LETS "Toronto Dollars" (tordoll@web.net) 
     JCT: Great news about a new local currency in Toronto. Though 
it's a 100% reserve LETS rather than a 0% reserve LETS, it 
demonstrates some of the benefits that are inherent in all LETS. Full 
information at: http://www.web.net/~tordoll/ 
news release
The Toronto $Dollar To Be Launched Dec. 5 by Mayor Lastman 
at Historic St. Lawrence Market
Toronto - Toronto's Mayor, Mel Lastman, will launch the Toronto 
Dollar, a new local currency, at 11:00 a.m. Saturday, December 5 at 
historic St. Lawrence Market on Front Street at Jarvis. - exchanging, 
dollar for dollar, his federal dollars for Toronto Dollars and 
spending them with participating local businesses.
The Toronto Dollar is community paper money, backed and used like 
regular money, except it is more valuable for community building. The 
new currency is being introduced by Toronto Dollar Community Projects 
Inc., a not for profit community group recently formed for this 
purpose. First, businesses agree to accept Toronto Dollars at par. 
Then, as residents, local businesses, community organizations and 
visitors spend their Toronto Dollars with each other, they generate 
business in the neighbourhood and get goods and services they want - 
as well as help the unemployed and homeless. Each time one exchanges, 
at the 100% exchange rate, federal dollars for Toronto Dollars to use 
in the community, 10% goes directly to a fund of Toronto Dollar 
Community Projects Inc. The main purpose of this fund is to create 
work - through community initiatives and groups - for those who are 
on low incomes, unemployed or homeless. Toronto Dollars is a project 
of St. Lawrence Works, a coalition of community, business and 
cultural groups. The first beneficiary of the 10% fund will be "Out 
of the  Cold", an important volunteer project to help the homeless. 
  
The Toronto Dollar organization, run and staffed by volunteers has 
been joined by over 50 cooperating neighbourhood businesses, as well 
as community groups, charitable organizations, churches and 
individuals. They have come together under Toronto Dollar's theme: 
"Money That Builds Community" to give birth to the Toronto Dollar in 
the St. Lawrence neighbourhood. The plan is to encourage other 
interested neighbourhoods in the new City of Toronto to introduce the 
Toronto Dollar to strengthen their local economies while helping the 
unemployed and homeless. The Toronto Dollar is a "cash-backed" 
currency since it can be redeemed by participating businesses for 
federal dollars kept in a trust fund. When individuals and 
organizations exchange their federal for Toronto dollars, the 10% is 
deposited to the Toronto Dollar Community Programs Trust Fund held by 
Toronto Dollar. 90% is deposited to the Toronto Dollar Reserve Trust 
Fund which backs Toronto Dollars in circulation. The earnings from 
the Reserve Fund are expected to offset Toronto Dollar expenses and 
fund administration. Participating businesses can, when necessary, 
redeem Toronto Dollars at their 90% redemption rate from the Toronto 
Dollar Reserve Trust Fund. Or, like anyone else, participating 
businesses can use their Toronto Dollars, at 100% value, to purchase 
goods and services for themselves or to make donations.
The management of the Toronto Dollar Reserve Trust Fund, as well as 
the circulation and redemption of Toronto Dollars, is contracted to 
Toronto's First Post Office which will also serve as a central 
distribution centre and Exchange Agent. Exchange Agents will be 
located conveniently throughout the St. Lawrence neighbourhood. The 
first Agents are: Toronto Dollar in the Flatiron building, at 49 
Wellington Street East, St. Lawrence Market at Front and Jarvis, and 
Frida Craft Store at 39 Front Street East. Distinctive Toronto Dollar 
Decals are displayed by businesses accepting Toronto Dollars. 
The Toronto Dollar currency is printed in denominations of $1, $5, 
$10 and $20 by the Canadian Bank Note Company, which also prints 
federal currency. Toronto dollars are printed on special paper and 
include security measures against counterfeit printing.
The Toronto Dollar group - like communities throughout the world who 
are working in similar ways to build their local economies believe 
that local citizens and local businesses have the will, the energy 
and self-reliance to strengthen their sense of community, its 
economy, health and social fabric. 
The Toronto Dollar is a pilot project of St Lawrence Works currently 
focussing in Toronto's St. Lawrence neighbourhood. It is hoped that 
the idea will spread throughout the city. The Toronto Dollar group 
will be glad to act as a resource for any citizens and community 
organizations wishing to use the Toronto Dollar within other 
neighbourhoods. The Toronto Dollar is being born in this rich milieu 
to further strengthen local businesses, and to enhance the health 
and social fabric of a community that already works.
Many communities throughout the world are acting in creative ways to
build their local economies by using local currencies from the
Tlalocs in Mexico to the Sel in France. The Toronto Dollar is part 
of this worldwide unstoppable trend. It is based on a belief that 
local  citizens and local businesses have the will, the energy and 
the self-reliance to solve local problems and to bridge the 
increasing gap between rich and poor.
A successful Toronto Dollar system signifies Toronto 
internationally  as an innovative and forward looking city, a city of
many  communities, a city that connects its citizens to one another.
How does it work?
Community minded citizens can exchange their Canadian dollars for an 
equal amount of Toronto Dollars. One Toronto Dollar is worth one 
Canadian dollar and can be spent at participating businesses. These 
businesses will be given the opportunity to exchange their surplus 
Toronto Dollars for Canadian dollars although it is in their interest 
to spend them within the community and with other businesses in the 
area. If they choose to cash in their Toronto Dollars, they will 
donate 10% for community projects such as employment creation and 
care for those most in need. Communities are supported in this way 
at no cost to the consumer.
Here is an example: Future Bakery in the St. Lawrence Market and 
Frida Crafts on Front Street will take Toronto Dollars. They receive 
fifty Toronto Dollars from Joan and fifty from Lee. Both businesses 
now  have choices. They can spend their Toronto Dollars at other 
participating businesses or within the community or cash them in and 
make a 10% donation for job creation. And how did Joan and Lee get 
Toronto Dollars in the first place? Joan exchanged fifty Canadian 
dollars and received fifty Toronto Dollars. She lost no money and 
her action supported two local businesses. She also helped to create 
local work. It was Joans way to transform her concern for unemployed 
people into action.
People may also choose to buy and sell goods and services from one 
another using Toronto Dollars. There is lots of work to do in our 
community and unemployed people who want to work, but often money is 
the problem. Toronto Dollars can help. For example, Lee got her 
Toronto Dollars after she put up an advertisement at the market and 
in local papers indicating that she would sell homemade cookies for
Toronto Dollars. And some people may want to donate their Toronto 
Dollars to ST LAWRENCE WORKS to encourage this type of barter since 
they can receive a charitable receipt for the donation.
Joan and Lee share a vision of Toronto Dollars as the money that will 
prove the power of community. Like using the blue bins to recycle, 
using Toronto Dollars may feel unfamiliar at first. But as its 
benefits become clear, Toronto Dollars can become part of our way of 
life. Small part time Toronto Dollar jobs, such as window cleaning, 
bicycle repairing and home help are sound approaches to tackling 
problems of poverty. And in the long term, as local businesses and 
people keep working in partnership, our social and economic well 
being will increase. The widespread use of Toronto Dollars will not 
only make neighbourhoods safer and more lively but will help to 
create a paradigm shift from fear of scarcity to a more caring 
society. The Toronto Dollar is a way of hope. 
How do I participate?
Participation is as simple as donating Canadian dollars and receiving 
Toronto Dollars. Toronto Dollars can also be earned and spent through 
buying and selling goods and services. Participants willing to accept 
Toronto Dollars can advertise on bulletin boards, in newsletters and 
elsewhere. Both The Toronto Voice (416-927-0150) and the St. Lawrence 
Neighbourhood Community Bulletin (416-368-3071) will carry a Toronto 
Dollar advertising column and will accept part of their payment in 
Toronto Dollars.
Questions about the Toronto Dollar
How can Toronto Dollars benefit my business?
