The Shell Game Of Manhattan
( Originally Published 1930's )
ALTHOUGH New York thinks of itself as a money-making town, the only money made here comes from counterfeiting operations. But some excellent money was made here in early colonial days, more than three hundred years ago.
When the Dutch arrived, in 1609, they found the Indians using seashell discs as measures of value and as a medium of exchange, a fiscal unit so prized that other forms of money, even gold and silver, meant nothing to them. Accordingly the newcomers had to recognize shell money, wampum, or as it was then more commonly called, sewant. In 1634 the Patroons of New Netherland ordained:
"Wampum being, in a manner, the currency of the country, with which the produce of the interior is paid for, must be considered as obtained goods, being representative there of."
While wampum was made all up and down the Atlantic coast, the metropolitan district was the center of the trade, the Long Island and New Jersey coasts being especially prolific of good shells. In fact, the Indians of these shores had become wampum specialists; and in so doing had lost some of their original skill in hunting and fighting. They are described as a weak and lazy lot of humans, with fishing as their manly art. The fact is that they could purchase nearly everything they needed from the other tribes and also could buy off war parties which threatened them. Their wampum commanded respect as far west as the Great Plains beyond the Mississippi and among the red men who had never seen the ocean or tasted a clam.
Like all good, hard money, wampum required hard work. There were plenty of shells, but nature made them too large to suit Indian fancy. So they had to be chipped down to required size and pattern, then pierced and strung together on fibers. Since the wampum workers lacked steel tools and had for thread only what fibers nature provided ready-made, the task took infinite patience and craftsmanship. Immense labor went into gathering and preparing the better grades of wampum, and a good deal of artistry into the larger pieces. These were belts running up to five inches in diameter and in length the girth of a robust warrior. In these belts shells of various shades were wrought into geometric and symbolic patterns, with reproductions of the animal guardians reverenced in Indian mythology. Strings of shells represented lesser values; loose shells passed current as small change.
Peter Kalm, the Swedish scientist, writing as late as 1748, leaves this account of the wampum trade: "These wampum are properly made of the purple parts of the shells, which the Indians value more than the white parts. A traveler who goes to trade with the Indians and is well stocked with them, may become a considerable gainer; but if he take gold coin, or bullion, he undoubtedly will be a loser; for the Indians who live farther up the country put little or no value on these metals which we reckon so precious, as I have frequently observed in the course of my travels."
While the lower forms of wampum gradually gave way before European currencies, the belts retained their values as the money of ceremony, diplomacy and war down to the American Revolution. Agents of the British king wooed with wampum his red subjects on the frontier. Sir William Johnson took a cargo of the best belts of the East to Detroit with him in 1762, to settle relations with the tribes in what had been French America, sealing the situation by presenting, at impressive pauses in his last oration before the council, nine belts and three strings. This was the money of international relations, the stuff with which to snare tribal affections, buy an ally, placate a foe, cancel a war debt. A religious veneration attached to these noble evidences of wealth, which straightway became part of the tribal reserves surrounded by taboos and solemnly placed in the keeping of the most venerable and trusted sachems.
The great belts of the Mohawks which they took with them to Canada when they left their native valley after the American Revolution, form one of the most influential deposits in American history. Issues of peace and war had hung upon their presentation and reception. If those belts had never been made, or if they had been disposed of otherwise than they were disposed of, Middle America might be French-speaking rather than English-speaking, since the Mohawks, as the elder brothers of the Iroquois Confederacy, held the gate open through which the English entered upon their conquest of the mid-continent after the French had been established there for half a century. No other relics can mean quite as much to Middle Westerners as the wampum treasures of the Mohawks. Good wampum is still worth money today—ask the next museum director you meet.
After the arrival of the whites on and around Manhattan, some of their more pushing spirits, looking at wampum with envious eyes, entered the trade in a large way. They worked with improved tools and methods. Also they worked longer hours and at a stiffer pace, scamping on materials and craftsmanship in order to achieve quantity production. The Indians, with few wants, had followed the common-sense practice of making wampum only when they actively desired some definite goods; as a result they never inflated their shell currency. However, some of the native wampum makers fell for rum and other civilized goods and so were brought into wage control by the businesslike whites. Thus the wampum currency became debased in quality and expanded in quantity, falling off in buying power and losing the respect in which it had been formerly held.
Wampum depreciated fifty per cent from the first price-fixing of four sewant beads for a stuyver to six for a stuyver, ten years later, and eight for a stuyver in 1650. This for the white beads. The black or purple ones were double value from 1650 and continued to command a premium for more than a century because of Indian preference. A Dutch stuyver was about equal to half a cent. In the early days of the colony on Manhattan, a braided string a fathom long was worth four "Hollands" guilders, or about $1.66.
Wampum was used not only in the Indian trade but between the colonists themselves. Many homes of the early settlers were acquired with wampum, and some of the most expensive real estate in the world today once was sold for strings of shells. For instance, the southeast corner of present Exchange and Broad streets, containing a house, garden and orchard, was sold by Nicasius De Sille to Captain Thomas de la Valle in 1672 for 3,000 guilders sewant. The money value of this sewant, which amounted to roughly 750 standard fathom strings or their equivalent in lesser or greater wampum units, is estimated at $1,200. Another of many land sales for sewant was a house and lot on the east side of the Graft (or Gracht), present Broad Street, Abraham Rykin selling to Jan Rutjersen for 950 Carolus guilders, current wampum, or approximately $380, the land being worth $100; the house, $280.
