11 Consumption and Trade in the British Atlantic
Britain’s central role in transatlantic trade greatly enriched the mother country, but it also created high standards of living for many North American colonists. This two-way relationship reinforced the colonial American feeling of commonality with British culture. It was not until trade relations, disturbed by political changes and the strain of warfare, became strained in the 1760s that colonists began to question these ties.
During the seventeenth and eighteenth century, improvements in manufacturing, transportation, and the availability of credit increased the opportunity for colonists to purchase consumer goods. Instead of making their own tools, clothes, and utensils colonists increasingly purchased luxury items made by specialized artisans and manufacturers. As the incomes of Americans rose and the prices of these commodities fell, these items shifted from luxuries to common goods. The average person’s ability to spend money on consumer goods became a sign of their respectability. Historians have called this process the “consumer revolution.”
Britain relied on the colonies as source of raw materials, such as lumber and tobacco. Americans engaged with new forms of trade and financing that increased their ability to buy British-made goods. But the ways in which colonists paid for these goods varied sharply from those in Britain. When settlers first arrived in North America, they typically carried very little “hard” or metallic British money with them. Discovering no precious metals (and lacking the crown’s authority to mint coins), colonists relied on barter and non-traditional forms of exchange, including everything from nails to the wampum used by Native American groups in the Northeast. To deal with the lack of currency, many colonies resorted to “commodity money,” which varied from place to place. In Virginia, for example, the colonial legislature stipulated a rate of exchange for tobacco, standardizing it as a form of “money” in the colony. Commodities could be cumbersome and difficult to transport, so a system of notes developed, allowing individuals to deposit a certain amount of tobacco in a warehouse and receive a note bearing the value of the deposit that could be traded as money. In 1690, colonial Massachusetts became the first colony, as well as the first place in the Western world, to issue paper bills to be used as money. These notes, called bills of credit, were issued for finite periods of time on the colony’s credit and varied in denomination from quite small to large enough to cover major transactions.
While these notes provided colonists with a much-needed medium for exchange, it was not without its problems. Currency that worked in Virginia might be worthless in Pennsylvania. Colonists and officials back in Britain debated whether or not it was right or desirable to use mere paper, as opposed to gold or silver, as a medium of exchange. Paper money tended to lose value quic