# Does any industrialized nation allow "competing currencies"? **URL:** \ **Category:** Factual Questions\ **Created:** [October 19, 2011, 7:09am UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122 "2011-10-19T07:09:42Z")\ **Posts on this page:** 19\ **Page:** 2
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [October 19, 2011, 6:50pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/21 "2011-10-19T18:50:35Z")
I believe it was a key bit in “The Immigrants” or its sequel, that the wanderers return home, having risked their lives (and some died) in the Old West, only to find the money they had sacrificed so much for is worthless banknote script from a defunct bank. IIRC the “Sixteen Tons” song “I owe my soul to the company store” celebrates the fact that many coal companies in the Appalachians also pulled the same trick with company script. Because of the pricing, the workers could never get out of debt from the company and so were virtual slaves. Free enterprise at its best. ---
**Author:** ![Machine\_Elf](https://avatars.discourse-cdn.com/v4/letter/m/82dd89/32.png) [@Machine\_Elf](https://boards.straightdope.com/u/Machine_Elf)\ **Post date:** [October 19, 2011, 6:57pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/22 "2011-10-19T18:57:04Z")
> [@Smapti](#): > > [As mentioned in this thread](http://boards.straightdope.com/sdmb/showthread.php?p=14372278#post14372278), it’s a belief of Ron Paul and his cronies that legal tender laws should be abolished and anyone should be allowed to set up their own currency. 😕 You already can set up your own currency system. You can’t make anyone accept it, but you can certainly set it up. FWIW, [Bitcoin](http://en.wikipedia.org/wiki/Bitcoin) seems to be having some success as an internet-based alternative to the dollar. ---
**Author:** ![constanze](https://avatars.discourse-cdn.com/v4/letter/c/f9ae1b/32.png) [@constanze](https://boards.straightdope.com/u/constanze)\ **Post date:** [October 19, 2011, 7:39pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/23 "2011-10-19T19:39:34Z")
> [@code\_grey](#): > > it seems that [rentenmark](http://en.wikipedia.org/wiki/German_Rentenmark) was briefly a “competing currency” in parallel to the legal tender but totally worthless Deutsche mark in the industrialized nation of Germany. Subsequently deutsche mark was scrapped in favor of legal tender reichsmark but rentenmark bills continued to circulate without trouble because they were backed by real assets and not by “full faith and credit” of a gang of politicos. No, it wasn’t parallel (you misread your own cite). It was introduced to replace the Deutsche Mark at hyperinflation and based on a different basis - the name Rente means pension (funds). But it was issued by the same state and “politicos” gang as the old Deutsche Mark. The [Reichsmark](http://en.wikipedia.org/wiki/Reichsmark) officially replaced the Rentenmark, because the Rentenmark had been intended as temporary currency for this reason. > [@](#): > > To stabilize the economy and to smooth the transition, the Papiermark was not directly replaced by the Reichsmark, but by the Rentenmark, an interim currency backed by the Deutsche Rentenbank, owning industrial and agricultural real estate assets. The Reichsmark was put on the gold standard at the rate previously used by the Goldmark, with the U.S. dollar worth 4.2 ℛℳ. That the Deutsche Mark went through hyperinflation was NOT because a “gang of politicos” devalued it. The decision to put the Deutsche Mark away from the Gold Standard was [made because of the war](http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic). In the first years after, the Mark and the economy did stabilise again for a short time, until demands for reparation exceeded available amount of total money. Generally, hyperinflation in the 20s given the state of economy, reparations, unstable governments (not enough democrats as citizens) has got nothing to do with the situation today or the question of whether gold as basis for money is a good idea. ---
**Author:** ![constanze](https://avatars.discourse-cdn.com/v4/letter/c/f9ae1b/32.png) [@constanze](https://boards.straightdope.com/u/constanze)\ **Post date:** [October 19, 2011, 7:42pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/24 "2011-10-19T19:42:12Z")
> [@Little\_Nemo](#): > > One disadvantage of private currency is it offers big companies an opportunity to abuse its employees. George Pullman used to pay his employees in his own script. This was only good at the company stores he owned. So Pullman not only controlled how much his workers were paid, he also controlled how much they were charged for food and other goods. Pullman also required his workers to live in buildings they rented from him. How’s the law on that today: are employers generally forbidden from paying workers in their own script, or is it simply required to announce it before so that workers can choose freely? After all, employers can offer non-monetary compensations, like a company car, stock options or even healthcare in the US, legally. So what protections are in place against this practice today, given the imbalance of the labour market? ---
