Latest / Ridiculous History / CLASSIC: The Rise and Fall of Local Scrip: Alternative Currencies of the Great Depression

Transcript

CLASSIC: The Rise and Fall of Local Scrip: Alternative Currencies of the Great Depression · Ridiculous History

0:00
Speaker 1: Fellow ridiculous historians. This week's classic episode is hopefully aspirational
0:05
Speaker 1: for you. Have you ever run out of regular state
0:09
Speaker 1: approved currency and started to try started your own thing
0:13
Speaker 1: like ben Buck's or Nol Nichols or max Moolah.
0:18
Speaker 2: Absolutely happens every day, and given the state of the
0:22
Speaker 2: economy these days, it might be a smart thing to
0:24
Speaker 2: look into for the future. No, we're kidding, it's always
0:27
Speaker 2: a bad deal for them. What bear these notes cave
0:33
Speaker 2: the company store?
0:35
Speaker 1: Yeah, sixteen tons. Indeed, it might sound like you were saying, Nol.
0:39
Speaker 1: It might sound like a Bonker's idea in twenty twenty
0:43
Speaker 1: six outside of NFTs and crypto, But during the poorly
0:47
Speaker 1: named Great Depression, a lot of communities banded together. They
0:51
Speaker 1: couldn't trust Uncle Sam's currency, so they made up their
0:55
Speaker 1: own local currency.
0:57
Speaker 2: Yeah, and in this case it's actually not a bad idea.
1:00
Speaker 2: I don't mean to malign the whole concept. If you
1:02
Speaker 2: have like intentional communities and you agree upon what things
1:05
Speaker 2: are worth, by all means, go with God. But we
1:07
Speaker 2: are also referring to situations where folks were given very vaguely,
1:13
Speaker 2: you know, valueless currency and that they could only use
1:17
Speaker 2: at certain places, and it was really more way of
1:19
Speaker 2: controlling people than empowering them.
1:21
Speaker 1: Let's roll the tape. Yeah, Ridiculous History is a production
1:28
Speaker 1: of iHeartRadio. You know, whether you're reading the news headlines
1:57
Speaker 1: in nineteen sixty three or twenty nineteen, quickly realized the
2:01
Speaker 1: world is ending for someone somewhere every day. That's a
2:05
Speaker 1: heavy way to start, but we're going somewhere with it.
2:08
Speaker 2: Hi, I'm Ben. Hey, I'm no, it's true, Ben. I mean,
2:11
Speaker 2: we think about the Great Depression, right, but if there's
2:13
Speaker 2: a Great Depression, surely there must be dozens, if not hundreds,
2:17
Speaker 2: of minor depressions, many depressions, microdepressions, recessions.
2:22
Speaker 1: He is a word that's often bandied about. And you know,
2:26
Speaker 1: depending on where you grew up, you probably heard various
2:30
Speaker 1: pundits in your country or province or your state claiming
2:34
Speaker 1: that a depression rivaling the Great Depression was looming imminently
2:39
Speaker 1: on the horizon, looming. Indeed, like our own super producer
2:44
Speaker 1: Casey Pegram, who looms large, the man has swag. And
2:49
Speaker 1: speaking of swag, let's talk a little bit about the
2:52
Speaker 1: nineteen twenties in the United States, also called the Roaring twenties, right, the.
2:57
Speaker 2: Gilded Age, not like all the time.
3:02
Speaker 1: Because at this time there was a woeful divide between
3:07
Speaker 1: the haves and the have nots in the US, and
3:12
Speaker 1: everything seemed like, depending on your position in society, everything
3:16
Speaker 1: seemed like it was growing at this frenetic, hectic place
3:20
Speaker 1: until that is, the stock market crashed in October of
3:23
Speaker 1: nineteen twenty nine.
3:24
Speaker 2: Well, what's the thing, I mean? There was this sense
3:26
Speaker 2: that everything was just honky dor though. Well to do
3:28
Speaker 2: but spend them money handover fist on luxury goods and
3:32
Speaker 2: dancing and all of that stuff. And the people that
3:35
Speaker 2: had less money credit was relatively easy to come by.
3:38
Speaker 2: They were spending hand over fist with money they did
3:40
Speaker 2: not actually own.
3:41
Speaker 1: And as you can see, this situation was unsustainable. Eventually,
3:46
Speaker 1: the bubble, as bubbles do, went and our country entered
3:52
Speaker 1: what is called today the Great Depression. By nineteen thirty two,
3:56
Speaker 1: the economy contracted by thirty one percent and an estimated
4:01
Speaker 1: thirteen million people were left unemployed. For comparison, that's like
4:07
Speaker 1: twenty five percent.
4:08
Speaker 2: Of the workforce.
4:10
Speaker 1: Franklin Delano Roosevelt took office in nineteen thirty two. He
4:14
Speaker 1: started something called the New deal, which was designed to
4:18
Speaker 1: boost federal spending, create government jobs for people who couldn't
4:22
Speaker 1: get private sector jobs, and ultimately led to some really
4:27
Speaker 1: amazing cultural progress and great public works here in the US.
4:31
Speaker 1: But today's story is not about that. Today's story is
4:35
Speaker 1: about how people managed to get by when they found
4:39
Speaker 1: themselves in a situation where the bank they counted on
4:43
Speaker 1: was closed. The currency that they were so used to,
4:47
Speaker 1: the US dollar, was gone.
4:49
Speaker 2: Yeah, like poof, it's gone overnight. This thing that we
4:54
Speaker 2: thought we could rely on, that would always be there
4:56
Speaker 2: for us when we woke up the next morning was
4:58
Speaker 2: now really shown to be this sort of ephemeral idea.
