Cooperatives: Scrip

In Chapter Two, Orchestra Pit, we learn one of the activities of Sara Niemi’s father and mother, Martin and Elizabeth, is operating the Work People’s Co-operative Store in Hibbing, Minnesota. The Finnish Socialists gave momentum to the movement in northern Minnesota. The cooperative store was a kind of mutual support system organized by Finnish-American immigrants.

A co-operative can be simply defined as a business organization owned and operated by a group of individuals for their mutual benefit. In communities today you will find food cooperatives. The major distinction between cooperatives today and the one the Niemi’s operated in the Incident at the Bruce Mine is the theoretical objective. The Finnish Socialist’s aim was the creation of an alternative system for retail purchasing. As a cooperative member, one had ownership in the store and into the local store’s practices. These “Red” co-ops were focused on liberating the miner, worker and farmer from monopolistic business practices of the era. One of those practices was scrip. Company scrip was company printed currency issued  as pay for its employees. This scrip could only be exchanged in company stores owned by the employers.

In the United States, mining and logging camps were typically created, owned and operated by a single company. The locations of these were often quite remote and often cash poor. However, even in ones that were not, workers were paid in scrip instead of currency. There was little choice but to use this “money” to purchase goods at a company store. With this economic monopoly, the employer could place large markups on goods, making workers dependent on the company, thus enforcing employee “loyalty”

If one did not want to purchase at the company store, the scrip sometimes could be exchanged for currency, but the cost for the exchange was expensive. The fee would often exhaust a significant value of what the worker, farmer, or miner had been paid.

In 1903, the Sampo Cooperative of Menahga, MN, was the first cooperative in the state. Wadena County farmers had objected to being paid in scrip for their butter, eggs, etc. In the 1907 strike year, cooperative stores and boarding houses boomed. Often they both were located in the same building. This co-location intensified the social, cultural and political aspirations of the members.

The contemporary manifestation of scrip can be imagined in brand specific gasoline cards which offer discounts per gallon to people who purchased gasoline within that company’s franchises. Another way to understand scrip is reward cards which amass point totals which are redeemable within the retail organization where purchases have been made. A third example is earning air miles for flights taken.In each of these cases, the organization’s “members” receive discounts for their “membership” status. They cannot spend their “scrip” at other retail organizations.

NOTE: On September 4, 2008, the Mexican Supreme Court of Justice ruled that Wal-Mart de Mexico, the Mexican subsidiary of Wal-Mart, must cease paying its employees in part with vouchers (contemporary scrip) redeemable only at Wal-Mart stores.