**Author:** ![leahcim](https://avatars.discourse-cdn.com/v4/letter/l/b4bc9f/32.png) [@leahcim](https://boards.straightdope.com/u/leahcim)\ **Post date:** [October 19, 2011, 7:53pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/25 "2011-10-19T19:53:55Z")
> [@Machine\_Elf](#): > > FWIW, [Bitcoin](http://en.wikipedia.org/wiki/Bitcoin) seems to be having some success as an internet-based alternative to the dollar. If you count falling more than [90%](http://arstechnica.com/tech-policy/news/2011/10/bitcoin-implodes-down-more-than-90-percent-from-june-peak.ars) between June and now as “some success”. ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [October 19, 2011, 7:54pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/26 "2011-10-19T19:54:49Z")
> [@Little\_Nemo](#): > > George Pullman used to pay his employees in his own script. > [@md2000](#): > > only to find the money they had sacrificed so much for is worthless banknote script from a defunct bank. > > … coal companies in the Appalachians also pulled the same trick with company script. > [@constanze](#): > > How’s the law on that today: are employers generally forbidden from paying workers in their own script Nitpick: I believe the term is _scrip_, not script. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [October 19, 2011, 8:01pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/27 "2011-10-19T20:01:33Z")
> [@Acsenray](#): > > Nitpick: I believe the term is _scrip_, not script. You’re correct. I used the wrong word. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [October 19, 2011, 8:05pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/28 "2011-10-19T20:05:50Z")
> [@code\_grey](#): > > rentenmark bills continued to circulate without trouble because they were backed by real assets and not by “full faith and credit” of a gang of politicos. You think that a national government lacks real assets to back its currency? Who do you think has more real assets, the United States of America or the First Bank of Podunk? I’d rather have American Dollars than Podunk Dunkets. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [October 19, 2011, 8:13pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/29 "2011-10-19T20:13:42Z")
> [@constanze](#): > > How’s the law on that today: are employers generally forbidden from paying workers in their own script, or is it simply required to announce it before so that workers can choose freely? After all, employers can offer non-monetary compensations, like a company car, stock options or even healthcare in the US, legally. So what protections are in place against this practice today, given the imbalance of the labour market? I don’t know what the law is on the subject. But I can tell you it happened to me once. I worked for New York State. Back in the eighties there was a budget battle and the government shut down when the legislature refused to extend the emergency budget. All fo us government employees were told we should keep working. Come payday we were given what were essentially IOU’s saying that we would get paid. As it turned out most banks grudgingly accepted them at face value and allowed us to cash them. The state got its act together and passed a budget and redeemed all the IOU’s. But there were a lot of unanswered questions. What would have happened if the banks had refused to accept the IOU’s? What would have happened if the state had issued them for several weeks instead of only two weeks? What would have happened if it had been a private business doing this instead of the state government? What would have happened if the banks had accepted the IOU’s and the government then defaulted on them? ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 19, 2011, 8:52pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/30 "2011-10-19T20:52:33Z")
I expect that payment exclusively in scrip would fall afoul of minimum wage laws. You can offer scrip as an extra benefit if you’d like, but you’d need to pay the minimum in US dollars. ---