5:02
Speaker 2: And the Great Depression was worldwide in its scope. It
5:08
Speaker 2: wasn't just I mean, you know, it's a chain reaction
5:10
Speaker 2: because everything's interconnected because of trade. And this is how
5:14
Speaker 2: the US Department of Commerce characterized the Great Depression in general.
5:20
Speaker 2: It has like a list that they officially used to
5:23
Speaker 2: break this down, and there were nine points, and let's
5:26
Speaker 2: let's split them up in let's do it so. Number
5:29
Speaker 2: one an unemployed population estimated at over twelve million. This
5:33
Speaker 2: of course is in the United States portion of it.
5:36
Speaker 1: Number two, a serious agricultural situation resulting from excessive production,
5:41
Speaker 1: ruinous ruinously low prices and large debts.
5:44
Speaker 2: Number three, a financial and credit system in grave danger
5:48
Speaker 2: of collapse.
5:49
Speaker 1: Number four, a large internal debt on the government side.
5:53
Speaker 2: Number five almost insurmountable barriers to foreign trade.
5:57
Speaker 1: Number six A quote perplexing foreign debt situation.
6:01
Speaker 2: I love that word. Yeah, it's also very vague, but
6:03
Speaker 2: it just means like, huh, what are we gonna do
6:05
Speaker 2: about this? This is quite perplexed.
6:07
Speaker 1: It also just candidly sounds like somewhat at the Department
6:10
Speaker 1: of Commerce said, how can we explain this in one sentence? Yeah,
6:15
Speaker 1: because we can't do the whole five page paper, right,
6:17
Speaker 1: They really.
6:18
Speaker 2: Are going for a brevity kind of thing. Here a
6:19
Speaker 2: number seven, an unbalanced federal budget.
6:22
Speaker 1: Number eight, disorganized state and municipal finances.
6:25
Speaker 2: Number nine, increasing disorder, and an almost complete lack of
6:30
Speaker 2: confidence on the part of the people. That's kind of
6:33
Speaker 2: key here, isn't it. Right? See? This is this is
6:36
Speaker 2: the problem.
6:37
Speaker 1: A lot of the larger financial things we're talking about
6:42
Speaker 1: wouldn't occur to a lot of the people in the
6:46
Speaker 1: US on the ground at the time. You know what
6:48
Speaker 1: I mean, Say, oh, well, foreign debt is complicated.
6:53
Speaker 2: Excuse me.
6:54
Speaker 1: Four in debt is perplexing. But if you are, you know,
6:58
Speaker 1: living in an agriculture community somewhere in Oklahoma, you will
7:03
Speaker 1: be more concerned with what is happening in your neck
7:06
Speaker 1: of the global woods. So the problem that people were having,
7:12
Speaker 1: in addition to all this economic uncertainty, this lack of
7:16
Speaker 1: faith in the economic system, and the very difficult situation
7:22
Speaker 1: of trying to find a job when you were unemployed,
7:25
Speaker 1: the thing that really bugged them is that there was
7:27
Speaker 1: very little physical money in the hands of people. And
7:32
Speaker 1: because people didn't know, Like if you had, you know,
7:35
Speaker 1: ten one dollar bills and you thought it might be
7:38
Speaker 1: months or even years before you ever saw any physical
7:40
Speaker 1: currency again, you wouldn't use that. You would try to barter,
7:44
Speaker 1: you would try to borrow, you would hoard the physical
7:48
Speaker 1: currency you had, and that slows down the economic circulatory system.
7:53
Speaker 2: This is kind of the era of stuffing your mattress
7:56
Speaker 2: with cash, keeping it on hand. Let's let's do a
7:59
Speaker 2: little metaphor, is that we can all understand twinkies. Okay,
8:02
Speaker 2: let's say twinkies are currency. Uh, if if everyone's holding
8:06
Speaker 2: onto the twinkies and it's eating themselves with their supply
8:09
Speaker 2: of twinkies. Little by little, we don't see twinkies in
8:11
Speaker 2: circulation anymore than twinkies kind of lose their value or
8:15
Speaker 2: lose their meaning in terms of the way it's interconnected
8:18
Speaker 2: in our society. Right, such is the case with cash.
8:22
Speaker 2: So you have to replace twinkies with something else. You
8:25
Speaker 2: have to replace cash with something else because no one's
8:27
Speaker 2: feeding it back into the system. So what you have
8:30
Speaker 2: to do you have to create a new delicious snack.
8:32
Speaker 1: But wait, someone might say, what about banks, isn't it
8:35
Speaker 1: their job to keep money flowing? That's that's a good
8:39
Speaker 1: that's a good point.
8:40
Speaker 2: What about the hostess company? Why aren't they putting more
8:42
Speaker 2: twinkies out into the world.
8:44
Speaker 1: So the problem is that these banks can only do
8:47
Speaker 1: their job when they are open, and a lot of
8:50
Speaker 1: them close permanently. It was both an effect of the
8:55
Speaker 1: early stage of the Great Depression and it was an
8:58
Speaker 1: exacerbating factor. It got so bad that in nineteen thirty three,
9:03
Speaker 1: President Roosevelt declared a banking holiday quote unquote. This shut
9:08
Speaker 1: down the entire national banking system. But between nineteen thirty
9:13
Speaker 1: and that date, in March nineteen thirty three, about half
9:16
Speaker 1: the banks in the United States had either permanently closed
9:21
Speaker 1: or merged with others, and the ones that were still
9:23
Speaker 1: around cut back their deposits and loans, and they also started,
9:29
Speaker 1: you know, basically hoarding money. So everybody's hoarding cash, and
9:33
Speaker 1: of course it makes total sense, you know, without getting
9:38
Speaker 1: to personal. A lot of my family is from rural
9:43
Speaker 1: Appalachia or Appalachia however you prefer to say it. And
9:47
Speaker 1: I had relatives who were who still didn't trust still
9:52
Speaker 1: didn't trust banks, which was crazy growing up with those people.
