Today, coins and banknotes are the most common physical manifestations of money, but money does not need to take these common forms. Anything could be money, or at least exhibit some of the qualities of money, even seemingly common items anyone could produce. Consider that cowrie shells were used as money in Africa and Asia for centuries. In America, seashell money also existed in the form of ‘wampum’. Though one might assume the use of seashells as money was a purely indigenous practice, this product was not traditionally used as money among Native Americans. Rather, wampum only assumed all of the qualities of money after European settlers arrived in North America.
Colonial America and Currency
Few conceived of money in terms broader than the early European settlers in America did. To this population scattered across a few settlements on the Atlantic coast of the continent, money was not a simple thing. In the early history of colonial America, coins were in short supply and there was no printed currency. The absence of any local sources of the precious metals meant coins had to be imported from abroad via exports, but the scale of this trade was limited in its early days. Instead, in the 17th century, colonists traded amongst each other and with the indigenous peoples by bartering various commodities. Goods such as corn, fur pelts, and tobacco were used as money; these commodity-monies were relied upon to purchase goods and even to repay debts.
Seashells, manufactured into a product called wampum, were one form of money of particular importance in the North American colonies. Wampum came from the indigenous Massachusett word wampumpeag, a name which was the source of wampum and zeewam in English and Dutch respectively. Wampum was manufactured from cylindrical beads cut from seashells, such as from clams or mussels, with holes drilled through by a nail stuck in a reed and used as an awl or drill. The beads would then be strung through these holes onto a cord made of plant fiber or animal tendon. Wampum was usually made from white or purple shells and was worn as belts, necklaces, headpieces, bracelets, or earrings.
The beads were not of monetary significance at first. Rather, indigenous nations used wampum for sealing treaties and they were also common gifts upon childbirth and marriage. The length and color of wampum would reflect the occasion of the gift and the status of the wearer. In diplomacy, the delivery of wampum could also signify the pursuit of peace or the declaration of war. Wampum was not valued by only a single tribe. Indeed, though associated with the Atlantic coast, wampum could be found as far west as the Rocky Mountains. However, though an item of value, wampum was not used as money until European settlement of the New World began.
The value of wampum to native peoples was not immediately recognized by Europeans but the product eventually went on to be adopted by Europeans themselves. However, they did not make use of it as a fashion accessory. Instead, they used it as money, even adopting it as Massachusetts’ first official currency in 1650.
The length of a wampum belt determined its value as too did the color of the beads. This color in turn depended on the shells the beads were manufactured from. Two colors were most common, white and purple, the latter usually very dark and almost black. The white beads were more common and the purple rarer. The relative values could vary by place. In Maine for example, purple beads were not so rare because they were manufactured there from a more common shell.
In any case, by the 1620s, Dutch merchants were using wampum acquired from coastal tribes to purchase furs from natives along the Hudson River. They then used a portion of these furs to acquire even more wampum from coastal peoples and thereby grew their fur trading business with northern nations. Their access to wampum and use of it in making payments gave Dutch fur traders a competitive advantage over the French traders operating to their north.
Wampum became the most common form of money in the northern colonies by the 1630s. English and Dutch traders acquired mass produced wampum from the Narragansetts and Pequots, tribes of the northern coast of Long Island Sound. These native nations with access to wampum, or furs with which to trade for wampum, gained power relative to others. In this way, wampum-enabled trade was changing the balance of power among indigenous tribes.
The seashell money was also changing colonial economies. Massachusetts Bay Colony officially recognized wampum as currency in 1650. Its value was fixed at the rate of 1 penny per eight beads, or twice that for purple beads, in standardized strings of eight, twenty-four, ninety-six, and 480 beads. By now, wampum seemed to meet all of the criteria to be considered money; it was a medium of exchange, a unit of account, and a store of value. In some respects, it was not entirely unique; cowrie-shells were used as money in Africa and Asia. The American version of seashell money required a larger degree of human processing to make the final product recognized as a currency though.
Despite the work required to turn shells into wampum, overproduction weakened the use of wampum as a currency by the 1660s, as did the declining importance of the fur trade. European coins were also increasingly found in the colonies as were paper notes and coins minted in the colonies themselves. During the preceding decades, European settlers had learned to mass produce wampum by themselves in a manner that met the requirements of craftsmanship expected by the indigenous tribes. There was also the issue of counterfeit wampum, such as in the form of white beads made to look like the more valuable purple beads by the use of dyes.
For whatever combination of these reasons, wampum was losing its value. In Massachusetts, the seashell beads were no longer currency required to be accepted at a fixed rate by 1661. From then on, its value was left to individual agreements to decide. By the 1670s, wampum of the finest quality had become scarce, hoarded by Native Americans as the lesser quality wampum replaced it in whatever trade still made use of the beads. This was a case of Gresham’s law playing out, namely bad money driving out the good. Nonetheless, wampum continued to be used as money into the 19th century, especially among settlers in the western United States and in Canada. On the Pacific coast, wampum-like seashell money was also used in trade and six feet of wampum there could buy ten beaver-skins into the early 1800s. By the middle of the century though, the days of seashell money in America had passed.
Wampum is one of the symbols of the convergence between European and indigenous American history in North America. Wampum was a product that predated European settlement but only assumed its monetary role thereafter. It was also an instance of the settlers adopting a local product in order to mimic the organization of their societies back home. In the absence of local coins and banknotes, European settlers in the New World embraced alternative forms of money, of which wampum was only one of the most notable. The seashell beads illustrate that money is more a role than an item.
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1. Gentle, Paul. “Native American Wampum for Non-Monetary Uses and for Use as Money.” Public and Municipal Finance, vol. 5, no. 3, Dec. 2016, pp. 16–21.
2. Green, Cynthia. “Wampum Was Massachusetts’ First Legal Currency.” JSTOR Daily, 23 Nov. 2017.
3. Ingersoll, Ernest. “Wampum and Its History.” The American Naturalist, vol. 17, no. 5, May 1883, pp. 467–479.
4. Markham, Jerry W. “Chapter 4: Trade and Money.” A Financial History of the United States, M.E. Sharpe, Armonk, NY, 2011.
5. Tweedy, Ann C. “From Beads to Bounty: How Wampum Became America’s First Currency-and Lost Its Power.” Indian Country Today, 13 Sept. 2018.