With recent mortgage foreclosures in the housing market, we can perhaps more readily relate to the events that transpired in the Great Depression of the 1930s. With continual drought and low commodity prices, farmers across North Dakota were losing their farms to taxes and mortgages; but the State Legislature on this date would reintroduce an ancient practice to remedy this situation. Alfred Dale, State Treasurer, recommended the use of script. Many farmers and merchants, lacking available cash, had already adopted forms of barter to exchange goods and services, but Mr. Dale now proposed a form of script to allow farmers to repay their loans and at the same time obtain negotiable script to purchase other items and expand the economy.
This is how it worked. The farmer would sell one thousand bushels of wheat at 35 cents a bushel, then take his check for $350 to the Bank of North Dakota to pay on his farm loan. The bank would credit the payment and then issue the farmer an additional $350 in negotiable bonds of $1, $5 and $10 values - in essence giving him 70 cents a bushel for his wheat, a form of currency inflation. These bonds were then usable for any purchase at face value, but at each transaction, the handler affixed a stamp purchased from the Bank of North Dakota equal to 3% of the value of the bond. After the bond has passed through thirty-four transactions, the full value of the bond has been reached and the Bank of North Dakota was out nothing, while at the same time, the farmer had met his taxes and mortgage payments.
The State Legislature adopted House Bill 265, but somewhat modified the script to Self-Liquidating Tax Certificates and revenue stamps based on the amount of unpaid taxes in each county. It was also noted that it was the patriotic duty of all public employees to accept at least 15% of their salary in self-liquidating tax certificates.
Although it was too late for many farm owners, the use of script temporarily halted tax sales and allowed thousands to remain on their farms. It would be an ironic twist for some of these individuals, since it was land script instead of homesteading that had allowed them to obtain their parcels originally.
Dakota Datebook written by Jim Davis
Wells County Free Press February 9, 1933
Laws Passed at the Twenty-Third Session of the Legislative Assembly of State of North Dakota- 1933