Truck wages are wages paid not in conventionalmoney but instead in the form ofpayment in kind (i.e. commodities, including goods and/or services);credit with retailers; or amoney substitute, such asscrip,chits,vouchers ortokens. Truck wages are a characteristic of atruck system, and are banned by thelabour legislation of many countries.
"Truck", in this context, is a relativelyarchaic English word meaning "exchange" or "barter".
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 bylabour law and employment standards; andlegislation such as the BritishTruck 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 aManchester cotton manufacturer in 1827 one worker gave evidence that he had received wages of only twoshillings 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 ofBrewer'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 hisRural Rides, the agriculturist and political reformerWilliam Cobbett reports the use of "the truck or tommy system" inWolverhampton andShrewsbury. 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 thirtyper cent., or more, he determines tokeep 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 wrongin 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.
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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 chorus of thesailing song "TheWellerman" referencesWeller Bros., an Australian whaling supplier that paid in goods rather than money[6] to the workers at theirwhaling 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.
Truck systems often existed in tandem withcompany 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 asalcohol andprostitution.
On the other hand, a company town in a remote area with both the ability to keep out any potential competition for company stores, 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.
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