Today, money is issued by the federal government, and companies pay their employees by check or cash. But it wasn’t always like that. Until fairly recently, many companies issued their own notes to pay employees, known as “company scrip.” Glasshouse money is a good example.
Until the federal government began producing paper currency in 1861, bank notes were issued by local and state banks. Glasshouses, amongst others, often issued their own bills which could be redeemed at the company store for goods or cash. According to the Corning Museum of Glass, “The Manufacturers and Farmers Bank of Wheeling, Virginia opened in 1851, and also issued bills that illustrated glassblowing. During this time there were several glasshouses in town, including the Union Glass Works; Barnes, Hobbs and Company; and Sweeney and Company. The owners of one or more of these factories may have been directors of the bank or stockholders. The Philadelphia and Wheeling notes were issued on the funds of the bank, not the funds of the glass companies.”
Scrip served many purposes, including making payment more stable for companies in rural locations that might not have the cash flow of larger or more urban industries. It also served to tie employees to the company; scrip lost value when exchanged for cash, and goods in the company store (often the only store for miles around) were marked up. This system ensured that workers would not be able to save enough to move or look for other work; it was not unusual for multiple generations of a single family to work for the same company.
Though the printing of bills ceased after the government began issuing federal currency, companies continued using tokens and vouchers well into the 20th century. This scrip token from the Olga Coal Company in Coalwood, WV (familiar to anyone who’s seen the movie October Sky) is dated 1945. As late as 2008, the Mexican Supreme Court ruled that the Mexican subsidiary branch of Wal-Mart must cease paying workers in Wal-Mart vouchers.
[Featured image credit Corning Museum of Glass. Used under fair use.]