Truck wages

Last updated
Brass trade token from Fort Laramie, Dakota Territory, used in a truck system Mc cormick.JPG
Brass trade token from Fort Laramie, Dakota Territory, used in a truck system

Truck wages are wages paid not in conventional money but instead in the form of payment in kind (i.e. commodities, including goods and/or services); credit with retailers; or a money substitute, such as scrip, chits, vouchers or tokens. Truck wages are a characteristic of a truck system.


"Truck", in this context, is a relatively archaic English word meaning "exchange" or "barter".

Truck system

A truck system includes one or both of the following practices under which truck wages are used to defraud and/or exploit workers.

Truck systems have been specifically outlawed in many countries by labour law and employment standards; and legislation such as the British Truck Acts. [1]



While truck systems had long existed in many parts of the world, it was widespread during the 18th and early-19th centuries in Britain. Despite a long history of legislation intended to curb truck systems (Truck Acts), they remained common into the 20th century. In a prosecution brought against a Manchester cotton manufacturer in 1827 one worker gave evidence that he had received wages of only two shillings in nine months; the rest "he was obliged to take [in goods] from the manufacturer's daughter, who was also the cashier". [2]

In Britain the truck system was sometimes referred to as the tommy system. The 1901 edition of Brewer's Dictionary of Phrase and Fable [3] notes the tommy shop as:

Where wages are paid to workmen who are expected to lay out a part of the money for the good of the shop. Tommy means bread or a penny roll, or the food taken by a workman in his handkerchief; it also means goods in lieu of money.

In the "Midland Tour" of his Rural Rides , the agriculturist and political reformer William Cobbett reports the use of "the truck or tommy system" in Wolverhampton and Shrewsbury. He describes the logic of the tommy as:

The manner of carrying on the tommy system is this: suppose there to be a master who employs a hundred men. That hundred men, let us suppose, to earn a pound a week each. This is not the case in the iron-works; but no matter, we can illustrate our meaning by one sum as well as by another. These men lay out weekly the whole of the hundred pounds in victuals, drink, clothing, bedding, fuel, and house-rent. Now, the master finding the profits of his trade fall off very much, and being at the same time in want of money to pay the hundred pounds weekly, and perceiving that these hundred pounds are carried away at once, and given to shopkeepers of various descriptions; to butchers, bakers, drapers, hatters, shoemakers, and the rest; and knowing that, on an average, these shopkeepers must all have a profit of thirty per cent., or more, he determines to keep this thirty per cent. to himself; and this is thirty pounds a week gained as a shop-keeper, which amounts to 1,560l. a year. He, therefore, sets up a tommy shop: a long place containing every commodity that the workman can want, liquor and house-room excepted.

Although Cobbett sees nothing wrong in itself in the tommy system, he notes that "The only question is in this case of the manufacturing tommy work, whether the master charges a higher price than the shop-keepers would charge," but given the guaranteed market, Cobbett sees no reason why any master should ever abuse the system. However, in rural regions he notes the virtual monopoly of the shopkeeper:

I have often had to observe on the cruel effects of the suppression of markets and fairs, and on the consequent power of extortion possessed by the country shop-keepers. And what a thing it is to reflect on, that these shopkeepers have the whole of the labouring men of England constantly in their debt; have on an average a mortgage on their wages to the amount of five or six weeks, and make them pay any price that they choose to extort.

United States

One reason for the truck system in the early history of the United States is that there was no national form of paper currency and an insufficient supply of coinage. Banknotes were the majority of the money in circulation. Banknotes were discounted relative to gold and silver (e.g. a $5 banknote might be exchanged for $4.50 of coins) and the discount depended on the financial strength of the issuing bank and distance from the bank. During financial crises many banks failed and their notes became worthless. [4] [5]

The popular song "Sixteen Tons" dramatizes this scenario, with the narrator telling Saint Peter (who otherwise would welcome him to Heaven upon his death), "I can't go; I owe my soul to the company store."

