The Great Depression is remembered for the devastation it brought to the American people. Joblessness, homelessness and debt plagued the country, but even when hundreds of banks closed, Americans found a way to continue commerce with local currencies called “scrip.”
The closing of American banks was both an early effect of the Great Depression and a factor that grossly exacerbated it in the early 1930s. Between December 1930 and the “banking holiday” President Roosevelt declared in March 1933 – which shut down the entire national banking system – about half of the banks in America either closed or merged with others. Surviving banks cut back drastically in their deposits and loans, contributing to a decline in money supply, and causing people to hoard their cash rather than entrusting it in a banking system that was rapidly deteriorating. Hoarding effectively removed money from circulation, further contributing to the deflation that characterized the Depression era. With decreasing cash availability and with money worth markedly less than before, Americans turned to local currencies to carry out daily commerce.
Depression-era scrip was issued by local governments, businesses and even individuals. The scrip spurred local economies by being most valuable in the community that had issued it. Some store owners accepted scrip issued in other neighborhoods, but usually at a highly inflated rate to compensate them for the risk of the currency being invalid elsewhere. Scrip was issued on a variety of materials, including paper bills, wooden tokens or bills, animal skin, fish skin parchment and even seashells. Though local currencies existed in America long before the Great Depression, and some even today, Depression-era scrip played a vital role in reviving local businesses and keeping their owners and employees from suffering the worst blows of the Depression.
The Museum of American Finance holds an impressive collection of Depression-era scrip representing a variety of issuers and materials from communities across the United States. Below are a few of our favorite examples from the collection.