9:56
Speaker 1: And yes they were older, but they did have stories about,
9:59
Speaker 1: you know, burying stuff in the ground or hiding it
10:03
Speaker 1: in a creek or a creek somewhere and then coming
10:05
Speaker 1: back and finding it years later. The problem is that
10:10
Speaker 1: when no one is spending money and money anyway, the
10:15
Speaker 1: concept of economy is arguably a religion, but money is
10:19
Speaker 1: an article of faith, right and when no one believes
10:21
Speaker 1: in it, then it loses its social value. So this
10:26
Speaker 1: causes deflation. The money's not in the system, no one
10:30
Speaker 1: if people probably have some cash stashed away somewhere, but
10:33
Speaker 1: they're never going to touch it, and with less and
10:35
Speaker 1: less physical cash available, and with money worth less and
10:39
Speaker 1: less than before they did, they did as you say, no,
10:43
Speaker 1: they turned to alternatives.
10:46
Speaker 2: So, Ben, just to backcheck a little bit, we foreshadowed
10:49
Speaker 2: this idea of alternatives. I really tried to make my
10:51
Speaker 2: Twinkie metaphor work. I'm going to let that one die.
10:54
Speaker 2: I'm fine with that. I tried my best. But here's
10:56
Speaker 2: my question. Why wasn't the government pushing more money into circulation?
11:01
Speaker 2: Like why was it entirely about the individuals? Is it
11:05
Speaker 2: because it had deflated so much because of that loss
11:07
Speaker 2: of confidence that what would be the point? No one's
11:10
Speaker 2: using it anyway? What are they just going to do
11:11
Speaker 2: go door to door and say here's a bunch of money,
11:14
Speaker 2: can you please spend it?
11:16
Speaker 1: Yeah, it's a good question, right. And I didn't think
11:18
Speaker 1: that Twinkie metaphor was bad at all. I think you
11:20
Speaker 1: should beat yourself up, man.
11:22
Speaker 2: I appreciate that, Ben.
11:23
Speaker 1: So, there are a couple of intervening variables here, or
11:26
Speaker 1: contributing factors. Maybe would be a better way to say it.
11:30
Speaker 1: First is that we know from various cases throughout history,
11:35
Speaker 1: and some that happened well before the Great Depression, that
11:39
Speaker 1: when you just start minting money and you just start
11:44
Speaker 1: printing money, minting coins of printing money. Then people are
11:49
Speaker 1: aware that there's much more money out there, and that
11:52
Speaker 1: that drives these economic problems to even further extremes.
11:56
Speaker 2: It makes total sense then, so they honestly would have
11:59
Speaker 2: just doubled down on the problem. It would have devalued
12:02
Speaker 2: the currency even more, because now it's everywhere. People are
12:05
Speaker 2: literally handing it out in the streets and it's like, wow, well,
12:08
Speaker 2: I definitely don't believe in this. I need there to
12:10
Speaker 2: be some scarcity in order for me to feel like
12:12
Speaker 2: my money is worth something.
12:13
Speaker 1: You know what I learned about these kind of tendencies
12:16
Speaker 1: at a young age. I don't know if I ever
12:18
Speaker 1: told you. This is a weird. This is a weird,
12:19
Speaker 1: very short story. One time when I was when I
12:23
Speaker 1: was a little bit younger, I was I was going
12:25
Speaker 1: through some tough times in my life, and I asked,
12:28
Speaker 1: I asked my dad, who's appeared on this show. I said,
12:31
Speaker 1: I said, hey, hey, pops, do you think I'll ever
12:34
Speaker 1: actually be a millionaire? And then he said, well, you know, son,
12:39
Speaker 1: you could be a millionaire tomorrow because money is just
12:43
Speaker 1: an idea and they can always print more and then
12:46
Speaker 1: if you're a millionaire, everybody will be a millionaire. It'll
12:49
Speaker 1: be horrible, it'll be worthless. And I was like, wow,
12:52
Speaker 1: it's cold water man.
12:53
Speaker 2: Seriously, was that like does that make you feel better?
12:55
Speaker 2: Or where should that kind of like introduce a whole
12:57
Speaker 2: new existential crisis to you? A very good points. Yeah,
13:01
Speaker 2: it is a good point, but it's also kind of like,
13:03
Speaker 2: what's the point at right? Right? Why bother?
13:12
Speaker 1: So you know, maybe these people were in a why
13:15
Speaker 1: bother situation. This idea that you could not trust Uncle
13:21
Speaker 1: Sam's coupons led people to say, well, we have to
13:25
Speaker 1: we have to do something because you know, before the
13:29
Speaker 1: era of currency, the most popular form of transactional medium
13:35
Speaker 1: is going to be bartering. Just straight, I have eight twinkies,
13:39
Speaker 1: but I really want the Hostess cupcakes with the little
13:44
Speaker 1: lattice of white icing on them.
13:45
Speaker 2: Ding Dongs? Are those ding dongs? Hoes? Hoes? Little debbies?
13:50
Speaker 1: Maybe they're little debbies. They look like cupcakes, their Hostess cupcakes.
13:53
Speaker 2: I think they're ding dongs. Really, Yeah, what a terrible name.
13:56
Speaker 2: It's a really bad name. It sounds like a depression snack.
14:02
Speaker 2: Well here's I'm gonna I'm gonna ask. I'm gonna beg
14:04
Speaker 2: Casey to shive us a little a little clip of
14:06
Speaker 2: I remember that scene in Batman the movie, the motion
14:09
Speaker 2: picture Who do you Trust? Who do you trust? Can
14:11
Speaker 2: we a little Prince Q real quick? Trust? Now photos,
14:18
Speaker 2: It's time for who do you trust? Money? Money? Money?