Australia/New Zealand

The chorus of the sailing song "The Wellerman" references Weller Bros., an Australian whaling supplier that paid in goods rather than money [6] to the workers at their whaling stations in New Zealand:

Soon may the Wellerman come

To bring us sugar and tea and rum.

Some day, when the tonguin' is done, ["tonguing" = breaking up and processing captured whales]

We'll take our leave and go.

The subtext being that "some day" never comes, because without wages, the workers could not afford their passage back home.

Relationship with company towns

Truck systems often existed in tandem with company towns (communities owned by an employer for the purpose of housing workers), which usually contained company stores. However, a truck system is not a prerequisite for the existence of a company town or vice versa.

Truck systems often persisted in long-settled, densely populated areas which hosted many employers and many merchants nominally in competition with one another. In such areas, their existence depended on the ability of employers to pay employees in scrip exchangeable at a company store. Such arrangements meant that potential nearby competitors were not typically in a position to accept the scrip at their stores (or at least not at a competitive exchange rate) since even if the company issuing the scrip was willing to accept it from non-employees, it would only accept it in exchange for goods at company-mandated prices. In this regard, employers' policies regarding the transferability of their scrip ranged from a willingness to accept it from anyone bearing it regardless of his or her relationship with the company (least restrictive) to refusing to accept scrip from anyone except the person it was paid to (most restrictive). The less restrictive the policy, the greater the potential workers paid in scrip could exchange it (likely at a discount) for goods and/or services the company store was unable (or unwilling) to provide, or for cash to obtain those goods and services. Indeed, one justification often given by employers for paying in scrip was that it supposedly prevented their workers from spending their earnings on "immoral" goods and services such as alcohol and prostitution.

On the other hand, a company town in a remote area with both the ability to keep any potential competition for company stores out and an ample supply of cash might be able to exploit workers in a manner similar to that of a truck system without actually employing a truck system. If the company store is the only vendor to which employees in a remote location have reasonable access to obtain goods, then such a company is in a position to pay wages in cash while charging inflated prices (also in cash) at the company store.

See also

Related Research Articles

Currency Generally accepted medium of exchange for goods or services

A currency is a standardization of money in any form when in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a system of money in common use within a specific environment over time, especially for people in a nation state. Under this definition, U.S. dollars (US$), euros (€), Indian rupee (₹), Japanese yen (¥), and pounds sterling (£) are examples of (government-issued) fiat currencies. Currencies may act as stores of value and be traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are defined by governments, and each type has limited boundaries of acceptance.

Gratuity Sum of money customarily tendered to service sector workers

A gratuity is a sum of money customarily given by a customer to certain service sector workers such as hospitality for the service they have performed, in addition to the basic price of the service.

Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in return for carrying out assigned work. Employees work in return for wages, which can be paid on the basis of an hourly rate, by piecework or an annual salary, depending on the type of work an employee does, the prevailing conditions of the sector and the bargaining power between the parties. Employees in some sectors may receive gratuities, bonus payments or stock options. In some types of employment, employees may receive benefits in addition to payment. Benefits may include health insurance, housing, disability insurance. Employment is typically governed by employment laws, organisation or legal contracts.

Goodwill Industries American nonprofit organization

Goodwill Industries International Inc., often shortened in speech and writing to Goodwill, is an American nonprofit 501(c)(3) organization that provides job training, employment placement services, and other community-based programs for people who have barriers to their employment. Goodwill Industries also hires veterans and individuals who lack either education, job experience or face employment challenges. The nonprofit is funded by a network of 3,200+ retail thrift stores which operate as independent nonprofits as well.

Wage Distribution of a security paid by an employer to an employee

A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as minimum wage, prevailing wage, and yearly bonuses, and remunerative payments such as prizes and tip payouts.