**Author:** ![robert\_columbia](https://avatars.discourse-cdn.com/v4/letter/r/e79b87/32.png) [@robert\_columbia](https://boards.straightdope.com/u/robert_columbia)\ **Post date:** [October 19, 2011, 10:16pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/31 "2011-10-19T22:16:52Z")
> [@md2000](#): > > Canadian establishments frequently used to have an established policy - accept $US; in tourist areas or large stores, the exchange rate even used to be posted. When the exchange rate was US92cents for $1C, there would be signs “US exchange 95-cents”. It comes from having only 1 neighbour, 10 times the size, usually less than an hour’s drive away. My wife worked at several establishmens where they even had a separate deposit slip entry for US currency (bills only). Another small business, the owner pocketed the US currency for his vacations, which he had acquired at a 10% markup when the dollar was in the 75-cent range. > > Of course, now that our currencies are pretty much even, he exchange rate is a lot less favourable. (Because the banks will take their 2 to 5% also.) And it’s not really multiple currencies, so much as US cash tendered is usually translated to Canadian equivalent before the transaction is accounted for, then change is in Canadian cash. Just, some Point-of-Sale systems had a separate button for “US cash in” to do the conversion automatically. I was able to use US currency in Canada. At the time, the general rate was 1-1 and they gave you back Canadian change. Rather easy, though perhaps not the cheapest route. I have encountered small change from both countries (US and Canada) on the other side of the border. Generally, nobody seems to mind if it’s a small amount (say, a quarter or less). ---
**Author:** ![An\_Gadai](https://avatars.discourse-cdn.com/v4/letter/a/d6d6ee/32.png) [@An\_Gadai](https://boards.straightdope.com/u/An_Gadai)\ **Post date:** [October 19, 2011, 10:53pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/32 "2011-10-19T22:53:31Z")
> [@bucketybuck](#): > > They pop up sometimes in Northern Ireland, and I have never had a problem spending them. The problem is not spending them. ---
**Author:** ![code\_grey](https://avatars.discourse-cdn.com/v4/letter/c/f4b2a3/32.png) [@code\_grey](https://boards.straightdope.com/u/code_grey)\ **Post date:** [October 19, 2011, 11:28pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/33 "2011-10-19T23:28:21Z")
> [@constanze](#): > > No, it wasn’t parallel (you misread your own cite). It was introduced to replace the Deutsche Mark at hyperinflation and based on a different basis - the name Rente means pension (funds). But it was issued by the same state and “politicos” gang as the old Deutsche Mark. > > The [Reichsmark](http://en.wikipedia.org/wiki/Reichsmark) officially replaced the Rentenmark, because the Rentenmark had been intended as temporary currency for this reason. > > That the Deutsche Mark went through hyperinflation was NOT because a “gang of politicos” devalued it. The decision to put the Deutsche Mark away from the Gold Standard was [made because of the war](http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic). In the first years after, the Mark and the economy did stabilise again for a short time, until demands for reparation exceeded available amount of total money. > > Generally, hyperinflation in the 20s given the state of economy, reparations, unstable governments (not enough democrats as citizens) has got nothing to do with the situation today or the question of whether gold as basis for money is a good idea. I think you should a) read the article more carefully and b) read up on the history of your very own country. RE a, quote: > [@](#): > > The Rentenmark was only a temporary currency and was not legal tender. It was, however, accepted by the population and effectively stopped the inflation. The Reichsmark became the new legal tender on 30 August 1924, equal in value to the Rentenmark. So if rentenmark was not legal tender, what **was** legal tender? Did they have no legal tender whatsoever? Or was reichsmark legal tender, like I said? RE the causes of hyperinflation, right, all because of the war :rolleyes:. The graph of the dollar exchange rate in the [wikipedia article](http://en.wikipedia.org/wiki/Inflation_in_the_Weimar_Republic) clearly shows that in the first two years after the war the currency devaluated by 90%. Well, maybe, reasonable thing, what with the consequences of the war, revolts and reparations. Then in the next 3 years the currency value fell by a factor of 10^11 (!!). The [del]devil[/del] war made them run the printing press at truly German level of productivity. And here is another quote: > [@](#): > > In January 1923 French and Belgian troops occupied the Ruhr, the industrial region of Germany in the Ruhr valley to ensure that the reparations were paid in goods, such as coal from the Ruhr and other industrial zones of Germany, because the Mark was practically worthless. Inflation was exacerbated when workers in the Ruhr went on a general strike, and the German government printed more money in order to continue paying them for “passively resisting.” Maybe those Ruhr workers should have asked for in-kind payments from the politicos instead, if the **war** kept driving them to sink the national currency deeper and deeper. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [October 20, 2011, 1:01am UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/34 "2011-10-20T01:01:29Z")
