Pilgrim Currencies: From Wampum to Gold Eagles
The majority of Americans know the basics behind the story of the pilgrims’ 1620 journey on the Mayflower, their eventual landing at Plymouth Harbor, and the physical and mental hardships they faced helping form the first permanent settlement of Europeans in New England.
Native American tribes like the Pokanoket were instrumental in helping the Pilgrims survive harsh winters, showing them how to plant corn, the best places to fish, and where to catch beaver. Thanksgiving is the day we celebrate the harvest feast the Pilgrims shared with the Pokanokets as an expression of thanks and good will.
Trade with other cultures, like the Pokanokets, was as essential for the Pilgrims’ survival just as it is for Americans today. Unlike our nation’s early European ancestors, however, today we use some pretty sophisticated ways to exchange goods and services. Credit cards, electronic transfers, bank wires, and cryptocurrencies make the Pilgrim’s form of currency seem like an alien technology, but that doesn’t mean it didn’t (and still doesn’t) work just as effectively today.
Early on in the New World, coined money simply wasn’t an option. Little coinage was brought from the Old World, and England strictly prohibited the colonists from producing their own. Early arrivals like the Pilgrims traded through barter or with objects like nails, tobacco, or Indian Wampum, according to the Federal Reserve Bank of Philadelphia. Coins brought with Pilgrims were quickly sent back to Europe to purchase supplies.
Eventually, trade with the West Indies brought coins from a variety of different areas to the burgeoning colonies. One of these currencies was the silver Spanish Dollar, which gained popularity because of its uniformity in weight and size, along with its distinctive notched-edge design.
The Spanish Dollar served as the unofficial national currency of the colonies until the Coinage Act of 1857, which prohibited the use of all foreign coins as legal tender. Also known as the “piece of eight”, the silver coin was typically cut into eight pieces or “bits” for making change, which is where the term “two bits” or a quarter gets its name.
The Pine Tree Shilling
England’s ban on New England establishing its own currency was an impractical prohibition doomed to failure. Geographical distances lead to shortages, and what coins still remained soon were worn so badly they became unrecognizable. Eventually, the commercial success of the Massachusetts Bay Colony would lead to it challenging the law by passing the Mint Act in May of 1652 and secretly minting its own coins.
The first Massachusetts coins were rather crude silver blanks in a variety of sizes and contained the value denomination in Roman numerals on one side and the letters “NE” on the other. One of these new coins was the silver Pine Tree Shilling, named for and featuring one of the colony’s chief exports, the pine tree. The Shilling would eventually become a monetary standard and accepted throughout the Northeast.
The Coinage Act of 1792
After the Revolutionary War, the newly minted country finally began considering the need for its own national currency. The Constitution had given Congress the exclusive power to coin money, and it passed the nation’s first coinage act (Coinage Act of 1792), which established a national mint in Philadelphia.
The nation’s mint adopted a denomination system derived from Alexander Hamilton’s bimetallic standard with Thomas Jefferson’s believe that the dollar should be the standard unit of US currency.
The 1792 Coinage Act created silver coin denominations of half dime, dime, quarter dollar, half dollar, and dollar. Gold coin denominations were to be the quarter eagle ($2.50), half eagle ($5) and eagle ($10). Although copper coins weren’t given the status of legal tender, the Coinage Act did provide for copper cents to be struck by the U.S. Mint.
The road to creating the nation’s first currency began with the humble beginnings of the Pilgrims, a group who dealt not only with hostile environments, disease, and starvation, but with the lack of a proper currency to exchange goods and services. This holiday season, we should be thankful the dollar has continued to maintain value, especially given the decades of monetary policies that continue to challenge its position as a monetary standard for the world.