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        REA-6           Guarantees.                   December 12th, 1985


        Establishing a revolving fund.

        Amongst people in business, the most popular theory about people 
        in business has something to do with incisive, astute, risk-
        taking independent self-starters who... etc,etc.    

        In reality, there are some such, and they probably only need to 
        hear about a LETSystem to be in it.     

        The truth of the matter is that most business is extremely 
        conservative, quite often to the point of paranoia.    

        Once bitten, twice shy, thrice angry, eventually cynical.     

        Business knows that everybody wants something for nothing and           
        will insist on the same service.     

        Fortunately, you are in a position to provide it.

        A guarantee fund can be used to allow any business a no cost, no 
        obligation trial participation in the LETSystem.     

        The business agrees to accept green dollars from LETSystem 
        members at a predetermined rate - say 15% for a food store, 50% 
        for a restaurant - up to a specific limit - perhaps $50 or $100 

        At that point they may join the system or decline in which case 
        the guarantee fund buys the green from the business for cash at 
        par without question.    

        The predetermined rate is, however, established so that the cash 
        returns to the business clearly justify the entry fees requested.       

        If the businesses selected for this option are well chosen, both 
        for their relevance to the LETSystem membership and their 
        willingness for this to work, there is little risk of losing the 
        fund, and every opportunity to expand it.

        Landsman Community Services Ltd.              REA-6     Page    1

        REA-6           Guarantees.                   December 12th, 1985

        Passing it on.

        Each business membership should realise a very healthy cash flow 
        to the LETSystem operations and Guarantee Fund.     

        A minimal membership fee for a business would be $100 green and 
        $100 cash, which is all a tax-deductible expense to the business, 
        and the cost of processing that business can be extremely low.   

        Hence progressively more money should become available to the 
        Guarantee Fund, and more businesses can be on the trial program.     

        The system expansion thus "bootstraps" itself into the general 
        economy, and as it does so the range of goods and services 
        expands, hence attracting more members, which in turn attracts 
        more business.

        Holding paper.

        The cash requirements of running the LETSystem are minimal and 
        the basic philosophy requires that it should take as little as 
        possible from the community, and then use it to create a 

        It is possible to do all this without ever requiring any business 
        to come up with cash.     

        When a business joins, rather than taking a cash fee, ask for an 
        account payable to the LETSystem.     

        In this way the LETSystem establishes an asset value without 
        drawing cash from the business.   

        The application of this to LETSfund is covered elsewhere, but 
        there is a special process that may be effective in the guarantee 

        The cash membership fee for each new business, a current cheque, 
        is not cashed but used instead in the guarantee program.    

        It may then be the instrument through which many businesses join, 
        and perhaps never be cashed.   

        Indeed, if the business originating the cheque is invited to 
        specify which other businesses should be approached, few if any 
        guarantees will be invoked, and much goodwill and connection will 
        be established.

        Landsman Community Services Ltd.              REA-6     Page    2

        REA-6           Guarantees.                   December 12th, 1985

        A matter of pride.

        The idea of current cheques circulating within a community as  
        a form of money offers an elegant reflection of a basic principle 
        - money is what we say it is.       

        It is a powerful way to awaken the business community to their 
        potential effect on the local economy.     

        The emergence of a full LETSystem in any community may be 
        traceable through the records of the movement of the guarantee 

        There may be some prestige in the local community deriving from 

        Whose cheque went furthest, and what were the spinoffs ?      

        Which service club will be the first to run a sweepstake 
        competition on it ?

        Landsman Community Services Ltd.              REA-6     Page    3

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