14:22
Speaker 2: Who do you trust me? I'm giving away free money?
14:27
Speaker 2: And where is the man?
14:30
Speaker 1: He's it?
14:35
Speaker 2: Yeah, that's the scene where the Joker is passing out
14:39
Speaker 2: money and everyone's freaking out and gathering it up off
14:41
Speaker 2: the streets. Then they look at it and realize it
14:43
Speaker 2: has the Joker's face on it, sort of like your
14:45
Speaker 2: ben bucks.
14:46
Speaker 1: Right, yes, but uh, but that's the work of fiction.
14:50
Speaker 1: Ben bucks are very real.
14:51
Speaker 3: Okay, that's fair, And in a way, this episode is
14:54
Speaker 3: kind of an advertisement for for the validity of these
14:59
Speaker 3: sorts of things, because, aside from being the only kind
15:04
Speaker 3: of currency you can trust in these our modern days
15:07
Speaker 3: and uncertain times, ben bucks are something that exists with
15:11
Speaker 3: historical precedent.
15:13
Speaker 2: No, what is script? Yeah, exactly, the question of who
15:17
Speaker 2: do you trust? You don't trust Uncle Sam. You don't
15:19
Speaker 2: trust the big banks because they screwed you over, they
15:22
Speaker 2: screwed the pooch, and they might close. They might close.
15:24
Speaker 2: They're also not around. They're not there for you. Right,
15:27
Speaker 2: Who is there for you? Maybe at least at arms
15:29
Speaker 2: length is your local municipality, perhaps even as your local shopkeeper,
15:33
Speaker 2: your local economy that is there for you to see
15:35
Speaker 2: and to interact with. So scrip is cash, well, cash
15:40
Speaker 2: is even a weird kind of ephemerald term. It is
15:43
Speaker 2: currency issued by local governments or businesses or even human people.
15:49
Speaker 1: Right and an individuals.
15:50
Speaker 2: We agree that it means something because we say it does.
15:54
Speaker 2: And I don't know how they did the math where
15:55
Speaker 2: it equals certain you know, the amount of goods they
15:58
Speaker 2: had to trade or whatever, but it obviously they had
16:01
Speaker 2: to exchange it for something, and there had to be
16:03
Speaker 2: a system that gave it some value that they agreed upon. Yeah,
16:06
Speaker 2: it is all faith based, isn't it. Yeah?
16:08
Speaker 1: It's an iou and script has been used in various
16:14
Speaker 1: various ways throughout history. It reminds me of that one
16:18
Speaker 1: great song, what is it sixteen tons?
16:21
Speaker 2: How do you get company store? Yeah? Company store? Help out?
16:25
Speaker 2: A company store which is kind of inherently userless because
16:29
Speaker 2: the idea of the company store is that you're working
16:31
Speaker 2: off your debt and you're getting goods in exchange for
16:34
Speaker 2: your labor, but you're not really able to ever work
16:37
Speaker 2: your way out of debt. Because that's the line another day, older,
16:40
Speaker 2: deeper and debt.
16:41
Speaker 1: Yeah, because it's a reference to businesses wherein someone would
16:46
Speaker 1: have to they would work at this business, they would
16:49
Speaker 1: be paid not in cash, but in a script that
16:52
Speaker 1: was only usable at a store that was also owned
16:56
Speaker 1: by the business for which you were employed.
16:58
Speaker 2: Yeah. I mean, a modern day example that I think
17:01
Speaker 2: something's being done about is a lot of lift or
17:03
Speaker 2: Uber drivers will lease their car through lift or Uber
17:08
Speaker 2: and then the money they make driving for that service
17:11
Speaker 2: literally goes back to paying off that note. But it's
17:15
Speaker 2: an incredibly inflated interest rates, so it's kind of like
17:19
Speaker 2: it's a losing proposition.
17:21
Speaker 1: Although on a good note, there was recently a court case,
17:26
Speaker 1: maybe not in this country yet, where someone was an
17:31
Speaker 1: Uber driver was decreed to be an employee and not
17:34
Speaker 1: just an independent contractor. So hopefully they'll get some more rights.
17:37
Speaker 1: But that's a good you know, that's a good comparison.
17:40
Speaker 1: And think about those are the ways we name two
17:43
Speaker 1: ways uber Lyft and company stores. Those are the ways
17:47
Speaker 1: in which script can be used to hurt the employees,
17:51
Speaker 1: hurt the proletariat. But in this case, script was used
17:55
Speaker 1: to keep local economies going.
17:57
Speaker 2: Because it all goes back again, Casey, who do you trust?
18:00
Speaker 2: Just yeah, you're right, Ben, we're talking about negative examples.
18:03
Speaker 2: This was a way to help economies exist, and it
18:08
Speaker 2: was about trust. Yeah. Yeah.
