Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-03-07
SCRIP Of UNIFORM
VALUE IS j. s. AIM
Issue Here Probably Will Be
in Denominations of
ST to $50.
What is scrip?

What is scrip?
Stripped of all technicalities, 1t is
nothing more than legal substitute for
the paper currency in general use be-
fore the banks were closed by President
Roosevelts proclamation.
In all probability, the scrip to be
issued here will range in denominations
of from ST to $50 and will be printed
on paper similar in size to the paper
money to which We are accustomed.
The design, of course, will be different,
but will be sufficiently distinctive in
character to eliminate danger Of coun-
terfeiting.
The use of scrip should not be con-
fused with the early systems Of trade
and barter in this country.
Shortly after the Revolutionary War,
settlers in what is now Tennessee at
tempted to set up a State which they
named Franklin. Shortage of money in
this pioneer community led to wide
spread barter raccoon skin was
deemed the equivalent of pound OF
sugar. Peach brandy was traded for
fax linen. Such mediums of exchange
were later decreed legal tender by the
Legislature of the new State, the law
fixing definite scale of values.
Values Varied in States.
The trouble with this system was that
the trading value of the commodities
varied in the different States. OBJ
viously. bushel of corn could be traded
for less in corn-groWing community
than in Northern State, where the
grain was scarce
Probably the most important aspect
of the use of scrip in the present emery
ency will be the efforts made to give it
a uniform value throughout the country
The Government will seek to accomplish
this by using the Federal Reserve Sys-
tenn as a master clearing house for the
substitute money. The value of the
proposed scrip, until it can be replaced
by the money now held in the banks.
will be guaranteed by the resources of
each individual clearing house associa-
ton, through which the scrip will be
issued.
In order to facilitate transactions in
volving the use of small change, it is
expected that the banks will be permit
ted to convert limited amounts of scrip
into pennies, nickels, dimes, quarters
and half dollars.
DR.. Max Winkler, writing for the
North American Newspaper Alliance,
pointed out that the present plan for
use of scrip in New York was employed
there with considerable success in 1907.
Acceptable to Merchants.
He said it was hoped the action to be
taken by the New York Clearing House
Association will allay anxiety occasioned
by the banking holiday and make posi-
BILE the carrying on of business in New
York despite emergency restrictions.
Discussing the plans to issue scrip in
New York, DR.. Winkler saidi
1T will be in denominations Of 81
to $50, will be available for pay rolls
and similar purposes, and will be &C
ceptable to merchants, business men
and all others in place of currency
Its use will be of temporary character
and it will be withdrawn from circula-
ton Immediately the emergency is
passed.
For all intents and purposes, 1t will
be equivalent to money. except that it
will look different. Obviously, the back
ing will not comprise gold and silver,
as is the case of United States Govern
ment currency. but will be in the form
of the assets of New York banks, nota-
bly, the enormous amount of United
States Government bonds held by these
institutions.
Imitation View Disputed.
I'm some quarters, it is commended
that the issuance and use of scrip, to
some extent, will constitute imitation,
resulting-as imitation ordinarily does
in a flight from currency to COM
modities and various other forms Of
assets which are not subject to fixed
return. including real estate and So
called equities or common stocks.
This view is untenable. To begin
with. scrip is not issued without any
backing, as is the case with paper
money which is often printed by gov
ernments that resort to imitation, pay
ing no attention whether or not such
increased currency is accompanied by
corresponding increase in reserves.
Scrip is issued merely against ones
assets in banks and, for the time being
will take the place of actual currency,
the withdrawal of which is prohibited.
Adequate provision is made for the
withdrawal from circulation of scrip as
soon as the present emergency will dis
appear"