Your Toronto Dollars work for you quickly, efficiently, and at very 
low cost:
7 To increase your advertising exposure
7 To attract new customers
7 To improve your reputation as a concerned member of your community
7 To increase your contact with other local businesses
7 To accelerate movement of inventory between businesses
7 To conserve cash in slow periods
7 To reduce bank and credit card charges
7 To build a loyal customer base
7 To enrich the community where you do business
7 To attract tourist dollars
Are Toronto Dollars taxable?
Yes. Toronto Dollars must be treated as income by businesses. 
Merchants who pay wages must submit payroll deductions to the Federal 
Government.
What about counterfeiting?
When merchants buy Toronto Dollars from Toronto Dollar Inc., they 
have  the security of knowing that we have taken several precautions 
to  protect the value of the Toronto Dollar. We are using special 
paper  and ink that cannot be copied, and each dollar issued has a 
serial  number that is recorded. As well, only registered businesses 
can cash  in the Toronto Dollars.
Where will the money come from to back the Toronto Dollar?
Each Toronto Dollar is being exchanged for a Canadian Dollar by 
citizens who support our values and goals for a healthy community. A 
financial institution will hold the Canadian dollar received. 90% of 
these monies will be retained to back the Toronto Dollar. The other 
10% of monies received will go to projects that benefit the 
community. 
Do I have to accept 100% payment for merchandise in Toronto Dollars?
No. You can choose to accept whatever ratio you want. Businesses that 
have low margins may choose to accept a small percentage of payment 
in Toronto Dollars for merchandise sold.
Why would I want to dedicate the proceeds of the Toronto Dollar 
project to strengthening the community where I do business?
By strengthening your community, you increase the buying power of the 
people who live here. In these times, we find ourselves among 
increasing numbers of people without work. Many of our neighbours are 
pleased at the chance to earn more income through casual labour, 
micro-business promotion, and job creation projects. And they are 
also very willing to build on their ability to address concerns such 
as homelessness, substance abuse, violence and crime. When you add 
to the equation initiatives for street beautification, festivals, 
arts and culture, and historical tours, the outcome for you is a 
bustling, interesting and happy neighbourhood which tourists will 
find irresistible. 
Will this be an administrative headache?
No. We are keeping the concept of the Toronto Dollar simple so that 
every merchant will want to participate: $25.00 to get in, 10 cents 
on your dollar for early cash out, no monthly fees and no surcharges.
If I receive more Toronto Dollars than I can use, how do I cash them 
in?
A registered business can cash in Toronto Dollars at any time in 
amounts of $100 - i.e. $200, $500, etc. Just contact Toronto Dollar 
Inc. and you will receive 90% for the amount you have.
What if I have Toronto Dollars that are expiring?
In order to maintain control of our inventory of Toronto Dollars, 
each bill will have an expiry date two years away from the date that 
the currency has been printed. If you have dollars that are nearing
expiry, you will be able to redeem them for other Toronto Dollars 
that have a much later expiry date.
How are administrative costs being paid for?
Toronto Dollar Inc. will receive some monies from the interest 
received on its bank deposits and these will be applied toward 
administrative costs. Also, we are receiving donations from citizens 
and businesses interested in this project. 
It's been about a year since the idea of St Lawrence Works grew out of 
the changing Toronto. Whether you were for or against the amalgamation 
of Toronto, the fact remains that people and communities require a 
vehicle for their voices to be heard in the decisions that affect 
their lives in the city. St. Lawrence Works began, in part, out of 
that need, and intends to be a strong neighbourhood voice at Toronto 
Community Council. It is a coalition of community, business and 
theatre groups, a synergy of organizations and individuals who believe 
in the power of community. 
In the past months, St. Lawrence Works has assembled a board of 
directors; it has incorporated as a not-for-profit corporation; it has 
produced Global Roots: The Festival, a Celebration of World Music; it 
has led an attempt to save an historic streetscape on Front Street; it 
has applied for funding to help the homeless people on our streets; 
and it is actively creating a community currency called the Toronto 
Dollar. 
The objects of Toronto Dollar Community Projects Inc are: To improve 
the social and economic health of communities in the City of Toronto 
by undertaking projects that benefit these communities, including the 
sponsoring of barter networks and local currencies.
http://www.web.net/~pcwf/ 
Local Economic Trading System (LETS) Toronto
PCWF has been involved with LETS for several years as a member;
and at various times has acted as a trustee, or in an administrative 
capacity.
Currently, (1998) the Foundation is a sponsor of LETS Toronto.
~LETS Toronto Homepage <http://www.web.net/lets/index.html>
The major task remains the recruitment, training and management of 
~VOLUNTEERS <http://www.web.net/lets/voluntee.html >
     JCT: Notice that even though they are not operating a credit 
system like most LETS, they do get many of the benefits of a local 
currency. Actually, it's a perfect example of how the City-State of 
Sparta ran their local currency system. 
     When merchants arrived in Sparta, they had to exchange their gold 
for clay Sparta dollars for use in the city. The city won the benefits 
of the interest while they held the gold. The same applies here. The 
interest on the money deposited for Toronto chips is used to defray 
system costs as well as fund local initiatives. It's the same idea I 
suggested the the National Capital Freenet a couple of years ago when 
I urged them to start such a LETS so that I could approach the 3000 
gamblers and businessmen I knew in Ottawa to purchase their local 
currency and let the NCF benefit of the interest. Unfortunately, NCF 
refused and can still be heard begging for funding to this day. 
     I'd also mention that Reverend Lindsay King, a Toronto LETS 
founder, and I made a presentation on LETS to Mel Lastman when he was 
Mayor of North York, a northern suburb of Toronto. Though it's several 
years later, I'm glad to hear that our pitch did not fall on deaf 
ears. 
     I'd further point out that Mel Lastman was in the 1985 Anthology 
of Great Canadian Characters with me. I think his starting a LETS in 
Toronto may further add to that distinction. 
     Finally, I will write him and suggest that every business in 
Toronto would soon be taking Toronto Dollars if the City of Toronto, 
like King Henry I and his tallies, were to fund some municipal 
projects with them and accept them for payment of taxes. The city need 
only treat them like any other loan, minus the interest. They're so 
close that it might only take a small push to get the full advantages 
of LETS. 
-------------------------------
LETS Toronto Dollars #2
>Article #98999 (99039 is last):
>From: Shou Eric Wang <shouwang@princeton.edu>
>Date: Fri Dec 4 21:49:04 1998
>I have some questions/comments regarding these inherent benefits. 
>From reading just a few of JCT's many writings in these newsgroups, I 
>get the impression that JCT believes that the benefits of the Toronto 
>Dollar and LETS in general are real and not merely psychological 
>(feel good). Just to be totally clear, let me define the real 
>benefits of something (in this case, the new Toronto Dollar) as 
>tangible economic benefits that are THEORETICALLY IMPOSSIBLE to 
>achieve without it. 
>In short, given the definition above, I do not see any real benefits
>from introducing the Toronto Dollar (TD) over the old system of just
>using the Canadian Dollar (CD). In fact, I don't see any long term 
>real benefits even if I replace the words "theoretically impossible" 
>with a less restrictive word "difficult".
>Let me summarize the system just to make sure I got it right. Suppose 
>I want to use TD, I take my $50 CD bill and exchange it for a $50 TD
>bill. I spend that $50 TD at a local business, call it Firm A. Firm 
>A takes the $50 TD and can either spend it on another business or 
>cash it in for CD. Let's suppose that Firm A doesn't need anymore TD 
>and decides to cash the $50 TD bill, but then it only gets back $45 
>CD. The missing $5 goes to Toronto Dollar Community Programs Trust 
>Fund (TDCPTF), and TDCPT will (HOPEFULLY) use that money for the 
>common good such as planting trees and feed the homeless.
>Also, suppose there are overall $10,000 TD bills circulating, this 
>means that there will initially be (0.9)*10,000 = $9,000 CD in a 
>chartered bank (which JCT dislike), earning interest (which JCT 
>dislike) so that those working for the Toronto Dollar Project can get 
>paid for their time.
