The Coast Salish Stock Exchange Project - White Paper

A project being developed by Douglas Champion, Charles Champion and Meaghan Walker-Williams (Champion)

Cowichan (Coast Salish) Stock Exchange

Sections:

1.  Summary

2. Cowichan Traditions of Trade, Money, and Potlach

3. Stock Exchanges

4. Blockchain Technology

5. Who is Doing This

6. Financial Aboriginal Rights

7. How This Benefits Cowichans

8. Why Now

1. Summary

This project is being done by Douglas Johnny Williams Champion with the support of his family. He is 14 years old and is a member of Cowichan Tribes. He is the great grandson of Doug Williams

The purpose of this project is to assert certain financial aboriginal rights that all Cowichans have. These rights are very valuable. They may be as valuable as all the lands of all Cowichan traditional territory.

If these rights are not asserted and understood to be valuable, they will probably be lost. The wording of the treaty proposed by the government is designed to extinguish all such rights.

This project will involve creating a stock exchange. People will meet in person or online to buy, sell or trade financial assets. This can include shares of stock in companies, currencies from different countries, bitcoins, loans and other financial assets.

This will be an organized way for Cowichans to raise money to start small businesses of their own. It may bring in money from hwinitum investors.

It may also someday be able to finance larger projects. The Mik'maq recently used business financing to resolve issues over aboriginal fishing rights. They bought a company called Clearwater Seafoods which owns all the lobster fishing licenses for one area. Because of that, the Mik'maq's company completely controls those fishing grounds.

2. Cowichan Traditions of Trade, Money, and Potlach

Cowichans have a long tradition of doing trade with other Cowichans and with other nations all up and down the Pacific Coast of North America and beyond to Hawai'i and elsewhere. The late Willie Seymour told us about huge convoys of boats taking roe on kelp and other goods to distant nations for trade. He talked about the grease trails which were trade routes to the interior. He told us about places where people from many nations would gather to trade huge amounts of things. Blankets and dentalia shells were used as money in the old days. Cowichans did not do all this as employees working at jobs. They were trading for their own benefit, not for some employer who kept most of the profits. It was also customary to make sure your trade partners got a good deal so they would be happy and want to trade again. It was normal to use what was gained to support your family and give gifts to friends and relatives.

Part of the the gift giving tradition was to give large amounts of gifts to many people in large t'lunuq (potlach) ceremonies.

In our tradition, when someone gives you a gift at a potlach, unless it's specified otherwise, it's understood that you should someday give them a gift in return that's worth at least as much, typically two or three times as much.

That's how we created value in our potlach system. Those who gave gifts were rewarded with larger gifts later. The si'em gained honor and wealth this way.

The hwinitum have their own version of potlach.  They call it a stock exchange. People invest money and may be rewarded with larger amounts of money later. Hwinitum investors try to gain wealth and sometimes honor this way.

3. Stock Exchanges

Stock exchanges have changed a lot over the past few centuries, but originally they were places where people would lend money. They worked similar to potlach except, instead of gifts, they called it loans. Someone would give money to someone else and then would later be repaid a larger amount of money. The type of loans they did were called "bonds".

That is still the basic idea behind transactions on a stock exchange. Someone gives money and expects to get a larger amount of money later. They don't always get it, but that's what they're trying to do.

Now they do it with different types of transactions in addition to bonds. They use things called shares, options, mutual funds, index funds, futures, preferred stock and so on. They keep adding more types of transactions.

A potlach gift is matched by a return gift later to the same person or their family. But in a stock exchange, the person who gave money doesn't have to wait. As soon as they give money for a loan, they can receive a piece of paper which is proof of the loan. The piece of paper is called a "bond". The company that borrowed the money promises to repay the money to whoever owns that piece of paper.  So the person who gave the money can sell the paper to someone else. The bond can be bought and sold many times before the debt is repaid.

This is also done with other things besides bonds. Another thing people often buy and sell on stock exchanges are "shares" in companies. The idea of shares is that the people who own a company share the profits among themselves. If you own a "share" of the company, the company may give you a share of the money it makes. These little gifts of money are called "dividends". The owners of companies also elect people to run the company by taking a vote. Usually each share gives you one vote. Shares are also represented by pieces of paper that can be immediately sold to someone else.

