Money in the colonies

Could you live like this?

The overarching

economic system for

Colonial America:

Mercantilism

Mercantilism

The belief that a nation’s wealth will be

increased by controlling and protecting all

parts of trade for the benefit of the nation.

What the heck does that

mean?

Good question! Glad you asked.

“The belief that a nation’s wealth will be

increased by controlling and protecting all parts

of trade for the benefit of the nation.”

“nation” means: Great Britain

“wealth” means: money/goods/profits

“controlling and protecting”: Means: GB

dominates all goods/services/cash in the

colonies.

Take Two:

Great Britain gets to be in charge of all trade

inside and outside of Colonial America; it

gets to take over all profits, goods, services,

cash (gold and silver) and use them/hoard

them for the benefit of Great Britain.

So this is what mercantilism looked like for trade of goods...

Colonists could export goods only to Britain.

Colonists could only import goods from

Britain. Ships were only British. Crew on the

ships was only British...

British monopoly

So what do colonists do

for money?

First question: Why do they need money?

and what is that money?

that’s the second question...

There was no one “money” used!

Britain used: Pounds;

Shillings; Pence.

Colonies used those

words, but not the

value.

Cash: Paper money

and coins. (Also called

specie)

Commodity money:

Tobacco, beaver pelt,

wampum

(shells/beads/bones)

Colonies issued their own

Paper money;

see:

http://en.wikipedia.org/

wiki/Early_American_

currency for examples

Coins: Colonists used

coins from all over the

world, but didn’t really

make their own. But

they had to pay tax in

British specie (cash).

So what were the jobs to

earn money?

That’s the third question...

At first, everyone did

everything

From making furniture to weaving cloth to

growing food, to just living!

But specialization is

needed

People get settled, stable, and start to want

better quality goods and services.

Jobs abound:

Blacksmith

Cooper (barrel maker)

Silversmith

Barber

Coroner

Weaver

Mason/Bricklayer

Gunsmith

Locksmith

Lawyer

Printer

Apothecary (pharmacist)

Wigmaker

Cobbler

But everyone was a farmer first

3 out of 4 American

colonists had a farm

5 to 150 acres, with:

● house

● barn

● yard

● fields

Lots of jobs were

farm-based, and the

entire family pitched

in.

Some sold their crops

(cash crop--usually

not edible, but

sometimes…)

People needed to get paid

● Labor/services are compensated (paid for) in

wages;

● Goods are purchased not bartered (paid for,

not traded for);

● Goods come from home and abroad;

● Money is needed to measure the value of

goods and services. So an economy forms.

Two special cases

Both involve labor...

Indentured Servant

A person who promises to trade their labor

for a set period of time in exchange for room,

board and transportation to the colonies.

Usually a poor, white European.

Slave

A human being who was captured and

forced into labor for another person. The

slave is sold and is considered property-

owned for life. His or her offspring is owned

too. In the colonies, this person was African.