>The irony of JCT endorsing a plan that uses the interest earned from 
>a chartered bank to fund a new bureaucracy aside [see
>http://www.cyberclass.net/turmel ], I have the following 
>questions/comments. 
     JCT: I don't think it's so ironic. Would an army general think 
it's ironic if he could somehow divert some of the enemy's ammunition 
to his own army's arsenal? Sure I want to get rid of the positive 
feedback on debt but I won't turn down any spare ammo necessary to 
fund the fight. Actually, I think using the interest to fight interest 
and help the poor is the only valid alibi God will accept for taking 
interest. That's why I've never hesitated in taking any interest from 
my bank account knowing it was going to be used in the fight to get 
rid of interest. 
>Before you write your responses, please focus your attentions on REAL 
>BENEFITS (because once anyone starts talking about psychological 
>issues, this discussion will soon become less than informative).
     JCT: I agree that a 100% reserve LETS doesn't have all of the 
benefits of a zero reserve LETS but has some nevertheless. 
>What are the real economic benefits? The followings were suggested 
>by JCT's post.
>>it is more valuable for community building.
>Community building is a very vague concept (I will comment a little 
>more about it in the end). I ask how does having a new money enable 
>one to build community in ways which simply cannot be done in the old 
>(CD only) system? 
     JCT: Agreed. Money builds community whether it's LETS dollars or 
Canadian dollars. 
>Is it that by introducing TD, one is "persuaded" to spend his money 
>on local merchants (because to spend the money outside the local 
>network implies an immediate 10% penalty) and not "squander" the 
>money on an evil outside merchant? 
     JCT: Yes, since a local currency can only be spent within the 
circle, this is one of the local benefits claimed by LETSers 
everywhere. That's what they mean by community building. The money 
can't be sent out of the town for investments in more profitable 
investments, they must be spent and generate wealth within the 
community. Of course, enough Canadian dollars would do the same but 
interest creates an automatic shortage of Canadian dollars which must 
go in search of the highest investment rates. 
>However, I would point out that if people really want to, they could 
>have done that under the old system by spending their CD at local 
>businesses, there is no need to introduce TD. 
     JCT: Sure they could but if they can get the goods cheaper with 
Canadian dollars from outside the system, they will while letting 
their local supplier go under. They can't do this with local currency. 
They must trade with their local suppliers as their local suppliers 
must trade with them for their own goods and services. 
>This also brings up another point which you may or may not agree 
>with. It is well-known in the economic literature that in most cases 
>trade is good, and tariff is bad. By introducing TD, this system 
>implies a 10% tariff whenever anyone with TD wants to trade with 
>those outside the TD network.
     JCT: Actually, there's no reason people in North York or 
Mississauga or even Hamilton won't take Toronto Dollars rather than 
pass up a sale when they know the Toronto Dollars can be spent when 
they or someone they know visits Toronto. It's just like bond. It has 
value everywhere. It is the inherent advantage of having a paper LETS 
that outsiders may accept them as valid currencies since so many 
people within their trading circles will also see a value in a piece 
of paper that may be spent in the next neighborhood. 
>>help the unemployed and homeless (using the 10% that goes to TDCPT)
>Once again, it is not necessary to issue a new currency to help the
>unemployed and the homeless. The Salvation Army does not walk around
>with new currencies, they walk around with red cans asking for
>donations. If people in Toronto want to help their less fortunate
>citizens, they can simply donate their CD.
     JCT: Sure this is true though having another source of fund-
raising for the poor can't hurt. 
>>solve local problems and to bridge the increasing gap between rich
>>and poor.
>Does TD reduce the income gap. I am not sure how. The only thing I 
>see is that whenever the rich accepts TD and then tries to converted 
>it to CD so that he can buy a BMW from someone outside St. Lawrence, 
>he will be subjected to a 10% currency conversion tax. Is that what 
>one means by TD reduces the income gap? 
     JCT: Actually, a typical example of reducing the income gap 
was the situation where the local dentist used to charge around C$80 
an hour. When he tried charging G$80 greendollars an hour to his local 
trader partners most of whom charged only G$10, they complained and he 
eventually reduced his rate to around G$30. So there seems to be less 
disparity between the incomes of the rich and the poor when working 
for local currency. 
>Let's not forget the rich 
>doesn't have to accept TD so this is not guaranteed to work.
>Of course, there is also the issue of job creation. Suppose there is 
>a job that does not yet exist, I ask why the job will all of a sudden
>appear just because there is TD? Is it because any local businesses
>with a wad of TD they want to get rid of will now be "induced" to 
>hire someone from the neighborhood because anyone outside the 
>neighborhood will not accept TD as wage? Hence hiring an "outsider" 
>implies a 10% currency conversion tax? I suppose this might work.
     JCT: I think you suppose right since there's no reason to hoard 
interest-free money. What it demonstrates is an exception to Gresham's 
Law which states that bad money drives out good money. People will 
naturally use a clipped or less valuable coin to pay for something 
rather than a full-value coin so Gresham postulated that when slugs 
become accepted as gold, the gold coins disappear and people will use 
their slugs first. 
     The expression "bad drives out good" tends to mislead. Actually, 
interest-free LETS money is good and usury-bearing money is evil but 
most people will tend to spend their interest-free money first and 
save their interest-bearing money for the logical reason that they 
gain by hoarding their interest-free money but gain nothing by 
hoarding their interest-free currency. 
     So in the case of interest-free and interest-bearing money, it can 
be said that "good money drives out evil money." 
>except that businesses will then not accept TD to avoid this problem 
>altogether and hire whoever they want to hire.
     JCT: If they want to avoid hiring people from the neighborhood 
who would spend their paychecks back in the participating stores and 
if they prefer hiring people from outside the neighborhood who won't 
spend their paychecks in the neighborhood, then they are free to do 
so. Yet, those who do join are those who understand that to hire 
someone from the neighborhood leaves that currency in their 
neigborhood to be spent in their stores. 
>Once again, suppose a business really cares about the neighborhood 
>and wants to hire a homeless off the local street, it can do that 
>without TD.
     JCT: Sure but then the guy isn't forced to spend his pay back in 
your neighborhood store. But if you pay him with local currency, he 
has to spend it within a circle of people who must come into your 
store.
>>participating businesses can use their Toronto Dollars, at 100% 
>>value, to purchase goods and services for themselves or to make 
>>donations... at no cost to the consumer.
>No cost to businesses and consumers? You can't possibly believe that!
>Taxation means higher prices to consumers and/or lower profits to
>businesses. TDCPTF gets a $10 cut out of every $100 TD issued. That
>money has to come from somewhere.
     JCT: Hopefully, very few businesses will have to cash out for 
Canadian currency and will thereby get not only the full value of the 
Toronto dollar in trade but trade with it many times over. 
>>Like using the blue bins to recycle
>It is NOT like using the blue bins to recycle. Recycling helps the
>environment. Making the environment better is a REAL benefit 
>(speaking of which. you are killing more trees by printing a new 
>currency).
     JCT: Actually, they might be killing more tree but not trees. How 
much trees do you think it takes to print up a few bundles of notes? 
>>make neighbourhoods safer and more lively
>I don't get this. TD Secret Service?
     JCT: They've found that the use of local currency seems to 
introduce people to their neighbors through trades which tends to have 
your trading partners act more neighborly. They've found that once you  
know your neighbors, they become more vigilant about your home and 
business and you might find you need less insurance when you have more 
neighbors watching over you. 
>>create a paradigm shift from fear of scarcity
>How does a new paper money alleviate scarcity?
     JCT: Actually, only a zero reserve credit based LETS currency can 
create the paradigm shift from fear of scarcity. Since the Toronto 
dollars are limited to the amount of scarce dollars available as base, 
the shift can't occur. But once they're used to Toronto Dollars and 
they start extending interest-free credit loans, then the paradigm 
shift which is reported in most zero reserve LETS will occur in 
Toronto. 
>>How can Toronto Dollars benefit my business?
