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Instead of government-issued money, many coal companies paid their workers in company-specific currency. The system of payment was known as Scrip. Because Scrip was not redeemable elsewhere, miners and their families were forced to buy all of the groceries and supplies from company stores.
These company stores, often located in the center of mining towns, stocked all of the food, clothing, furniture, and other supplies miners would need. Having no alternative, many mining families were forced to be completely reliant on company stores (Wagner, 2011).
To purchase essential items in between pay days, miners could spend some of their upcoming paycheck. As a result of this process, many miners found themselves without any money left on payday. The cycle of Scrip credit would then start again, pushing miners and their families further into debt.
Furthermore, company stores often inflated prices to maximize the coal company's profits. Additionally, if coal operators raised miners' wages, they often also increased prices at company stores. In some cases, coal operators made more money from company stores than from the coal mines themselves (Wagner, 2011).
Miners were also forced to buy their own equipment at the company stores, making them indebted to the coal companies even before they had begun working in the mines. These men were only paid about forty cents for each ton of coal they produced. Coal operators were also known to tamper with weigh stations, so two tons of coal would only be measured as one and a half. There were no federal regulation for wages, and miners were consistently exploited and underpaid.
Having constructed the company towns, coal operators also owned the miners' houses. This meant that if a worker was fired, he lost both is source of income and his family's home. Because miners were paid in Scrip, they were unable to move to another town or to secure their own housing (Soodalter, 2020).
Miners and their families were forced to be entirely dependent on coal companies. Living in company-owned housing and being paid in company-specific currency prevented many from being able to quit their jobs or move to another town (Wagner, 2011). They were forced to stay in the company town, where coal operators could continue making a profit.