Tag: Money

  • Growing Money

    Growing Money

    Brandon Plumlee // AMH 4110.0M01 – Colonial America, 1607-1763

    Nowadays, we say that money doesn’t grow on trees. In colonial Virginia it didn’t grow on trees either, but it did grow on gold-green shrubs. As can be seen in the Glassford and Henderson accounts, clients to the Colchester store (1760-1761) overwhelmingly used tobacco to purchase
    their goods and services, far more so than cash. In fact, it has been estimated that by the time of the American Revolution, a full two-thirds of the population of the Tidewater and Piedmont regions of Virginia grew tobacco, even after a move to grow more wheat.[1] The people of colonial Virginia, both in the Tidewater and Piedmont regions, were literally growing their own money. So pervasive was the use of tobacco as currency that one observer in 1740 stated that “they have not the least occasion for paper money.”[2]

    A depiction of the enslaved preparing a hogshead of tobacco. From The New York Public Library, UUID: fb320ec0-c600-012f-ed2b-58d385a7bc34.

    Today we pay for goods and services with cash, but don’t really pay any attention to how exactly that cash is minted or printed. So, how did they grow their money? First things first, it was a very labor intensive process requiring many workers, usually enslaved, at very specific times throughout the growing season. The first step was to germinate the plants in small seedbeds until the plants were big and strong enough to transplant into the fields. Before the tobacco plants could be planted, field hands had to build earthen mounds about a foot or two high and approximately three to four feet apart. This task was the most time consuming and labor intensive since the mounds often required being rebuilt several times throughout the season. After ensuring that the seedlings wouldn’t be choked by weeds, the growing plants would have to be “primed,” meaning the lowest hanging leaves were removed to improve overall tobacco quality. Tobacco had to be constantly monitored for pests and disease, as it is highly susceptible; field hands went out daily to check for tobacco worms.[3]

    Assuming the tobacco survived all of these growing challenges, the harvesting season usually occurred in late summer during the dog-days of August and September. The problem was that each individual plant would be ready at a different time, meaning hands had to go out to the fields many times and gather up all the plants ready for harvest. However, if they waited too long, an early frost might kill whatever plants were left in the field. After the plant was cut, it was taken to a barn or similar place and  hung up to be “cured.” In the very early days, the farmers would simply leave the tobacco on the ground and cover it with hay or straw, but they quickly learned that hanging the leaves was far more effective. The process of curing took about a month to complete, assuming that it was done properly and mold didn’t damage any of the tobacco. It was then “prized,” or put into large casks called hogsheads. A hogshead’s weight varied slightly but was officially 1000 pounds of tobacco.[4] It is at this point that the tobacco would have been inspected and a tobacco note issued. This note would have been given to Henderson, or one of his employees, for store credit.

    Benoni Halley’s credit account, which he used to pay his debts with four hogsheads of tobacco (folio 023C).

    These hogsheads of tobacco were what were used as currency in just about any store in the colonial Chesapeake region. The credit pages of Glassford and Henderson’s ledgers abound with information on the various weights of the hogsheads. For example, a customer of the Colchester store, Benoni Halley, paid the store a total of 4 hogsheads for purchases in the store – that’s roughly 2 tons of tobacco![5] Henderson gave him a little over £22 sterling worth of credit.[6] To put this into perspective, the annual income of American colonists was £15.6, which means that Mr. Halley would have been able to live quite comfortably off of his tobacco for that year.[7] With his credit, Mr. Halley was able to buy goods ranging from cloth to rum to gunpowder.[8] It is safe to say that people throughout the colonial Chesapeake were growing their own money.

    Benoni Halley used his four hogsheads of tobacco to purchase various goods, such as different fabrics, alcohol, and gunpowder, as well as items such as women’s shoes, combs, and bridles (folio 023D).

     

    [1] Drew A. Swanson, A Golden Weed: Tobacco and Environment in the Piedmont South (New Haven: Yale University Press, 2014), 20.