>Let me add one
>To turn lead into gold. What the hexx are these totally unjustified
>propaganda.
     JCT: I see nothing unrealistic about: 
7 To increase your advertising exposure
7 To attract new customers
7 To improve your reputation as a concerned member of your community
7 To increase your contact with other local businesses
7 To accelerate movement of inventory between businesses
7 To conserve cash in slow periods
7 To reduce bank and credit card charges
7 To build a loyal customer base
7 To enrich the community where you do business
7 To attract tourist dollars
     JCT: Which do you find as totally unjustified propaganda? 
>>Merchants who pay wages must submit payroll deductions to the 
>>Federal Government.
>Actually, taxed TWICE. I don't think the Canadian government accepts 
>TD as tax payment. So for those who have a bunch of TD and want to 
>use them to pay taxes, you have to convert them to CD first (10% tax) 
>and then pay your regular income tax.
     JCT: Good point if they had no Canadian cash to pay it with. Most 
however do have sufficient cash. 
     Here's how members save enough money so they can pay their taxes 
in the national currency:
     Consider a teacher who earns and spends $1000 a week and spends 
it all to support his family. Consider that he earns an extra $100 a 
week in Greendollars and uses it instead of his cash to pay for his 
family's expenses. 
     Notice that he now has $5,000 a year extra which remains in his 
bank account and even though he must pay added taxes on the extra 
G$5000 he earned, he uses some of the remaining $5,000 cash in his 
federal account which he did not have to spend because he used his 
local currency. 
     That's how using Local currency for transactions frees up federal 
cash for payment of federal bills. 
>I have a few final comments.
>1) I think people should realize TD imposes a tax on those using it.
>This tax, like any other tax, may or may not be used efficiently by 
>the government. And this tax, like any other tax, will impose a 
>burden on the economy.
     JCT: I agree that such a 10% levy on the odd cash-out is one way 
to pay for the system but I'd also point out that it's a lot cheaper 
than paying 10% interest on the whole issue of federal currency.
     And of course, the levy is targetted to support the poor rather 
than rich investors and it's a burden that we'd have to support 
whether via government taxes or LETS contributions. 
>2) This is not a tax which everyone pays, it is a burden only to 
>those who choose to use TD. And these people are probably the ones 
>who care about the neighborhood. So you are basically taxing those 
>who cares while those who don't (and decide to stick with CD only) 
>are not taxed and still benefit from the public services funded by 
>TDCPTF. Summary: those who care pay higher taxes, those who don't 
>pay no tax and still enjoy the benefits.
     JCT: What benefits are these that non-members enjoy? The non-
support of the poor? Do you call it a benefit that others help the 
poor and you aren't? You already enjoy the benefit of not contributing 
to charity to help the poor. Still, there are the other benefits that 
accrue to members such as neighborhood watch and mutual trading that 
non-members will not enjoy.  
>3) I would like to reiterate the trade issue. If you believe trade 
>is good, then you should also believe this is a bad policy b/c it 
>inhibits trade with those outside the local area.
     JCT: No it doesn't. It encourages trading within the local 
community but does not discourage necessary trade from without. 
>4) Finally, Community. I suppose having a unique currency different
>from everybody else in the country may give people in Toronto a sense 
>of brotherhood (kind of like a fraternity) and yes, making people 
>feel good about themselves and be proud of who/where they are can 
>indeed make the local economy better. 
     JCT: If you say so though I wouldn't count this as a major 
benefit. 
>But given the problems I stated above, this is a lousy way of 
>building a sense of brotherhood and a sense of community. 
     JCT: And you have another way to suggest? 
>Go help your poor, donate to charities, hire from your local 
>neighborhood if you feel good doing it. But you don't need someone 
>to threaten you with a 10% currency conversion tax.
     JCT: The point is that the whole group benefits from the Sparta 
effect even though it goes to the central entity rather than each 
individual member. But imagine that the day is near when members will 
be able to pledge their Canadian dollars and leave them in their own 
bank accounts reaping the interest themselves rather than having the 
central entity reap the interest. Once every Canadian dollar in your 
bank account is pledged to obtain Green currency which you can use for 
all your transactions, then you and all your neighbors benefit from 
the saving of the interest on your own accounts. 
     Whether those interest savings accrue to each member individually 
or to the central entity is of no consequence to the overall benefit.
>P.S. Please post your comments to this post in sci.econ only. I don't
>want to go through 10 newsgroups to read your comments.
     JCT: Sorry but I post to seven regular newsgroups and no one 
forces you to visit all seven to read the same post in all seven. If 
you insist on reading the same post in all seven different fora, then 
that's your choice but I'd advise you need only visit sci.econ and not 
all the the other newsgroups. 
P.S. Hasn't Princeton started a "financial engineering" course? If so, 
they might be interested in my Banking Systems Engineering Analysis 
at: http://www.cyberclass.net/turmel/bankmath.htm 
-------------------------------
TURMEL: LETS Toronto Dollars #3
>From: mosler@gate.net (Warren Mosler)
>Date: Tue Dec  8 11:11:44 1998
>To: bc726@freenet.carleton.ca (John Turmel)
>I would like to borrow TD's immediately for a large purchase from 
>someone who won't take my credit. Is there a way to do that today?
     JCT: Let's say you wanted to purchase a home which has been 
valued by the usual bank estimators at $100,000. 
     You bake donuts and offer to provide him with $100,000 worth of 
donuts over the next 40 years. Sorry but he doesn't want that many 
donuts. 
     So you approach the Toronto LETS and offer to sell their 1000 
members donuts in order to pay off your loan if they will lend you 
$100,000 Greendollars based on the collateral of the house. Now, 
should the vendor find enough things he wants to purchase from the 
1000 Toronto members, he'd have somewhere to spend those 100,000 
Greendollars you will give him and there's no reason he should not 
accept. 
     Now, go one step further. Suppose the Toronto LETS or Toronto 
Dollars systems lend $10 million Greendollars to Mel Lastman who uses 
it to pay a percentage of his employees salaries. Of course, just like 
any other loan, he'd have to budget new taxes to recuperate that loan, 
minus the usual interest, and every store in Toronto would now accept 
Green for that reason. With every store in Toronto now accepting 
Toronto Dollars, the house vendor would have no reason not to accept 
Greendollars and the Greendollar would have no reason not to liquify 
the house being used as collateral for the tokens. 
     So, though you probably can't do a large transaction yet, I'm 
sure it's just around the corner. 
>Date: Tue Dec  8 09:46:57 1998
>From: flanders@web.net ("john flanders")
>Subject: The Toronto Dollar
>To: econ-lets@mailbase.ac.uk ("Econ-Lets ")
>Contrary to appearances in recent postings, John Turmel had nothing 
>to do with the creation of the Toronto Dollar -- he doesn't even live 
>in Toronto. It appears that he downloaded the contents of our 
>web-site, presented the project as his own, and appointed himself the 
>spokesperson. Three days into this project, we did not need this kind 
>of 'help'. 
     JCT: I'm used to these kinds of unfair shots but I think he's 
unaware that he's planting seeds in ground I've already tilled for 
him. I'm sure that most Torontonians heard first about LETS from one 
of my 30 Abolitionist candidates back in the 1993 federal general 
election. 
     And though I may not reside in Toronto, I certainly helped the 
Toronto LETS when they needed a new laser printer for their newsletter 
and I purchased $3000 Toronto LETS dollars for Canadian cash so they'd 
have their newsletter. 
     For the many who think that members with high positive balances 
are hurting their LETS systems, I'd suggest that I probably have the 
highest balance in the Toronto LETS without hurting anyone else's 
trading. 
     I'd also suggest that the success of the Toronto LETS may have 
had some influence on original members.
>This is not a LETS project, and needless to say Toronto's 
>Mayor Lastman has not set up a LETS program here, as Turmel seems to 
>claim. 
     JCT: It is a System for Trading Employment Locally and whether 
you call it a Local Employment-Trading System or not is irrelevant as 
to whether it is one or not. 
