The Bank-Issued Currency of 1893
Facing a national economic panic, Seattle merchants and bankers agree to honor certified checks as local tender to keep the hop harvest moving.
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A meeting of the Merchants and Manufacturers' Exchange resolved to assist hop growers by endorsing the use of certified bank checks in small denominations. With the 'stringency in the money market' resulting in a scarcity of currency, producers were unable to pay laborers or move their crops. The banks proposed issuing checks ranging from $5 to $20, which merchants agreed to accept at par value for goods and debts. Manager Van Horn noted that these checks would allow producers to pay laborers, who in turn could use the notes at local stores, effectively creating a private, local medium of exchange to bypass the national financial collapse.
“It is apparent that the producers in this vicinity are unable to obtain money with which to move their crops.”
In 1893, when credit dried up and banks failed, Seattle's business community turned to local 'scrip' to keep the economy functioning. It is a striking historical parallel to modern interest in community currencies and local economic resilience during times of macro-financial instability.
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