In the early years of the colony, a constant shortage of coins meant goods were exchanged for other goods and often not for currency directly. During Dutch control of the Hudson Valley, the Dutch West India Company set the value of a “guilder” which, in turn, was used to reckon the value of goods and services. This multi-step exchange process meant that many European farmers and merchants kept detailed records, allowing historians to see what was bought and sold and how much it was worth at the time. From this, the workings of a colonial economy can be reconstructed.
Wheat, wampum, and furs were commonly used for payment in transactions between Europeans, and the value of these commodities changed based on market forces locally and abroad. In the 17th century, wheat dominated the Kingston exchange market while furs were more commonly traded in Albany and New York City.
The system of commodity-as-money continued into the era of British control of New York, although new currencies were eventually used to determine the value of goods. The value of cash, both coins and paper, typically varied across the colonies, and denominations followed a system of pounds, shillings, and pence, although all colonial cash was valued less than the British pound sterling.
Eventually, each colony began to print their own paper money in the form of “bills of credit” representing the government’s debt to the holder of the bill. These circulated as currency and, though accepted by the government to pay taxes, were not always accepted for private debts. Often, colonial governments issued too many bills, leading to inflation and the devaluing of the state currency. This currency instability echoed throughout the colonial economy.
-New_York-2_Aug_1775_OBV.jpg)
The note below is an example of the very first paper money in the colony of New York. The odd cutout at the top worked as an anti-counterfeit measure: when used to pay taxes, each unique cutout would be matched to its counterpart in the possession of the government, verifying its legitimacy.
Coins remained in short supply throughout the colonial period. The British government supplied little coinage to the colonies and prohibited the colonies from making their own. Instead, colonial New Yorkers often used the Spanish dollar coin, which was widely used in Europe, the Americas, and Asia and was one of the world’s first international currencies.
Centuries of misinformation spread the idea, still repeated today, that wampum acted as currency in the Indigenous cultures of the Eastern Woodlands. Historic records show that Dutch traders noted the important place wampum held in Munsee culture as early as 1620. And, while the shell beads held great value to the Munsee people, they were not used as money in Munsee society or in those of neighboring Indigenous cultures. Despite this, the Dutch West India Company, and later the English government, set the value of wampum in the exchange of goods. Early in Frederick Philipse I’s trading career, he made a considerable part of his income on currency speculation, buying shell beads in bulk and stringing them into “wampum” to be sold when the value of the commodity soared.
Wampum served spiritual and ceremonial purposes and was a signifier of authority. It was used for diplomacy, woven into belts with designs imbued with meaning. These patterns acted as mnemonic devices, assisting leaders in remembering history, laws, and traditions. Holding wampum while speaking conveyed truthfulness and instilled a sense of importance in the words spoken.
The hard and brittle shells of mollusks were traditionally used in the painstaking process of cutting, rounding, sanding, and drilling to make the beads. The inner spiraled parts of various whelk species have been used for the white beads, including snow whelk, lightning whelk, channeled whelk, and knobbed whelk. The quahog, or hard clam, was prized in wampum making, providing the purple inner shell needed to make the distinctive dark beads contrasting with the white whelk shell. Wampum continues to be spiritually significant to the Munsee people. It is incorporated into objects, ornaments, and worn as clothing and jewelry.
