Wampum wove its way into the American vernacular as a slang term for money. A popular misconception is that wampum was used as money among native tribes in the northeastern United States. In fact, most native peoples didn’t use money at all and instead bartered for resources, and the story of how wampum became used as a currency is complicated.
Before delving into the history of how wampum went from bling to bounty, let’s answer the first question: what is wampum? Wampum was decorative beads made from the shells of whelks and clams. From the whelks, a spiral-shaped sea snail, came white beads, and purple beads came from a clam called the quahog. While these shellfish were found in abundance along the waters from Cape Cod down to New York, part of the wampum’s value comes from the difficulty in its production.
Summer was harvest season for the clams, and after the meat was consumed, the shells were then worked into beads. An artisan would need to work carefully as a stone drill could shatter the clam. Once the shells have been cut and drilled into beads, they were strung onto either plant fiber or animal tendon and woven into a variety of adornments including belts, necklaces, and headpieces.
To the indigenous peoples of North America, wampum denoted several things about the wearer: status, their obligation to their people, and even a spiritual message conveyed by the design of the beads. The scholar David Graeber writes in Debt: The First 5000 Years that “[wampum] was a representation of a value that could only be realized through its exchange.” In other words, wampum was priceless and didn’t have a commercial value until contact with European settlers.
In 1622 a Dutch West India Company trader named Jacques Elekens took a Pequot chief hostage and demanded a large ransom in return. In exchange for the chief, 280 yards of wampum were delivered, thus changing the settler’s indifference to wampum. It is worth noting that the strings of wampum were not necessarily a “cash payment,” rather, they represented the symbolic value and status of the chief. Graeber notes, “there’s no evidence that even the Indians living in the closest proximity to Europeans used wampum to buy and sell things to one another.” The Pequots who had traded with the Dutch knew that sometimes they used glass beads and reasoned that they would perhaps appreciate wampum.
The Dutch first traded furs for wampum along the Hudson River and then used the wampum for their transactions with Native fur traders. Wampum became an important commodity, and because it was durable, portable, divisible, uniform, and limited in supply, it became the preferred coin substitute in the seventeenth-century fur trade. Wampum drew the attention of the more northern Native fur-trading nations who usually conducted business with the French. Without wampum, the French found it difficult to compete with the Dutch for furs.
The business-savvy Dutch saw an opportunity to manufacture beads in the New World. Graeber writes, “English and Dutch colonists apparently found it a relatively simple matter to force [the Narragansetts and Pequots] to mass-produce the wampum beads, stringing them together in belts of pure white or pure purple and setting fixed rates of exchange with the Indians of the interior; so many fathoms of wampum for such and such a pelt.” Eventually, overproduction and lower quality beads flooded the markets. Traders were wary to accept the inferior wampum and discounted its value.
Attempts to standardize the value of wampum eventually fell into the hands of the English. The Puritan Massachusetts Bay Colony officially recognized wampum as a currency and set formalized exchange rates on October 18, 1650. Strings of 8, 24, 96, and 480 beads were valued, respectively, at one, three, and twelve pence and five shillings. Because of their rarity, purple beads were worth twice as much as white ones, and for the next ten years, the standard exchange rates for wampum were stable.
Wampum had a good run, but soon trade with the West Indies grew to be more lucrative than the fur trade. European silver and gold coins were imported to be used as currency in the islands and many of these coins made their way north and into the pockets of the New Englanders. There was no standard national currency. The value of a coin was determined by its weight in precious gold or silver. By the 1660s, the wampum valuation law was repealed and the value of wampum would be arbitrary dependent on individual agreement. In time, the colonies began minting their own coins and the use of wampum to pay for goods and services lost its appeal.
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