Thanks to ingenuity, and a little frugality, Sea Island’s scrip helped the company and its employees survive the Great Depression.
By Michelle Franzen Martin
In the early 1930s, the country was in the throes of the worst economic collapse in the modern industrial world—personal income dropped, unemployment skyrocketed, banks closed. Like many companies, Sea Island, which had always depended on visiting guests, struggled to survive.
The Cloister opened in 1928, one year before the devastating stock market crash that triggered the Great Depression. Like other businesses in the area, Sea Island was hit hard about a year after the Depression began. In response to the crisis, company leaders A.W. Jones and Jim Compton took necessary measures to sustain the resort, including reducing their own salaries.
They also lowered rates on hotel rooms, hoping to bring in families who could afford to pay $11 a night for a double room and three good meals; a single room and three meals cost just $5.50. (By comparison, a quart of milk around that time cost about 25 cents.) Resourcefulness was emphasized in every area of the hotel—even on the golf course, where maintenance was reduced to the absolute minimum.
The Great Depression hit its lowest point in 1932, with unemployment reaching 25 percent nationwide. Throughout the decade, more than 5,000 American banks went out of business and many people lost their savings.
“Nobody knew how long the Depression would last,” says Mimi Rogers, archivist at Sea Island.
When cash became largely unavailable, Sea Island issued a scrip to its employees. Available in denominations of 5 cents to $5, it ensured that staff members would be able to pay for necessities and support their families. It was honored at every local grocery store, gas station and business in the area, which spoke to the locals’ confidence in Sea Island.
“The scrip was accepted throughout the community because of the integrity of the company issuing it,” Rogers says. “Everyone here knew each other, and the business owners knew that if an employee of Sea Island Co. paid in scrip, the company would reimburse the business.”
A fateful experience allowed the resort to continue operating during the Depression. In 1933, when company President Jones took a trip to Detroit, he saw that two major banks had shut down and he fully realized the severity of the economic crisis. As a result, he immediately went to Dayton, Ohio, where he visited a brokerage house to borrow cash. He quickly returned to Sea Island and gave the money to Compton, the company’s vice president and treasurer. Through careful management of the funds by Jones and Compton, 200 people employed by the company continued to have jobs.
Having the cash proved helpful in emergency situations that year, especially after all of the country’s banks were closed for a weeklong bank holiday issued during President Franklin D. Roosevelt’s first days in office.
“Cash was very tight and people wanted to get their cash out of the banks,” Rogers says. “Having the cash on hand, along with the scrip, helped our guests and employees in many ways.”
Thankfully, the scrip wasn’t needed for long—the redemption date for it was Jan. 1, 1934. “According to a former officer, the scrip was used for a short period of time, probably less than a year,” Rogers explains. “The Depression continued throughout the 1930s and did not end until World War II.”
Following the end of the Great Depression, it took Sea Island, and many other businesses throughout the nation, years to completely recover. After the attack on Pearl Harbor in 1941, America’s factories went into full production of military equipment, and by 1942 the country’s unemployment rate was restored to pre-Depression levels. Sea Island turned a profit in 1941.
Thanks to the vision of Jones and Compton, and the loyalty and commitment of the resort’s staff—who stayed with the company even through its most trying times—
Sea Island grew to worldwide acclaim,
becoming a destination for dignitaries and celebrities, as well as families and friends who return year after year.