Truck System Wages
The Truck System of paying wages relates to the practice of paying workers in script, or tokens, rather than legal money, for their labour. During the 18th and 19th centuries, it was a wide-spread practice in the world, and still exists in some areas today (2009). It was made illegal for miners (and other specified occupations) in the U.K. in 1831. (1831 Act 1 and 2 Will. 4 c. 37) with further restrictions legally imposed in the 1870's.
The script or tokens could only be used in designated places, such as stores or pubs/bars owned and operated by their employers or associates. Many of these places charged exorbitant prices for goods which could be purchased for much less elsewhere. In some extreme cases, lawful money was never used; "store credit" would be given for purchases that would normally require change, with records kept by the storekeeper. No receipts for transactions were ever given. The "company store", with its high prices, became infamous in many places.
Another variation would be that such script could only be changed into legal tender by designated agents, who charged a fee for the service.
This system was closely associated with small, isolated and/or rural communities, where uneducated workers did not have a wide choice of employment, and would quickly become indebted to their employers so they were unable to legally leave the system.
According to the West Briton and Cornwall Advertiser newspaper, in Cornwall, England, in 1848 one person sued for wages owed. He had an ill child, but could not buy the medicine the doctor ordered, as the store did not happen to have it, and all he had to use for money was script, so he could not visit any shop in town. The child died, and he could not buy a stamp to send word to his family of what had occurred. His employer did not dispute any of his testimony, but pointed out they had given him 5s. for a coffin, and allowed him the afternoon off so he could bury the child. The court held that the man had agreed to be paid in script by accepting the job offered, and he was not working as a miner since he operated dubbers in a china clay pit; therefore, the 1831 laws against the truck-system of paying wages did not apply to his situation.
In most accounts of china-clay mining even today, employees are referred to as "workers", rather than "miners", despite the places of their work always being termed "mines". Perhaps this is a remnant of the "truck system" days.
The terms "tommy shop" in the U.K., and "tienda de raya" have also been applied to this system of work/payment.
Truck systems increasingly came under criticism, and laws have been passed in many jurisdictions making it illegal for payment for work done to be made in anything but legal tender, or to specify where employees may spend their pay.
"Of the Hiring, and Wages Paid to Persons Employed in Mines; The Condition and Treatment of the Children Employed in the Mines and Collieries of the United Kingdom", London; William Strange, 1842. pp 84-85
"Changes in the Law of England Affecting Labour (The Truck System)" A Century of Law Reform, London; MacMillan and Col, pp 254-257
The West Briton and Cornwall Advertiser, "An Account of the Recent Trials" February 24 1848, Truro, Cornwall; Mrs. Heard, publisher