Have you ever heard of Ithaca HOURS? If not, don’t worry – for many this type of currency has become something of an antiquated concept hidden away in the depths of local history. Representing one of the longest-running local currency systems in the US, Ithaca HOURS emerged in the 1990s and inspired similar local currencies in places like Madison, WI and Santa Barbara, CA.
Sometimes more challenging economic environments have led to a resurgence of interest in local currencies like Ithaca HOURS, igniting a new wave of appreciation for this unique form of currency from days gone by. Not only did Ithaca HOURS offer community members an alternative to national currencies, but it also helped them create meaningful relationships with nearby businesses and neighbors, giving them the opportunity to form lasting ties within their own towns and cities.
In this article, we’ll take a comprehensive look at this former local currency system, how it worked, why it’s no longer used, and the impact it had.
What are the Ithaca HOURS?
Quite simply, Ithaca HOURS were a currency just like the US dollar, except with a few important differences. First, unlike the US dollar that is universally accepted in every part of the US (and many parts of the world, for that matter), Ithaca HOURS was a local currency system only designed for the use of one local community which, in this case, was Ithaca in New York, US.
Local currencies like Ithaca HOURS are legal in the US, even though they are not backed or guaranteed by the federal or state government. Such currencies are typically issued to try and keep money within a particular local community and to spur economic development. This was also one of the aims of Ithaca HOURS – to facilitate the economic development of Ithaca and protect its economy from the social and economic costs of the increasingly global financial system.
The Ithaca HOURS were launched as the new Ithaca currency in 1991 by a man known as Paul Glover. Glover would go on to prove instrumental to the uptake in the adoption of the local currency in later years, as well as its partial success. On its launch, Glover pegged the value of one Ithaca Hour at $10. This was generally recommended to be used as payment for one hour of work. In essence, the Ithaca HOURS was a time-based currency that sought to align with the value of an hour of work in the city.
At the end of 1991, about 20 local businesses had pledged to accept Ithaca HOURS. Thanks to the founder’s persistence and heavy involvement, this number grew into hundreds in the following years, and at its peak, there was over $100,000 worth of Ithaca HOURS in circulation. The Ithaca HOURS were printed on high-quality paper and used faint graphics to make it difficult to reproduce. The notes also had serial numbers on them to help prevent counterfeiting.
Eventually, the Ithaca HOURS fell into disuse. A number of factors potentially contributed to the currency’s demise. However, the primary factors have been identified as, first, the exit of the currency’s founder from the area and, second, the general shift away from cash transactions to electronic banking.
The History and Origin of the Ithaca HOURS
The idea of local currencies like Ithaca HOURS seems to have taken root in America during the Great Depression. The specific idea for Ithaca HOURS, though, as mentioned earlier, can be traced directly to Paul Glover.
Glover had seen an ‘Hour’ note issued in the 19th century during his research on local economics in 1989. This particular Hour note had been issued by British Industrialist Robert Owen to his workers. This note inspired Glover to conceive of a local currency system that would support the local economy, promote self-reliance, and strengthen community bonds.
Eventually, in 1991, Glover launched Ithaca HOURS as a complementary currency to the US dollar. Glover settled on the name „Ithaca HOURS” to symbolize the idea that time and effort spent within the community are valuable and can be exchanged for goods and services. He designed the notes for the HOUR and HALF HOUR within a few days. Furthermore, he determined that the value of each Ithaca HOUR was to be equivalent to $10. This choice was based on the fact that $10 was about the average hourly pay workers received in Tompkins County, where Ithaca is located.
At the start of the local currency, 90 people agreed to accept the Ithaca HOURS as pay for their services. Glover was able to network and successfully push for the adoption of the local currency by more businesses and people in subsequent years.
Notably, the first printing of Ithaca HOURS notes was completed by Fine Line Printing in October 1991. The printing was primarily financed by small donations solicited by Glover. The day after the first notes were printed, on October 18th, 382 HOURS were disbursed and prepared for mailing to the first 93 pioneers. The first transaction in Ithaca HOURS occurred a day later when Glover bought a samosa from Catherine Martinez at the Farmers’ Market with HALF HOUR #751.
The launch of Ithaca HOURS garnered a lot of local and international attention. Several other communities took an interest in implementing a similar currency system, and this led to the formation of the Ithaca HOURS Network. The Network was essentially an organization to help share knowledge and resources that could support the development of local currencies in other communities.
The Management and Use of Ithaca HOURS
As of 1996, Glover was still running the Ithaca HOURS system from his home. However, there was an advisory board and a governing board called „Barter Potluck.” The management of the Ithaca HOURS was based on Glover’s philosophy that economic interactions should be based on harmony, as opposed to Hobbesian forms of competition. In one interview with Jana Fortier, Glover described Ithaca HOURS as “a non-capitalistic market system.”
Notably, the management structure of the local currency experienced a major shift in 1999. The currency became a not-for-profit with an elected board of directors that had term limits. The advisory board incorporated the currency system as Ithaca HOURS, Inc, and in March 1999, the first elections for its board of directors were held. A couple of months following this election, Glover transferred the management of the currency system to the elected board of directors. He continued to support the currency through community outreach in the years that followed.
At the height of the currency, it was accepted by almost 500 businesses and over a thousand individuals as payment for goods and services. Businesses that used the currency include the Alternatives Federal Credit Union, which accepted deposits in HOURS, and other entities such as the Cayuga Medical Center, the public library, restaurants, and movie theaters. The currency also appeared to have been popular with individuals such as local farmers, plumbers, carpenters, and electricians.
One survey carried out in 2002, which involved 42 HOUR users, found that the individuals who used Ithaca HOURS were engaged with the system for an average of 8 years. The survey also revealed that 50% of the currency users used it as part of their primary source of income. This shows that Ithaca HOURS achieved a significant acceptance and adoption level among the Ithaca population.
The Currency’s Disuse and Efforts to Revive
In many ways, the sustenance of Ithaca HOURS was dependent on the personal efforts of Glover. He carried out extensive promotion and networking to get many businesses and individuals on board with the local currency. However, this overreliance on Glover proved to be fatal to the local currency system. His departure from Ithaca was followed by a steady decline in the use of HOURS.
However, beyond the absence of its founder and most staunch advocate, the Ithaca HOURS currency was also weakened by the general shift from a cash-based economy to electronic transactions. It appears that the local currency system was not well poised to adapt to the changing nature of banking. It still relied on paper notes, even as these became obsolete.
There have, however, been efforts to revive the currency, though without much success currently. For instance, one organization known as Ithacash attempted to introduce an internet-based currency called „Ithaca Dollars” that users could transact on an online marketplace. This attempt hasn’t been successful, as the project’s website is no longer operational.
Similarly, it was reported as recently as 2019 that a team of local businesses, non-profits, and individuals was collaborating to revive the use of Ithaca HOURS in the Ithaca community. Their strategy is to leverage advances in banking technology, carry out an effective marketing campaign, and expand the directory of local businesses that accept the currency. It remains to be seen how this project will pan out.
Ithaca HOURS was an experimental currency aimed at keeping money within a specific community while ensuring its economic development. While it may not have ultimately achieved all of its objectives, it did successfully show some of the benefits that are attainable with a local currency system. In this regard, it served as a model for local currencies in several communities, some of which have been very successful. Overall, one cannot deny the impact and legacy of the Ithaca HOURS as an innovative economic initiative.