There was a time when there were more than 20,000 company stores using scrip in pace of, or in addition to, cash wages in North America.(*1)
It has been estimated that around 75% of all the scrip that was used was used by coal companies in Eastern Kentucky, West Virginia and Virginia. People in these areas called the tokens “scrip” and the name stuck and is what is still used today. Scrip was known by many other names in the early days, among them: Trade Tokens, Flickers, Secos, Clackers, Checks, P’Lollys, Good Fors, Lightweights, Bingles, Stickers, Chink-tins and Dugaloos (keep in mind that scrip came in paper as well as in metal form). (*2)
Scrip Started As A Company Store Trade Credit
Scrip started out as a trade credit for the company store. For example, the company store extends a $10 credit to a man who needs a few things to help make ends meet for his family between pay days. The “scrip” was accounted for in a ledger which required manual entries and tracking so that the proper amount could be deducted from the workers pay when the time came. This method was tedious, time consuming and subject to errors, It wasn’t long before the ledger method was abandoned in favor of using paper “coupon” booklets.
We know that scrip was used as a method to pay wages as far back as the early 1880s. Scrip was commonly issued in denominations similar to U.S. coins and bills: 1, 5, 10, 25 and 50 cents; 1, 5 and 10 dollars; and sometimes odd amounts like 3 cents.
“The Allison Company of Indianapolis, for example, noted that when one of its coupon books was issued to an employee, he signed for it on the form provided on the first leaf of the book, which the store keeper tore out and retained for the company time keeper, who deducted the amount from the man’s next time-check. Then when the employee bought goods from the company store, he paid in coupons, just as he would pay in cash.” (*3)
Most companies first issued paper scrip which was in the form of coupons with designated values or with varied values that were punched out as they were used. These coupons were good only at the issuing company store. More importantly, they were not transferable. As a result, the discounting of scrip became a common practice. Some merchant or individual would buy the scrip from the miner paying about seventy-five cents to the dollar. Then the “middleman” would turn in the scrip to the issuing company and receive about ninety cents in value. Many merchants began accepting scrip for the goods they sold at only twenty-five cents to the dollar! This was the case in Fentress County, Tennessee where scrip was discounted 25% to 50%. (*1)
“We cannot exchange. . . (the checks) with farmers or others. A farmer comes to my door. He has produce, just what I need. He sells for thirty cents. He also wants something out of the store and would willingly give me the produce and take the “check” on the store but the store will not receive the check from him so he is obliged to sell his produce to the store, and I am forced to pay the store forty cents for the article I could have bought for thirty cents. . .” Athens County Correspondent: Source: Ohio Bureau of Labor Statistics, First Annual Report (Columbus, Ohio: 1878), 156–192. (*6)
Scrip Minted From Metals
In the early 1900s companies started to use scrip that was minted from metals particularly brass, copper and aluminum. This scrip was used just like money. In many places scrip was even used as money between private individuals. Unlike earlier forms of scrip the metal tokens were transferable. When people felt confident in the longevity and power of the coal company they also felt the same about the scrip. However, we can be sure that scrip was valued less than cash money. For cash could be spent anywhere.
The first company to file a patent for minted tokens was The Childs Company of Chicago, Illinois in 1899. Ten years later, in 1909 The Ingle Company (which later became the Ingle Schierloh Company of Dayton, Ohio) filed a similar patent. In 1919 the Insurance Credit System joined in followed by many other companies. Wiley Osborne bought the Murdock Stamp and Specialty Co. in 1920 and then in 1924 the acquired Insurance Credit System. Osborne combined the companies and renamed it the Osborne Register Company (ORCO). After Dayton, Ohio based Ingle Schierloh Co. shut down ORCO grew to become “the king of the scrip biz”.
Most coal camps were in very isolated regions. The coal companies built entire towns around their mining operations. The center of the community was the company store. Most often the company store was the only store. People had one choice and only one selection. If the company store didn’t have it they probably couldn’t get it. It was difficult to travel the long distances to other places where items could be bought. This wasn’t made easier by the fact that you were paid in scrip which could only be spent at a particular store.
Even so, there were many poor souls who looked up to the coal company and aspired to be a part of it all. People who had nearly nothing and to whom the hope and promise of a job and a place to live meant everything to them. How many young men went to the coal camps to get a job and a house for their wife and children? Unfortunately, they most likely found themselves in worse condition. Working to pay off an ever growing debt to the company. Trapped in a way of life
Typically, when a man went to work for the coal company, he had to wait anywhere from 1 to 2 months to get his first pay check. Now, anyone can understand how difficult that can be. The coal company would often loan money to the new workers in the form of paper scrip. This scrip could be used only by the receiver, spent only at the company store and was considered to be a loan against future pay checks. Often, by the time pay day came around, a miner would owe a great deal of his wages to the company store.
Here is an actual pay envelope for a miner by the name of A. Baughman. The pay period was March 1 to 15, 1895. Mr. Baughman loaded 79 cars, each of which was 5 tons. He was paid 40 cents per car for a total of $31.60.
Looking at the details on the pay envelope we see that Mr. Baughman owed the company store $17, his rent for the 2 week period was $3 and tool sharpening was 25 cents per pay period. This would have left his net pay at $11.35 however, it appears that he owed the company doctor $9.10.
In the end Mr. Baughman found $2.25 in his pay envelope. All we have is this miniscule glance into this man’s work experience but I imagine that in the next week a much larger portion of his check would be owed to the store. With only $2.25 to stretch at the company store until next pay day he is bound to ask for more credit.
In the 1950’s many states began to outlaw the use of scrip as a method to pay wages and it wasn’t long until scrip disappeared from use.
The history behind these interesting pieces of metal is fascinating. Learning about the use of scrip and how it affected family and communities in the early days of the Appalachia’s helps us to better understand our past.
Written by Beauregard J. Finnegan Esq. & Copyright 2014 CoinCollectorGuide.com
1. Scrip-A Coal Miner’s Credit Card
2. Coal Mine Scrip by John Freddie Wilson
3. Appalachian History Company store Scrip
4. Coal Wood, West Virginia
5. Miners Wages
6. “Store Pay Is Our Ruin”: The Tyranny of the Company Store