18:09
Speaker 1: So, no matter how well you know everyone in your community,
18:14
Speaker 1: no matter how tight knit you are, it can be
18:17
Speaker 1: difficult to exist completely on a barter system. So let's
18:24
Speaker 1: say there's one family or one proprietor some lady or
18:28
Speaker 1: some guy owns the local general store, right, and they've
18:33
Speaker 1: been extending credit to everyone in the community, and they
18:38
Speaker 1: decide to start issuing script and their script. Let's say
18:42
Speaker 1: it's Bandarino's General Goods and Sundry, and Bandarino's General Good
18:49
Speaker 1: and Sundry issues script to the people, the good people
18:54
Speaker 1: of the town of Bandarino, and now they start using
18:59
Speaker 1: it like cash. They don't just use it at that store, though,
19:03
Speaker 1: they use it with one another. Okay, here's the problem
19:06
Speaker 1: with bartering real quick is that it can very quickly
19:10
Speaker 1: get into some intermediaries and complicated plot twists. So let's
19:15
Speaker 1: say noel that you are an eggman and that you
19:18
Speaker 1: have haggar and eggman an enthusiast. You know a poultry
19:24
Speaker 1: farmer who specializes in eggs for some reason, and you
19:29
Speaker 1: want to buy some glue to fix something related to
19:35
Speaker 1: your business, a shack or something. You want some caulk
19:38
Speaker 1: or whatever. And Casey, being the glue man in town,
19:43
Speaker 1: you would be able to give him some eggs, but
19:47
Speaker 1: Casey doesn't want glue. Instead, Casey wants a different good
19:51
Speaker 1: or service. He wants someone like, let's say I'm a
19:54
Speaker 1: blacksmith or a farrier. He wants someone to put to
19:58
Speaker 1: shoe his horses. Right, And you say, look, I've got
20:01
Speaker 1: these eggs. I need this glue. You know, Stall's coming in.
20:04
Speaker 1: And then he says he says, look I am lousy
20:07
Speaker 1: with eggs. You got to give me something else. And
20:10
Speaker 1: then you go to me and you say, look, I
20:11
Speaker 1: got these eggs. Can I give you these eggs? And
20:14
Speaker 1: you shoe this guy's horses and then he'll give me
20:17
Speaker 1: this glue. So already now we have so many transactions
20:20
Speaker 1: happening too, right, and currency simplifies that.
20:22
Speaker 2: It absolutely simplifies that. And this local or regional issued
20:27
Speaker 2: script would be printed or carved or what have you
20:32
Speaker 2: issued on a various and sundry materials, everything from like
20:36
Speaker 2: wooden tokens, the idea of a wooden nickel, you know
20:39
Speaker 2: you ever heard that one don't take them, don't take them,
20:41
Speaker 2: or a fish skin parchment of some kind. You know
20:45
Speaker 2: you've heard the idea of of in indigenous cultures using
20:49
Speaker 2: things like seashells at our currency. Yeah, that came back
20:53
Speaker 2: into into fashion here you did have you can look
20:56
Speaker 2: it up online and it's pretty amazing because there is
20:59
Speaker 2: there are current museums I'm sure where you can see
21:01
Speaker 2: dozens of these things, all different kinds, sort of like
21:04
Speaker 2: the early days of speculatory currency that we talked about
21:07
Speaker 2: in previous episodes, right, the two dollars bill episode, I
21:09
Speaker 2: believe printed regular looking bills that had that had markings
21:14
Speaker 2: on them and text on them and images that would
21:17
Speaker 2: link them to a specific market, let's call it, right,
21:21
Speaker 2: and they would be accepted, you know, with open arms
21:24
Speaker 2: in these markets, and then sometimes in regions outside of
21:28
Speaker 2: these markets they'd accept them too. But what would they do.
21:30
Speaker 2: They'd charge you those lift or uber car loan rates.
21:34
Speaker 1: Right, right, So one band Aurino piece of script, right
21:38
Speaker 1: that you usually use in the good town of band Reino.
21:41
Speaker 1: You can go to the other town of umberto Ecoville
21:47
Speaker 1: and you can give them that script, but they'll say, hey,
21:50
Speaker 1: this is worth four of these equals one of the
21:55
Speaker 1: Umberto Ecoville script that we use. So now you are
21:59
Speaker 1: you twenty five percent of the buying power used to this.
22:03
Speaker 1: So this kept local businesses alive, but it also made
22:07
Speaker 1: the larger regions fragmented. You can see an excellent collection
22:13
Speaker 1: of this script at the Museum of American Finance, which
22:18
Speaker 1: is a real thing, and you can see the various issuers.
22:22
Speaker 1: You can also and I think this is pretty fascinating
22:25
Speaker 1: to your point, Noel. You can see the different materials
22:29
Speaker 1: that were used. Well, just we can say a couple
22:32
Speaker 1: of examples. I got to tell you a lot of
22:34
Speaker 1: these look better than modern currency. One looks like kind
22:39
Speaker 1: of a monopoly bill Hepner sheepskin script which is worth
22:44
Speaker 1: one dollar from nineteen thirty four.
22:47
Speaker 2: I believe.
22:48
Speaker 1: And then did you see the one for Micosta County, Michigan, also.
22:53
Speaker 2: From nineteen thirty seve And then then you have the
22:55
Speaker 2: inside scoop on this. Give it to me it's wonderful.
22:58
Speaker 2: It's striking, it's bold. It's like the dorrito if a
23:03
Speaker 2: dorito is a piece of currency.
23:06
Speaker 1: It's it's bright yellow and it looks like it's a
23:10
Speaker 1: four color print job. They've got some great photos. And
23:15
Speaker 1: it's issued again, not by the State of Michigan, not
23:20
Speaker 1: by the government of the United States, but it is
23:26
Speaker 1: issued by the Macosta County, authorized by their Bord of Supervisors.
23:32
Speaker 1: And it's almost like a bond because the idea is,
23:35
Speaker 1: it says here on the currency. The idea is that
23:38
Speaker 1: they will pay to the bearer face value of this
23:41
Speaker 1: certificate at three percent per annum from the date of issue,
23:46
Speaker 1: so anem per year got it. So it's it's worth
23:50
Speaker 1: a dollar now. Let's say Casey has one of these,
23:53
Speaker 1: it's worth a dollar now, and then every year that
23:56
Speaker 1: he holds on to it, it's worth three percent more
23:59
Speaker 1: than it was. So really what they're doing is kind
24:02
Speaker 1: of investing.
24:03
Speaker 2: Again.
24:03
Speaker 1: It's an IOU with a baked in interest rate.