In recent times, when people say "stock", they mean shares of ownership in a company, but when stock exchanges were new, "stock" meant whatever you had to sell. This is the origin of the phrase "stock in trade" which means whatever product someone is in the business of selling. It is why stores say an item is "out of stock" when they don't have any left to sell. It is also the origin of the word "livestock" meaning live farm animals offered for sale.

At early stock exchanges, the "stock" they had for sale was mostly bonds, not shares. Now, most people think it only means shares. Shares are now usually called "shares of stock".  Often, people will just call them "stock".

Another way in which stock exchanges resemble potlach is that people sometimes give each other shares of stock with no immediate payment. They call this "trading on margin." The person receiving the stock is expected to later give back either an amount of money greater than the value of the stock or the same amount of stock plus some money. They don't call it a gift. They call it a loan, but it works in a similar way to potlach gifts.

When people are "buying" stock, it is also similar to a gift of money because the stock they get in return is just a piece of paper. What matters is that someone gave someone else money and someone is expected to give them a greater amount of money later. That can be someone buying back the piece of paper. Or it can be just giving them dividend money with nothing in exchange.

It is increasingly common now for companies to just record how much money people paid for their shares or bonds and never bother to give the buyer a piece of paper at all. This is called the "book entry" method because the shares or bonds only exist as entries in a record book kept by the company. This is almost exactly the same as our families at funerals writing down the amount of every donation and who it came from. It is also announced to all the witnesses present so they can remember. Announcing it in front of paid witnesses is our ancient method of doing this before we had writing. It is the same basic idea as hwinitum companies use when they record the amounts of money that have been given to them to help start the company and write down how many shares each contribution is worth. It is expected that hwinitum companies will later give dividend gifts of money to those who helped get the company started. In our modern day funerals, it is expected that the families who donated to pay the costs of a funeral from another family will receive similar donations when their family needs to have a funeral. This is still done at funerals and it is a continuation of the potlach tradition. Potlach was not just for paying the cost of funerals, it was a way that our people handled money and wealth that could be used for any purpose.

Most people get money only from working at a job or they're on a small fixed income. Most very wealthy people get a lot of their wealth from owning things like land or companies. Just like in Cowichan there are some land owners who get an income from the lease of their lands. In the hwinitum business world, very wealthy people make money from using their money. Sometimes they buy land with their money and get lease money from the land. Other times, they buy companies and get profits from those companies.

You don't have to be rich enough to buy a whole company to get profits from companies. You can buy a share of stock in most companies for less than $100 per share. Many companies sell their shares for $1 or less.

Just like with potlach, though, if you give money to a person or company that does not do what it is expected to do, you will not get any money back. The same is true if you buy a bond, a share of stock, or any other investment. It could become worthless and you would never get any money back.

Because of this, it matters very much which companies people buy shares of. Companies develop reputations as honorable and successful so investors will buy their shares or bonds.

In hwinitum stock exchanges, there are rules that require the main participants to have a lot of money to be allowed to participate. These are called "net capital requirements" and "accredited investor requirements." These rules are written and enforced by the hwinitum government.

The beautiful thing about Cowichan potlach is that it's open to all people to participate. There are no requirements for a minimum amount of wealth to participate. There are not any government rules telling people what they have to do. It's all voluntary.

Doing potlach in a way that resembles a modern stock exchange may be a protected aboriginal right under Canadian law. Because of how Cowichans and other Coast Salish people did potlach, we may be uniquely positioned to do this. Case law says when native people are practicing their culture, they are not frozen in time. They're not limited to, for example, hunting with a bow and arrow. You still have the same hunting rights if you use a modern hunting rifle.

This is in addition to the United Nations Declaration on the Rights of Indigenous Peoples saying we have the right to do just about anything we want.

We can start something that is similar to potlach and is similar to what the hwinitum understand as a stock exchange. We can call it a stock exchange so the hwinitum will more easily understand it. If we called it Khowutzun T'lunuq Tsutsuwatil, they might not understand.

