Gesell Research Society Japan
Rui Izumi
An Exchange System Based on Mutual Appreciation

The Implementation of the WAT-System
Building a Smooth Circle of Trust

Since summer 2000 local currencies in all regions are mainly using an account system which is quite established in barter rings. The administration group which is necessary for its management and the costs that come along with it have continuously led to serious complaints. In trying to find a solution to this situation, Eiichi Morino, the leader of the Gesell Research Society Japan, investigated whether the bill of exchange which is widely used among merchants, could provide an appropriate measure. The challenge was to find a method for solving the question of organisation and - in case of issued tickets - how to avoid the necessity of controlling their amount. Thus the WAT-system had been developped. The difficulty in existing local currencies to carry out barter deals over a longer distance was overcome by building a smooth circle of trust, a relatively new way of creating value and by an equal level of relationships between participators in a smooth circle of solidarity and relative trust. The local currency is realized on a peer-to-peer basis. For this reason there is no superior administration group controlling the relationships between ordinary participants. Whoever is ready to accept WAT-tickets as payment simply becomes a member of the circle. Another peculiarity is the standard of value within the system. The value of 1 WAT is compared to 1 kWh of electrical current, generated in a citizen's co-operative, to an appropriate span of time of easy work and an approximate amount in Yen. Presently this means, that 1 kWh of electricity generated by natural forces (wind, water, sun etc.) equals to about 6 minutes of simple work or about 75-100 ¥. It is assumed that the costs for generating electrical current from natural sources will go down by the time. Since momentary costs for 1 kWh are equal to about 6 minutes of human working force, this had been set as basic value for the WAT-system. The system was implemented in August 2000 and began by distributing WAT-forms and the founding of an association of WAT-friends. In the beginning participants came from local currencies in all regions and about one month later the WAT-system began to spread among people who had not yet come in touch with local currencies.

The procedure of exchange
The Three Stages of the Accounting System

It is very easy to obtain an empty WAT-form. They can be ordered at the association of WAT-friends, they can be downloaded from the WAT-homepage or an empty form of a friend may just be copied. There is neither an office nor a co-ordinator for the WAT-system, therefore no member fee for the administration will be charged. The association of WAT-friends only exists for providing and distributing WAT-forms and the publication of an information periodical. Anyone who wants to use and issue WAT-tickets automatically becomes a member in the circle of WAT-friends.

The exchange between buyers and sellers is based on mutual agreement and is performed with self-responsibility. Anyone can issue a WAT-ticket at any time if it is needed for a deal. Of course, the WAT-ticket can not be used, if the recipient does not acknowledge it as a means of payment. Since the WAT-ticket is a kind of promise for payment (promise for work in return) it kind of resembles a bill of exchange. However, there is no fixed date for redemption. The person who accepts a WAT-ticket can use it for a deal with a third person. The person using a WAT-ticket shows to his partner from whom s/he wants some goods or service, that s/he had already granted credit to a person s/he thinks is reliable. Thus the ticket circulates within the circle of members while every change of hands will be registered on the reverse side of the ticket. One day in the further course the ticket will return to the issuer who himself sells goods or services in exchange for it. As soon as he receives the ticket he had issued himself, the ticket has finished its task.

1. Issuing a WAT-Ticket. Start of the Circulation.
Since at first the WAT-form is merely a piece of paper it must become valid by a certain procedure. For this purpose in line »B« on the front side of the WAT-form the drawer (issuer) of a WAT-ticket puts down his name as well as his signature [1] and the present date. Thereupon the name of the giver of some goods or service will be entered in line »A« who is the lender in this transaction.

At the cutting line between receipt and WAT-ticket the drawer puts down his stamp and then the WAT-ticket will be cut off along this line. The receipt remains in the hands of the drawer and the WAT-ticket will be handed over to the giver of some goods or service (lender). This is called the »issuing« of a WAT-ticket and now the ticket is a valid document.