>The Mayor did however, help us promote the project on the 
>first day. 
     JCT: And I'd hope my presentation may have influenced him into 
helping you. I wouldn't denigrate the efforts of a large city who lets 
you add his name to your project.
>For us, the Toronto Dollar project is a work in progress 
>that will no doubt evolve over time. We welcome your input, perhaps 
>you would care to comment on our work directly, our web site is 
>http://www.web.net/~tordoll 
>John Flanders for the Toronto Dollar Project
     JCT: Of course, I have always had the vast vision of local 
currency based on labor and collateral, not just money, but I'd bet 
that even your half-vast vision will do some good.
>Article #99216 (99222 is last):
>From: Shou Eric Wang <shouwang@princeton.edu>
>Date: Tue Dec  8 03:39:02 1998
>I have to disagree with your analogy here. You are saying that
>collecting interest in order to stop interest is similar to a general
>using his enemy's ammunitions to stop his enemy. But I think a more
>appropriate analogy is to say that it is a Pacifist trying to stop a 
>war by killing the aggressors. You are against the use of interest 
>and you are endorsing a system that uses it (for whatever reason). 
>It's exactly like a pacifist trying to stop the killings by killing 
>the killers. It is a contradiction.
     JCT: If you insist on likening my advocacy of monetary reform to 
killing, then so be it and I am that pacifist trying to stop the 
killings by killing the killers. 
     Please note though that I've always said that should I get 
elected and obtain the power to reprogram the banking system, I 
wouldn't let anyone shoot the bankers or the economists for what 
they've done no matter how much they deserve it. 
     My motto has always been to forgive and forget and God be their 
judge. 
 
>I usually don't want to get involved in any religious discussions
>because 1)I don't know the subject matter that well and 2)It clouds
>discussions on economic issues. However, I do find your statement 
>about God very strange. From your statement, you believe that God, 
>who you believe does not like people collecting interests (and I 
>think you quoted several passages from the Bible concerning this 
>issue), will make an exception just because the goal is good. This 
>basically says that the end justifies the means. Do you really think 
>that's God's will? Does God condone killing killers? 
     JCT: I don't know whether God condones killing killers but if I 
could guarantee abolishing the death-gamble of the poor by executing 
the bankers and economists who are doing it to them, sure I'd flip the 
switch and face His possible wrath. Fortunately, no matter how many 
Muslims and families of the victims argue the international bankers 
deserve the death penalty for their usury, I will defend leaving their 
punishment to the Father. 
     Of course, I stress the difference between those bankers and 
economists who were fooled by the system and those who, like me, 
understand the engineering of the "death-gamble" "mort-gage."  
>Does the statement 
>"Thou shall not kill" really mean thou shall not kill except in some 
>cases where they are okay? 
     JCT: I guess you don't see the distinction between killing in 
self-defence and killing as aggression. I do. 
>If so, please point me to the passage in 
>the Bible where God says that it is okay to collect interest in the 
>cases of X, Y, and Z. If no such passage exists, I think you should 
>reconsider your position of committing an evil act in order to fight
>an (or 10,000) evil act(s).
     JCT: Sorry. Collecting interest, not in self-defence which 
everyone does anyway, but in offence against the function itself is 
too smart to be wrong. I'd suggest that all those in the interest-rate 
fight use every resource at their disposal and bet on forgiveness as I 
do. 
>>JCT: Actually, there's no reason people in North York or
>>Mississauga or even Hamilton won't take Toronto Dollars rather than
>>pass up a sale when they know the Toronto Dollars can be spent when
>>they or someone they know visits Toronto. It's just like bond. 
>First of all, if a merchant from Montreal is selling stuff to someone
>in Toronto, the seller will demand payment in CD, not TD.  From the
>point of view of the merchant, there is absolutely no advantage to
>accepting TD, only disadvantage of having a much less liquid asset. 
>The Toronto buyer in this case will not insist on paying TD and 
>comply with the seller's demand because the buyer probably has some 
>CD. 
     JCT: He will insist if it's the only money he has and then it's 
up to the Montreal merchant to decide if the things he can buy with 
the Green make worth his while taking the Green. 
>Second, if a buyer from Montreal is buying something from 
>Toronto, that person will pay CD and that will be accepted without 
>any problems.  Bottom line is that no one outside of Toronto will 
>ever want to hold any TD.
     JCT: Unless they see something in the Toronto LETS trading circle 
that they'd like to buy in which case there is every reason to make 
the sale to obtain the currency that will buy the desired product. 
>Also TD is not a bond. Bond pays interest. If someone from Montreal 
>wants to hold bond, he will hold something that pays interest, not 
the 
>no-interest,>10%-penalty-if-you-convert, TD "bond".
     JCT: Okay, call it a warehouse receipt for collateral. You don't 
get any interest, you don't get anything but what is stored in the 
LETS warehouse of goods and services. 
>>So there seems to be less disparity between the incomes of the rich 
>>and the poor when working for local currency.
>I don't understand this at all. Before the introduction of TD, a
>dentist charges $80/hr and a plumber charges $40/hr and no one
>complains. Why is it that once TD is introduced, all of a sudden 
>that the plumber will be unhappy to pay $80 TD/hr while only earning 
>$40 TD/hr?
     JCT: Because the plumber is probably getting closer to the 
standard $10 Greendollars per hour too. 
>>So in the case of interest-free and interest-bearing money, it can
>>be said that "good money drives out evil money."
>I see you agree with my guess on how TD may lower unemployment rate.
>(although I must say that I don't quite like how you label things:
>"good" and "evil" money-- in an economics discussion, I personally 
>like to use more neutral terms, also, what is so environmentally 
>friendly about TD that you keep calling it the "Green"?).
     JCT: So Gresham's saying "good money" versus "bad money" is okay 
but my calling it good money versus evil money is not? 
     Let's consider the Ithaca Hour system as an example. Why is 
Ithaca's good money preferred over United States federal bad money. Of 
course, an Ithaca Hour is worth an Hour of labor today and next year. 
It won't inflate. There's no unearned interest income. It promotes 
employment rather than causing unemployment like federal cash does. 
Yet, people spend it first given the choice of a store that takes both 
federal and Green. So good employment-promoting inflation-free "Green" 
money drives out employment-causing inflation-causing federal bad 
money only because the evil money gets interest and the good Green 
money does not. 
>I do want to discuss this unemployment issue a little further though.
>When one talks about unemployment rate, one can talk about the
>unemployment rate for Canada, for Toronto, or for St. Lawrence. So 
>even if TD is successfully at lowering the unemployment rate for 
>Toronto, it is doing nothing for the Canadian unemployment rate 
>because TD does not CREATE jobs, it simply makes employer an 
>incentive to hire local workers.
     JCT: Yes, but a true LETS which issues new liquidity does create 
jobs. A town LETS simply gets all of its unemployed to list their 
skills in a Directory database, lends them all some currency interest-
free and they now have the money to hire each other and create jobs 
among themselves.   
>>Yet, those who do join are those who understand that to hire
>>someone from the neighborhood leaves that currency in their
>>neighborhood to be spent in their stores.
>Again, this is anti-trade (of human capital).  Firms are no longer
>trying to find the most qualified person, because the scale is
>artificially tilted towards a local worker.
     JCT: If they're using regular LETS "credits" rather than 
Greendollars they had to buy, then there are major savings in hiring 
and paying locally. Any why assume that a less qualified local person 
can't do the job too? And if they can't, then the firm will hire from 
the outside anyway.  
>Also, I think you should stop thinking about a closed economy. 
>Suppose there are two towns, A and B.  Some of town A's workers work 
>in town B and vice versa and all workers are as efficient as they can 
>be because they are free to find jobs that value them (pay them) the 
>most.  In this case, both towns are doing well.  Now think about 
>introducing local currencies to both towns and people are all 
>restricted to work in their own towns because no employer in the 
>other town would hire them. As the result, some of them will receive 
>lower wages and both towns will suffer.
