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Old 05-12-2012, 07:40 AM
ralph124c ralph124c is offline
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Circulation of "Scrip/IOU" Currencies During The Great Depression?

Years ago I read that many farmers and tradesmen would accept "scrip" currency during the depression. The Great Depression (1929-1941) was a time of severe deflation-which meant that small farmers and business owners had a hard time getting the credit they needed to run their businesses. As the money supply shrank, prices dropped, and the amount of cash in circulation dropped.
In an effort to provide credit, people would write out their own "fiat" currency-this was usually hand-written, though I understand that some was printed up.
In any event, wasn't such currency illegal? And, did significant amounts of it actually circulate in rural areas of the USA?
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Old 05-12-2012, 08:05 AM
Ruminator Ruminator is offline
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Originally Posted by ralph124c View Post
In any event, wasn't such currency illegal?
Would you consider gift certifcates and gift cards to also be illegal?
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Old 05-12-2012, 10:01 AM
Exapno Mapcase Exapno Mapcase is online now
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Scrip.
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Old 05-12-2012, 02:07 PM
Cardinal Cardinal is offline
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As Cecil points out in one of his old columns from one of the books, you can agree on any exchange of legally-owned items you want. You can take an IOU, trade a jet ski for a roofing job, etc. You just can't claim that your scrip is US currency that was created by the federal government.
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Old 05-12-2012, 05:29 PM
samclem samclem is offline
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Speaking stricly about the Depression in the US of the 1930s, there's a nice catalogue of "depression script" which I have at work. Many, if not most cities/counties in the US were broke on any given week. They issued "script" which was usually printed, not hand written. It was to be redeemed as soon as things got back to normal. Some of these notes are quite scarce, some are incredibly still common.

As far as "much of it" circulating in rural America, I doubt it. Certainly not for any extended period.

Last edited by samclem; 05-12-2012 at 05:39 PM..
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Old 05-12-2012, 05:29 PM
kunilou kunilou is offline
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It wasn't just rural areas. Entire states, like Louisiana and Wisconsin, issued scrip, as well as big cities like Cleveland. I'm talking about government-issued scrip. In addition, merchant/private-issue scrip was widely circulated in places like Newark and Chicago.

And it's not a lot different from me taking my California IOU and trading it to you in exchange for goods or services, then you trading it to someone else who eventually gets paid real money by California.
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Old 05-13-2012, 11:38 AM
ralph124c ralph124c is offline
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Originally Posted by kunilou View Post
It wasn't just rural areas. Entire states, like Louisiana and Wisconsin, issued scrip, as well as big cities like Cleveland. I'm talking about government-issued scrip. In addition, merchant/private-issue scrip was widely circulated in places like Newark and Chicago.

And it's not a lot different from me taking my California IOU and trading it to you in exchange for goods or services, then you trading it to someone else who eventually gets paid real money by California.
Fascinating-the state of California is reverting to barter! Can I pay my tuition at UCLA with IOUs?
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Old 05-14-2012, 02:21 PM
Gatopescado Gatopescado is offline
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USC Grad here....

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Originally Posted by ralph124c View Post
Can I pay my tuition at UCLA with IOUs?
You certainly get what you pay for!

More-or-less unrelated: I spent time in Brazil in the early 80's, a period of serious inflation. People would use personal checks like cash, and pass them from person to person to person several times before they finally ended up in a bank. Never made much sense to me, as every day it got worth less and less. Also the potential for fraud seemed extream.

But it happened all the time. Strange.

Last edited by Gatopescado; 05-14-2012 at 02:22 PM.. Reason: I put that in there on purpose!
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