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Concept
Scrip
Summary
A scrip (or chit in India) is any substitute for legal tender. It is often a form of credit. Scrips have been created and used for a variety of reasons, including exploitive payment of employees under truck systems; or for use in local commerce at times when regular currency was unavailable, for example in remote coal towns, military bases, ships on long voyages, or occupied countries in wartime. Besides company scrip, other forms of scrip include land scrip, vouchers, token coins such as subway tokens, IOUs, arcade tokens and tickets, and points on some credit cards.
Scrips have gained historical importance and become a subject of study in numismatics and exonumia due to their wide variety and recurring use. Scrip behaves similarly to a currency, and as such can be used to study monetary economics.
A variety of forms of scrip were used at various times in the 19th and 20th centuries.
Company scrip is a substitute for currency to pay a company's employees.
In United States mining or logging camps where everything was owned and operated by a single company, scrip provided the workers with credit when their wages had been depleted. These remote locations were cash poor. Workers had very little choice but to purchase food and other goods at a company store. In this way, the company could charge enormous markups on goods, making workers completely dependent on the company, thus enforcing a form of loyalty to the company. Additionally, while employees could exchange scrip for cash, this could rarely be done at face value. This kind of scrip was valid only within the settlement where it was issued. While store owners in neighboring communities could accept the scrip as money, they rarely did so at face value, as it was worth less.
When U.S. President Andrew Jackson issued his Specie Circular of 1836 due to credit shortages, Virginia Scrip was accepted as payment for federal lands.
In the 19th-century, the federal government in Western Canada offered money scrip (valued at 240) or land scrip, valued at or , to Métis people in exchange for their Aboriginal rights.
Official source
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