We do want hwinitum to participate. The reason why is because it will bring us more money.

All over the world various kinds of hwinitum (foreigners of different countries) are buying and selling stocks and bonds in stock exchanges. They are paying billions of dollars every day to buy stock in various companies. They are earning billions of dollars a day by selling stock in various companies. Perhaps we can offer stock shares they would want and get them to pay attention to a stock exchange in Cowichan. Then some of that money could be invested in Cowichan businesses.

4. Blockchain Technology

There is a new computer technology called blockchain.

If you have ever been to a Cowichan Tribes general meeting, you will have been handed a budget. That budget contains financial information that has been kept on a type of document called a ledger. Numbers recorded in the Cowichan Tribes ledger keep track of what money came in, what department it went to and what it was spent on. Banks use ledgers to keep track of how much money is in each customer's account and to keep track of money going into and out of each account. Blockchain technology is a computerized ledger. It does the same thing as the bank ledger, except without a bank.

A blockchain ledger can also keep track of accounts at a stock exchange and the number of shares or bonds in each one. It can keep track of all purchases and sales of stock, bonds or anything else. It can keep track of money moving in and out of each account.

It can do all this automatically. It can do it quickly, easily and cheaply. It can also make it very, very difficult for anyone to steal money by changing the records of what happened. Almost impossible.

So far as we know at this moment, there are not any stock exchanges in the world that are running on a blockchain ledger. But a stock exchange could be safer, faster, easier and cheaper to use if it did run on a blockchain ledger.

Our plan is to do that. To create a stock exchange on the Cowichan reserve that will run on a blockchain ledger.

The first version of this stock exchange will be very simple It will be what is called a "proof-of-concept demonstration." That means that we're just trying to prove that the concept actually works. It might be just a few people meeting somewhere on the reserve to buy and sell stocks to each other. Or we may use a blockchain computer system that already exists to carry out a few transactions. Once we have demonstrated that this can be done, then we may try to improve on that. Only after it is working will we worry much about whether we need a stock exchange building on reserve or whether we need to write new computer programs for the stock exchange to work on the internet.

Blockchain technology can make all of this a lot easier. But to use blockchain technology for stock transactions, we need a new type of money designed for that.

Blockchain technology has already been used to create a new type of money. The first blockchain money ever created is called "bitcoin".

"Bitcoins" only exist on computers. They are like the numbers in a bank computer that says how many dollars are in your account. With blockchain technology, there is no bank. Many computers keep track of who owns which bitcoins, but only the owners of each bitcoin account can reduce the number of bitcoins in their account. These accounts are called "addresses", but they work like accounts. Anybody can create an address. When you create an address, you also create a code called a "private key". It's as if everybody had money locked in safety deposit boxes at a bank and any money you put in your box can only come out if your private key is used to open the lock. Since all of this is on computers on the internet, the bitcoin system is like one big bank that is completely automated.

But having only one bank isn't a good idea, so people took this idea and made about two thousand other types of computer money like bitcoin that are created and run by different people. These types of money are called cryptocurrencies. The term "crypto" comes from the word "encryption" which just means codes. It's talking about the codes that are decoded/unlocked when people use their private keys. Currency just means money.

Bitcoins started out worth only pennies each in 2009. Now each one is worth more than $10,000. All bitcoins together are now worth more than 100 billion Canadian dollars. The value of all the other cryptocurrencies is about another 100 billion Canadian dollars. A lot of people have gotten a lot of money from blockchain technology.

Now that there are thousands of cryptocurrencies, Cowichans can create their own currency. One Cowichan family has already done this. The currency is called "tetla" which means "little money" in Hul'qumi'num. The tetla tsetsuwatil started in 2011 and started printing paper money called tetlas in 2012. You can use them to pay for things at participating businesses. Most of those businesses are in Victoria and Langford, though, not Duncan. In 2015, a new kind of tetla was created which is a cryptocurrency like bitcoin. It actually runs on the same blockchain that was created for bitcoin. That is, the same computerized ledger that keeps track of who owns all the bitcoins in the world also keeps track of how many tetlas are in each account as well. Every bitcoin address can hold bitcoins or tetlas or both.

