Depression Scrip of the 1930's

Welcome to a little known place in history.  Depression Scrip?  What's that you ask?  It's money issued during the banking crisis in the 1930's during the Depression.  This money was issued by local businesses, schools, banks, counties, and even individuals.  Most people have no idea that this little piece of history even exists.  Well, that's where I come in.  I've spent a lot of years going from one collecting thing to the next.  I have spent endless hours with my Grandfather going to everything from garage sales to auctions to flea markets for many many years.  Some of my best memories are with my Grandfather and the thrill of the chase.  I learned alot from him.  I think because of him my love of history was developed and his stories about the depression era got me hooked.

Depression scrip was issued as a direct result of the stock market crash and the banks being closed by President Roosevelt.  When the stock market crashed in 1929, businesses of all kinds, including banks starting failing.  Back then, a bank was just like a privately owned business.  It gained it's value in what people believed in it, it's name, it's owner.  If the bank went out of business without paying off it's depositors, there was nothing you could do.  You lost your money.  The only option was to try and reclaim it through the bankruptcy, if there was one.  There was no FDIC insurance, no backing by the U.S. Government or any other agency.

So, after the stock market crash, banks started failing and people started losing their life savings.  The only way to keep from losing your money was to have the cash in your hands.  So people would rush to banks and withdraw their money.  But, most banks were insolvent.  They had more money on the books then actual cash in the vaults.  So, as people rushed to pull out their cash, the bank couldn't supply the demand.  Withdraws were now greater than deposits.  Once the cash was gone, the bank had no option other than to close it's doors.

As more people lost their money from a bank closing it's doors, more people rushed other banks to withdraw their money.  This was a vicious circle that perpetuated itself.  The more banks that closed, the more the average person rushed to withdraw their money.  The more withdraws, then even more banks closed.  This was contributing to the economy spiraling out of control and making the depression even worst than it was.  No cash means you couldn't buy anything.  You couldn't pay rent, pay for utilities, pay for food or buy gas.

To stop this vicious circle, President Roosevelt declared a "banking holiday".  All banks nationwide were closed by Federal order.  The President then proceeded to find ways to stop the depression by employing the millions of unemployed to try and turn the economy around.  He created the FDIC, also a system of Federal Reserve Banks, abolished the gold standard and started the CCC (Civilian Conservation Corps).  He also created the NRA (National Recovery Act), created Federal Bank inspections, and the SEC and FCC.  But, overall, physical cash was still short.  For a short time, the Federal Government contemplated creating a temporary nationwide scrip issue that could be quickly printed.  But, that idea was shot down and they put their efforts into increasing the production of Government issued Federal Reserve notes.  That's one of the reasons why a 1935 $1 silver certificate is so common.  They're everywhere.  Just look at Ebay - there're always a couple dozen auctions for them.  Some dealers would try to convince you they're hard to find, but that's not true.  High quality notes are the ones that are harder find along with original bank packs of 100 notes.

But, increasing production of Federal Reserve notes was still a realitvly slow process.  So, good ol' American know how revived an old idea.  Make their own local currency and issue it.  There are good and bad points about using a locally issued currency.  Some of the most appealing reasons are it keeps the money local.  You're helping you're fellow neighbors by spending your money locally for services and products.  It forces you to help your neighbors even more than what was already happening.  There are just over 3200 known types of depression scrip issued in the 1930's with new ones being discovered every year.  Paper, cardboard, wood, metal tokens, leather, clam shells and even parchment made from fish skin was used.  I've started a website dedicated to documenting depression scrip and it's history.  Take a look at my About Me page to learn more and you can find a link to my website.  My website has lots of pictures of the different forms of depression scrip as well as memorabilia and historical documents related to depression scrip.  There are new issues of depression scrip discovered all the time.  I personally have found over a dozen new issues in the last year. 

Some of the most notable people that have spent considerably time and effort in the past and present researching depression scrip are Benjamin J. Lazar - who was the Managing Director of the Cleveland Federal Reserve Bank, Ralph A. "Curly" Mitchell, Charles V. Kappen, Vernon L. Brown - former Curator of the Chase Manhatten Money Museum, Messrs. Kappen, and of course, Neil Shafer.  Personally a dealer Tom Durkin is the person that set my interest in stone for depression scrip.  Unfortunately, some of these men are no longer with us, but because of these men, they have given us several references and a huge headstart to enjoying the unique history of depression scrip.  They've documented alot of history, but there's even more to learn.  Here's a set from Nokomis, Illinois that was just recently discovered by me.  For years this set sat in an envelope in someone's desk draw.  How many more are out there?

So, join me in the thrill of re-discovering history and looking for depression scrip.  Feel free to email me any questions about depression scrip.  I will certainly try and answer your questions to the best of my knowledge.  If you're a fellow collector of depression scrip, I would love to hear from you and your collecting stories.

Thanks for reading my guide....and don't forget to vote below if this info was helpfull or not.

Rod