You need a new pair of shoes. Does it really matter whether you buy them from the local merchant or a national chain? It does, for your community. Buying local helps keep your money circulating through your hometown: paying your neighbors? salaries, boosting local government revenues, and so on. But when you fork over your cash to a national chain, your money gets whisked away in that night?s deposit.

To keep money flowing around town longer, communities across North America have created special local currencies to encourage local spending. Towns from Ithaca to Gainesville to Tucson have introduced new currencies, often adorned with pictures of local art or historical figures. And some have had great success convincing small businesses to accept them.

This idea is not new (many places did it during the the Depression), nor are the problems associated with it. Lawrence, Kansas, found out the hard way that for local currencies to succeed, they need to be fully integrated into the larger economy. People in Lawrence happily spent the local REAL dollars (which featured local resident and novelist William Burroughs on the three-dollar bill) at small businesses across town. But merchants eventually ended up with stacks of local currency and nowhere to cash in the bills. ?Businesses need to be able to make deposits and withdrawals,? says Denis Highberger, organizer of the REAL dollars program, which was put on hold in late 2002 until organizers develop a banking and debit card system. ?This is essential for keeping a local currency going.?