Zach interviews Hustle writer Michael Waters about Tenino, Washington — a small logging town that invented its own wooden currency during the Great Depression and is now reviving that program in 2020 to help low-income residents impacted by the pandemic. Michael covers the history of the wooden dollar, how the current distribution program works, and what research says about the effectiveness of local currencies.
Speakers: Zach (host, Behind The Hustle), Michael Waters (writer, The Hustle)
Introduction: Tenino’s Wooden Dollar Revival [00:00:05]
Zach: Everyone, this is Zach here with Michael Waters — he’s our newest writer at The Hustle. Michael, this week you wrote a really interesting Sunday story about a small town in Washington that created its own currency. Tell me a little bit about this place and why they started doing this.
Michael: Yeah, so the town is called Tenino — it’s out in the woods. It was known as this big lumber hub in the early 1900s, and one of its claims to fame, especially in the U.S., is that during the Great Depression it started its own currency. They printed sort of fake dollar bills on slick, thin wooden blocks and passed them out to members of the community in the early 1930s, after one of their only town banks closed down.
People were out of money, people were desperate, and so they basically started their own currency. It was a huge hit — to the point where people still collect these wooden Tenino dollars. They’re not legal currency in the federal sense.
Now, though, we’re facing another unprecedented economic catastrophe, and this town knows its history very well. The mayor is basically trying to bring back that program for 2020. So ninety years later, they’re once again printing their own wooden dollars to pass out to the community.
The 1890 Printer: Same Mint, Ninety Years Later [00:02:10]
Zach: They were even using the same — like a 130-year-old printer — as their mint, right?
Michael: Yeah. In the 1930s it was originally printed on this newspaper printer from 1890, so even then it was kind of old. And they’re using the same exact mint right now to print their currency. One reason for that is the historical value, and the other reason is that even the best forger is probably not going to do a great job of forging something printed on an 1890 newspaper printer. So it’s a little proof against counterfeiting.
How the $10,000 Distribution Works [00:03:05]
Zach: So they’re starting with a first printing of around $10,000. What’s their general plan for distributing this? What’s their vision, and who is it going to help exactly?
Michael: Yeah, so this money is going to be distributed not in U.S. federal dollars but in this local wooden currency. The idea behind that, first of all, is that because this currency is only really accepted in Tenino — you can’t go off spending it anywhere. Amazon is not going to take your wooden Tenino dollars. So it’s a way to keep the money local.
They’re targeting, especially with this initial $10,000 printing, low-income residents who’ve been affected by the pandemic. To qualify, you have to prove that you’re below the poverty line and that you’ve been affected in some way by these last few months. They’re pretty open to how that latter part — whether you’ve been affected — is defined.
I should also clarify that this is a town of about 1,800 people, so $10,000 does go a long way, especially when it’s only targeting a certain population within the community. So although it might not seem like much on the scale of a larger city, it means a lot in a town like this.
Michael: And basically every business in town is locally run, so almost every business has signed up to accept this money. People who are given the wooden dollars can spend it anywhere in town. And like I said, because it’s not official U.S. dollars, it’s a way to ensure that the money stays local and is boosting local businesses who have also been impacted by the pandemic.
Dual Effect: Businesses and Residents [00:05:15]
Zach: Sure, so it’s got this twofold effect — helping businesses that have been beleaguered by the pandemic, but also helping provide some kind of recourse for low-income residents.
Michael: Exactly.
Does Research Support Local Currencies? [00:05:30]
Zach: You also touched on a number of other examples — you found tons of cases of other towns doing this internationally — which I thought were really interesting. Is this something that might be used effectively in other towns? I know there’s been a little bit of research done on the effectiveness of local currencies. You touched on that a little bit.
Michael: Yeah, the research as it stands is a little complicated. It’s really hard to find exact cause and effect with something like this, because there are so many factors at play. It’s hard to measure exactly to what extent local currencies help economic recoveries — which is especially what they were designed for.
But the evidence seems to be cautiously positive. I’d probably summarize it this way: in about half of the cases, there are signs that local currencies have some sort of positive impact on local businesses and on getting people spending. And then another half of cases, according to one study, are kind of inconclusive.
It’s certainly something that has worked in different places more than others around the world. There are plenty of stories, especially from the Great Depression, of local currencies dramatically cutting jobless rates in a certain region, while in the larger country jobless rates might be going up. So again, it’s hard to tease out the exact links sometimes, but the evidence is, like I said, cautiously positive.
Wrap-Up [00:07:20]
Zach: Sure. Well, this is a really interesting story, Michael. Appreciate your time.
Michael: Yeah, thank you.