Word: scrip
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John Citizen marches into a bank where he has $500 on deposit and slaps down his personal check for $50. The teller deals him out $50 in scrip. It carries no promise of redemption in lawful money at any time but it does evidence the fact that John Citizen's bank is good for $50. He buys a suit of clothes. The clothier passes the certificate on to a wholesaler who finally deposits it in another bank associated with the local Clearing House. That bank either reissues it or returns it to John Citizen's bank for collection...
During the 1907 panic U. S. banks issued $238,000,000 scrip. In New York City it passed as currency for five months, despite its illegality. The great trouble with scrip is the difficulty of transfer from one clearing house district to another between which there is no agreement of confidence. One district's scrip might be at a discount in another district. The Federal Reserve is counted on to facilitate interstate as well as interdistrict exchange but at best scrip is expected to be only a local and temporary relief during the currency shortage...
American Bank Note. While young bankers learned about scrip, the public suddenly learned that there was an American Bank Note Co. Shortly before midnight, Friday, President Daniel Ellis Woodhull was suddenly given the order for hundreds of millions of dollars of Clearing House certificates. His was the only concern that could do the job and do it on time. Never an advertiser, American Bank Note suddenly became the most thoroughly publicized company in the U. S. From the dribble of business it has had since the Depression, its chief plant in The Bronx, N. Y. jumped to capacity production...
Mint. While scrip poured forth in The Bronx, the U. S. Mint in Philadelphia calmly pursued its routine coinage of pennies and $20 gold pieces. Said an official: ''We have no orders with regard to the present situation. This is just a factory...
...Princeton. N. J. The Daily Princetonian, undergraduate daily, ran off 25? scrip notes on its presses, to be purchased by check, passed on to merchants, redeemed by the Princetonian when banks reopen...