5. Who is Doing This

The same family that created the tetla is the one proposing to create the Cowichan Blockchain Stock Exchange.

It is the Champion family, the family of Meaghan Walker-Williams, granddaughter of Douglas Johnny Williams. They are called the Champion family because Meaghan married Charles Champion. Their son, Douglas Johnny Williams Champion, is named after his great grandfather, the late Doug Williams.

The plan is for Douglas Champion to run the blockchain stock exchange on the Cowichan Reserve. He will, of course, be assisted by his family. Douglas is 14 years old, but has started and run a successful business before. He was selling snacks to other kids when he was only 11 years old and made hundreds of dollars from that.

This is a much more ambitious project, but Douglas should at least be able to get it working in a very small way. That is enough to prove it can work. That is enough to be an assertion of aboriginal rights that are extremely valuable.

6. Financial Aboriginal Rights

All Cowichans have a aboriginal rights to engage in financial transactions of many kinds -- as we have in the past. For thousands of years we had money (tela). We earned money and paid money. We gave and received money as gifts. We loaned money and borrowed money.  We had our own currencies and our own banks. That is why we have words in our language for money, loans and banks. The word for bank in Hul'qumi'num is "telout". We had complex financial arrangements such as t'lunuq.

We have done these kinds of financial transactions and many others for countless generations. We have rights to do financial transactions today. In the modern world, those rights may be worth more than our lands. We should not give up these rights or let them fade away.

Because we are doing this for the benefit of all Cowichans, we would like the Cowichan chief and council to participate in this project. We would welcome a council member to sit on the advisory board of the project.

Although exercising an aboriginal right does not require approval from chief and council, we are asking chief and council to express support for this project in a band council resolution. This is intended to be an assertion of aboriginal rights that all Cowichans have. That is why we would like chief and council to officially endorse that effort and stand behind it, supporting our youth in asserting the right to do this without asking permission from any hwinitum authority.

7. How This Benefits Cowichans

Assertion of aboriginal rights

Doing this asserts and preserves financial aboriginal rights for all Cowichans. Even if we don't make money and don't keep going, just doing it at all helps preserve our financial aboriginal rights.

At first, Cowichans can get their companies listed for free

If the stock exchange succeeds, it will probably charge money for companies to be "listed" on the exchange and have their stock traded there. In the early days, the plan is to allow companies to be listed for free. Cowichans with suitable businesses could get them listed for free.

More Cowichans can own and run businesses

If the stock exchange works, it will enable Cowichans to raise money to start businesses that they can own and run.

More jobs for Cowichans

The more businesses Cowichans create, the more jobs they will create.

All Cowichans could have an opportunity to own shares

All Cowichans would have an opportunity to buy shares in Cowichan businesses. This would give them an opportunity to receive money from the success of those businesses, even if they don't have a job there.

Better negotiating position with government

The treaty that the Canadian government has offered to Cowichan is terrible. They want us to give up lands worth millions of dollars per person and rights worth millions of dollars per person and they offer us thousands, not millions, per person. Would Cowichans even be seriously considering this if so many of us were not desperately poor? The government knows this and is counting on it. Everything we do to help our people use and profit from their aboriginal rights, makes them less willing to sell those rights to the government for less than 1% of their value.

Ownership of the stock exchange

At first, the stock exchange will be owned by Douglas Champion, but if it starts to succeed, he is considering giving some small portion of the ownership of the exchange to every Cowichan.

Economic Progress Fund

Another idea that may result from this project is to put profits from the stock exchange into an "Economic Progress Fund" that would directly invest in Cowichan businesses to help our people become business owners.

Supporting our youth

Since Douglas is only 14, this is a youth-led project. Other Cowichan youth may be able to participate and learn about business and finance. One of the great things about Cowichan is that people do support the youth and encourage them to strive to accomplish what they want to accomplish.

Leading the way as the biggest band in BC

Cowichan Tribes is the largest Indian Band in BC. We should be leading the way and setting an example that others may follow. Financial aboriginal rights is an important area that we can take the lead in.