Intershop was a chain of government-owned and operated retail stores in the German Democratic Republic in which only hard currencies could be used to purchase high-quality goods. The East German mark was not accepted as payment. Intershop was originally oriented towards visitors from Western countries, and later became an outlet where East Germans could purchase goods they could not otherwise obtain. An unintended consequence was that ordinary East Germans had some insight into the selection of goods available in the West, which they could then compare with the rather limited offerings available in their own country.

Salary Form of periodic payment from an employer to an employee

A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. From the point of view of running a business, salary can also be viewed as the cost of acquiring and retaining human resources for running operations, and is then termed personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.

Scrip Any substitute for legal tender or currency

A scrip is any substitute for legal tender. It is often a form of credit. Scrips have been created and used for a variety of reasons, including exploitative payment of employees under truck systems; or for use in local commerce at times when regular currency was unavailable, for example in remote coal towns, military bases, ships on long voyages, or occupied countries in wartime. Besides company scrip, other forms of scrip include land scrip, vouchers, token coins such as subway tokens, IOUs, arcade tokens and tickets, and points on some credit cards.

Labour power Concept

Labour power is a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, labour power, from the physical act of working, labour. Labour power exists in any kind of society, but on what terms it is traded or combined with means of production to produce goods and services has historically varied greatly.

Company store Store selling almost exclusively to employees of a specific company

A company store is a retail store selling a limited range of food, clothing and daily necessities to employees of a company. It is typical of a company town in a remote area where virtually everyone is employed by one firm, such as a coal mine. In a company town, the housing is owned by the company but there may be independent stores there or nearby.

Welfare capitalism is capitalism that includes social welfare policies and/or the practice of businesses providing welfare services to their employees. Welfare capitalism in this second sense, or industrial paternalism, was centered on industries that employed skilled labor and peaked in the mid-20th century.

Token money Form of money that has little intrinsic value compared to its face value

Token money, or token, is a form of money that has a lesser intrinsic value compared to its face value. Token money is anything that is accepted as money, not due to its intrinsic value but instead because of custom or legal enactment. Token money costs less to produce than its face value. A banknote, e.g a five pound note, is token money because despite its value being 5 pounds it only costs significantly less to produce. A gold coin is not considered token money. The Token money system has been adopted in many businesses around the world as an effective way to exchange value between companies and customers. Token money as a system is predominantly used in mobile games, but is also used in the realm of e-commerce. Token money is similar to fiat money which also has little intrinsic value, however they differ in that token money is a limited legal tender. The adoption of token money has improved transaction efficiency, as the practicalty of transacting with sums of gold poses a larger security risk. In a commodity economy, money is a measure of the value of goods and services (prices) within a sovereign country or the same economy, as well as a particular commodity to pay off debts. The token is also used as a medium of exchange, as a store of value, and as a unit of account. Digital currenncies using decentralized blockchain technology are also a form of token money.

The Cincinnati Time Store (1827-1830) was the first in a series of retail stores created by American individualist anarchist Josiah Warren to test his economic labor theory of value. The experimental store operated from May 18, 1827 until May 1830. He sold things at-cost plus a small markup for his time. It is usually considered to be the first time alternative currency labor notes were used, and as such the first experiment in what would later be called mutualism. He also founded stores in New Harmony, Indiana and at Modern Times, Long Island. The store in Cincinnati closed in 1830 with Warren being satisfied he demonstrated running and managing a business without the "erection of any power over the individual". His theory — replacing money with time — was turned into an actual practical demonstration project. It was the first such activity, preceding similar labor notes in Europe by more than 20 years, and still has implications for other concepts of currency such as cryptocurrencies. Nonetheless, at the time it was the most popular mercantile institution in Cincinnati.

Canadian Tire money, officially Canadian Tire 'money' or CTM, is a loyalty program operated by the Canadian retail chain Canadian Tire. It consists of coupons, issued by the company, which resemble real banknotes. It can be used as scrip in Canadian Tire stores, but is not considered a private currency. The notes are printed on paper similar to what Canadian currency was printed on when they were still paper, and were jointly produced by two of the country's long-established security printers, British American Banknote Company (BABN) and Canadian Bank Note Company (CBN). Some privately owned businesses in Canada accept CTM as payment, since the owners of many such businesses shop at Canadian Tire. In Canadian Tire stores, CTM is accepted for Canadian money at par, ie; 1 Canadian Tire Dollar = 1 Canadian Dollar.

