Skip to main content Accessibility help
×
Home
Hostname: page-component-5959bf8d4d-gl8zf Total loading time: 0.358 Render date: 2022-12-08T18:44:09.559Z Has data issue: true Feature Flags: { "useRatesEcommerce": false } hasContentIssue true

Resource endowments and the problem of small change: insights from two American mints, 1600–1700

Published online by Cambridge University Press:  19 October 2021

Jane E. Knodell*
Affiliation:
University of Vermont
Catalina M. Vizcarra*
Affiliation:
University of Vermont
*
Jane E. Knodell and Catalina M. Vizcarra, Department of Economics, University of Vermont, 239 Old Mill Building, 94 University Place, BurlingtonVT05405, USA; email: jane.knodell@uvm.edu, catalina.vizcarra@uvm.edu.
Jane E. Knodell and Catalina M. Vizcarra, Department of Economics, University of Vermont, 239 Old Mill Building, 94 University Place, BurlingtonVT05405, USA; email: jane.knodell@uvm.edu, catalina.vizcarra@uvm.edu.

Abstract

This article discusses historical evidence from the Potosi mint and Massachusetts Bay mint that illustrates the importance of the resource endowment (in this case silver) for the provision of small change. We show that the availability of silver was fundamental in shaping incentives. The relative scarcity of silver in Massachusetts Bay contributed to the small scale of the mint's operations, and implied that neither the monetary authority nor the mintmaster faced a significant tradeoff between drawing seigniorage from the mint and the production of small-denomination coins. In contrast, in the Viceroyalty of Peru, the abundance of silver, and the consequent large level of production of the mint's heavy peso coin, heightened the tradeoff between the fiscal and monetary objectives of the coinage. We suggest that these incentives negatively affected the production of fractionary coinage in the Peruvian viceroyalty, whereas in Massachusetts Bay the production of small-denomination coins was the norm.

Type
Articles
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of the European Association for Banking and Financial History

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We are particularly indebted to the editors and two anonymous referees for their thoughtful comments. We also want to extend our appreciation to participants at the 2020 American Historical Association meetings, the World Economic History Presidential Session at the 2019 Southern Economic Association conference, the 2019 Congreso Latinoamericano de Historia Económica (CLADHE), the 2019 Business History Conference and the 2018 World Economic History Conference for their insights and encouragement on earlier versions of this article. All errors are our own.

References

Sources

Hull, J. Colony Journal, vol. I, New England Historic Genealogical Society, MS Cb110.Google Scholar

