I ask this because i recall that during the graet depression 9which was a time of great deflation) , cash was hard to come by. in an effort to stimulate commerce, many cities and towns promoted 'local currencies"-these were effectively “IOUs”, that you could use to spend at local businesses. Now, i belive that coining/printing money is now the exclusive right of the federal reserve…but supose I pay a guy with an IOU (promissory note), which i value at $500.00. Can he turn around and sell that note to third party? or use is to buy from someone elese?
Or is this a violation of commercial codes. heck, suppose a city is short of cash-could it issue promissory notes?
I’d like to issue my own dollars-I have some good designs to try out! 
You should read up on JSG Boggs, an artist who does exactly that. See http://www.jsgboggs.com/.
Yes. In fact, you can get a kit on how to do so.
Ithaca Hours is one of the best known and most successful local currencies, and they have information on how to start your own.
http://www.ithacahours.com/
Quercus beat me to it. I was going to mention Ithaca Hours also.
On a more general note, currency is simply a medium of exchange. You can make whatever you want (except, of course, copies of real federal currency), and if someone will accept it as payment then that’s all you really need. If i fix your roof, and am happy to accept in return a note promising that you will fix my car, that should generally be fine.
Of course, this doesn’t address the issue of taxation. If everyone started bartering like this and not keeping official records, i’m sure the IRS might have something to say about the lost tax revenue. According to the Ithaca Hours site linked by Quercus, “HOURS are taxable income when traded for professional goods or services.” Not sure how this is traced, or exactly what qualifies as “professional goods or services.”
The IRS has rules on bartering and everything is pretty well-defined.
http://www.irs.gov/businesses/small/article/0,,id=113437,00.html
How does this differ from writing checks?
Honoring the check is handled by the bank. Honororing your own currency is your responsibility.
Also of note are Liberty Dollars which are backed by gold and silver and issued by some activist group calling themselves the National Organization for the Repeal of the Federal Reserve Act and the Internal Revenue Code (NORFED).
It seems to be worth mentioning that they mis-spell “Protest” but I’m willing to give them the benefit of the doubt and assume their organization as a whole is run better than their spell-checker. Their money looks neat, in any case.
There’s also the currency notes that were issued by Emperor Norton to finance his administration. While many people originally accepted them only as a gesture of affection, they’ve actually appreciated far above their supposed face value and have turned out to be a sound investment.
Ahh yes, I forgot about Emporer Norton I.
This is no different from stores issuing gift certificates. You’re free to buy a gift certificate, give it away, trade it for stuff, sell it, or whatever. It’s just a promise on the part of the store to deliver something in return for the certificate.
A slight aside, but how the heck does this work? Isn’t it basically inflating the local economies in Ithaca and surrounding communities by displacing hourly wages? That strip mentions movie theaters that accept “hours”. I can’t imagine any sort of movie theater employing a young kid for $10.00 an hour, just to rip tickets and serve popcorn.
I’m not knocking the idea, just really confused how $10 = 1 Hour.
Tripler
Sounds suspiciously Communist to me. 
bearer bonds are a form of currency
Boxtops? Skate Keys? UPC Proofs?
The best emperor the United States ever had!
Do those silver-backed dollars have a picture of William Jennings Bryan on them?
I’m tired of constantly being crucified on a cross of gold!
And let’s not forget Disney Dollars.
We’ve got a local currency here too.
I’m not sure if it’s the same idea as a local currency, but there are several online games which have their own economy, and in which game money is traded for things in the real world (usually with eBay, etc.)
I recall a news story about 10 years ago or so where a group of people used a point system to trade goods and services. The IRS ruled that they were effectively using their own currency and went after them for tax evasion.