The Silver Currency of Cannabis Country
Past the last stand of giant redwoods, the road to Petrolia takes a dystopian turn. Climbing westward from Highway 101 into Humboldt County’s lawless marijuana hinterlands in early January, the pavement crumbles into gravel; in some places, huge chunks have calved away onto the dirt shoulder. The only cars we pass are abandoned—a yellow Volkswagen bus, a late-model Audi—and shot through with bullet holes, or torched and stripped to their axles. As we wind deeper into the gloom, we catch glimpses of plastic grow houses tucked away in the forest, their driveways posted with Keep Out and No Trespassing signs. We keep moving.
Almost two hours later, we descend into the Lower Mattole Valley and what is sometimes called the Lost Coast of California, one of the most remote pockets of the continental United States. Beyond the old barns and rain-lashed pastures is Petrolia, an unincorporated hamlet of some 500 people that has a reputation for fiercely independent locals—in part thanks to a homegrown effort to launch its own currency.
In 2007, a renegade climate scientist and Petrolia resident named Ken Young bet most of his own savings to create the Petol (pronounced peh-toll), minting coins in pure silver in an effort to strengthen the self-sufficiency of the valley against the socioeconomic upheaval he foresaw on the national horizon. Plenty of people have launched alternative currencies in this country, but Young’s choice to use silver, a precious metal with intrinsic value, set him apart from most. The Petol was a serious attempt to break away from government-backed money.
Despite some promising early sales, the coins struggled to gain traction, even among locals. Then, in February 2018, Young died of a brain tumor at the age of 76. His bold currency experiment may be destined to fade with him. Still, I wanted to better understand what the Petol said about the Mattole Valley and its people. Why would a community want to stop using the federal government’s legal tender?
Young’s former house is less than a block off the Petrolia town square, which is lifeless on a wet January morning, save for some stray cows. Solar panels canvas the roof, and the front yard is a tangle of blueberry bushes that run up to a neighbor’s garden, where more than 60 cannabis plants sit out in the open.
“Welcome to the Mattole Free State,” says Melanie Mirthan-Nelson, Young’s closest friend and the custodian of his estate. A former outlaw and bike-gang member, Mirthan came to the valley in the 1970s because, as she explains, it was one of the few places she could “disappear” from the law and her vengeful enemies. She and Young bonded over radical ideas (“We were part of the ‘blow-up-the-bridges committee,’ a group that wanted to cut off road access to the valley,” she says) and a mutual distrust of the government (“Good government is no government”), forging a friendship that endured philosophical disputes and Mirthan-Nelson’s decision to transition to female several years ago. “Ken was a contrarian who didn’t suffer groupthink,” explains Mirthan, now 66. “But he was the most tolerant intolerant person I’ve ever met.”
Young was also obsessive. While serving in the Air Force in Okinawa, Japan, in the early 1960s, he fell in love with a local beauty named Toshiko. Young’s affection was never requited, and Toshiko married another man, but that didn’t stop Young from returning to the island eight times over the years and getting a tattoo of her face on his back. He liked to run shirtless on warm days and managed to complete at least one mile a day—for a daily average of 8.3—for 40-odd years. He tracked his streak and compiled the feats of runners around the world into a database and weekly newsletter, a service that consumed hours every day and made him a legend in distance-running circles.
Young brought the same zeal to his silver currency, adamant that Petols had to have intrinsic value to weather inflation and what he saw as the eventual downfall of the US economic system. He created six coins, available in denominations of 20, 10, 5, 2, and 1, with a half-Petol in brass. A single Petol was priced around $2, meaning a 10 Petol (one ounce) piece went for $20. They featured beautiful engravings dedicated to “a sustainable society” (windmills and hydropower wheels, farming and bicycle transport, a pot leaf), ringed with the words “ecology,” “economy,” “culture”: three factors Young believed were essential for an autonomous community.
His gamble made sense in the context of the Mattole Valley’s renaissance as a bastion of counterculture. The site of the first oil well drilled in California in the late 19th century, the region was overtaken in the 20th century by a logging boom that razed vast swaths of old-growth forest and killed off once-abundant salmon. In the 1970s, back-to-the-land hippies flocked from the San Francisco Bay Area and began “consciously working on being a community that relied on each other rather than the outside world,” explains Laura Cooskey of the Mattole Valley Historical Society.