References

Allen, M. (2012). Mints and Money in Medieval England. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
American Antiquarian Society, Committee of Publication (1857). Diaries of John Hull, Mintmaster and Treasurer of the Colony of Massachusetts Bay. Boston, MA: John Wilson and Son.Google Scholar
Andrien, K. J. (1984). Corruption, inefficiency, and imperial decline in the seventeenth-century viceroyalty of Peru. The Americas, 41(1), pp. 120.CrossRefGoogle Scholar
Andrien, K. J. (1985). Crisis and Decline: The Viceroyalty of Peru in the Seventeenth Century. Albuquerque, NM: University of New Mexico Press.Google Scholar
Arroyo Abad, L. and Palma, N. (2021). The fruits of El Dorado: the global impact of American precious metals. In Dobado-González, R. and García-Hiernaux, A. (eds.), The Fruits of the Early Globablization: An Iberian Perspective. Cham: Springer.Google Scholar
Bailyn, B. (1955). The New England Merchants in the Seventeenth Century. Cambridge, MA: Harvard University Press.Google Scholar
Bakewell, P. (1988). Silver and Entrepreneurship in Seventeenth-Century Potosí: The Life and Times of Antonio López de Quiroga. Albuquerque, NM: University of New Mexico Press.Google Scholar
Bodge, G. M. (1906). Soldiers in King Philip's War. Baltimore, MD: Genealogical Pub. Co.Google Scholar
Céspedes del Castillo, G. (1996). Las casas de moneda en los reinos de India: las cecas indianas en 1536–1825, vol.1. Madrid: Museo Casa de la Moneda.Google Scholar
Challis, C. E. (1978). The Tudor Coinage. New York: Manchester University Press.Google Scholar
Cipolla, C. M. (1967). Money, Prices, and Civilization in the Mediterranean World, Fifth to Seventeenth Century. New York: Gordian Press.Google Scholar
Craig, S. J. (1953). The Min: A History of the London Mint from A.D. 287 to 1948. Cambridge: Cambridge University Press.Google Scholar
Crosby, S. S. (1878). The Early Coins of America; and the Laws Governing their Issue. Boston, MA: Estes and Lauriat.Google Scholar
Grubb, F. (2020). Money and price in colonial America. In Battilossi, S., Cassis, Y. and Yago, K. (eds.), Handbook of the History of Money and Currency. Singapore: Springer.Google Scholar
Hodder, M. (2002). The Hain Family Collection of Massachusetts Silver Coins, Stack's Americana Public Auction Sale January 15, 2002. New York: Stack's.Google Scholar
Irigoin, A. (2020). Rise and demise of the global silver standard. In Battilossi, S., Cassis, Y. and Yago, K. (eds.), Handbook of the History of Money and Currency. Singapore: Springer.Google Scholar
Jordan, L. (1996, with updates). The Coins of Colonial and Early America, www.coins.nd.edu. James Spilman, image coordinator.Google Scholar
Jordan, L. (2002). John Hull, the Mint, and the Economics of Massachusetts Coinage. Hanover, ME: University Press of New England.Google Scholar
Judd, S. (1976). The History of Hadley, Massachusetts. Somersworth, NH: New Hampshire Publishing Company.Google Scholar
Lane, K. (2014). Slavery and the Casa de la Moneda in seventeenth-century Potosí. In Ghirardi, M. (ed.), Territorios de lo Cotidiano, siglos XV–XX: del antiguo virreinato del Perú a la Argentina contemporánea. Rosario: Prohistoria.Google Scholar
Lane, K. (2017). From corrupt to criminal: reflections on the great Potosi mint fraud of 1649. In Corruption in the Iberian Empires: Greed, Custom, and Colonial Networks. Albuquerque, NM: University of New Mexico Press.Google Scholar
Lane, K. (2019). Potosí: The Silver City that Changed the World. Berkeley, CA: University of California Press.Google Scholar
Lazo García, C. (1992). economia colonial y régimen monetario Perú: siglos XVI–XIX, vols. 1–3. Lima: Banco Central de Reserva.Google Scholar
Luque, J. (2016). Monedas de cuenta y cuño, siglos xvi-xviii. In Contreras, C. (ed.), Historia de la moneda en el Peru. Lima: Banco Central de Reserva del Perú and Instituto de Estudios Peruanos.Google Scholar
Marichal, C. (2006). The Spanish–American silver peso: export commodity and global money of the ancien regime, 1550–1800. In Frank, Z., Marichal, C. and Topik, S. (eds.), From Silver to Cocaine: Latin American Commodity Chains and the Building of the World Economy, 1500–2000. Durham, NC, and London: Duke University Press.Google Scholar
Massachusetts Historical Society. Map of the town of Boston 1676. Drawn by Samuel C. Clough.Google Scholar
