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Bulloch History with Roger Allen - Tobacco becomes currency in the U.S.
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Roger Allen

    Note: The following is the first in a series of columns on the origin of currency in the American colonies and Georgia.

    The word "bank" comes from the Italian word "banco" (or bench). The Italian moneychangers transacted their business from benches as early as 1157. Eventually, the bench became the insignia of their trade.
    "Bank notes" were receipts written by goldsmiths to customers for valuables left in their custody. Some of these notes dating back to 1670 were discovered at Child's Bank, the jeweler to King William III of England.
    In the early North American colonies, the colonial treasury served as a bank. The system of barter was in full swing: Farmers used their grain as payment for taxes, which were recorded as "country pay."
    Wampumpeage, also called Wampum, a type of bead, was the favored medium for trading with local Indian tribes. The black beads came from poquanhock or quohaug shells, while the white beads came from periwinkle shells.
    In the Southern colonies, trading was conducted somewhat differently. In 1642, the Virginia Legislature forbade the making of contracts payable in money, insisting that tobacco be the sole form of currency.
    In 1727, tobacco notes were legalized, representing tobacco stocks being held in warehouses. In 1734, "crop notes" were introduced, which could be exchanged for specific casks of tobacco that had been graded and sealed.
    John Colman of Boston proposed "erecting a bank of credit in Boston, New England, founded on land security" in 1714. In 1740, Edward Hutchinson actually started a commercial "specie bank."
    Hutchinson issued 20-year "merchant notes" payable in silver. Similarly, the New London Society for Trade and Commerce, formed in Connecticut in 1732, issued "bills of publick credit."
    The nation's first legally chartered bank, the Pennsylvania Bank, was started in Philadelphia in 1780. Its name changed twice in rapid succession: first to Girard's National Bank, then to the Bank of North America.
    In 1791, Alexander Hamilton, secretary of the U.S. Treasury, established the First Bank of the United States. Its Savannah branch office opened on the corners of Julian and Drayton streets. It shut down in 1809.
    The Second Bank of the U.S. was established in 1816 at the urging of Stephen Girard, a Philadelphia merchant and banker. He arranged for former Bank of North America President William Jones to become its president.
    Second Bank of the U.S. President Langdon Cheves demanded Georgia's banks pay their debts in hard currency or pay 6 percent interest. In response, the Georgia Legislature exempted all Georgia banks from paying any interest.
    Roger Allen is a local lover of history. He provides a brief look at the area's historical past. Email Roger at

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