Probably none of the parties involved had ever heard of Gresham's Law; nevertheless, the bad wampum drove out the good wampum, which was hoarded, the the best of it going into tribal treasuries to be saved against sovereign needs. European coinage, and to some extent beaver skins circulating as bank notes do now, at a value of about three dollars, took the place of shells in the ordinary transactions of commerce. Gresham's Law appears to be two-edged; bad money drives out good, but when it becomes too utterly bad it is in turn driven out if other money is available. One difficulty of keeping modern currencies in order is that government, having achieved a monopoly of currency, tries to drive competing currencies off the market.
Wampum, like gold, was durable, had artistic possibilities, enjoyed high prestige in international trade, and received religious backing. "In God we trust" still adorns our sequestered golden coins with which the people are no longer trusted. Of wampum it can be said that, until the whites took up the trade, every piece was chipped out with prayer, since the Indian was such a profoundly religious person that his every overt act was done after consulting the Deity. At present our gold, like the Indian wampum, has gone into the national treasury to be used only in international settlements and the higher affairs of state. It is harder for a citizen to see the golden hoard in the Assay Office or the Treasury than it was for the young Indian to behold the wampum treasures of his tribe.
As in the case of gold, wampum's utility as money grew from its decorative effect. Seashells became a fashion; the brave who wore them commended him-self to his sweethearts and his elders. When he boasted, he rattled his wampum as Thackeray's beaux used to chink the gold in their pockets. Also the brave was sure of his estate while he wore it, a point of some importance in a land as yet without strong boxes, banks and title deeds. In everything except personal effects —weapons, clothing and trinkets—communism was the rule. Thus there developed that wide demand for wampum which gave it exchange value, especially in dealings from clan to clan and tribe to tribe. Any workable measure of value must be something which nearly everyone wants badly enough to exchange his time and goods for it in some ratio or other.
Yet wampum had even less utility than gold, which is, of course, one of the less substantial metals. Nothing whatever could be made of shell discs. They could not even be used effectively to tip an arrow or skin a bear. Yet through the magic of a widely accepted idea based on their beauty and convenience, the little pierced shell-discs could accomplish life-or-death deeds. With wampum a tribe lacking flints could buy them and later could get powder and muskets, steel hatchets and firewater, allies and hunting rights. By means of wampum the Indian could equip himself to take scalps, captives and wives. The power of wampum resided, not in the shells themselves, but in the well-nigh universal acceptance of them as beautiful and valuable, an idea which seemed to the whites altogether heathenish. Yet the latter have applied exactly the same test to gold and silver.
The place of these metals in currency systems rests upon the same basis, is part of the same witchery of delight. Gold and silver gave joy to mankind long before either metal was coined into money. The Oriental dancer wearing her fortune in golden and silver bangles and bracelets is far older, as a type, than the gold standard or bimetallism. Call her obsession vanity, call it folly, call it what you will; nevertheless her hoard stands for the fiscal sense of the great trading peoples as far back as the records run. Decide, if you please, that her primitive notion of the supreme value of gold and silver should go into the discard, along with the Indian's misguided faith in seashell discs. Why should a mere style, an airy concept of beauty, hold a machine age so completely in thrall that its wheels must stop grinding out wealth until government can get gold out of common circulation? Are we on all fours with the bangled houri who danced before the Caliphs? Apparently we are. But having admitted all this, what next? Is there a substitute?
As gold passes out of common use and into tribal treasuries, as wampum did, it is clear that its popularity caused more harm than wampum ever did. Both gold and shells served well as measures of value and media of exchange; but the gold addicts of the modern world would not let the matter rest there. They were not satisfied with digging gold from the earth, minting it, and letting it go its way, as the wampum workers were satisfied to pass out their money. An elaborate credit system, backed by law and police power, was raised on the metal base, until ten paper dollars were based on one gold dollar and ten credit dollars were based on one paper dollar. The Indians were not smart enough to make wampum a measure of past and future values as well as of present goods. They lived from day to day, and speculated not; therefore their distresses were caused by famine rather than by plenty.
Because wampum at its best was honest money, it was highly esteemed in international trade just as gold is today. Credit monetary units, somewhat less honest, confound international trade, because each sovereign state has a monopoly of its currency. Whenever one nation wants another nation's currency very badly in-deed and is unwilling to pay gold for it, the buying nation bids more and more units of its own currency against the other currency, up to the limit of public patience with this shortsighted competition. In extreme cases of this nature, generally associated with settling or escaping of war costs, a sovereign state usually voids its debt contracts payable in gold. There is little use in quarreling with this settled habit of government; it has been going on a long time, but not as long as dancers have been wearing bangles.
For all that anyone knows to the contrary, the first duty of government may be that of maintaining a dependable measure of value for goods and services. Historically this was held to be a sacred function in the empires of the Old World; and in the wilderness of the New World the Indians understood it equally well, and made their wampum with prayers and incantations, while the gods looked over their shoulders. Government retains the same idea; an almost holy hush pervades the Assay Office, and visiting the Bureau of En-graving and Printing is like visiting a cathedral during mass. But modern worldliness has discovered ways of moving goods and binding time through credit in ways which affect prices as effectively as changes in money affect them. Moreover, credit moves are now made for profit only, without even the pretense of prayer before loans. Neither gold nor seashells work well in a world grown too sophisticated for gods as simple and elemental as the natural products of earth and sea.