24:06
Speaker 2: Some of these were almost like bonds of some kind, right, and.
24:10
Speaker 1: Then you can also see some of the wooden things.
24:13
Speaker 1: There were real wooden nickels or wooden token scripts. There's
24:17
Speaker 1: a wooden dollar from North Bend, Oregon, and there are
24:23
Speaker 1: other wooden scripts from Washington. The point we're making is
24:27
Speaker 1: that these were occurring in more than one state, you
24:31
Speaker 1: know what I mean. This was not just like one
24:34
Speaker 1: innovative answer from one small town.
24:37
Speaker 2: No, absolutely not. And it's interesting too because a lot
24:39
Speaker 2: of these, I mean, they had to be hand issued,
24:41
Speaker 2: or at least to give them a sense of legitimacy.
24:43
Speaker 2: They were signed by officials, you know. Yeah, it looks
24:48
Speaker 2: to me based on the difference in the printing like
24:50
Speaker 2: this Washington fish skin parchment script from nineteen thirty four
24:55
Speaker 2: has three signatures on it. The base printing of the
24:58
Speaker 2: actual certificate is blue and that the signatures are in
25:02
Speaker 2: black ink. So I'm assuming that these were not just printed,
25:05
Speaker 2: they were signed by hand to give them real weight
25:08
Speaker 2: and legitimacy.
25:09
Speaker 1: Quite possibly, yeah, because they were functioning as legal documents.
25:13
Speaker 1: That's another thing. This stuff, when it happened, it didn't
25:16
Speaker 1: happen because everybody in the country at the same time
25:20
Speaker 1: made up a similar plan. A lot of people were
25:24
Speaker 1: arriving at this process by what we call parallel thought,
25:27
Speaker 1: you know, and that's why the script type. So the
25:30
Speaker 1: thing about the US dollar, And think about most national currencies,
25:34
Speaker 1: is they all work the same way across the country.
25:38
Speaker 1: These did not. These were different types of certificates, right.
25:43
Speaker 1: We had payroll warrants, we had credit vouchers, tax anticipation notes.
25:49
Speaker 1: They worked in different ways, you know what I mean.
25:52
Speaker 1: One thing was a dollar and it was always going
25:54
Speaker 1: to be a dollar in your community. But the other
25:55
Speaker 1: thing would be a dollar the first year, and then
25:57
Speaker 1: it would accrue value over time like a bomb.
26:00
Speaker 2: Absolutely, And it's so interesting because considering how many different
26:05
Speaker 2: types of these there were, there's really no way to
26:07
Speaker 2: figure out what the total volume and circulation was. Your
26:11
Speaker 2: guests as good as mine, I mean, because they could
26:14
Speaker 2: have Some of them might have really stuck around for
26:16
Speaker 2: a minute and done well. Some of them might have
26:18
Speaker 2: been so niche and kind of for a small community
26:22
Speaker 2: that they were you never would have even heard about him.
26:24
Speaker 2: Some of them were probably pretty fly by night. And
26:26
Speaker 2: I bet you there were some pretty serious opportunities for
26:30
Speaker 2: scam artists in this situation as well.
26:32
Speaker 1: Oh yeah, absolutely, a stranger comes to town, right, any
26:37
Speaker 1: issues at currency?
26:44
Speaker 2: I think what we do know, though, is that about
26:45
Speaker 2: two hundred cities issued their own currency that's right.
26:48
Speaker 1: We do know over two hundred issue them. But when
26:52
Speaker 1: it gets tricky when we try to evaluate how much
26:55
Speaker 1: value these scripts represents and then put that in dollar terms.
27:01
Speaker 1: There's one estimate that put it at around a billion dollars,
27:05
Speaker 1: but you know, again that's that speculation. However, if you
27:09
Speaker 1: want to read more about this, there's a fantastic paper
27:12
Speaker 1: called local Money in the United States during the Great
27:15
Speaker 1: Depression by Lauren gatch Over at the Department of Political
27:19
Speaker 1: Science and the University of Central Oklahoma. And this paper
27:23
Speaker 1: walks through some of the different comparative values of script
27:27
Speaker 1: based on the type they were. You know, like a
27:29
Speaker 1: tax anticipation script. You couldn't spend that far outside of
27:33
Speaker 1: your town, but you could spend it as a form
27:37
Speaker 1: of tax payment to the local government. So it was
27:42
Speaker 1: kind of like a script with a superpower. And what
27:46
Speaker 1: gatch finds this may be controversial to some of us.
27:50
Speaker 1: What gatch finds is that this phenomenon proved that local
27:56
Speaker 1: money was actually possible in a modern economy on a
28:01
Speaker 1: wide scale. So I have to I have to ask you, Noel,
28:04
Speaker 1: and let's ask our fellow listeners as well, what do
28:08
Speaker 1: you think about this idea of local money. Do you
28:12
Speaker 1: think it's it's a good idea. Do you think it's
28:14
Speaker 1: just a band aid?
28:15
Speaker 2: Well, I don't think it matters so much. What I
28:17
Speaker 2: think what matters is what Uncle Sam thought.
28:20
Speaker 3: Right?
28:22
Speaker 2: Was it legal? Is this okay? Is this essentially a
28:26
Speaker 2: form of counterfeiting? I would say, no, you're not making
28:30
Speaker 2: copies of legal tender. You're going a step further and
28:33
Speaker 2: making your own currency. And here's the thing. The federal
28:38
Speaker 2: government since the Civil War had done their damndest to
28:43
Speaker 2: deal with issues of private currencies, or let's call it
28:48
Speaker 2: non national currencies. But most Script of the thirties was
28:53
Speaker 2: not necessarily illegal.
