City of Rhinelander
The City of Rhinelander found itself with insufficient funds to meet municipal payrolls and pay bills during the first week of March 1933. On March 4, 1933 the city announced that it would begin issuing scrip to pay its expenses. The scrip began to be paid out on March 7, 1933 in a single $5.00 denomination.
The scrip was redeemable in cash after July 1, 1933. It carried a 3% premium if used to pay obligations to the city prior to January 1, 1934. It carried a 4% premium if it was used to pay taxes.
The city government was so concerned about the scrip being accepted that T.M. Wardwell, the city manager, had the following statement printed in the March 4, 1933 edition of the Rhinelander Daily News:
Much speculation and misinformation is current relative to the city plan for issuing certificates of indebtedness as partial payment for payrolls and other accounts. This so-called scrip is not scrip in the sense that it is fiat money without adequate security. Various types of scrip have been issued throughout the country as inflationary measures without any backing whatever beyond community confidence and still others have made use of redeemable features such as stamp taxes which are equivalent to a sales tax on each turnover.
Rhinelander’s plan involves none of these drawbacks and is purely a means of conserving our cash resources until such a time as postponed taxes become available. The total value of scrip issued shall not exceed 50 per cent of the amount of taxes postponed by means of affidavit or otherwise, which from our experience we know gives more than adequate security.
The story has been told of the actor from the show troupe that had a few nights stand at a small rural community. For a little amusement he approached the hotel keeper ad handed him a fifty dollar bill and askd him to keep it for him until they left. The hotel man being duly impressed, having never seen a fifty dollar bill before, promptly put it away in his safe. Later however, thinking of the local prestige that would come from passing ut such large money, he took the bill and paid his grocer on account, figuring he would just deduct the amount from the show troupe bill when they settled. The grocer also being duly impressed passed the bill on to the farmer, the farmer paid to his doctor for services rendered, the doctor gave it to a traveling man for some equipment purchased, the traveling man gave it back to the hotel keeper in payment of his bill. The hotel keeper put it back in his safe and decided to give it back to the actor instead of accepting it on payment of the bill. So this was done. After the troupe left town the actor was chuckling over his little joke. ‘That hotel man’s eyes stuck out when I handed him that bill to keep for me. And the joke of it is that it was only stage money.’ Whereupon he pulled the bill from his pocket, rolled it up, set it ablaze and lit his cigaret with it. This little problem in economics serves to illustrate much the same process through which our scrip goes.
The city employee receives his scrip and in turn gives it to his grocer, doctor or other creditor; they turn it over to other creditors and finally someone brings it back to the city hall for redemption in cash or apply it on next year’s taxes. It is hoped that many will use this latter method which involves no cash outlay by the city and in turn allows the depositor to draw 4 per cent interest on such prepaid taxes. No person should give or take this scrip at less than face value. It will be redeemed in full together with interest at 3 per cent. Or if it is turned over to us as a credit on prepaid taxes, it will immediately start drawing interest at 4 per cent.
The city stopped paying out the scrip on March 16, 1933 when the Rhinelander banks reopened. As of July 14, 1933, all but $500.00 of the scrip was redeemed or received by the city in payment of taxes.
No examples of the Rhinelander scrip are known. It is assumed that the entire issue returned to the city was destroyed. No record of the amount issued or outstanding is known.