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Research - Solutions and Alternatives
Salt Spring Island Monetary Foundation - interview by Paul Dumais
Eric Booth - cofounder SSIMF (Salt Spring Island Monetary Foundation)
ebooth@saltspring.com 1-250-653-9533
http://saltspring.gulfislands.com/money/welcome.htm
1,2,5 (hot foil as securinty feature) $$ bills were printed (20,000
each) first $12-13 thousand. This is the total cost, including
design and printing. Cost is somewhat higher for the bills with
Adlertech security features. The cost is going down now due to
the ability of digital presses to do the printing of serial numbers
in a single printing press. When they fist formed the idea, they
approached the Chamber of Commerce to get them to endorse it as
a good community solution. They signed a letter of endorsement
and they took it to the credit union next to get them to agree
to accept it. They then went to CIBC, then Royal and Bank of Montreal
etc. They sold bundles at credit unions. The banks essentially
treat them like cheques. Money deposited by businesses get converted
to national currency and a trust account set up by SSIMF is used
to cover the transactions. Under the bank act, banks have to contribute
to the community. They have $85,000 circulating as money right
now so they did not have to charge GST. They next approached the
largest foodstore in the area to get them to accept the money,
then the next largest. Within a month they had 85% of the businesses
on board. They have set up exchange centers so that people could
buy local currency. They are now working on giving $$ back in
change at as many businesses.
He suggests getting together with one other person to do get
everything done (a committe of two). We should put together a
presentation and we should use the example of salt spring island.
$50 to set up a non-profit society. Get 3-4 well known and respected
people to endorse the idea first before approaching the chamber
of commerce.
Financing was done by private loans to the society. They are
in the process of paying these loans back. We might do better
by public fundraising. They are doing some value added activities
to pay this off, such as selling smart cards and phone cards.
They have now stopped issuing $$ with expirey dates. They are
now using an asset management model rather than that revenue model.
They have issued their first interest-free loan to a building
group for housing. They will be giving $20,000 to a community
radio start-up. They will issue a bond to help finance this as
well (3-4% interest). They got the whole thing running in less
than five months.
Some questions:
Did the banks agree to sell $$ in their branches (you talked of
bundles)? Originally we had the Credit Union selling $$50 bundles.
Currently we are in discussions with the CIBC to have them available
at the teller stations.
How and where were your exchange centers operated? - Exchange
center are simply stores that have agreed to carry $$ on hand.
Do they buy back $$ as well as sell them? - Yes
How do you earn most of your revenue now that the currency no
longer expires? - Because we have gone to an "asset-backed"
approach, as long as we have sufficient funds on hand to cover
monthly exchanges, the balance can be used as we see fit, invested
into either GIC's or, as I mentioned community projects such as
the affordable housing group's no-interest $$10,000 loan.
In what order did you do things? Did you approach the Chamber
of Commerce before forming the SSIMF society? -In order - Chamber,
established society, credit union, CIBC, Bank of Montreal, and
then - biggest to smallest - food stores, hardware, pharmacies,
then pretty much everyone else in no particular order.
At what point did you approach people for financing? We were
totally self financed, so we didn't have to approach anyone.
Did you get acceptance from the banks and businesses before you
even designed the currency? - We were in the process of designing
when we began getting acceptance.
How is membership in the society governed? - Regular society,
open membership to anyone who wishes to join.
How are decisions made? - The Board of Directors makes all decisions.
We meet about twice a month, or once a week if we're busy on a
particular idea/project.
What control does the municipality have? - None (actually we
don't even have a municipality here yet)
Is there any danger of losing your not for profit status if you
accumulate too much cash? - No, because all of the cash represents
$$'s that are in circulation.
Does the society have any paid employees? - No, although we currently
have one person working part time through a federally funded CED
project.
What are your next steps? We are looking at ATM's, smart cards,
telephone cards, and affinity cards, as well, we are looking at
the JAK Banking system.
Do you see your inability to accept deposits as a major inhibitor?
- At this point no.
I would suppose that your assets would be much higher if the
banks kept deposits denominated in $$ rather than automatically
converting to national currency (I think some credit unions in
Ithaca, NY were doing this). - Not really, like they say (paraphrased)
a $$ is a $ is a $$
Do you see any advantage to actually starting a bank or credit
union? - Yes
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