TENINO’S WOODEN CURRENCY
The current corona virus pandemic has tumbled the world into a recession, decimated small and local businesses,affecting many livelihoods and causing job losses across nations on a severe scale.
At such times, it is important for the policy makers to come up with systematic measures to help revive economies. Both national as well local governments are looking for innovative and effective ways to help their citizens weather the storm.
One such measure to revamp its local economy was taken by a small town in USA’s Washington state called Tenino which began printing its own currency notes made from “wood” . Yes, you read that right!
Tenino is a small town consisting of a population of mere 1800-2000 people, relies heavily on tourism and small local business both being deeply hampered by the COVID-19 lockdown. So to tackle such an extraordinary situation,it started printing its local banknotes made of Maple veneer- a white or pale yellow colored wood, beginning April five weeks into Washington state's lockdown.
Each wooden bill printed is a worth of $25 bearing the town's name — Tenino with the words "COVID Relief" superimposed on the image of a bat and the Latin phrase "Habemus autem sub potestate" (We have it under control) printed.
Any resident of the town who is able to prove economic damages caused by the pandemic is eligible to receive upto $300 per month in wooden dollars subsidized by the city hall program.
These wooden money can be used by residents to make purchases related to necessities and services in stores and restaurants that are licensed or certified providers, as specified in the guidelines by Tenino's City Hall. Tenino's city government backs the local currency, which merchants can exchange for U.S. dollars at city hall at a 1:1 rate.
The spending comes with a few restrictions,these dollars cannot be used to purchase alcoholic beverages, tobacco or marijuana, which is legal in Washington state.The residents cannot exchange these wooden dollars directly for cash.Only the licensed merchants are authorized to get it exchanged.
As the wood is limited to make purchases in the town only, Tenino keeps the money in the community. As Fournier puts it, “Amazon will not be accepting wooden dollars.”The residents make purchases only from local stores that helps in escalating local business.
The main question that arises here is whether this measure is legal or not. From the legal point of view, the US dollars are the only legal tender in the country with the authority of printing money lying solely with the Fed.However if we look closely the wooden dollars are just like system of tokenism backed by US dollars issued to provide economic stimulus.Thus it is not like actually printing money and also its scope limited to town prevents Fed from worrying about it.
This creative initiative can prove to be a win-win situation for both the residents as well as the local economy. On one side the residents are compensated for their loss of income thus easing their economic hardships and on the other hand it provides direct support to the town economy as the money is spent locally only among its own stores.
Until now, this measure has shown good results and it would be really interesting to see the effectiveness of such a measure in unpredictable times coming ahead.