And if they had asked, what do you think the politicos would have told them? ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [October 20, 2011, 1:58am UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/35 "2011-10-20T01:58:44Z")
> [@robert\_columbia](#): > > Generally, nobody seems to mind if it’s a small amount (say, a quarter or less). Except for Phoebe Buffay at Christmas time. ---
**Author:** ![Throatwarbler\_Mangrove](https://avatars.discourse-cdn.com/v4/letter/t/8c91f0/32.png) [@Throatwarbler\_Mangrove](https://boards.straightdope.com/u/Throatwarbler_Mangrove)\ **Post date:** [October 20, 2011, 12:36pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/36 "2011-10-20T12:36:28Z")
> [@Smapti](#): > > [As mentioned in this thread](http://boards.straightdope.com/sdmb/showthread.php?p=14372278#post14372278), it’s a belief of Ron Paul and his cronies that legal tender laws should be abolished and anyone should be allowed to set up their own currency. > > I’m rather baffled by this idea, as I can’t think of a single example of it in practice. The closest thing I can think of is Third World states with failed economies where dollars or euros are the de facto currency, or Middle Age mercantilists where it didn’t matter which king’s face was on the coin as long as it was gold or silver. > > Is there some nation i’m not thinking of that practices this kind of monetary policy? > **[Free banking](https://en.wikipedia.org/wiki/Free_banking)** > > Free banking is a monetary arrangement where banks are free to issue their own paper currency (banknotes) while also being subject to no special regulations beyond those applicable to most enterprises. > In a free banking system, market forces control the total quantity of banknotes and deposits that can be supported by any given stock of cash reserves, where such reserves consist either of a scarce commodity (such as gold) or of an artificially limited stock of fiat money issued by a central bank... ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [October 20, 2011, 3:47pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/37 "2011-10-20T15:47:26Z")
> [@Freddy\_the\_Pig](#): > > All types of coin circulated in the Nineteenth Century; for a long time the most popular coin was the Spanish dollar. 😕 Would that be silver duros? ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [October 20, 2011, 3:54pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/38 "2011-10-20T15:54:57Z")
> [@Nava](#): > > 😕 Would that be silver duros? [Yes, _dollar_ in English, _thaler_ in German, and _duro_ in Spanish:](http://en.wikipedia.org/wiki/Spanish_dollar) > [@](#): > > The Spanish dollar (also known as the piece of eight, the real de a ocho or the eight-real coin) is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497. Its purpose was to correspond to the German thaler. … > … > The term peso was used in Spanish to refer to this denomination, and it became the basis for many of the currencies in the former Spanish colonies … . ---
**Author:** ![merrick](https://avatars.discourse-cdn.com/v4/letter/m/58956e/32.png) [@merrick](https://boards.straightdope.com/u/merrick)\ **Post date:** [October 20, 2011, 6:08pm UTC](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122/39 "2011-10-20T18:08:12Z")
> [@code\_grey](#): > > RE the causes of hyperinflation, right, all because of the war It _was_ because of the war, though not for the reasons often claimed. The bit that usually gets missed out is that Germany had funded World War 1 - the most expensive war in history to that point - by borrowing. It was shut out of the international capital markets, so almost all the money came from patriotic German citizens buying Hindenburg Bonds and the like. The Weimer Republic inherited the Imperial government’s war debts. And the political Right - representing the middle classes who had bought the bonds - insisted that the debts be honoured. Meanwhile the political Left insisted on extensive social provision, not least for the millions of demobilised soldiers, disabled veterans, war widows and orphans. The government didn’t really have the money for either, but with armed leftists and armed rightists both threatening revolution, they weren’t really in a position to say No. The result was massive budget deficits - 2-3 times anything Greece has managed recently. To cover the gap, the government borrowed as long as they could find lenders and when lending dried up they resorted to the printing presses. And the more money they printed, the more the value of the notes declined and the faster they had to run the presses to keep up. Sure, it was a self-destructive option, but so was everything else. [Previous page](https://boards.straightdope.com/t/does-any-industrialized-nation-allow-competing-currencies/600122.md?page=1)