The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1896-12-26
THE AMERICAN CIRCULATING
MEDIUM.
HOW BAD WAMPUM WORKED
OPERATION OF GRESHAM'S LAW
OF MONEY.
THE BAD DROVE OUT THE Gool
From Circulation and Created
Something of a Panic In New
Amsterdam.

LII l44CoC I1ayS WlECI q great pOllLlCdl
faction is before the people with
proposition to lessen the value of their
money in order to bring about a gem
eral rise in prices. a great deal is said
and written about currency imitation
and its effects, says the New York
Sun. The history of this and other
countries is appealed to for the pur-
pose of showing how disastrous cheap
money has proved in the past Advo-
Gates Of honest money, in support of
their contentious, point to the revolu-
tionary period and to the recent war
times when fiat money was plenty.
Yet little Is heard of one of the first
instances of currency imitation that
ever occurred ON this side of the At
lantic. This was back in the seven
teenth century when New York was a
little village lying below what is now
Wall street and was known to the
world as New Amsterdam.
The stolid old Dutchmen who lived
in New Amsterdam wrested with the
same problem that is before the Ameri-
can people today. and finally took
measures to prevent what. in the words
Of the old council, must prove the
ruin of the country"
The people of New Amsterdam used
as currency the money Of the Indians
which is now commonly known as
wampum but which they called sewan
or seawant. Two kinds of seawant
were used; wampum, or white seawant
and suckanock or black seawant The
former was obtained from the stem
of the peTiwinlxle, and was estimated
at first at half the value of the latter.
which was the purple lining Of hard
clans.
MONEY STRUNG ON A STRING.
The seawant was cut into beads, pol
ished and strung on the sinews Of ami
mails. The white seawant was taken as
the standard. At first four beads were
estimated as worth one silver, Dutch
coin equal in value to about two cents.
A string Of white beads six feet long
passed for four guilders or about 1,6S
in our money.
The best seawant was obtained in
Long Island, Which was called by the
Indians Sewanhacky, or the Isle of
Shells. It was hard and polished well,
and was much priced by the Indians,
who used it for ornament as well as
money. 1t is said that the use of wam-
pun as currency was unknown among
the New England Indians and the
yankees, until Isaac de RaSieres, the
KoOpman of New Amsterdam in 1927,
went on an embassy to Plymouth to
buy corn from the English settlers.
He paid for the corn in wampum. The
yankees speedily took up the use Of
the substance and the Indians learned
to make the beads. From this en-
basSy Of the old Dutch KOopman dated
the history Of the first currency infia-
ton in America, and began what might
we'll be known as 1.-THE crime against
Wampum."
The trade Of New Amsterdam nat
urally was much increased by the in
PRODUCTION of the new circulating me-
dunn among the English and the New
England Indians. For a time every
thing thrived. The business of the
colony Of New Netherlands was cas-
lily carried on, for money was plentiful,
and it was accepted everywhere. The
Indians took it in exchange for furs,
corn and game and paid it for powder
guns and firewater Then trouble be-
gan to raise over the quality of the
seawant. The yankees and the New
England tribes were making their own
beads out Of shells obtained on their
coast. Their product did not compare
with that Of the Long Island shells,
for it was rough and did not take on a
good polish The beads in circulation
among the IroQuois were likewise Of
poor quality.
WAMPUM WAS COUNTERFEITED.
Irving, in his "Knickerbocker's His
tory of New York. tells pretty story
illustrative of the Dutch and Yankee
characters. According to him, the
sharp English cOloniStS for years did
thriving business selling wooden nut
megs to their stolid neighbors. Wheth-
er or not this be true, they certainly
did thriving and profitable trade
with bad Wampum. Gresham's law was
in force then as it is now, and always
has and will be. The people of New
Amsterdam slowly awakened to the
fact that their currency was depreciat-
ing. All their fine Long Island wam-
pun had left the colony or was being
boarded and in it's place there was in
circulation the crude product of the
Iroquois and Yankee minis. The out
come was natural. The money sank
il value and by 1910 six white beads
We're required to equal one silver.
The result was almost a financial
panic, such as would be caused today
| by a general unsettling of values. The
debtor class reaped the benefit, Just
as the free silver men say they would
today. Where they borrowed wampum
worth one-fourth- of a silver per bead,
they paid back wampum worth one
sixth of silver per bead. This was
| accomplished without the assistance
of any Dutch boy orator. The creditor
class naturally objected, and the great
men of the village discussed the cur
rency question long and soberly over
their pipes and beer, but until 1641 no
official action was taken.
DEPRECIATION CAUSED PANIC.
At about this time the worthy burg
hers found that not only had they
been the victims of poor Wampum. but
OF counterfeit wampum made Of porce-
lain. The yankees, discovering how
gullible were their neighbors, did not
content themselves with merely pass
/ ing on them poor clam shell beads.
! but speedily began to pay their foreign
i obligations with capital porcelain imf-
t tat1onS of the wampum. These coun-
terfe1t beads were made in England
| and showed into New Netherlands in
! large quantities. When the fraud was
| discovered there was panic. Many
| merchants found that their money was
! worthless, and the per capita circu-
! lation suddenly fell Good wampum
was scarce and the Dutch colony suf-
/ fered all the evils of what was first
an imitation of currency due to a de-
probation, and then, q sudden con-
traction caused by the fall of the beads
| to their bullion value, as it were
General lack of confidence in bust
ness circles followed. Every bead was
examined carefully before it was ac-
cepted in payment, and then it was
received only at it's actual value.
The matter came to the attention of
| Kieft was then head, and after much
6GIs1 Nov %4rax, tIa al