In 1931, Tenino, Washington — a small city about an hour and a half south of Seattle — started printing its own currency. The Great Depression had ravaged the local economy, and a run on the local bank left it without money, so the local government, the Chamber of Commerce, the newspaper publisher, and the town doctor got together to set up an alternative. Soon after, a run of wood enamel bills, backed by the town, were printed on an 1870s-era press for use at local businesses.
Within a year, the town's economy had turned around.
As a result of the Covid-19 pandemic, Tenino's wooden currency has made an unexpected comeback. Staring down another economic catastrophe, Mayor Wayne Fournier and the local government decided to use it to inject some cash into the local economy.
"It's been part of the town lore for the past hundred years," Fournier tells Grow. "It was not necessarily a new idea. It was an old idea that was taken off the shelf, dusted off, and made anew."
The town just printed its first run of new wooden bills, using the very same printing press, and set aside $10,000 in the town budget to back them. Here's how Tenino's local currency works and why the town hopes it will provide a similar economic boost in modern times as it did during the Great Depression.
Households, after applying for assistance, can receive up to $300 each month based on their income level in wooden bills. Businesses that accept the wooden bills can redeem them from the town government for U.S. dollars at a 1:1 exchange rate.
That town backing makes Tenino's wooden bills "convertible local currency." Salt Spring Island, British Columbia, a vacation community located about five hours north of Tenino, has issued its own currency since 2001, backed by the Canadian dollar.
In essence, Tenino's currency is a form of government cash assistance, with limits. The money cannot be spent on alcohol, tobacco, lottery tickers, or marijuana, and can only be used within the town.
That in-town restriction is a key feature of the currency: It keeps the money within the local economy.
"Most of the hundreds of community currencies that have been issued over the past three decades in various places around the world have had the avowed purpose of keeping money circulating locally instead of 'leaking out' to the wider world," says Thomas Greco, a community economist and expert on local currencies. "The idea is that if money can be kept circulating within the community, it will enable a greater number of local business transactions leading to greater community prosperity."
Fournier says that the currency seems to be enjoying "universal acceptance" within Tenino: He doesn't know of any stores that aren't accepting it. That includes both owned businesses and local outposts of national chains, including the town's Subway and a NAPA Auto Parts store.
The choice of wood was a largely practical one in the 1930s. Logging was a major industry in Tenino, and the local newspaper publisher had enough scrap wood lying around that could easily be repurposed as money. Today, the wood bills also serve as symbols of civic pride.
"We've been asked, 'Well, why aren't you doing cryptocurrency? Why aren't you doing debit cards? Why aren't you just handing out cash?'" says Fournier. "We want to stay true to our own story."
The unusual nature of wooden bills can also add value on its own. The original bills went "1930s viral," says Fournier, and became collector's items. Several of them, along with the printing press, are on display in the town museum, and they occasionally pop up for sale or auction.
"Back then, when a small city of 1,800 people had people from India writing letters about the news that they'd heard to buy the wooden dollar, that was a big deal," says Fournier.
While the collectors' market could cause the money to leak out of the economy, it can also help inject cash into it. Tenino's and Salt Spring Island's currencies are unlikely to be redeemed with any frequency, since collectors are likely to buy them at a substantial markup, according to Greco. Fournier says that collectors are already offering to buy bills from the Chamber of Commerce at four or five times face value.
Printing bills on wood also provides a basic level of security against counterfeiting. "There's not likely to be anyone else that is able to fire up a 1870s printing press and use strips of wood to be able to print money," says Fournier.
By 1933, Tenino's original wooden currency was out of circulation, but it had served its purpose. The town's economy had come back to life and very few of the wooden bills were ever redeemed.
Fournier is unsure how long the current wooden bills program will last, but he says the wooden dollars are one part of a larger experiment he hopes to conduct so that the town can "become a more sustainable independent economy."
Ultimately, the dollars will only remain useful as long people and businesses agree they're useful. That's not a concern for the U.S. dollar, which Greco notes is backed by the U.S. government and the Federal Reserve and is widely accepted around the world.
"Community currencies do not have those same advantages so they must stand on their own feet as credible credit instruments," he says. "What makes such a currency credible, sound, and acceptable in trade is its redeemability either in conventional money or in goods and/or services that are generally desired and needed."
For Tenino's currency to survive in the long run, at some point it has to shed its novelty factor, Fournier admits. But even if Tenino's dollars cease to be accepted in a year, he still thinks they will have done a great deal to help the town during the pandemic.
"If the city disburses $300 to John Doe, and John Doe uses it buy $300 in groceries, then John Doe's been helped," he says. "But if John Doe sells that $300 in wooden script to a money collector in Texas for $900, John Doe has still been helped."
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