2. The Circulating WAT-Ticket. Ordinary Exchange.
The person who has received the WAT-ticket can now use it as a means of payment towards a third person. In this case he will sign with his name in the user line on the reverse side of the ticket and enter the name of the recipient. The recipient in turn can now use the WAT-ticket in the same way for a deal. This kind of handing-over is also called »circulation« or »ordinary exchange«. In this case the ticket circulates as a countermove to goods and services among the members of the circle.
3. The Return of the WAT-Ticket. Redemption.
When one day the WAT-ticket returns to the drawer, that is, when it returns to the person who has set its circulation going, the ticket - which had been a lending confirmation - then becomes invalid. This actually means that the name of the »recipient« on the reverse side of ticket is identical with the name of the »drawer« in line »B« at the front-side. In the meantime the »credit« which had been granted in the moment of issuance, had been running through many hands and has now returned. This occurence is called »redemption«. The borrowing of goods or services in the beginning has been running through many hands and now returns, which means that the obtained favour is returned to the members of the circle.
In this way the multiple use of the ticket can be traced back by the stages: issuing => circulation => redemption.[2]
(1) On the left-hand receipt date, name of recipient, name of the drawer and the amount of value will be entered. It is a receipt for the issuing of the WAT-ticket.
10 WAT-Ticket

front side

WAT-ticket, front side
(3) The drawer puts his stamp at the cutting line. Then the WAT-ticket on the right side will be cut off and handed over to the recipient who has given some goods or service.  (2) A is the name of the partner in the deal (giver of goods or service),
B is the name of the drawer (issuer), date and signature
reverse side
WAT-ticket, reverse side
(4) At the occasion of handing it over to a third person the date, the signature of the user and the name of the recipient will be entered in these columns. This is being done as long as the ticket is in circulation. In case the space for entries is not enough an additional slip of paper can be attached to the right edge. (5) If the name of the recipient on the reverse side coincides with the name of the drawer B on the front side, then the ticket has returned and becomes invalid. This is the last phase in the existence of a WAT-ticket - the redemption
If a deal is being done with WAT-tickets there are various modes of payment which the partner in the deal can expect. These depend on the trust relationship between the two partners and on the various levels of trust of the WAT-ticket itself. There are actually three modes:
(1) deal with a newly issued ticket (new ticket deal)
(2) deal with a ticket which is already circulating (circulating ticket deal)
(3) deal by using new tickets and already circulating tickets at the same time (mixed tickets deal)
The acceptance of a newly issued ticket proves the trust of the partner in the deal. An already issued ticket which had been used in previous deals hints at an existing circle of participants. A participant who possesses issued tickets had already expressed his trust. Even with the same nominal value a ticket with a number of entries on the reverse side has accumulated the trust of all these people and gains additional value besides the nominal value. Thus three modes of payment can be distinguished.

Objects of Exchange
Services and Goods - Various Kinds in Various Ways

With the help of WAT-tickets a great number of things or services can be exchanged - like books, pieces of art, transportation by car, go shopping for somebody else aso. aso. There are just a few examples on this little list.
charcoal (oak) 12,5 kg 15 WAT + 1500 ¥ 1200 ¥ transport
charcoal for the tea ceremony 15,0 kg 30 WAT + 3000 ¥ 1500 ¥ transport
bamboo-charcoal 500 g 3 WAT + 200 ¥ 400 ¥ transport
rice package, unpolished 600 ¥ 
(polished rice weighs about 15% less)
escargots   prices of the season  
kabocha-pumpkin   prices of the season  
orange- or plum jam  150 g 300 ¥ (selfmade,
no sugar added)
  up to 10% of the price in newly issued or up to 50% of the price in already circulating WAT-tickets, plus transportation costs in ¥

In this way agricultural products can be purchased. Small commercial entrepreneurs, like sake-pubs, sake-shops, rice-shops aso. can take part in the exchange system, too. Since the WAT-tickets circulate in the whole country it already happened that travellers could use WAT-tickets for overnight stays.

Changes after implementation, important events
Simple Membership, No Administration Office
If you take into consideration that only half a year has passed since the first implementation of the WAT-system two significant results have already shown. The first is a network which had been built up between people. Since there is no member fee and no individual entries are being published in a market list, it is easy for everyone to participate. Just the wish to take part in deals with others is enough. Deals will be performed while the reverse side of the ticket will be filled out and at the same time a network between people will be built up in an uncomplicated manner just by playing along. Another point is that this new system provides a solution to the problems of existing local currencies and therefore can find recognition in all regions. It is not necessary to establish an office and therefore no administration costs arise and the issued amount of WAT-tickets does not have to be controlled. The WAT-system can be implemented in addition to already existing local currencies as a complement for neglected opportunities. It is also easy to found new local currency systems in any region and in any community.

