Green Dollar LETSystem

A paper, edited from information supplied by Guy Dauncey and published by Ledis (The Planning Exchange, 186 Bath Street, Glasgow G2 4HG, tel 041 332 8541) gives a very good account of the Green Dollar Local Employment and Trading (LETS) System on Vancouver Island, Canada. The following are extracts, and many of the points are also relevant for those considering starting a Hopman Community Co-operation Co-ordinator system (described above).

Origins

The Green Dollar LETSystem was established in 1983 by Michael Linton, a self-employed business studies graduate who was concerned about the 18% unemployment rate on Vancouver Island. He observed that while many local people had skills and products to offer, their lack of money prevented them from trading with each other. The LETSystem is really only an information exchange, which uses a computer to keep track of account holders' green dollar trading transactions. Its objective is to stimulate trade, local economic activity, community relationships and personal self-confidence.

'The objective of LETSystem is to stimulate trade, local economic activity, community relationships and personal self-confidence'

Organization

The account holders list what their wants are and what they have to offer in a regular monthly newsletter, eg:

068 - - Simple Car Mechanics Rosie 645 3773

069 - - Lawn Mowing Dave 339 4567

075 ++ Building Work Andrew 776 4263

086 ++ Fresh Vegetables Jenny 776 9375

'++' means 'to offer' and '- -' means 'wanted'. People get in touch with each other and negotiate a trade and a 'green dollar' price. No money is exchanged - a message is put on the LETSystem answering machine and the information is registered in the books and the computer. The sum total of 'credits' in the system always balances exactly the sum total of 'debits' or 'commitments', hence the use of '+' and '-' symbols. Account holders can take out 'loans' simply by spending green dollars, and running up a debit account. No interest is charged on 'overdrafts' and no interest is given on positive account balances.

Technical Questions

Personal income tax: The Canadian tax authorities have ruled that green dollar earnings in pursuit of your normal occupation are taxable, but that other green dollar earnings are not.

Sales Tax (VAT): Sales tax is collected in normal dollars on top of the green dollar price, if necessary.

Shops: Many shops offer goods for a mix of normal and green dollars, eg '10% green.' A dentist in Courtenay regularly offers his services at 50% green.

Difficulties

(a) In order for a system to flourish, considerable persistence is needed by individual people to get new people to join, and to publicise the system's existence.

'People get in touch with each other and negotiate a trade and a green dollar price. No money is exchanged'

(b) In British Columbia, the welfare authorities have ruled that green dollar earnings count as normal earnings, which hinders the LETSystem's usefulness to unemployed people. In Whangarei, New Zealand, a 'blind eye' arrangement has been made with the welfare authorities allowing a trial period during which time green dollar earnings will not be counted as income. A similar arrangement will be needed in the UK for the LETSystem to be of value to unemployed people, single parents, etc.

Starting a System

(a) A LETSystem can start with as few as 20 people. It can be based initially among a group of friends, or around a neighbourhood, community or church organisation.

(b) Write off for the LETSystem manual and programmes. These are available on IBM-compatible diskettes, from which you can print your own 250 page manual. This should be read and digested by key people in the group.

(d) An answering machine and a personal computer are needed, and someone should be familiar with logging in entries and keeping records.

(e) A commitment is either needed from 5 to 6 key people who will work at getting it going for six months, or a grant is needed to fund a part-time organiser for six months. A LETSystem will not get going on its own without effort.

(f) Groups starting a LETSystem are asked to pay a one-off licence fee of L50 to Landsman Community Services Ltd to cover the costs of pioneering and developing the system. There are also start-up costs for printing the newsletter, office supplies, etc. A group of 40 could cover start-up costs of L300 by paying L10 each for lifetime membership, and a per transaction fee of around 15p should cover running costs. You may be able to pay suppliers in green currency.

(g) Once initial planning has been done, a group can start trading within 2 to 3 weeks. Future expansion should be taken slowly. Publicity tends to look after itself.

There are now some 50 LETSystems in Canada and the USA, 35 in Australia and 20 in New Zealand.

- For further information contact: Michael Linton, Landsman Community Services Ltd, 375 Johnston Avenue, Courtenay, British Columbia, Canada V9N 2Y2 (tel 604 338 6877).
- Guy Dauncey's address is 2069 Kings Road, Victoria, BC V8R 2P6, Canada (tel 604 592 4472 h; 604 592 4473 w and fax).

A Green Pound UK network

Some of the following information is from an article by Susannah Herbert in the Daily Telegraph and another by Margaret Dibben in the Independent.

A UK Network for the LETSystem, called LETSlink UK, was formed in 1991 with LETS representatives from around the country. It aims to encourage new start-ups and offers advice and training. There are at present at least eight such trading communities in the UK. For instance, in Totnes, Devon, more than 100 locals calculate their debits and credits in a currency called the Acorn. And in Blickling, Norfolk, the Rural Community Association (treasurer Ms Viv Horner) has encouraged the creation of a barter network - examples include a haircut in return for flowers; home-made curtains for a car service; and goats milk in exchange for child minding. In Stroud, the 143 LETS members include the local taxi firm, a cafe, printers and plumbers. Payment is in 'Stroud' currency by cheque from a special cheque book. It costs L7-50 plus 10 Strouds a year to belong to the scheme, and 2.5 per cent in Strouds is added to each transaction to cover the costs of administration.

Are such exchanges taxable in the UK? The Inland Revenue requires 'people who make a living out of exchanging services for goods to put a monetary value on the things they receive - but if you are just doing a favour for a friend, it is not taxable.'

- Liz Shephard, LETSLink UK, 61 Woodcock Road, Warminster, Wilts BA12 9DH (tel 0985 217 871).
- A London LETS trading system, under the name 'The Networking Market' is being set up in London by Sabine Kurjo McNeill, with a L15 joining fee, and a further L3 if a copy of an IBM compatible disk about the system is required. Sabine Kurjo McNeill, 21a Goldhurst Terrace, London NW6 3HB (tel 071 625 8804).

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