Miners’ Pay

Miners’ Pay. . From the perspective of the coal company, the company store had a vital economic function. In an age when sixty percent of the mine’s cost of production consisted of wages, it ensured that the flow of money was circular. Miners’ wages flowed directly back to the Company’s coffers in the form of payment for goods and rent for company houses. This form of secondary economic exploitation of the work force was of importance to company balance sheets, particularly in hard times and for smaller firms. , To further reduce outlays of cash, companies issued their own currency , scrip , which was redeemable at the company store. Scrip came in a variety of forms and denominations. Some companies issued paper scrip, which resembled currency and was printed with a monetary value, the company name and the store location. More common was metal scrip, which was made from a variety of materials , aluminum, brass, bronze, copper, nickel and nickel silver. , In the earliest days of mining, some companies actually paid miners with scrip instead of cash, but this practice was outlawed in 1887. State law then required payment in legal tender and at two-week intervals. Scrip was issued to miners in advance of payday at their request to tide them over, but only if the miner had pay due him. At payday the value of the scrip was deducted from the miner's earnings. , There was also something of a "black market" for scrip in which it could be traded for cash at a discount of up to forty percent. In an effort to provide a higher standard of living for their families, or simply to obtain the tools required for their jobs, some miners drew their entire earnings in scrip and found themselves “owing their soul to the company store,” at least according to the lyrics of a popular song of the 1950s. This was more common during hard times, especially during the Great Depression. , (sidebar) , During the first half of the 19th century, banks and companies often issued their own money. As the nation was growing rapidly, U.S. currency and coin were not always readily available. The issuing of scrip by a coal company accomplished several things. Most importantly. It provided a means for the company to preserve cash. After all, the coal company had to deal with the outside world to buy equipment and supplies that required real currency. Secondly, scrip was an accounting device that provided the miner with a clear picture of his working balance. However, by accepting scrip instead of cash, the miners were, in fact, extending credit to the company. For the miner, he could request scrip as an advance against his future wages , basically, an interest free loan to the miner. On payday, the miner would be paid in cash or could request scrip instead. , Mining communities were dry , no liquor was sold in the company stores. Having scrip made it more difficult for a miner to buy liquor , he would have to either cell his scrip for cash or deal with a merchant who would take the scrip, at a high discount in value. This was thought to discourage the purchase of liquor.