Truck Acts is the name given to legislation that outlaws truck systems, which are also known as "company store" systems, commonly leading to debt bondage. In England and Wales such laws date back to the 15th century.

Company scrip Scrip issued by a company to pay its employees

Company scrip is scrip issued by a company to pay its employees. It can only be exchanged in company stores owned by the employers. In the United Kingdom, such truck systems have long been formally outlawed under the Truck Acts. In the United States, payment in scrip became illegal in 1938 as part of the Fair Labor Standards Act.

Money Object or record accepted as payment

Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Any item or verifiable record that fulfils these functions can be considered as money.

Indian labour law Laws regulating labour in India

Indian labour law refers to law regulating labour in India. Traditionally, Indian government at the federal and state levels have sought to ensure a high degree of protection for workers, but in practice, this differs due to form of government and because labour is a subject in the concurrent list of the Indian Constitution. The Minimum Wages Act 1948 requires companies to pay the minimum wage set by the government alongside limiting working weeks to 40 hours. Overtime is strongly discouraged with the premium on overtime being 100% of the total wage. The Payment of Wages Act 1936 mandates the payment of wages on time on the last working day of every month through a bank transfer or through postal services. The Factories Act 1948 and the Shops and Establishment Act 1960 mandates 15 working days of fully paid vacation leaves each year to each employee with an addition 10 fully paid sick days. The Maternity Benefit (Amendment) Act, 2017 gives female employees of every company the right to take 6 months worth of fully paid maternity leave. It also provides for 6 weeks worth of paid leaves in case of miscarriage or medical termination of pregnancy. The Employees' Provident Fund Organisation and the Employees' State Insurance, governed by statutory acts provides workers with necessary social security for retirement benefits and medical and unemployment benefits respectively. Workers entitled to be covered under the Employees' State Insurance are also entitled 90 days worth of paid medical leaves. A contract of employment can always provide for more rights than the statutory minimum set rights. The Indian parliament passed four labour codes in 2019 and 2020 sessions. These four codes will consolidate 44 existing labour laws. They are: The Industrial Relations Code 2020, The Code on Social Security 2020, The Occupational Safety, Health and Working Conditions Code, 2020 and The Code on Wages 2019.

The Wära was a demurrage-charged currency used in Germany introduced in 1926 as a free economy experiment. It was introduced by Hans Timm and Helmut Rödiger, who were followers of Silvio Gesell. The Wära is comparable to current models of local currencies.

In Russia, from the second half of the 19th to the early 20th century limited means of payment got rather widespread among private individuals - owners of commercial firms, shop owners, owners of profitable outlets at clubs. Sometimes the use of surrogate money resulted in a temporary shortage of state paper bills of small denominations and small coins in some region of the country. But most often the initiators of such unofficial emissions were the desire to get a more concrete economic benefit, for example, when bons that were paid instead of usual wage went then to purchase goods in a trade points organized by the same entrepreneurs.


  1. G.W. Hilton (1958), The Truck Act of 1831. The Economic History Review, 10: 470–479
  2. Aspin 1995 , p. 108
  3. Brewer, E. Cobham (1901). Brewer's Dictionary of Phrase and Fable, New ed., rev., corrected and enl. London: Cassell. pp. 1440pp. OCLC   38931103.
  4. How Gold Coins Circulated in 19th Century America David Ginsburg
  5. Taylor, George Rogers (1951). The Transportation Revolution, 1815–1860. New York, Toronto: Rinehart & Co. pp. 133, 331–4. ISBN   978-0-87332-101-3.
  6. "NZ Folk Song * Soon May The Wellerman Come". Retrieved 2021-01-12.