Coal Scrip Money

Currency throughout the world comes in many forms and in the early nineteenth century, firms in remote coal producing communities developed "coal scrip." These towns were remotely isolated from the extended population and as a result, the money supply became scarcely unavailable. As mentioned in the article titled "Scrip- A Coal Miner's Credit Card," coal firms soon created scrips as a means of exchange in place of hard money to employees (National Parks Service). This form of currency was used in paper as coupons or metal rounds called tokens (National Parks Service). The downfall of coal scrip is attributed to circulatory limitation, changes in federal and state laws and increased economic changes.

Similar to the function of modern society's credit card, coal scrip was an advance against unearned wages of the coal miner. However, this system in coal communities was extremely limited as the scrip was only usable by the employee who received issuance. Although employees could exchange scrip for cash, it was rarely done at apparent value (National Parks Service). Scrip became redeemable only within the confounds of that area or town where it was issued. Store owners in neighboring communities could opt to accept the scrip as currency but they seldomly provided a fair exchange which limited the variety of obtainable good and services to the consumer (National Parks Service).

The United States Supreme Court ruled in 1918 that scrip was transferable and redeemable in cash (National Parks Service). Opposition to the ruling soon arised as coal operators in a number of states lobbied to have laws passed forbidding transferability (National Parks Service). Eventually, legistlation in Kentucky passed the transferabilty law in 1932, but its effect was minimal towards preventing discounting (National Park Service). Paper scrip was replaced by metal tokens which stated their redemption in cash or merchandise, but also claimed that they were "nontransferable"(National Parks Service). As a result, the production and circulation of coal scrip slowly degressed towards extinction.

As America experienced increasing GDP economic growth, it soon allocated monetary resources towards technological investments which transformed the coal industry. As mentioned in the article titled "Coal Miners and Their Communities" by Rhonda Coleman, with advanced environmental-friendly burning fuels such as oil, gas and hydroelectric power, the demand for coal quickly declined (Coleman). New physical capital and technological knowledge enhanced the mechanization of the mines thus increasing production and cutting the coal mine work force tremendously. Unions soon utilized its authority to increase wages and miners began to make more money than they could possibly envision (Coleman). The use of automobiles, a luxury previously unknown in the coal towns became accessible and filled the remote communites (Coleman). The miner had more money and greater freedom to go beyond the bounds of coal town. This newfound accessibilty became the catalyst of the coal scrip demise.  

As one can see, the peak of the coal industry created the establishment of coal communities and essentially a "monoply" town with the firm possessing sole authority and the miners with minimal substitutes. By the end of the Great Depression, expansion of coal cities and scrip had virtually ceased as the nation changed due to new technology and advanced production (Coleman). The limitation once held by coal scrip decreased as people stepped outside of their boundaries to experience a new abundant life which excluded coal scrip currency. Accessibilty, new competitive markets, advanced production, new laws and technology became the end of the coal scrip era.

Works Cited

1. "Scrip- A Coal Miner's Credit Card." National Parks Service. National Parks Service, 29 June 2013. Web 30 June 2013. http://www.nps.gov/biso/historyculture/scrip.htm
2. Coleman, Rhonda Janney. "Coal Miners and Their Communities in Southern Appalachia." West Virginia Historical Society Quarterly. Web. 30 June 2013.  http://www.wvculture.org/history/wvhs1503.html.