At the height of the Depression,
the financial situation in Joliet was desperate. Jobs were non-existent;
most of the employees at U.S. Steel and at the E.J. & E
Railroad were laid off. People
could not pay their bills or taxes, and as a result, teachers
and public employees were paid in tax-anticipation warrants and
teacher's orders. Without
taxes being collected, these warrants and teacher's orders could
not be redeemed. Grocers
and merchants, who had taken these warrants as payments for
merchandise, found their shelves almost empty and no cash to
restock them. Almost
the entire amount of unpaid warrants was being carried by local
merchants.
Mayor William Hennessey, who had just come into office,
found the banks closed and the city without money to buy
gasoline for the police cars and fire engines. Mayor Hennessey took the
problem to certain local merchants: Jake Adler, Ed Daley,
Gene Dinet, Ted Flint, Ray Pilcher, Milton Johnson, Joseph
Lewis, George Mariner, Harold Wallace and Frank
Turk, all Rotarians. This group met with a
few additional merchants, and on May 27, 1933, they formed a
corporation called the Joliet Clearing Association. Jake
Adler was president and Harold Wallace was
manager and treasurer.
The association then printed
script, which they planned to redeem with cash. Printing the script was
a real problem as a special paper had to be purchased to protect
against counterfeiting. A
special ink was used that could not be erased or the amount of
the bill be changed. On
the face of each bill it read, "Hold up to light--see
watermark." The
script was issued in amounts of 25 cents, 50 cents, $1.00, $5.00
and $10.00. On the
back of the script were listed the trustees who guaranteed
to redeem the script in lawful money of the United States. Eleven of the 15
trustees who guaranteed the script were Rotarians.
At that time, the Depression had
just passed its lowest point.
Ten dollars was a lot of money. People would gladly work
five or six-day weeks for $10.00 or $12.00 and were able to
support a family of four or five.
A penny was real money.
When the trustees guaranteed the script, it involved
thousands of dollars. They
took quite a risk.
The next problem was to find the
money to redeem the tax warrants and teacher's orders. Without any banks to
supply the cash, the only alternative was to go to local
manufacturers who received cash from outside Joliet. The Farrell Mfg. Co. and
the Deaton Kennedy Co. were the primary companies among those
participating. Clate
Farrell and Martin Kennedy, also
Rotarians, agreed to help by paying 1/3 of their payrolls in
script and then send
the 1/3 cash that was withheld to the Joliet Clearing
Association.
The Association used this cash to
redeem the tax warrants and teacher's orders that were being
held by the local merchants.
This cash made it possible for merchants to stay in
business and restock their merchandise. The script circulated in
the community as cash until it was redeemed a year later by the
Association.
Business in Joliet improved rapidly
as employees who received 1/3 of their pay in script thought it
was worthless and spent it as fast as they received it. By June 1934, people
were able to pay their real estate taxes, thus making it
possible to redeem all tax anticipation warrants and teacher's
orders.
In the closing of the Joliet
Clearing Association on June 29, 1934, one year and one month
later, the script was called in for cash with a profit of
approximately $1,000.00. This
was divided among local charities.
Thus ended an event that succeeded
only because of Joliet Rotarians.
