|W. Virginia scrip|
The U.S. Constitution stated in article 1, section 10 that only gold and silver was to be the legal tender of any government. So how did Scrip come to be used? As usual there are gray areas around any statement or law, the coal companies found a way and the courts originally ruled in favor of scrip. There are many articles to read on how Scrip bypassed the legal requirements of currency. Early courts generally ruled that coal and lumber scrip did not violate the currency laws of 1862 and 1864 since it was not intended to be circulated as money. William Fugera submitted an informative and interesting four page article entitled, A HISTORY OF SCRIP to the National Scrip Collectors Association 6-2005. This article is on their website.
Wikipedia website has a very good article on local currency [private currency]. An example of how private, alternative, complementary currency or company scrip can play into the economics of an isolated or rural community is detailed. The fore mentioned currencies in no way refer to national currency. Wikipedia has a classic example of how local currencies worked in the town of Worgi, Austria in 1932-1933. Coal company scrip had [or was supposed to have] a very restricted circulation or use, but there are so many stories about how company scrip was used as a medium of exchange for goods and services that were forbidden, so call it some type of money that was not money.
I can only deduce after research that at least coal scrip [not to exclude other tokens] was Private Currency [money]. That being said, dedicated coal scrip collectors are on the cutting edge of a historical spot in time of Private Currency. From the late 1800's to about 1952 Private Currency in the form of scrip was coin of the realm in at least West Virginia. Fortunately, those of us that collect coal scrip and the attendant records are preserving an almost forgotten time of private currency while enjoying having an rare item.