Opportunity to be at the forefront of the financial technology revolution

Blockchain technology and cryptocurrencies are new technologies that have great potential. This is an opportunity for Cowichan to not just catch up to the rest of the world, but to lead the way, showing Canada and the rest of the world what can be accomplished with this technology. Among other things, blockchain technology can easily allow a stock exchange to operate easier, cheaper and faster than any other stock exchange in the world. Also, blockchain technology automatically publishes every transaction and keeps a public record of all transactions. This reduces the risks of someone trying to be dishonest.

8. Why Now

With Cowichan tribes having passed its land code and achieving more independence from the Department of Northern and Indian Affairs, now is a perfect time to do this.

Also, as Cowichan tribes is about to begin offering business licenses and encouraging band members to start businesses, it can be vital to the success of those businesses if they have a source of money to pay for the expenses of starting those businesses. A stock exchange can provide that money from investors.

The Hul'qumi'num Treaty Group is negotiating a treaty with the federal and provincial governments. As it currently stands, trade rights aren't even mentioned in negotiations, let alone other economic rights besides fishing and hunting. By having a stock exchange in Cowichan, it strengthens our position at the treaty table immeasurably. (In 1999 the Kanawake Mohawks threatened to open a stock exchange in their negotiations with the government. In exchange for not doing a stock exchange, they got permission from the Canadian government to run the only online gaming services in North America and made millions of dollars per year from it.)

At the negotiating table, it would be fair to say to Canada and BC that we have the absolute right to engage in this traditional activity of trading. If they want to deny us that right or insist that we have given up that right, we should be compensated in the billions of dollars, because that is what those rights are worth. Hwinitum stock exchanges carry out billions of dollars of stock transactions every day. We have an aboriginal right to do that, too. That right is worth billions. The key to indigenous rights in recent supreme court rulings is that you must use them or lose them. That's why even if this project only succeeds in the smallest way, it would still be of tremendous benefit to the Cowichan people as a whole.

Another reason to do this now is that if a treaty is signed with the currently proposed wording, all Cowichans would forever lose their rights to do this. If it works, the treaty should, at the very least, be revised to not ban it. We think this project can demonstrate that these rights are far more valuable than what the government is offering us to give them up. That is true for many other rights the government wants us to give up. If it can be made clear that we can make more money using our rights than selling them, we may want to reconsider the whole idea of the treaty. It's the government that needs this treaty, not us. Our people just need money and selling their lands and rights in a treaty is not the only way to get money.

The development of blockchain technology is another reason to do this now. It makes this much easier than it would have been ten years ago or more.

Some companies have started selling their stocks using blockchain technology, but there is no stock exchange in the world that is set up for this, so it doesn't work nearly as well as it could.

Another big reason to do this now is because the Canadian government finally, in 2015, accepted the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP for short). Prime Minister Justin Trudeau has specifically said that Canada agrees with UNDRIP and has pledged to implement it. UNDRIP recognizes extremely valuable aboriginal rights that Canada has always before said did not exist. The most important of these is the right to self-determination. That is the right to decide whether we want the Canadian government to be the highest authority in our lands or whether we want our elders or Chief and Council or someone else to be the highest authority in our lands. UNDRIP also includes the rights to carry on doing things our own way according to our traditions. It includes the right to own and have control over all our lands. Most important of all, it says that we have these rights no matter what any hwinitum politician says. No matter what the laws of BC or Canada say, we have these rights. The rest of the world is backing us up on this and Trudeau gave in. This changes everything.

This only happened in 2015. The BC Treaty Commission process is based on the ideas invented by those working against us. Instead of restoring our control of our lands, the treaty process implies we don't really own the land. It says we just have "land claims" instead of "land ownership". It says we only have "traditional territory" instead of actual "sovereign territory". It is designed to extinguish almost all of our rights, especially the ones that are most valuable.

Things have changed. Now is the time to use our rights, not sell them. It is time to assert all the rights that other nations around the world have. One of those rights is the right to have our own economy run our own way with our own currency, our own stock exchanges, our own banks and everything else a strong economy can have.

The purpose of this project is to start taking a few small steps in this direction by demonstrating that this can really work, right here, right now. We can have a stock exchange on the Cowichan reserve. We can have a lot more after that.