Private Money

by Michael E. Marotta
© Copyright 1998 by Michael E. Marotta

In our modern world, we see the government as the source of money. Our coins and paper come from a centralized, public body. In fact, you have probably also handled quite a lot of private money.

By definition, money is anything which you accept now to trade for something else later. This includes merchant tokens. Restaurants, diners, video game and amusement halls, are most likely to issue tokens but tokens can come from any kind of business, from lumber yards, to tire stores, to barbershops.

Tokens have a long history going back at least to the 1300s. In colonial America almost any coin would be accepted in trade and many private issues circulated. In the late 1700s Britain's coinage was in a state of chaos. However, the new industrial methods allowed merchants to produce literally tons of penny and half-penny tokens. In America and Canada, the great depression of 1837 brought hard times and financial chaos. Without enough government money to carry daily commerce, people again minted their own copper coins. In America, hundreds of kinds of so- called Hard Times Tokens were issued by businesses and by private individuals.

This tradition continues into our own time. In addition to merchant's tokens -- called good-fors because they are usually good for 10 cents or some other amount in trade -- you can find a wide array of privately-issued money. If you special-order your own checks to reflect your personal tastes, this is a form of private money. Credit cards, debit cards, and phone cards that carry clever designs or special messages or commemorative patterns are another form of private money. In fact, even the coupons you cut from the newspaper are a form of privately issued money.