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

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