He observed that while many local people had skills and products to offer, their lack of money prevented them from trading with each other. The LETSystem is really only an information exchange, which uses a computer to keep track of account holders' green dollar trading transactions.
People get in touch with each other and negotiate a trade and a 'green dollar' price.
No money is exchanged - a message is put on the LETSystem answering machine and the information is registered in the books and the computer. Account holders can take out 'loans' simply by spending green dollars, and running up a debit account. No interest is charged on 'overdrafts' and no interest is given on positive account balances. Sales tax is collected in normal dollars on top of the green dollar price, if necessary. People get in touch with each other and negotiate a trade and a green dollar price.