  Personal Reports

Mrs. Chiba from Yahaba, Iwate-ken
People Help Each Other in the Circle of Trust

I'm fond of taking pictures in Nikkô [a popular tourist's attraction with splendid sights] and I like to do artistic work myself. Since I'm using WAT-tickets I feel easy when I give my work away to people who want it. I get into conversation with interesting people whom I had not known until now, I listen to what they are telling and besides that I receive WAT-tickets which I can use in dealing with other people. I have the impression that a new circle arises and expands. Until now most of the things I had enjoyed in making myself, I have put in a closet. But now they have become things I can give away and I know I can receive other things for them in exchange. This does not only serve my own satisfaction, but I'm participating in a circle of people with whom I want to share a feeling of community. I have a warm feeling towards those people with whom I can deal by using WAT. At the entered names on the tickets I can see through how many hands the ticket was running. If I look at the WAT-ticket in such a way I get the feeling, that this also expresses the greatness and the power of the mood of so many people. It touches me deeply that I can take part amidst these people. It is as if seeds are being spread. The consolidation of mutual trust between people in the circle is like the sprouting up of a little seed.

Mr. Yamanaka from Hagi, Yamaguchi-ken
The WAT-Ticket, that I had Issued - Where Might It be Now?

It was in autumn last year. I had been sent a pack of WAT-tickets with instructions for their use. For a long time I only issued WAT-tickets in order to get various materials. I didn't care for the amount which may have piled up in the meantime. I had the feeling that I could somehow leave that to my confidence and my inner peace. "After all it's a useful thing. One day the time will come when I can make myself useful, too." Up to now I was on the "minus"-side, but the surprising thing was, that I didn't have the feeling of a burden. I indulged in trying to imagine where my issued tickets might be at the moment.

This year it happened for the first time that I received a payment in WAT-tickets. Finally I could contribute something useful within the WAT-circle and I felt happy about it. "When I do a payment I can from now on either issue a new one from my own or send a received one on its further journey." "Well, if I keep my own tickets longer and get more from others I will be using those." Since in my closer environment there are almost no WAT-friends, there is no possibility yet to form a circulation-ring, but this doesn't worry me. That's why I feel it's my task now to slowly find new WAT-friends and to seduce them with something like: "It's interesting, don't you want to participate?" If you know the person, you know what he is like, don't you? Explanations are almost unnecessary. I have a certain presentiment that WA-TTO will spread at the right time.

The WAT-Ticket can be Used Additionally

Two big steps for the WAT-system are contemplated about. The one has to do with expansion, permeation and further development. The second deals with WAT as a basic system that helps implementing local currencies in all regions.
  • 1. The expansion of the variety of services and goods supports the participation of commercial enterprises
  • 2. The WAT-form will be provided for downloading in the internet and will thus be available for everyone at any time
  • 3. Since there are no registered members and therefore it is not known wherever members are, an information service in the internet will be established.
  • 4. For those, who don't use a computer, an information service via mobile phone will be established.
  • 5. The implementation of the "lending confirmation" style should be supported in regionally based local currencies.
The points 1-4 aim at the expansion of the multitude of services and goods for dealing as well as provision of easily accessible informations for supplying and demanding members, so that deals can be carried out more easily. Point 5 consists of the suggestion to explain the basics of the "lending confirmation" to members of existing local currencies in order to support their implementation in regionally based local currencies. Since administration costs are low, the WAT-system had been implemented as an additional tool in four local currencies till March 2001, for instance, in the T-WAT-ring in Tochigi-ken or in the YUFU-ring in Oita-ken. WAT is a tool in order to bring people together on an equal level and for the creating of autonomous communes based on mutual support or as a tool for strengthening this kind of attitude.


[1] Instead of a signature the Japanese usually use a personal stamp which is officially registered and is as obliging as a signature. [BACK]

[2] A basic description of the process can be found in the first paragraph of my article "Money - a Medium of Exchange": "Barter as the Basic Event". [BACK]

Taken from: »Fureai · sasaeai no kikkakezukuri. Chiiki tsûka · tebikisho«, Ed.: Sawayaka Fukushi Zaidan, Tokyo 2001 and »Naruhodo chiiki tsûka nabi«, Ed.: Makoto Maruyama and Eiichi Morino
Translation from Japanese: Robert Mittelstaedt