References: Scrip

Table of Contents

MISS WALLACE: [continuing to read the letter] “But our plans, they never worked out somehow. The company stopped paying cash. Instead they paid us paper money called scrip that you couldn’t use anywhere but the company store so we had to buy everything there and prices went up so high it was all we could do to keep living, and then sometimes we couldn’t even get any scrip.

The Basics

scrip.jpgScrip is any substitute for currency which is not legal tender, and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns or occupied countries in war time. When U.S. President Andrew Jackson issued his Specie Circular of 1836, due to credit shortages, Virginia Scrip was accepted as payments for federal lands. Other forms of scrip include subway tokens, arcade tokens and tickets, and “points” on some websites. Scrips have gained historical importance and become a subject of study in numismatics and exonumia due to their wide variety and abundance occurrence.

History

Company scrip was a credit against the accrued wages of employees. In the United States, where everything in a mining or logging camp was run, created and owned by a company, scrip provided the worker with credit when their wages had been depleted. These remote locations were cash poor. Workers had very little choice but to purchase meals and goods at a company store. In this way, the company could place enormous markups on goods in a company store, making workers completely dependent on the company, thus enforcing their loyalty to the company. While scrip was a de facto form of currency, employees were rarely paid in scrip. Additionally, while employees could exchange scrip for cash, it was rarely done so at face value. Scrip in this context was valid only within that area or town where it was issued. While store owners in neighboring communities could accept the scrip as currency, they rarely provided a 1 for 1 exchange. This was to avoid the risk of having coins/currency that were worthless anywhere else.

Scrip as a de facto form of currency within the setting of the mining or logging industry was discontinued around 1952. This was not due to the “right to seignorage” or the right for a country to mint currency without its being violated.

Scrip is also related to the stock market where companies pay dividends in the form of scrip rather than paying actual currency. It is also a written document that acknowledges debt.

After the Great War and Second World War, scrip was used in Germany and Austria; detailed accounts are in Notgeld.

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