Cheesy Money

The owners of the old cheese factory agreed to rent out the building and equipment, and all the farmers around LeRoy who still milked cows pledged their support. A new dairy co-operative, the LeRoy Milk Producers Association, was formed to coordinate the milk deliveries and cheese sales, and an experienced cheese master named Herman Reinelt was hired to oversee production. But the directors of the association knew they had one enormous obstacle yet to overcome: How would they pay for all the milk that would soon come pouring into the factory’s vats?

Sales of co-op memberships had brought in some money, but not nearly enough. Nor could the factory delay payments until after the cheese was sold; few of the dairy farmers could afford to wait for six to eight weeks until the final product was ready for market. And with banks reeling from the financial chaos of a worldwide depression, a loan was completely out of the question. But what other option was there?

One of the association’s directors, Gordon B. Gregory, had an idea. Instead of cash, Gregory suggested that the factory could pay for milk using coupons — private notes, or scrip, that could be redeemed for legal-tender currency, but only after the first batches of cheese had been sold. In the meantime, if farmers needed money sooner, they could use the cheese scrip to purchase groceries or other goods from the merchants in town. All the merchants in LeRoy agreed, including the blacksmith, the mechanic at the garage, the farm-implement dealers, even the local hotel and café. With everyone in agreement, Gregory promptly sent off an order to the nearest printer for five hundred coupons — which arrived just in time to pay the farmers for their first deliveries of milk to the factory.

It wasn’t long before other newspapers across the country were milking the story for all it was worth. And, like the old children’s game of telephone, the headlines became more and more fanciful as the newspapers got farther and farther away. “Rabid Finance,” declared the Windsor Star in southern Ontario. “Saskatchewan Farmers Make Their Own Currency,” the Vancouver Province reported. “Saskatchewan has Cheese Money,” announced the American coin-collecting magazine the Numismatist. “If banks won’t lend you money, make your own,” was an oft-repeated phrase. One opinion piece in the Montreal Gazette even warned bankers to take careful note of what was happening in LeRoy, “where farmers are learning to get along without you.”

The LeRoy Milk Producers Association continued to issue cheese scrip for milk purchases until 1936, when the Saskatoon-based Dairy Pool bought the factory. A much larger operation, the Dairy Pool could afford to pay cash for all its milk deliveries, eliminating the need for the LeRoy factory to use its own coupons. Even still, there is evidence that some pieces of cheese scrip continued to circulate around town for years afterward. Association records show that as late as 1941 the directors were still redeeming the occasional cheese coupon issued in the previous decade.

By the early 1960s, however, the factory in LeRoy could no longer compete with cheese shipped in from larger manufacturers in eastern Canada. The plant shut down, and the LeRoy Milk Producers Association disbanded. Today, only a grassy field and a shallow dugout mark the spot north of town where the little factory once stood. But even to this day many folks in LeRoy still know the story of a time, not so long ago, when their “cheese money” was, quite literally, as good as gold.