    [2] William Keith, “A Discourse on the Medium of Commerce,” in Collection of Papers and Other Tracts, Written Ocasionally on Various Subjects: To Which Is Prefixed,
    by Way of Preface, an Essay on the Nature of a Publick Spirit     (London: Printed by and for J. Mechell, 1740), 209,
    http://galenet.galegroup.com.ezproxy.net.ucf.edu/servlet/Sabin?dd=0&locID=orla57816&d1-
    SABCP01767900&srchtp=b&c=19&df=f&d2=1&docNum=CY3802082052&b0=tobacco+planting&h2=1&vrsn=1.0&b
    1=0X&db=Title+Page&d6=1&ste=10&stp=DateAscend&d4=0.33&n=10&d5=d6.

    [3] “Tobacco: Colonial Cultivation Methods,” National Park Service Historic Jamestown, last modified unknown, accessed March 20, 2017, https://www.nps.gov/jame/learn/historyculture/tobacco-colonial-cultivation-methods.htm.

    [4] National Park Service, “Tobacco: Colonial Cultivation Methods.”

    [5] Alexander Henderson, et. al. Ledger 1760-1761, Colchester, Virginia folio 23 Credit, from the John Glassford and Company Records, Manuscript Division, Library of Congress, Washington D.C., Microfilm Reel 58 (owned by the Mount Vernon Ladies’ Association).

    [6] Henderson, et. al. Ledger 1760-1761 folio 23 Credit.

    [7] Peter H. Lindert and Jeffery G. Williamson, “American Colonial Incomes, 1650-1774,” Economic History Review 69, no. 1 (2014): 57.

    [8] Henderson, et. al. Ledger 1760-1761 folio 23 Debit.

  • Paper Currency – Not a Modern Idea

    Paper Currency – Not a Modern Idea

    Robyn Doran // AMH 4110.0M01 – Colonial America, 1607-1763

    When one thinks of the world of the eighteenth century, especially related to trade and commerce, one may think of small stores with raw goods, the sale of tobacco, or gold and silver coins being scooped up by a store merchant. What one might not consider when first recalling such a time is other types of currency that circulated throughout the British colonies during the 1700s. British sterling (pounds, shillings, and pence) were, of course, prominent in the colonies but they were not the only type of currency available. Spanish pistoles, silver dollars, commodity goods, and currency from individual colonies were also distributed throughout the British colonies during the seventeenth and eighteenth centuries.

    In the seventeenth and eighteenth centuries, Britain’s American colonies were thriving. However, that did not mean that there was a surplus of British sterling for them to use. When Britain founded the colonies in North America, the economic belief of mercantilism produced the idea that the colonies were there to create a surplus of goods for the mother country, not to drain the precious metal from the homeland.[1] While the British system of monetary units—such as pound, shilling, and pence—continued in the North American colonies, there was a deficit of British sterling in any of the colonies.[2] Because of this deficit, the colonies turned to other types of monetary units to use for payment.

    One type of money the colonies used was foreign coins. Some examples were Spanish pistoles and silver dollars. Most of these coins were imported from the Spanish colonies of Mexico and Peru.[3] Their worth compared to British sterling fluctuated quite a bit throughout the colonies and over time. However, just like several other types of colonial currency (such as the individual paper currency of each colony) they remained less valuable than British sterling.[4] Unfortunately, the age-old problem endured. There were not enough precious metals to go around. This was due to the philosophy of mercantilism—the belief that a country should accumulate and hold as much money (precious metal) as possible.[5] As a result of this philosophy, precious metals were not as readily available in colonies belonging to any country.[6]

    Another way colonists traded with each other was commodity goods. These were items such as tobacco or various animal skins that could be used within the colonies as currency.[7] Due to the unwieldy nature of commodity goods, the colonies devised another form of exchange: paper currency uniquely created by each colony.

