While doing research into local economics during 1989, Paul Glover had seen an "Hour" note 19th century British industrialist Robert Owen issued to his workers for spending at his company store. After Ithaca Hours began, he discovered that Owen's Hours were based on Josiah Warren's "Time Store" notes of 1827.
Within a few days, he had designs for the HOUR and Half HOUR notes. He established that each HOUR would be worth the equivalent of $10, which he theorized was the proper value of one hour of work (the exact rate of exchange for any given transaction was to be decided by the parties themselves). At GreenStar Cooperative Market, a local food co-op, Glover approached Gary Fine, a local massage therapist, with photocopied samples. Fine became the first person to sign a list formally agreeing to accept HOURS in exchange for services. Soon after, Jim Rohrrsen, the proprietor of a local toy store, became the first retailer to sign-up to accept Ithaca HOURS in exchange for merchandise.
During the next four months, 90 people provided 262 offers and requests. They all agreed to accept HOURS despite the lack of a business plan or guarantee. Glover then began to ask for small donations to help pay for printing HOURS.
Fine Line Printing completed the first run of 1,500 HOURS and 1,500 Half HOURS in October 1991. These notes, the first modern local currency, were nearly twice as large as the current Ithaca HOURS. Because they didn't fit well in people's wallets, almost all of the original notes have been removed from circulation.
The first issue of Ithaca Money was printed at Our Press, a printing shop in Chenango Bridge, New York, on October 16, 1991. The next day Glover issued 10 HOURS to Ithaca Hours, the organization he founded to run the system, as the first of four reimbursements for the cost of printing HOURS. The day after that, October 18, 382 HOURS were disbursed and prepared for mailing to the first 93 pioneers.
Stacks of the Ithaca Money newspaper were distributed all over town with an invitation to "join the fun."
The Advisory Board incorporated the Ithaca HOUR system as Ithaca Hours, Inc. in October 1998, and hosted the first elections for Board of Directors in March 1999. The first Board of Directors included Monica Hargraves, Dan Cogan, Margaret McCasland, Greg Spence Wolf, Bob LeRoy, LeGrace Benson, Wally Woods, Jennifer Elges, and Donald Stephenson. In May of 1999 Paul Glover turned the administration of Ithaca HOURS over to the newly elected Board of Directors. Paul Glover has continued to support Ithaca Hours through community outreach to present, most notably through the Ithaca Health Fund (now incorporated as part of the Ithaca Health Alliance) and Ithaca Community News.
The current Board of Directors, 2005-2006, includes Steve Burke, Monica Hargraves, Rebecca Nellenback, and Bill Chaisson.
Several million dollars value of HOURS have been traded since 1991, among thousands of residents and over 500 area businesses, including the Cayuga Medical Center, Alternatives Federal Credit Union, the public library, many local farmers, movie theatres, restaurants, healers, plumbers, carpenters, electricians, and landlords.
One of the primary functions of the Ithaca Hours system is to promote local economic development. Businesses who receive Hours must spend them on local goods and services, thus building a network of inter-supporting local businesses. While non-local businesses are welcome to accept Hours, those businesses need to spend them on local goods and services to be economically sustainable.
In their mission to promote local economic development, the Board of Directors also makes interest-free loans of Ithaca HOURS to local businesses and grants to local non-profit organizations.