Lawrence, Kansas, makes money the old-fashioned way: they print it.

By Kira L. Gould
The Metropolis Observed
August/September 2001

Social activism can take many forms. In Lawrence, Kansas--where shopping-mall resistance goes back to the early 1980s and free-state pride to the early 1860s--the latest dart launched against the growing presence of chain stores is funny money. Last fall the Lawrence Trade Organization (LTO) introduced a new currency under the program Realizing Economic Alternatives in Lawrence. REAL dollars are designed to encourage local spending, create money for those left out of the economic boom, and help Lawrence "resist corporate cultural homogenization," says LTO legal adviser Dennis "Boog" Highberger.

Offsite:
You can order limited-edition Real Dollars or find out more about the Lawrence Trade Organization (LTO) at lto.lawrence.ks.us/home.htm.
There are 60 or so local currencies in use in the United States; the best known is the labor-backed Hours program in Ithaca, New York ("Hours," Metropolis, September 1996). REAL dollars, on the other hand, are backed by federal currency and modeled on a much earlier effort on the Isle of Man. In the early 1800s, to raise money for a community hall, townspeople replaced their British pounds with a new currency, invested the pounds, and returned everyone's money once funds were raised. The Lawrence program is more modest--not everyone has to agree to use it.

The scrip, printed on recycled denim-and-cotton paper, honors three very different one-time Lawrence residents. The one-dollar bill depicts Pélathé, a Shawnee scout who tried to save the town from proslavery raiders. Poet Langston Hughes, who spent his childhood in Lawrence, is featured on the ten-dollar note. Once the LTO considered the possibility of a three-dollar bill, Highberger says, the choice of William Burroughs, the notorious Beat writer who lived in Lawrence near the end of his life, was too good to pass up.

Approximately $8,000 worth of REAL dollars is circulating, and 86 businesses accept them. Residents and business owners purchase REAL dollars from the LTO. The exchanged U.S. funds will eventually be used to make micro-loans to fledgling businesses or for other purposes approved by LTO members. Because REAL dollars are not bankable, the LTO pays face value on returned currency from participating businesses. The LTO has not sought out chain-store participation in the program, but Highberger says that if they want to accept REAL dollars, they are free to do so.

Mike Rundle, front-end manager of the Community Mercantile grocery (who also happens to be Lawrence's mayor), was initially wary that accepting REAL dollars would complicate register sales and bookkeeping. Today the store takes up to flve REAL dollars per purchase, and Rundle says there have been few glitches. He opts not to pay employees with REAL dollars but plans to use them for employee perks such as gift certificates at the Free State Brewery. Although Rundle commends the consciousness-raising and looks forward to the LTO funding a loan program, he notes that "a local currency is supposed to support local businesses, not the other way around."

David Burress, research economist at the University of Kansas's Policy Research Institute, says he doubts the program will have significant impact. "The goals--to hold money in the region and to create a preference for spending money locally--make some sense. If you get a large number of people doing that, it could increase local welfare," Burress says. "The greatest benefit is probably awareness. But it's possible that the cost to the merchants outweighs the benefits to the community."

Free State Brewery owner Chuck Magerl, however, believes that awareness is worth the effort. "It's a complex process to induce people to think about what local economics means," he says. "Supporting the program will not increase revenues. It's about increasing sophistication among customer groups and being part of a local network that is willing to be experimental."

This experiment won't protect Lawrence from the proliferation of chain stores or malls, but it may guard the community's character. And if participation increases--and the LTO nest egg expands--the group will be able to help local business owners compete.


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