A friend told me the other day that Minnesota was so concerned about the stability of the economy during the Great Depression, that it printed its own money. I’d never heard such a claim, and for good reason. It isn’t true.
But even wading into the subject revealed how different times were in the Great Depression than in the Great Recession.
I learned this from Shawn Hewitt, to whom I turned today to find out if what my friend said was true. Hewitt is the author of A History & Catalog of Minnesota Obsolete Bank Notes & Scrip .
The claim of your colleague is incorrectly stated. In the 1930s, there were two main types of notes issued by entities from Minnesota. One is National Currency, or National Bank Notes. These were issued since the 1860s by National Banks, bearing the name of the issuing bank on the face. An example is shown on my web site
They were introduced by the Union during the Civil War as a means to finance the war and to bring about a more uniform currency. They were discontinued in the 1935 at the close of the Great Depression as part of broader government efforts to shore up the financial system.
The other type is known as Depression Scrip. An example can be found here. The notes were not issued out of fear of government collapse, but due to the scarcity of money.
There were four main types of issuers of Depression Scrip from Minnesota:
1) Bank Scrip, in the form of denominated cashier’s checks. These were issued by banks during the Banking Holiday of 1933 and served as a currency substitute until banks were permitted to resume the normal course of business.
2) Municipal Scrip, issued by towns to fund unemployment relief projects.
3) Company Scrip, issued by companies for payrolls and commodities, or by merchant associations.
4) Barter Scrip, issued by unemployment relief organizations.
Most notes were issued in 1932-1933 as a measure of necessity, not one of fear.