Tucked away under lock and key in a former railroad depot turned small-town museum in the U.S. state of Washington, a wooden printing press cranked back to life to mint currency after nearly 90 dormant years.
The end product: $25 US wooden bills bearing the town’s name — Tenino — with the words “COVID Relief” superimposed on the image of a bat and the Latin phrase “Habemus autem sub potestate” (We have it under control) printed in cursive.
With the coronavirus pandemic plunging the United States into a recession, decimating small businesses and causing job losses across the country, some local governments are looking for innovative ways to help residents weather the storm.
For Tenino, the answer was the revival of the local currency that had bolstered the town’s economy in 1931 in the wake of the Great Depression.
“It was kind of an epiphany: Why don’t we do that again?” Mayor Wayne Fournier told the Thomson Reuters Foundation. “It only made sense.”
Tenino, a town of less than 2,000 people located about 95 kilometres southwest of Seattle, started printing the local banknotes in April, five weeks into Washington state’s lockdown.
$300 a month per person
Anyone with a documented loss of income as a result of the pandemic is eligible for up to $300 US a month of the local currency.
Businesses up and down the town’s quaint Main Street accept the wooden note for everything except alcohol, tobacco, cannabis and lottery tickets.
Tenino’s city government backs the local currency, which merchants can exchange for U.S. dollars at city hall at a 1:1 rate.
Local business owners can either reuse the bills themselves or trade them in at city hall for U.S. dollars, one for one. (Ted S. Warren/Associated Press)
Susan Witt, executive director of the Schumacher Center for a New Economics, a Massachusetts-based think tank, said alternative currencies like Tenino’s banknote are better than direct cash payments at boosting local economies.
“The City of Barcelona gave donations (in 2017/18) to sports teams and cultural groups as well as social programs (then) watched these donations go to big box stores,” she said in emailed comments.
“So, it created a local currency so that these ‘discretionary’ funds in its budget would circle back to support locally-owned businesses.”
Old idea
Mayor Fournier noted that, for long-time Tenino residents, the wooden notes are nothing new.
The tiny town founded around a sandstone quarry achieved national prominence in 1931 when civic leaders printed a wooden local currency to restore consumer confidence after the town’s bank failed during the Great Depression.
“This is woven into the DNA of the community,” Fournier said. “My great aunt Erlene has the family collection all stashed away.”
The mayor brought the idea of resurrecting the town’s legacy project to the city council as a way to provide economic relief to businesses and residents suffering as a result of lockdown measures to slow the spread of COVID-19.
In April councilors approved the proposal to issue up to $10,000 in local scrip.
So far, 13 residents have successfully applied for the funds and some $2,500 worth of wooden bills have been issued, Fournier said, with donations upping the total funds available to $16,000.
The town prints the money on a printing press that dates from the 19th Century. (Ted S. Warren/Associated Press)
Fournier views the project as the kind of initiative towns and small cities must take upon themselves to survive the coronavirus outbreak amid what he views as an inadequate federal response.
He pointed out that the federal Paycheck Protection Program (PPP), a fund of forgivable loans designed to keep businesses afloat through the pandemic, is not scaled for the businesses in Tenino that have just a handful of employees.
“A federal program dumps money from the top and these blue-chip companies steal it all,” Fournier said. “If we do it from the ground up, there’s no stealing. It’s a direct ballast to Main Street.”
From the outset, the unprecedented first-come-first-served program struggled with technology and paperwork problems that led some businesses to miss out while some affluent firms got funds they did not necessarily need.
“From mom-and-pop shops on Main Street to local employers who are anchors in our community, we have seen the PPP save millions of jobs and keep small firms moving forward,” said Jeremy Field, the regional administrator for the Small Business Administration, which oversees the program.
He noted in emailed comments that 86.5% of loans granted nationally were for less than $150,000 and that the program covered almost three-quarters of the small business payroll in Washington state.
‘Hacking the system’
Fournier said he has already fielded queries from towns across the country looking to emulate Tenino’s effort.
“What if 5,000 other small cities did that same thing and took it upon themselves to put $10,000 into Main Street?” he asked.
“That’s $50 million US directly into small businesses. It totally hacks the system.”
So far, however, Tenino’s currency does not appear to be circulating much among local businesses.
At the grocery and hardware store that anchors Main Street, manager Chris Hamilton said that by mid-June customers had spent $150 US in the local bills to buy necessities like groceries and a new faucet to replace a broken tap.
“I’ll redeem it for cash at city hall,” he said. “I hadn’t thought about recirculating it.”
Next door at Don Juan’s Mexican Kitchen, owner Juan Martinez Jr. has four of the wooden $25 notes sitting in his cash register.
In a case of history repeating, he said coin collectors have offered to buy the bills from him for double their value in U.S. dollars.
Back in the 1930s, coin collectors fueled a speculative rise in the value of the town’s wooden scrip, according to Washington state online encyclopedia HistoryLink.
50 local currencies currently in use
The Schumacher Center for a New Economics has documented more than 50 local alternative currencies globally that were active as of summer 2019.
They range from the artfully designed Brixton Pound in London, England, to the Mumbuca, which bankrolls the basic income scheme in Marica, Brazil.
The centre also sponsors BerkShares, a local currency that has been circulating in the Berkshire region of western Massachusetts for 14 years.
Witt cautions that notes backed by U.S. dollars are only a halfway measure, because the amount of local currency available is limited by the amount of federal dollars the town has on hand to exchange it with.
“A truly independent currency would allow for issuing currency as needed,” she said.
That “new” money would circulate through the local economy and then eventually go toward paying property taxes over the course of several years, she added.
But, for now, Witt said, Tenino’s project is an effective way to empower a community being brought to its knees by factors beyond its control.
“I don’t believe the good people of Tenino meant for their wooden (banknotes) to serve as a robust local currency,” she said.
“They are instead making an important point. COVID and the lack of federal response to the crisis has motivated municipalities to explore what could be done with their own currencies.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
