Coal Mining: The History of Scrip

Scrip issued by the Block Coal Company. Graciously provided by Fred Deskins

The rising number of factories popping up across the nation in the opening days of the 1900s created an endless demand for coal.

By 1918, the industry was experiencing record sales, totaling 579 million tons of bituminous coal.

Aided by railroads, which tore through the countryside, coal companies soon found themselves reaching a level of power that had previously been thought unattainable.
Owning countless square miles of land, coal companies created company towns, where miners and their families lived, worked and worshiped under the watchful eye of mine bosses.

Crandall Shiflett, author of the 1991 publication, Coal Towns Life, Work, and Culture in Company Towns of Southern Appalachia 1880-1960, described these company owned communities in the following way:
“Usually, the coal camp, like the railroad camp, began with temporary housing-tents or boardinghouses – until more permanent dwellings could be built. Gradually, within a year or so, the camp grew into a company store, the most essential structure in the town…”

As mining operations in company towns grew, coal companies would introduce other buildings, including schools and churches.

Ever increasing their power and control, mining companies soon began paying workers with scrip, a private currency issued by mining companies to their employees.

The argument for paying their workers in scrip was that the secluded location of mining communities made it difficult to provide cash to the miners; however, a 1911 report by the Immigration Commission found that in some cases, miners were receiving only 30% of their wages in cash.

According to Lou Athey, the Charles A. Dana professor emeritus of history at Franklin & Marshall College in Pennsylvania, “Coal companies received significant advantages in using scrip. Scrip reduced the outflow of capital, strengthened company cash flow, and reduced payroll theft, thereby lowering the cost of security… Miners often received pay envelopes marked with a curling line across them, a symbol miners called the ‘bobtail check’ or the ‘snake.’ It meant no wages due.”

Though coal companies refused to exchange scrip with legal tender, some miners found other locals willing to purchase coal scrip for a fraction of its value.

To combat this, a 1925 West Virginia law, driven by coal lobbyist, made it unlawful for scrip to be transferred to a third party. This law further solidified the company’s power over employees, effectively holding them hostage from escaping to other jobs or regions of the nation.

Within a generation, an entire workforce stood at the mercy of coal companies; which ultimately became the catalyst which drove miners to risk everything and join unions.

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  1. Script was sold for 80% on the dollar in the Sixties in the Kanawha Valley. Were these merchants breaking the law?

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