Geography Reference
In-Depth Information
for economic initiatives that are designed for the local town or area. In addition
many Credit Unions —essentially local savings and loans associations—can also be
found in many small towns in the Prairies, which provide a localized banking sys-
tem that is rare in the United Kingdom and other European countries. The growth of
these agencies in the Prairies is in part a heritage of the co-operative tradition that
developed in the agricultural sector in the early twentieth century. It is also a prod-
uct of a regional distrust of the five large banks that dominate the banking industry
in Canada, which are headquartered in Toronto, and had a reputation of foreclosing
too many farms and local enterprises that got into debt in the depression years of
the 1930s.
A significant initiative of many Credit Unions has been to try and increase the
degree of local shopping in small towns in place of the growing tendency to travel
50 or a 100 miles to larger centres where lower prices and greater selection attracted
customers. A popular device in many of these organizations has been to extend
loans to customers at Christmas time so long as the money was spent in the local
town. The loan did not require any surety, other than the fact that the customer and
credit history was known to the bank. The loans were repayable at standard interest
rates over the following few months and seemed eminently successful since very
low default levels (often below 3 %) were reported and these were easily covered by
the interest repayments. Such initiatives are however far more difficult in countries
such as Britain where local banking has almost disappeared. Certainly there were
lots of local mortgage agencies, called Building Societies, in which local people
saved, and the money was used to finance home purchases. They grew very rapidly
in the mid-nineteenth century. But many of these demutualised from the late 1980s
and either amalgamated into large units, or were bought by the big banks. So the
opportunities for local creativity in financial agencies were lost. However the local
banks do not always provide advantages. The financial crash in the western world
from 2007 revealed that many local lending organizations were dangerously over-
exposed because of rash lending practices that assumed houses would continue to
inflate in value, leading to bankruptcy or government take-over in subsequent years.
This problem of how to encourage the local ownership, local circulation of
money and local buying has led some Transition Towns to create their own cur-
rency, such as the Totnes Pound or the Lewes Pound. These notes are exchanged for
sterling and can be used in a large number of local participating stores, although it
has been discovered that many are bought and kept as souvenirs by tourists. This
approach encourages people to shop in local stores that accept the notes. The ideas
were based on the pioneering example of the Berkshares dollar in New England
(BSD) which was first issued in 2006 and now can be used in 400 organizations in a
region of Massachusetts. However, they are really a revival of older practices where
local banks often issued their own notes, such as the original Totnes Pound which
was in circulation from 1789 to 1895.
Although separate from the Transition Movement itself, another recent variant
of this desire to create more viable local financial organizations and provide a boost
to the local food production and supply system can be seen in the
Slow Money
(SM)
movement. This is based on two beliefs. The first is that money in the contemporary