     JCT: You made the assumption that if Mississauga and Toronto both 
had their own Mississauga and Toronto dollars, that they would not 
accept each other's dollars. I said they would. As a matter of fact, 
given that there are so many Toronto workers working and Mississauga 
and Mississauga workers working in Toronto, why would a Toronto firm 
refuse to accept Mississauga dollars that would be used to pay their 
Mississauga workers with and the same applies to Toronto workers?
But if you wish to presume that they will turn down currency they 
could use to pay their out-of-town employees with, then you can 
presume they do a lot of other stupid things too. 
>>JCT: Hopefully, very few businesses will have to cash out for
>>Canadian currency and will thereby get not only the full value of 
>>the Toronto dollar in trade but trade with it many times over.
>Okay.. here is the deal, you can either say that
>1) TD will provide funds for TDCPTF (by using the currency conversion
>tax), or
>2) TD will not impose taxes on its holders.
>But not both.  Please pick one.
     JCT: Seems they picked 1) So what? 
>>They've found that once you know your neighbors, they become more 
>>vigilant about your home and business and you might find you need 
>>less insurance when you have more neighbors watching over you.
>So you are saying once you know your neighbors, crime goes down (I
>believe you). And assuming that TD induces people to know their
>neighbors, TD reduces crime. Logical indeed. Can you cite any 
>studies on this to show that the assumption is true?
     JCT: I'd refer you to a wonderful article on the benefits of 
belonging to LETS written by James Goldsmith and Perry Walker at:
http://www.cyberclass.net/turmel/gold.htm 
>>>How does a new paper money alleviate scarcity?
>>JCT: Actually, only a zero reserve credit based LETS currency can
>>create the paradigm shift from fear of scarcity. Since the Toronto
>>dollars are limited to the amount of scarce dollars available as 
>>base, the shift can't occur. But once they're used to Toronto 
>>Dollars and they start extending interest-free credit loans, then 
>>the paradigm shift which is reported in most zero reserve LETS will 
>>occur in Toronto.
>I always think of scarcity (in the sense of economic theory) as more 
>a natural phenomenon. 
     JCT: I do too. Scarcity of food, minerals, etc. I call the 
artificial scarcity of money "poverty." 
>So I am assuming you are talking about scarcity such as famine which 
>is caused by people and not really caused by a lack of natural 
>resources. 
     JCT: Actually, I was talking about curing the scarcity of money. 
You may notice that LETS is called an "anti-poverty" system in the UK 
news report I haven't yet published at my web site though it may have 
been published in my first UK Trip report from early 1997. 
>To understand your argument here will require me to study your LETS 
>system in great details. Can you just say the main points here (on 
>how LETS reduces scarcity) so that I can get the gist of it or do I 
>really have to read the whole thing?
     JCT: Since it provides an alternate source of interest-free 
currency, it does not generate scarcity of the LETS currency and it 
reduces the effects of scarcity of federal currency.  
>>JCT: Which do you find as totally unjustified propaganda?
>My point was if someone tells you "Hi Mr. JCT, I can turn lead into
>gold". You reaction would be "That's total BS, show me." So, please
>elaborate on how exactly these benefits occur. To save you some time,
>let me focus on the ones that I think are both well-defined and most
>unbelievable. I will even make my best guesses on how these might
>happen.
     JCT: Actually, I'd prefer you asked the Toronto Dollar people to 
provide what I trust are ready explanations. 
>>7 To conserve cash in slow periods
>I suppose you mean conserve CD, because you can use TD instead? Slow
>period means low income. Low income means low TD and CD. So what are
>the benefits?
     JCT: More velocity within the local community. 
>>7 To reduce bank and credit card charges
>A person needs to pay these charges if 1) one pays ATM charge 
>2) Borrow money from a credit card. TD helps one avoid the ATM 
>charge because you no longer need as much CD because TD can be used 
>to carry out part of this transaction. I have no clue about why TD 
>can help one not borrow money.
     JCT: A true LETS which creates and lends you new liquidity can 
help you not borrow money. It's true that in order to get Toronto 
Dollars, you probably would have to use federal and hence borrowed 
money which is why I've labelled it a half-vast vision rather than the 
complete vision of a true LETS. 
>As for avoiding the ATM charge. That may be true. But people are also
>losing interests by holding TD instead of CD in their bank accounts. 
>I don't think interest lost < ATM charges. Not to mention (at least 
>in the US), there are many ways to avoid various bank charges.
     JCT: You're probably right about interest lost > ATM charges. The 
fact the Toronto LETS does not liquify labor or collateral but only 
money as a 100% reserve LETS is its major weakness. But it's easy for 
them to adapt and add a credit mechanism too. 
>>7 To accelerate movement of inventory between businesses
>No idea.
     JCT: More cash means more velocity. Just as unemployed people 
with no cash do no trades, unemployed people with their own local 
currency do trades, so having local currency does promote the velocity 
of inventory movement. 
>>7 To attract tourist dollars
>I think you are more likely to find the opposite effects for the
>reasons (trade) I mentioned earlier.
     JCT: Good point. I don't understand why having local currency 
would attract tourists unless they buy the local as souvenirs and the 
Toronto system gets to keep the federal cash. 
>>Consider a teacher who earns and spends $1000 a week and spends
>>it all to support his family. Consider that he earns an extra $100 a
>>week in Greendollars and uses it instead of his cash to pay for his
>>family's expenses.
>Okay. so the teacher earns $1100 a week, I don't see the relevance of
>how it is divided between CD and TD at this point.. Or are you saying
>that because there is TD, the teacher earns $100 more; if there were 
>no TD, then the teacher only earns $1000?  That makes no sense.
     JCT: I'm saying that there isn't enough Canadian Dollars for him 
to earn but there are enough Toronto dollars for him to work and extra 
number of hours per week. Of course, if he does have people with the 
cash to hire him, then he doesn't need the Green earnings. But if 
there aren't people with the available cash to hire him, then there 
are still people with Green to hire him with. 
>>Notice that he now has $5,000 a year extra which remains in his
>>bank account and even though he must pay added taxes on the extra
>>G$5000 he earned, he uses some of the remaining $5,000 cash in his
>>federal account which he did not have to spend because he used his
>>local currency.
>Suppose the teacher receives all $1100/week in CD, he still has $5000
>in his federal account by the end.
     JCT: That's assuming people have the necessary federal cash and 
he doesn't need to earn Green. 
>>That's how using Local currency for transactions frees up federal
>>cash for payment of federal bills.
>Dude.. this makes zero sense.
     JCT: It makes sense when you deal with the situation where people 
don't have the federal cash but do have the local currency. I wanted 
simply to show how earning local currency frees up enough of his 
federal cash to pay his tax on his Green earnings in federal cash. 
>>JCT: I agree that such a 10% levy on the odd cash-out is one way
>>to pay for the system but I'd also point out that it's a lot cheaper
>>than paying 10% interest on the whole issue of federal currency.
>Why will someone pay 10% on the whole issue of federal currency?  
>There is no conversion tax if you just stick with CD?????
     JCT: All Canadian cash has been borrowed into existence with the 
interest charge attached. The whole issue of Canadian money supply 
costs Canadians interest. The whole issue of the Green money supply 
costs only the printing and service charge for the banker's and 
printer's time and no charge for the money's time.
>>And of course, the levy is targetted to support the poor rather
>>than rich investors and it's a burden that we'd have to support
>>whether via government taxes or LETS contributions.
>Once again, you are not taxing the rich because the rich doesn't 
>have to use TD. You are taxing those who voluntarily choose to use 
>TD  (those who care about the neighborhood.. unless you are saying, 
>which  I doubt, only the riches care about the neighborhood).
     JCT: My point is only that it's the poor who get the benefit  of 
any currency charges whereas it's the rich who get the benefit of 
interest charges. It makes a difference. 
>>JCT: What benefits are these that non-members enjoy? The non-
>>support of the poor? Do you call it a benefit that others help the
>>poor and you aren't? You already enjoy the benefit of not 
contributing
>>to charity to help the poor. Still, there are the other benefits 
that
>>accrue to members such as neighborhood watch and mutual trading that
>>non-members will not enjoy.