    The first paper currency printed in the colonies was in December 1690. The Massachusetts Bay Colony needed to pay for military expenses from King William’s War but did not have the money to do so. Finding this to be successful, Massachusetts created legislation that would be the start of paper currency in that colony.[8] Other colonies followed suit throughout the eighteenth century, with Virginia being one of the last and most reluctant to do so in 1755.[9] The primary reason Virginia started printing money is because of the economic demands of the French and Indian War.[10] This type of exchange became prominent in all economies of the British colonies, although this locally printed paper currency was still considered less valuable than British sterling. In 1748, Virginia’s local currency had an exchange rate with British sterling of 10 to 1.[11] Here, you can see an image of a Virginian 5 pound James River Bank currency note issued in 1773.[12]

    An example of Virginia currency from 1773. Image courtesy of the American Revolution Museum at Yorktown.

    As the paper currency of the colonies became more widespread, it started showing up in store ledgers. The Colchester store in Virginia belonging to John Glassford and managed by Alexander Henderson was one such store where paper currency became very prominent. Merchandise was sold to customers in both Virginia currency and British sterling; customers paid for their merchandise with both forms of money, as well as commodity goods like tobacco. Below, a folio from the Colchester ledger (1760-1761) shows a client paying for all his purchases from November 1760 to March 1761 in Virginia paper currency.[13] British sterling was not included in any of his transactions. While there are many purchases in the ledger that were made in British sterling, it is obvious from this image that local currency was important to trade.

    Customer paying with cash at the Colchester store November 1760-March 1761 (folio 043C).

    Printed currency was an important form of payment in the British colonies. It kept trade thriving without the need of coins and allowed colonies to pay their debts and stay afloat. Of course, the colonies’ ability to create new money whenever needed was dangerous as it led to inflation, especially in times of war.[14] However, the benefits outweighed the risks as the colonies found a way to overcome the deficit of precious metals in North America. Paper currency became vital to the survival of America until the British colonies became the United States.

     

     

    [1] Louis Jordan, “The Value of Money in Colonial America,” Colonial Currency, last edited February 1, 1998,
    accessed March 21, 2017, https://coins.nd.edu/ColCurrency/CurrencyIntros/IntroValue.html.

    [2] Jordan, “Value of Money in Colonial America.”

    [3] Ibid.

    [4] Ron Michener, “Money in the American Colonies,” EH.net Encyclopedia, last modified January 13, 2011, accessed March 23, 2017, https://eh.net/encyclopedia/money-in-the-american-colonies/.

    [5] Encyclopedia Britannica Online, “Mercantilism,” accessed April 18, 2017, https://www.britannica.com/topic/mercantilism.

    [6] Encyclopedia Britannica Online, “Mercantilism.”

    [7] Jordan, “Value of Money in Colonial America.”

    [8] Louis Jordan, “The First Printed Currency – 1690,” Colonial Currency, last edited February 1, 1998, accessed March 23, 2017, https://coins.nd.edu/ColCurrency/CurrencyIntros/IntroEarliest.html.

    [9] Thomas E. Davidson, “Colonial Paper Money,” American Revolution Museum at Yorktown Galleries, accessed April 20, 2017, https://www.historyisfun.org/exhibitions/collections-and-exhibitions/yorktown-victory-center-
    galleries/colonial-paper-money/.

    [10] Omohundro Institute of Early American History and Culture, “Paper Money in Colonial Virginia,” The William and Mary Quarterly 20, no. 4 (April 1912): 228.

    [11] Omohundro Institute, “Paper Money in Colonial Virginia,” 252.

    [12] Davidson, “Colonial Paper Money.”

    [13] Alexander Henderson, et. al. Ledger 1760-1761, Colchester, Virginia folio 43 Credit, from the John Glassford and Company Records, Manuscript Division, Library of Congress, Washington, D.C., Microfilm Reel 58 (owned by the Mount Vernon Ladies’ Association).

    [14] Roger W. Weiss, “The Issue of Paper Money in the American Colonies, 1720-1774,” Journal of Economic History 30, no. 4 (December 1970): 772.