A group of small business owners in Detroit began printing their own currency last month, part of a local currency movement that is growing in popularity across the United States.

During the Great Depression, businesses, local governments and individuals launched currencies known as scrips. Michael Shuman, author of The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition, estimates that 75 different local currencies have been created recently. He says that local money is a direct response to the national economic crisis.

One of the most successful local currencies is the BerkShare, launched 2½ years ago in the rural Berkshire region of Massachusetts. Consumers can purchase $100 worth of BerkShares for us$95. They can then spend BerkShares at local stores for their full value. Stores or individuals can convert their BerkShares back to U.S. dollars at a rate of 100 BerkShares for us$95. This means that they save five dollars out of every hundred if they spend BerkShares locally rather than exchanging them for U.S. dollars. Over $2 million worth of BerkShares have been issued since the currency’s launch. Approximately 350 regional businesses participate in the scheme, and an additional 200 businesses accept BerkShares on occasion.

Advocates of local currencies argue that they can help stimulate growth in the local economy. Rather than spending the money on things hundreds of miles away, local currencies give consumers a monetary incentive to buy local, keeping money in the local community.

“It reformed the way many business owners and residents think about their local economy and helped educate the community on why shopping locally matters,” said Susan Witt, a board member of BerkShare. “The current national economy has only increased the use of BerkShares.”

The economic crisis is causing people to resort to Great Depression-era solutions. Read “Can the Financial Flames Be Stopped?” for more on this subject.