>Exactly. ASSUMING that TDCPTF indeed receives a lot of money (from
>tax) and revitalizes the local economy, then everyone benefits. 
     JCT: Exactly. But regular money does not and everyone does not 
benefit.      
>At the same time, none of the money comes from non-members. So the 
>non-members enjoys to live in a vibrant local economy without paying 
>a dime.
     JCT: So should be avoid having vibrant local economies to make 
sure the drones don't get a free ride? 
     
>>>inhibits trade with those outside the local area.
>>JCT: No it doesn't. It encourages trading within the local
>>community but does not discourage necessary trade from without.
>Suppose a Montreal merchant can trade with someone in Toronto or
>Vancouver. Suppose someone in Toronto insists on using TD, it will
>basically piss off the merchant and he will then turn to Vancouver.
>Bottom line is that it will inhibit trade with the outside world.
     JCT: If someone in Toronto insists on using Toronto Dollars with 
outsiders, then he will lose the contract to someone who will buy for 
federal. So what? If he does not insist, then he's in the same boat he 
would have been in had he not had any Green to spend. Yet, having 
Green may sometimes work with a Montrealer who is coming to spend some 
money in Toronto. So it's a use Green win if you can but use Fed if 
you can't type of situation. They have nothing to lose by asking and 
if the answer is no, then they're in the same boat they would have 
been in had they not been members. Gamblers call this a "free roll" or 
"rep-draw" with everything to gain and nothing to lose. 
     Holdem Poker example. I have the 7 and 6 of diamonds. You have 
the 7 and 6 of spades. The board contains a 5 with the 4 and 3 of 
diamonds. We both have the "nut straight" and should both keep raising 
as long as there are other callers. But once we're head's up, you'd be 
a fool to keep raising because I can still draw a fifth diamond for a 
flush but you have no such winning draw. These are the most wonderful 
situations in table-stakes because you would have to call my bet when 
I bet everything yet I'd have a free draw at winning and a sure thing 
at tying. 
     Toronto dollars work the same. If you find someone who'll take 
them, you're better off. If they won't, you're no worse off. 
>>>But given the problems I stated above, this is a lousy way of
>>>building a sense of brotherhood and a sense of community.
>>JCT: And you have another way to suggest?
>Some communities thrive, some die. Some go through cycles. I don't
>think a new local currency will have an impact on these events. 
     JCT: There are too many reports about major beneficial impacts. 
Read the Gold & Perry article to see how LETS actually reduced child 
mortality in El Paso Texas. 
>As for other ways to build a strong sense of community, that's beyond 
>my knowledge. But I am sure there are tons of studies out there
>(sociology, anthropology etc) and I doubt any mentioned a new 
>currency as a way to strengthen communities.
     JCT: I doubt they mentioned any at all until now. 
>>JCT: The point is that the whole group benefits from the Sparta
>>effect 
>>Whether those interest savings accrue to each member individually
>>or to the central entity is of no consequence to the overall 
benefit.
>Suppose everyone becomes a member (which is what you are shooting 
>for), then EVERYONE will receive interests, so where do these 
>interests come from?  Who is paying?
     JCT: No everyone won't receive interest though everyone will pay 
the least. 
>Also, if everyone converts all of their CD into TD, everyone will be
>taxed twice when paying taxes.
     JCT: So don't convert all your cash into Toronto dollars but keep 
a sufficient amount to pay your taxes with. But do change as much of 
your federal into Green as possible. 
>In economics, sometimes we look at partial equilibrium models, but we
>also need to look at general equilibrium models. I don't think you 
>are paying enough attention to the general equilibrium aspect of your
>economic system here.
     JCT: I'm not interested in what happens out in the economy. I'm 
only interested in the imbalance going on in the banking system. Once 
the banking system is balanced properly, the economy can operate at 
maximum clean industrial power. We can't ask for more. 
-------------------------------
LETS Toronto Dollars #4
>Date: Thu Dec 10 15:10:31 1998
>From: 106410.2165@compuserve.com (Andy Ryrie)
>Subject: Soiled ownership?
>To: Econ-LETS@mailbase.ac.uk (Econ-LETS)
>Why I dont read Turmels stuff these days:
>From: mmattos@pipcom.com (Mary Mattos)
>DITTO
     JCT: I'm always amused when the psychics respond to my posts that 
they claim they didn't read. They must be pretty silly if they think 
everyone doesn't realize they're lying. 
Andy continued: 
>>I'm used to these kinds of unfair shots but I think he's unaware 
>>that he's planting seeds in ground I've already tilled for him.
>This is sad. John it would be nice to see you working constructively 
>with other activists. Andy Ryrie.
     JCT: I don't know how I could work very constructively with other 
activists like Mr. Flanders when he writes things like:
>From: flanders@web.net ("john flanders")
>Contrary to appearances in recent postings, John Turmel had nothing 
>to do with the creation of the Toronto Dollar -- he doesn't even live 
>in Toronto. It appears that he downloaded the contents of our 
>web-site, presented the project as his own, and appointed himself the 
>spokesperson. Three days into this project, we did not need this kind 
>of 'help'. 
     
     JCT: I don't think I'm alone in thinking that these statements 
were uncalled for. 
>Date: Fri Dec 11 01:26:33 1998
>From: lcs@mars.ark.com (Michael Linton)
>Subject: SO? -  T or F?
>Andy,
>I think you are referring to "John" Turmel, but perhaps you mean 
>"John" Flanders.
>If "T", then perhaps the important word is "constructively". John T's
>record, at least of attempting to work with others, merits an entry 
>in Guinness, and the issue is more who considers what "constructive".  
>The jury may still be out on that, but there's plenty of evidence of 
>both good effort and good intent. His posting on the Toronto Dollar 
>is right on as far as I can see.
>If "F" -  well, one of the first responses to the announcement of the
>Toronto Dollar was from T, and it was positive, and it got slammed 
>by F T or F? m
     JCT: I can understand that Mr. Flanders might not have liked 
my pointing out the weaknesses in their plan but it was necessary if 
we're to handle criticisms like the following: 
>Article #99294 (99312 is last):
>From: jim blair <jeblair@facstaff.wisc.edu>
>Newsgroups: sci.econ
>Subject: Re: LETS Toronto Dollar bad for the local economy?
>Date: Thu Dec 10 11:06:00 1998
>Hi, What?? You PAY a CD for one of these TD's, which is only good in 
>some places in Toronto? And if you want to exchange back, you get 
>only 0.9 CD's? What a deal!!!
     JCT: To someone with this kind of brain, it seems a terrible 
deal. 
>This seems to me to have all of the drawbacks of the various other 
>LETS and it yet does not have the only obvious advantage of tax 
>avoidance. 
     JCT: He can't see any advantages to LETS at all other than the 
one that is not an advantage as it's been explained over and over that 
it's not a tax avoidance system. Still, this kind of brain stays 
fixated on the one thing that LETS doesn't do and at the same time 
assumes drawbacks that don't exist. 
     Watch. Mr. Blair, what drawbacks are there in a zero reserve 
LETS? As we know, there aren't any and I'd bet he can't even answer. 
     Yet, we have to deal with people who have this kind of brain and 
that's the reason I made sure to stress that though the Toronto 
Dollars has some of the good benefits a real LETS, it is missing 
certain of the greater strengths. 
>For a previous thread on LETS, see:
>http://www.geocities.com/capitolhill/4834/lets.txt 
>
>Funny Money
>This from the net.
>
>>Yes, It's legal for a community to print their own money.
>>Over 30 places have done it in the U.S. 
>>See this URL for details:
>>http://www.transaction.net/money/lets/ 
>
>Someone:
>I'm not sure where this "answer" comes from, but I like it...  Local
>currency is a way for local economies to help keep money earned and
>spent in the local area in the local area. Ithaca is a great example.
>Many smaller communities are doing it and I love the idea.
>Strength in local communities in all areas (economy, social,
>political, networks) is important. 