Illicit cannabis farming allowed residents to sustain their homestead lifestyles, and they learned to grow it well. Humboldt, Lake, and Trinity Counties became known as the Emerald Triangle, leading the country in high-grade pot production. When authorities began cracking down on cannabis farmers with troops and helicopters in the mid-1980s, an us-versus-them nativism hardened in the valley. Pot profits kept Petrolia residents flush through the 2000s and helped support an array of community-oriented projects. Biodiesel production, stonemasonry, a farmers’ cooperative, a seed bank, winemaking, hemp clothing, herbal medicine, roadkill skinning—these were just some of the goods and services available in what was loosely called the Mattole Self-Sufficiency Project, an informal network of three dozen members that promoted barter trade and interdependence. Young believed that minting coinage was the next step toward creating a local bank that would offer loans to small businesses that served the community.
Young’s evangelism, and the general disquiet following the 2008 financial crisis, convinced many residents and organizations to invest in his idea. Several contractors and massage therapists agreed to accept the Petol, as did some vendors at the weekly farmers market. By 2016, Young had reportedly sold at least $150,000 worth of Petols. But much to his disappointment, the Petrolia general store, the lone place to buy provisions in town, would not tender the currency. “It was just too hard to deal with—always having to check the price of silver, making calculations, and so on,” says a longtime store employee who does not want to be named. But still, she adds, the Petol was “real money, no question.”
In 2011, a sharp spike in the price of silver was followed by a steady decline, costing Young’s biggest investors two-thirds of their investment. Today, lots of people in Petrolia have some Petols stashed away, but the coins have largely been consigned to novelty status—awarded at community cooking contests, sold to collectors, or given to children as souvenirs.
Mirthan-Nelson—who is featured, with the visage of someone she calls her “evil twin,” Merlin, on the 10 Petol coin—insists the currency was always meant to be a long-term hedge against the vagaries of the US dollar, not a way to make fast cash for speculators. Petrolia’s self-described “token tranny” keeps most of Young’s coins locked away in a large safe, alongside a cache of firearms and topped with taxidermy of a snarling bear’s head.
The history of alternative currency in the United States is a long list of short-lived campaigns. Before the Civil War, in the absence of state and national currency, some 1,600 different banks in 34 states issued paper currencies to make economic activity more convenient and structured. The so-called “wildcat” banking era ended with the creation of a national banking system in the mid-1860s, after which the dollar was established as the sole official currency, under the control of the Department of Treasury. (The Federal Reserve, which now oversees currency, was created in 1913.) Technically, however, private currencies continue to be legal, as long as they do not imitate the dollar and are regarded as taxable income.
During the Great Depression of the 1930s, more than 400 local paper currencies emerged to fill a cash vacuum that lasted until the industrial boom of World War II. Since then, many well-intentioned attempts have come and gone, now simply footnotes on the pages of Wikipedia. Nearly all that are still active are used as a supplementary means of exchange aimed at fostering community, with no intrinsic value or pretense of replacing the almighty greenback. When the creator of the precious-metals-backed Liberty Dollar, Bernard von NotHaus, tried to get his coins into regular circulation, he was charged with counterfeiting and conspiracy, and sentenced to three years probation in 2014.
What is arguably the most successful alternative currency in America was launched in Ithaca, New York, in 1991. Reeling from a Reagan-era recession that saw jobs and capital shipped overseas, local businessman Paul Glover wanted to jump-start his community’s economy by rousing the underemployed to pursue their passions. He conceived of and printed a paper directory of services that could be bought and sold with a paper currency, which he called the Hour. One Hour was equivalent to $10, the county’s average hourly wage at the time, and over the next two decades, locals and more than 500 businesses traded several million dollars’ worth of Hours—paying for food and plumbing, taking out loans, even paying rent.
“A broken community realized, ‘Hey, our wealth isn't money; our wealth is us, and we still have us,’” says Fhyre Phoenix, a former alternative-currency developer and aficionado living in McKinleyville, California, two hours north of Petrolia, who was inspired by Glover’s work in Ithaca. “People use this currency and hire each other and create a subeconomy that works for them as they need it.”
Over the years, the use of Hours declined as people shifted to electronic transactions instead of cash. Having exhausted his efforts in Ithaca, Glover moved to Philadelphia in 2005, and his Ithaca project never recovered. “The hardest thing is the constant education it takes to keep something like this going. People are always defaulting to Federal Reserve notes, especially when the going gets rough,” explains Phoenix. Of the five alternative-currency projects Glover has been involved in nationwide, his best effort was the one in Boulder, Colorado, which amassed nearly 180 subscribers, only to be hijacked in 1995 by a sexual predator who began to assault women offering massage services using the currency. The scandal shook the community, and the currency scheme withered.