28:55
Speaker 1: No, it's kind of a it's tough to make it
28:59
Speaker 1: illegal because they're not saying it's necessarily replacing. They're not
29:05
Speaker 1: explicitly saying it's replacing the dollars. It's almost you could
29:10
Speaker 1: make a good argument that it's just a legal document
29:13
Speaker 1: representing an agreement between two or more people, which is
29:16
Speaker 1: how legal documents work. So of course the Fed doesn't
29:21
Speaker 1: like this at all, so hey, that's our job. We
29:25
Speaker 1: do the coupons. But as you said, no, most forms
29:29
Speaker 1: of the Script were skirting just on the side of legality. Right,
29:35
Speaker 1: So what we end up seeing is that there was
29:37
Speaker 1: no coordinated FED effort on Uncle Sam's part to suppress
29:43
Speaker 1: these currencies.
29:45
Speaker 2: Their job was more to make the real system work
29:48
Speaker 2: better as to make people not have a reason to
29:52
Speaker 2: use the scripts.
29:53
Speaker 1: Right right, right, like now they let's just make these keepsakes.
29:57
Speaker 1: And we have to take a note here. Currency is
30:01
Speaker 1: a very very very powerful tool, and it's more powerful,
30:06
Speaker 1: I think than a lot of people imagine. Like even now,
30:10
Speaker 1: one of the big controversies of the modern era is
30:16
Speaker 1: the question over which currency should be used to pay
30:19
Speaker 1: for fossil fuels. That's what we call it the petro dollar, right.
30:24
Speaker 1: And while it may not seem like a big deal,
30:27
Speaker 1: it may, you know, for many people it may sound
30:30
Speaker 1: like money is money is money. That's not entirely true.
30:33
Speaker 1: So it's kind of surprising that the FED did not
30:37
Speaker 1: crack down on these local currencies. And they did the
30:42
Speaker 1: smart thing they did just like you said, Noel, they
30:45
Speaker 1: made the existing system more attractive and made script seem
30:51
Speaker 1: less and less necessary. And the thing is, we can
30:56
Speaker 1: ask did it work.
30:58
Speaker 2: It depends on which way you look at It worked
31:00
Speaker 2: as a band aid, as like a stopgap measure so
31:03
Speaker 2: people could continue buying necessary goods and services and not
31:06
Speaker 2: end up riding in the streets or having to exchange
31:10
Speaker 2: glue for eggs for horseshoes and creating this bizarre web
31:15
Speaker 2: of bartering that wasn't sustainable. So, yeah, I would say
31:18
Speaker 2: it worked as far as that is concerned.
31:21
Speaker 1: Yeah, I would say I would say it worked on
31:24
Speaker 1: a better than nothing level totally, you know what I mean.
31:27
Speaker 1: So we quickly learned some rules here that that guide us.
31:33
Speaker 1: So some were more successful than others. But here are
31:37
Speaker 1: the basic rules we found. Script no matter what it was,
31:41
Speaker 1: became less acceptable if you printed too much of it
31:45
Speaker 1: or if the backing or basis for redemption became invalid.
31:50
Speaker 1: So if somebody came back at that Macosta County in Michigan,
31:54
Speaker 1: and pardon me if I'm mispronouncing that, by the way,
31:56
Speaker 1: if someone came back to that county in Michigan and
32:00
Speaker 1: they had their dollar and it was not accepted or
32:05
Speaker 1: it wasn't given the bait the value that it was
32:08
Speaker 1: agreed to have, then all of those all of those
32:12
Speaker 1: dollars seem worth a little bit less because people can't
32:15
Speaker 1: trust it, and you know, what's interesting is that, going
32:21
Speaker 1: back to that article you mentioned earlier, the scripts that
32:25
Speaker 1: seemed to work best were either the ones on the
32:28
Speaker 1: absolute smallest scale or the ones that could be used
32:34
Speaker 1: as payment for municipal fees or tax That's the one
32:39
Speaker 1: that gets the closest to being illegal. That is kind
32:42
Speaker 1: of like paying your your DMV fee or your driver's
32:47
Speaker 1: license fee or something in a currency that you made up.
32:49
Speaker 2: That's right, that's not gonna fly. I don't know. Uncle
32:53
Speaker 2: Sam's company store does not accept this. No, no, we do.
33:00
Speaker 2: I kind of know the ending for this story. That's
33:02
Speaker 2: a hard kind of this might be interesting.
33:04
Speaker 1: So let's call these scripts an economic experiment. Uncle Sam's
33:10
Speaker 1: plan works, and when the conditions that lead to the
33:15
Speaker 1: script go away and dissipate, the script itself disappears. These
33:20
Speaker 1: alternative currencies go the way of the dodo, as we
33:24
Speaker 1: so often say.
33:25
Speaker 2: Or did they yeah, Because apparently throughout the thirties, the
33:30
Speaker 2: small US town of Tanino, Washington was dealing with the
33:35
Speaker 2: Great Depression just like everywhere else, but their problems didn't
33:39
Speaker 2: really get stitched up in the same way that everyone
33:42
Speaker 2: else's did because they only had one bank, the Citizens
33:45
Speaker 2: Bank of Tanino and it closed completely after it ran
33:48
Speaker 2: out of cash. So the bank was one of just
33:52
Speaker 2: over a thousand that closed in the fourth quarter of
33:54
Speaker 2: nineteen thirty one. But for Tanino, which is a very
33:59
Speaker 2: very small how population wise, they only had this one bank.
34:03
Speaker 2: Things were really, really rough. So in order to deal
34:07
Speaker 2: with this cash issue, the Thurston County Independent newspaper publisher
34:11
Speaker 2: Don Major asked the city council to allow him to
34:16
Speaker 2: start facilitating a currency within the community. And they still
34:21
Speaker 2: print those today, these little iou slips. And by the
34:24
Speaker 2: time they had more or less temporarily as we mentioned,
34:27
Speaker 2: you know, the way these things tended to go solve
34:30
Speaker 2: the problem. There was kind of a demand for these,
34:33
Speaker 2: and this guy Major was able to turn this monetary
34:37
Speaker 2: you know, catastrophe into a real successful publicity stunt. Right.