>"Money has mobility. It knows no geographic loyalty and thus has a
>centrifugal force on family, neighborhood, community, and
>increasingly, our entire national identity."
>-Edhar Cahn from "Money That Builds Connections" as printed in
>YES! magazine Spring 1997
>
>"Paul Glover organized Ithaca Hours to keep local money circulating
>locally, to encourage local farmers and businesses and to provide an
>income for these people.
>And it seems to be working. Hours are accepted in 300 local
>businesses and have the enthusiastic backing of the chamber of
>commerce and the mayor, who accepts them for meals in his town center
>restaurant.  One local bank Pays staff partly in Hours, and you can
>pay your bank charges with them, too.
>'We wouldn't eat out if it weren't for Ithaca Hours,' said the
>divorced mother of two. 'It feels terribly good. You see the money's
>value coming around again and again.'
>Glover calls this the 'community magic act': they print their own
>currency and somehow it makes everybody better off...."
>-David Boyle as printed in same reference as above.
>The Spring 1997 issue of _YES! A Journal of Positive Futures_ was
>entitled "Money: Print Your Own."   
>
>Hi,
>Some people in Madison, over in the Williamson (Willy) St. area 
>decided that the problem is that there is not enough money in the 
>area for the people there to buy all that they want. So they started 
>printing their own local "money". The idea is that the stores there 
>will pay the workers with it, and will accept it in exchange for good 
>and meals, etc. They are called Madison Hours and you can find a 
>reference to them in that LETS (Local Exchange Trading Systems) web
>page under  "Project LETS list" and "USA".
>I hear that this idea is happening in many places.
>Money issued in exchange for work or goods, and backed by the
>full faith and credit of ... well of some ageing 60's
>hippies. I mean, who could ask for anything more?
>Now  this local money idea looks to me a bit like the "company
>script" issued in the last century. Remember that? Instead of paying
>their workers  in US currency, some companies paid in script that
>could be exchanged for goods at the company store.
>But I don't mean to be overly negative. 
     JCT: The only thing negative so far is that it "looks" like 
something else to him. 
>I see a bright side to this movement. It is really just a way to 
>avoid taxes and minimum wage laws, and avoiding both of these are 
>worthy goals. 
     JCT: The only thing he sees as profitable is defrauding the tax 
man which LETS members try to religiously avoid doing. 
>I mean if a store or restaurant wants to hire a worker or waiter, 
>but does not take in enough  money to pay minimum wage, and the 
>applicant is willing to accept  payment in little pieces of paper 
>with a picture of a duck, hey why not? And nobody has to pay taxes 
>when they get or spend them.
     JCT: Now I'm sure many people might ask why even bother dealing 
with these kinds of ignorant and idiot posts. The point is that they 
have to be responded to or people will believe that they can't be. 
>REPLIES:
>Date: Tue, 16 Dec 1997 02:57:20 -0600
>From: Kevin Bertsch <kbertsch@istar.ca>
>Subject: Re: On Seignorage
>Hi Jim,
>I enjoy many of your posts.
>Are you aware that there are many 'barter' clubs set up in Canada to
>avoid the combined (in Ontario) 15% tax bite (higher in most other
>provinces)? They use systems such as your LETS to allow the easy
>exchange of house cleaning services for, say, income tax return
>preparation.
>Of course, this is giving Revenue Canada fits, and they are trying to
>find ways to either tax or close down the clubs. Regards, Kevin
>---
>From: Enrique Diaz-Alvarez <enrique@ee.cornell.edu>
>Organization: Cornell University 
>Yeah, and with the Ithaca hours you can buy necessities such as Tarot
>sessions, acupuncture massages, overpriced organic food and incense
>sticks. As long as you pay 80-90% of the cost in evil greenbacks, of
>course. The only thing you can't buy with them are luxuries such as
>gasoline, utility bills, rent, etc.
     JCT: Funny that this person would come to this conclusion when 
previous information mentions the over 300 businesses in town 
including the bank. But when they choose to not see, it's obvious they 
don't see. 
>They look to me more like glorified discount coupons for high-margin,
>non-essential items.
     JCT: Sad slurs on a wonderful system. 
>Actually, the Ithaca Hours newsletter reminds hours users that the
>scheme is legal only as long as taxes are paid on each and every 
>Ithaca Hour earned, at a cash equivalent of $10/hour. No data on 
>compliance is provided, heheh.
     JCT: So at least the canard about it being a tax avoidance system 
has been shot down. 
>>Enrique Diaz-Alvarez   Office # (607) 255 5034
>>Electrical Engineering Home #   (607) 758 8962
>>112 Phillips Hall      Fax #    (607) 255 4565
>>Cornell University     mailto:enrique@ee.cornell.edu
>>Ithaca, NY 14853       http://peta.ee.cornell.edu/~enrique 
     JCT: How sad that an electrical engineering student is so intent 
on seeing the disadvantages that he can't see the advantages. Then 
again, I'm an electrical engineer who specialized in the Mathematics 
of gambling and casino banking which would certainly explain why I 
understand the advantages of LETS and this engineer may not. 
>Article #99308 (99312 is last):
>From: jim blair <jeblair@facstaff.wisc.edu>
>Subject: Re: JT-Borrowing LETS
>Date: Thu Dec 10 15:07:36 1998
>Warren Mosler wrote:
>> I want to make a large purchase with TD's. How can I borrow them?
>Hi, Why borrow them? Just print some.
>But if you think printing your own Toronto Dollars might violate some
>copyright, you can just print up some WM (Warren Mosler) dollars and
>sell them for one US dollar each.  Say they will be good for a 
>dollar's worth of goods or services at any place that accepts them. 
>And that you will buy them back for 90 cents each.
>---hmmm--- Anyone out there interested in some JB bucks?
     JCT: Even as he tries to make fun of the system, the inherent 
truth of its power stands out. Actually, printing up Warren Mosler 
dollars is exactly what the LETS bank does when it allows him to go 
negative in payment to someone else who goes positive. Much like the 
American Indian "wampum" system where each person's wampum bead was 
his IOU that was acceptable within the whole community. 
     Since some LETS systems to have checking mechanisms, when Warren 
signs a LETS check, he is in fact creating his own Warren Mosler 
dollars and as long as he's willing to work to get them back, they're 
perfectly acceptable.
     Of course, Blair focuses on the 90 cents on the dollar redemption 
rate offered by the Toronto LETS to be the straw man he knocks down 
while in other LETS, they are always redeemed for 100% value. 
>Date: Thu Dec 10 09:49:19 1998
>From: flanders@web.net ("john flanders")
>Subject: RE: TURMEL: LETS
>To: econ-lets@mailbase.ac.uk, mosler@gate.com, tordoll@web.net
>Warren, LETS Toronto and Toronto Dollar Inc are two separate 
>organizations, with two approaches. If anything, we relate more to 
>the Ithaca Hour system another paper based community currency. As the 
>moment, LETS Toronto does not have Toronto Dollars for loan purposes. 
>John Flanders
     JCT: Even though John Flanders may have rejected my input, notice 
that the LETS Toronto does not have Toronto Dollars for loan purposes 
"at the moment." This is good news because they only have to start 
using Toronto for loan purposes and they will have become a full-
fledged zero reserve system which accepts not only money but also 
collateral and promised labor as its base. So some good may yet have 
come from my intervention if they do upgrade to the better model. 
     Finally, I'd point out to Andy that if you look back at Mary's 
contributions to econ-lets, you'll notice that they always tend to 
aggravate dissention and strife. You have to know you're probably 
wrong when Mary agrees with you. 
     And don't bother telling us you don't read my posts. The fact you 
have responded makes it obvious that you're both lying and simply 
taking low blows at insulting me. Now, you'll have to admit that I've 
rarely joined your debates and only take the time now because I 
consider your intervention to have been unfair and unsportsmanlike. 
You didn't mind what Flanders said about me but objected to my 
defending myself. Before you talk about my soiled ownership, think 
about your own soiled sportsmanship. 
-------------------------------
See Part 2

 

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