The first food stamp program was introduced in 1939 by the Federal Surplus Commodities Corporation (FSCC) established by the Department of Agriculture. Advances in agricultural production during the 1920s created a surplus of foodstuffs to the point that prices became dangerously depressed. The price collapse was worsened by the Great Depression of the 1930s. During that decade the federal government tried various methods to prop up the agricultural sectors of the economy including the destruction of crops and livestock.
The FSCC was charged with dealing with the agricultural surplus. The food stamp program was the last program initiated by the FSCC. Its purpose was to aid in relief by making surplus commodities available to those in need.
There were two types of food stamps — orange and blue — both of which came in a single $.25 denomination. Participants paid face value for orange stamps and received one-half of that amount in blue stamps. Orange stamps could be used to pay for any food. Blue stamps could only be used to pay for surplus foods. The Department of Agriculture regularly published lists of what food could be purchased with blue stamps.
The stamps were initially sold in booklets in values of $2.00, $4.00 and $10.00 in orange stamps. Booklets with orange stamp values of $1.00, $3.00, $5.00, $6.00, $8.00 and $12.00 were added.
In 1940 the Department of Agriculture was re-organized and the issuing agency name on the food stamps was changed from FSCC to the USDA.
Merchants were prohibited from providing money as change for food stamp purchases. Instead, they produced their own tokens, scrip, due bills and other similar items as change. This permitted small purchases with food stamps but then required the customer to return to the same store to spend the food stamp change. The change returned by the merchant was specific to the type of stamp used so the tokens and other instruments used are identified as either orange or blue.
While merchants produced their own change, some grocery trade organizations made uniform scrip that could be used by individual stores by writing or stamping the name of the store on the scrip.
Because they were locally produced, there are hundreds of different types of food stamp change. Paper scrip is the more common type but metal and pressboard tokens were also produced. Most types are fairly scarce although hoards of some varieties have made their way into the marketplace.
World War II brought an end to this phase of the federal food stamp program in 1943.