that need to take place in order to be successful is to get money to help get the program started. ASSETS in Lancaster has a program called PRECAPS that would be perfect for a group wishing to establish a local currency. Their purpose is to help entrepreneurs get financial support as they begin. Basically, it is a loan from the bank but provides guidance for the entrepreneur each step along the way as they build their business. It also allows groups to form together as a network to access capital, build credit and improve business skills.





After learning about local currencies and its use in communities, I feel I am now more aware of the concept and its advantages. One advantage is it can support local farmers and promotes shopping in the local farmer markets. The benefit to the farmer is that he is a member of the community and provides jobs to other members of the community. He has a personal interest in seeing his neighborhood grow economically. The food that is provided is freshly grown and immediately distributed to the local markets and provide a healthier option for consumers. An interesting fact told to me by Trexx Proffitt is that the city of Florence, Italy actually passed a law that stated if a product is available locally you have to source it locally. Florence is known for being an economically successful city, so this supports Mr. Proffitt's opinion concerning the value of supporting your local business owners and markets. By supporting the local community and using the local currency, this creates more jobs for local residents. A possible disadvantage to developing a local currency might be the prospect of our society moving to a cashless purchasing system because advancements in technology. However, a suggestion to solve this might be to transform the local currency to a system similar to the one used by the college universities. In my opinion, using local currency helps communities support their neighbors and therefore their own city's economy. It also builds relationships between the business owners and consumers, which translates into a possibility of getting to know your neighbors a little better.













Created By Mike Reichenbach

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