The truck system was a practice once used by merchants in Newfoundland and Labrador. It dates back to the early days of settlement. Merchants would provide fishermen with goods and fishing gear on credit. The value of a fisherman’s catch would later be used to pay down the debt. Credit notes would be issued if the value of a fisherman’s catch was more than the amount of debt incurred.
Higher prices were charged for items advanced on credit. This was to cover a merchant’s risk of loss if debtors were not able to pay. The value of a season’s catch would often be set quite low due to markets and the need for profit. The assigned value of the catch would often fall short of the cost of the advanced goods. Fishermen would fall further into debt as they tried to provide for their families through winter. The result was a constant cycle of poverty.
The truck system was still in use in the 1930’s. A 1937 inquiry into the fishery noted that many fishermen were still using credit. Some even did so when they had enough cash on hand. It was said that buyers would be more likely to purchase fish from those who owed them money.
Labour and cooperative movements opposed the truck system. Governments discouraged it through new laws. The increased use of cash also helped put an end to the truck system.