In 2015, ten years after Glover’s departure, an Ithaca-based start-up called Ithacash launched an Ithaca Dollar to try and pick up where the Hour left off. To maintain continuity and honor the community-first spirit of Glover’s work, the project’s founders have allowed people still holding Hours to convert them to Ithaca Dollars, which have one-to-one parity with the US dollar. So far, more than 100 businesses and nonprofits have enlisted, with some accepting payment via text message. (Meanwhile, Glover recently ran for Pennsylvania governor as a Green Party candidate and signed on as an adviser to support the development of the Golden, a new global currency project that claims it will be the “first fully functional private currency, 100 percent backed by gold.”)
For his part, Phoenix says he’s done with alternative currencies, explaining that though he still believes in them, the activism needed to keep them going strong “never ends.” Phoenix stresses that these currencies, which are not meant to replace dollars but serve as catalysts to revitalize cash-poor communities with high unemployment, are optimal when they “step in and allow people to build on a regular currency.”
“With all due respect to Mr. Young, I’d say the Petol is more of a romantic pursuit,” he says. “I don’t see it going beyond somebody’s daydream.”
In the Mattole Valley, it’s green, not silver, that drives the economy. Almost everyone, from aging hippies to cast-iron ranchers, has a connection to the marijuana trade, whether it’s growing or leasing land for the plant’s cultivation. Up until a year ago, when California legalized recreational pot, the majority of Mattole Valley growers’ product was sold on the black market, where, as veteran pot farmer Josh Free puts it, “cash is always king.”
Free’s three-acre farm sits right along the road into Petrolia. In the 1990s, the 48-year-old ran guerrilla grows up in the mountains, playing a high-stakes game of cat-and-mouse with local, state, and federal law enforcement. Harvests and payouts came just once a year, and cash reserves had to last through the lean months. Prior to California’s legalization of medical marijuana in 1996, marijuana prices soared to as high as $5,000 a pound, spawning a “green rush” that attracted droves of ham-fisted growers whose appetite for land spiked property values in the region. “Before, people grew pot to stay here,” Free says. “Now they stay to grow.”
A year into full legalization, the price of a pound of marijuana has plunged to as low as $500 due to oversupply on the market. While Free’s operation may be large enough to cover the costs of compliance, which include hefty licensing fees and taxation, many small-time growers are being driven out of business entirely. “Aside from a 40-year-old car, piece of land, and a cabin, I don’t have a pot to piss in,” says Pete Marshall, another seasoned valley pot farmer. “There’s no economic certainty in the Mattole Valley.”
Marshall, 72, is an officer at the Mattole Grange, a fraternal organization of about 70 members that champions rural living and remains a hub of social life in the valley. Every third Thursday night, Grange members get together to plan events and share a potluck dinner in a wooden hall bookended by a fireplace and an American flag. We stop by on the invitation of Laura Cooskey, the historian, who introduces us to the eight other members in attendance. She apologizes that proceedings have become a little “confused” since the passing of Ken Young, who was the group’s long-time secretary and a stickler for procedural details.
While the Grange isn’t the community draw it once was, its ranks are still made up of people who, like the creator of the Petol, wanted a break from conventional living. Eight years ago, another Grange member, Nieves Rathbun, relocated her natural skin-care business from Oakland to Petrolia in order to be closer to her mother-in-law and give her son a fuller childhood in the outdoors. “Getting away from society is comforting to a lot of different styles of people,” says Rathbun, whose hippie-nomad father raised her on trails and communes in the Pacific Northwest. She and her husband, Danny, an instrument builder and avant-garde rock bassist, set up headquarters for her company, called By Nieves, in a corrugated barn on his mother’s homestead, and the business continues to grow.
In January, Nieves Rathbun sent out a message to a community email group announcing that she would start accepting Petols as payment for her products at the Sunday farmers market, at a value of $3 per Petol. It’s not likely the currency will ever come into wide use in the Mattole Valley, let alone replace the dollar, but it still has meaning: it’s a symbol of a community on the fringe of society that wants to stay there. “Since the value of currency is kind of arbitrary anyway, I was thinking that if we just decide on a value, we could start using them more easily and regularly,” she wrote to the group. “They are a wonderful thing to hold in your hand. How cool would it be if we passed them around a little more?!”