EcommerceBytes-Update, Number 288 - June 12, 2011 - ISSN 1528-6703     6 of 7

Collectors Corner: Alternative Currencies - Liberty Dollars and More

By Michele Alice

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Did you know that the use of money is a form of barter?

Before the development of what we now know as money, individuals traded whatever they had of value for those things that they valued more. A farmer may have traded some of his excess wheat for venison from a hunter. The hunter may have traded some of the wheat he'd received to a cobbler for a pair of boots. The cobbler may have traded any wheat he didn't eat to the person who brewed beer.

The wheat, in this case, became a commodity used as a medium of exchange, i.e. money!

Of course, wheat, like most other commodities, lacks certain properties that prevent it from becoming universally used as money. It's not easily transported because it's not relatively rare (how many bushels of wheat would you have to haul to the auto dealer to trade for a Lexus?). It's not durable (all that wheat you saved from last year to pay your taxes this year has molded!). And its value relative to other goods can fluctuate wildly depending upon whether the harvest was very good or very bad.

In fact, over the millennia there have been very few commodities that have satisfied all the requirements to be considered money or currency (the terms are interchangeable). Gold and silver are the best known. Today's legal-tender paper money originated as a type of receipt that could be exchanged for commodity money. And several states beginning with Utah have pushed to make gold and silver coins minted, ironically, by the U.S. government legal tender once more.

Everyone is familiar with the monies issued by national governments, but there are many alternative currencies circulated by individuals and institutions for limited use. Some examples of these are New York subway tokens, community-based currencies like Ithaca (NY) Hours and BerkShares (MA), and Liberty Dollars.

Liberty Dollars, created by Bernard von NotHaus, were issued from 1998 to 2009 as a "private voluntary barter currency." The discs were minted of gold, silver, platinum, or copper, while the paper certificates functioned as receipts entitling the bearer to the warehoused metals. The whole system operated rather cumbersomely, however, as the dollars' denominations had to be changed as often as necessary to keep pace with the voluble bullion markets.

Like the earlier Lesher Dollars (1900-1901), Liberty Dollars ran afoul of the U.S. government, and in a trial earlier this year, von NotHaus was found guilty of violating legal-tender laws due to his monies' design similarities to federal coinage.

Though Liberty Dollars can no longer circulate, they are, nonetheless, selling briskly online. It is difficult to tell, however, whether they are being snatched up as potentially valuable collectibles or primarily for their bullion content. Only time will tell.

It also seems to be too early to assess the collectible values of many other contemporary alternative currencies. Will Ithaca Hours - or any of the others - ever rival Confederate notes? Probably not, but they will probably retain historical value at the least since they often depict interesting local sites and figures.

Interested in learning more? Check out the resources listed below and

Happy Hunting!

Books

A Guide Book of United States Tokens and Medals (Official Red Book)

100 Greatest American Tokens and Medals

Websites

Collector's Corner - Lesher Dollars - Link to article

Community Currency Magazine - Link to website - Devoted to locally issued currencies.

The E. F. Schumacher Society - Link to website - Society promotes local economic ties including alternative currencies. Provides directories to local currencies throughout North American and Europe.

Is Gold the New Black? States Looks to Bring Gold Standard Back - Link to article (By Huma Khan for ABC New, April 15, 2011)

Ithaca Hours - Link to website - Explains how their community-currency program works.

Liberty Dollar - Link to website - Though the LibertyDollar.org site has been removed from the WWW by court order, it lives on at the Internet Archive Wayback Machine. (Nothing, it seems, ever disappears from the World Wide Web; this site tries to make sure of that!)

What Are NORFED Liberty Dollars Coins? - Link to website - Interesting piece by Susan Headley describes some of the problems with the Liberty Dollar.


About the author:

Michele Alice is EcommerceBytes Update Contributing Editor. Michele is a freelance writer in the Berkshire mountains of Massachusetts. She collects books, science fiction memorabilia and more! Email her at makalice @ adelphia.net eBay ID: Malice9


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