34:42
Speaker 1: So, even after what we called the depression and finally abated,
34:47
Speaker 1: the town of Tinino continued printing wooden money is souvenirs
34:54
Speaker 1: and commemorative bills, usually annually because people loved collecting them,
34:59
Speaker 1: you know what I mean. This even went on in
35:02
Speaker 1: the nineteen nineties. The original press, as far as we
35:05
Speaker 1: can find, is still in operation. It gets fired up
35:08
Speaker 1: at least once a year to make souvenirs for their
35:11
Speaker 1: annual Oregon Trail Days celebration, which I definitely want to
35:15
Speaker 1: go to. And you can even buy pieces of this
35:19
Speaker 1: wooden currency or script at local businesses today, such as
35:23
Speaker 1: the famous Scotti Bees cafe. And here's the thing in
35:26
Speaker 1: the town. They can still function as money.
35:28
Speaker 2: That's right, and it does, but it's also yeah, you
35:31
Speaker 2: know it. Admittedly it's a little bit more of a
35:33
Speaker 2: kitchy kind of fun thing that they're doing to kind
35:36
Speaker 2: of keep the past alive or whatever, but they do
35:38
Speaker 2: accept it. An analog to this that I have seen
35:43
Speaker 2: is a lot of local farmers' markets here in Georgia
35:47
Speaker 2: will issue these wooden tokens that you can exchange if
35:50
Speaker 2: you have what's called snap or it's like basically the
35:54
Speaker 2: yeah equivalent of stamps. You can take your EBT card
35:57
Speaker 2: and swipe it and then they will give you these
35:59
Speaker 2: tons that are two dollars to one dollar of investment
36:02
Speaker 2: from your EBT. So the idea is they give you
36:05
Speaker 2: double your money for using these tokens and your shopping locally.
36:09
Speaker 2: So it's but at the end of the day, you
36:11
Speaker 2: still exchange these tokens at the farmer's market instead of money, right.
36:15
Speaker 1: And there are still local or community currencies around today,
36:21
Speaker 1: and it's funny because they haven't. I guess they have
36:25
Speaker 1: sort of gone away, but they've never really disappeared. And
36:31
Speaker 1: the rise of our digital information networks over the past
36:36
Speaker 1: few decades has also given rise to purely non physical
36:41
Speaker 1: digital currencies like you know, Casey and I have always
36:46
Speaker 1: I've always talked about years and years and years ago
36:50
Speaker 1: when we were we were at our old office and
36:53
Speaker 1: bikehead deciding whether or not bitcoin would be a fad.
36:56
Speaker 2: Do you remember that, Casey, I remember that very clearly,
36:59
Speaker 2: and I remember investing in bitcoin, and I remember selling
37:04
Speaker 2: at the wrong.
37:05
Speaker 1: Point Casey on the case, me too, man. And for now,
37:12
Speaker 1: as we record this, if you are listening hundreds or
37:17
Speaker 1: thousands of years in the future, right to us and
37:21
Speaker 1: let us know if the US dollar has stuck around
37:24
Speaker 1: or if it is a fad, and if so, what
37:27
Speaker 1: has replaced it.
37:28
Speaker 2: It may take a while.
37:30
Speaker 1: For someone to answer, it may not be us, but
37:33
Speaker 1: hopefully you'll get a reply. That'd be cool if the
37:35
Speaker 1: show is around for centuries.
37:37
Speaker 2: Oh man, yeah, I would love that. I mean, at
37:38
Speaker 2: least keep us in you know, script script form, script form. Yeah.
37:42
Speaker 2: You can write us at Ridiculous at iHeartRadio dot com.
37:45
Speaker 2: Or you can join our Facebook group at Ridiculous Historians,
37:48
Speaker 2: where you can chat with all your other Ridiculous history
37:52
Speaker 2: pals and exchange memes and barbs, and you know, debate
37:56
Speaker 2: things that we talked about, the issues. You can call
37:58
Speaker 2: us out on mistakes we made. That's fine. Whatever you
38:00
Speaker 2: want to do, it's there for you to do it.
38:03
Speaker 1: You can also find us personally on Instagram. Learn about
38:08
Speaker 1: my various misadventures getting kicked into and kicked out of cities, regions,
38:12
Speaker 1: and countries at Ben Bollen.
38:15
Speaker 2: You can check me out at Embryonic Insider. It's mainly
38:17
Speaker 2: pictures of my kid doing the dab, going to farmers' markets,
38:20
Speaker 2: little travel stuff here and there. I like to take
38:22
Speaker 2: a lot of weird pictures with no people in it.
38:24
Speaker 2: My mom says that makes them boring, but I have
38:26
Speaker 2: a good time with it.
38:28
Speaker 1: Thank you to Casey Pegram, our super producer. Thank you
38:31
Speaker 1: to Alex Williams who composed our track. Thanks to everybody
38:36
Speaker 1: who has written into us or written to their fellow
38:39
Speaker 1: listeners on the Facebook page. And Hey Noel, thank you
38:43
Speaker 1: for being a friend.
38:44
Speaker 2: Hey Man, travel down that road and back again, hand
38:47
Speaker 2: in hand. You're a friend in him. I don't know,
38:49
Speaker 2: see you next time. Books. For more podcasts from iHeartRadio,
39:02
Speaker 2: visit the iHeartRadio app, Apple Podcasts, or wherever you listen
39:06
Speaker 2: to your favorite shows.