Currency Week
Thursday, July 29th, 2010
During bad economic times (a depression comes to mind), it’s not uncommon for municipalities to offer their own script - local currency or certificates to that is used just like fiat money. When hyper inflation takes over (we still have about 2 years to go before we see that) and prices go through the roof and regular ole fiat money is worthless, THEN local municipalities roll out the certificates like the one you see above.
This happened in Alberta in 1936. The Social Credit Party began to issue local certificates called Prosperity Certificates. They were issued in $1 notes and were designed to pay relief workers, gov’t officials and such. The idea behind the certificates was to discourage hoarding. Here’s how it worked:
A holder had to affix to the back of a certificate a 1-cent stamp before the end of every week, for the certificate to maintain its validity. But the hassle and expense of the stamps made the certificates unpopular with the public. To make matters worse, the tiny stamps (smaller than 1 cm²) kept falling off. To avoid having to purchase and affix the stamps, holders would try to spend the certificates just before the week’s validity expired. That left them in the hands of merchants, who would have to purchase and affix the stamps themselves to maintain the notes’ validity.
The notes were intended to be redeemed after two years of issue, by when 104 stamps would have been affixed. But the program was cancelled after only about one year.
Oh, are we done? Is the post over already? Man, that was pretty quick, I thought there would be more of a story than that.
Tune back in tomorrow and I’ll tell you the story about the time Marc from Calgary and The Mayor went to DMorris’ stag. What a keraaaaazy night!!