Mayhew, N. J. (1995). Population, money supply, and the velocity of circulation in England, 1300–1700. The Economic History Review, n.s., 48(2), pp. 238–57.Google Scholar
McCusker, J. H. (1978). Money and Exchange in Europe and America, 1600–1775: A Handbook. Chapel Hill, NC: University of North Carolina Press.CrossRefGoogle Scholar
McWilliams, J. E. (2007). Building the Bay Colony: Local Economy and Culture in Early Massachusetts. Charlottesville, VA: University of Virginia Press.Google Scholar
Munro, J. H. (1988). Deflation and the petty coinage problem in the late-medieval economy: the case of Flanders, 1334–1484. Explorations in Economic History, 25, pp. 387423.CrossRefGoogle Scholar
Noe, S. P. (1943). The New England and Willow Tree Coinages of Massachusetts. Numismatic Notes and Monographs, no. 102. New York: The American Numismatic Society.Google Scholar
Noe, S. P. (1947). The Oak Tree Coinage of Massachusetts. Numismatic Notes and Monographs, no. 110. New York: The American Numismatic Society.Google Scholar
Noe, S. P. (1952). The Pine Tree Coinage of Massachusetts. Numismatic. Notes and Monographs, no. 125. New York: The American Numismatic Society.Google Scholar
Palma, N. (2018). Reconstruction of money supply over the long run: the case of England, 1270–1870. Economic History Review, 71(2), pp. 373–92.CrossRefGoogle Scholar
Palma, N. (2020). American precious metals and their consequences for early modern Europe. In Battilossi, S., Cassis, Y. and Yago, K. (eds.), Handbook of the History of Money and Currency. Singapore: Springer.Google Scholar
Peterson, M. (2019). The City-State of Boston; The Rise and Fall of an Atlantic Power, 1630–1865. Princeton, NJ: Princeton University Press.Google Scholar
Quiroz, F. (2016). La moneda en el mercado colonial peruano. In Contreras, C. (ed.), Historia de la moneda en el Perú. Lima: Banco Central de Reserva del Perú and Instituto de Estudios Peruanos.Google Scholar
Rabushka, A. (2008). Taxation in Colonial America. Princeton, NJ: Princeton University Press.Google Scholar
Redish, A. (2000). Bimetallism: An Economic and Historical Analysis. Cambridge: Cambridge University Press.Google Scholar
Romano, R. (1994). Coyunturas opuestas. La crisis del siglo XVII en Europa y América. Mexico: Fondo de Cultura Económica.Google Scholar
Romano, R. (2004). Mecanismo y elementos del sistema colonial americano siglos XVI–XVIII. Mexico: Fondo de Cultura Económica.Google Scholar
Sargent, T. J. and Velde, F. R. (2002). The Big Problem of Small Change. Princeton, NJ, and Oxford: Princeton University Press.CrossRefGoogle Scholar
Shurtleff, N. B. (1854a). Records of the Governor and Company of the Massachusetts Bay in New England, vol. 4, part ii. Boston, MA: William White, Printer to the Commonwealth.Google Scholar
Shurtleff, N. B. (1854b). Records of the Governor and Company of the Massachusetts Bay in New England, vol. 5. Boston, MA: William White, Printer to the Commonwealth.Google Scholar
Suárez, M. (2016). Metales preciosos, moneda y comercio: la participación del Perú en el mundo ultramarino, siglos xvi–xviii. In Contreras, C. (ed.), Historia de la moneda en el Perú. Lima: Banco Central de Reserva del Perú and Instituto de Estudios Peruanos.Google Scholar
Wall, R. E. (1990). The Membership of the Massachusetts Bay General Court, 1630–1686. New York: Garland.Google Scholar
Wallace, N. (2003). Modeling small change: a review article. Journal of Monetary Economics, 50, pp. 13911401.CrossRefGoogle Scholar
1
Cited by

Save article to Kindle

To save this article to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Resource endowments and the problem of small change: insights from two American mints, 1600–1700
Available formats
×

Save article to Dropbox

To save this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you used this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about saving content to Dropbox.

Resource endowments and the problem of small change: insights from two American mints, 1600–1700
Available formats
×

Save article to Google Drive

To save this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you used this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about saving content to Google Drive.

Resource endowments and the problem of small change: insights from two American mints, 1600–1700
Available formats
×
×

Reply to: Submit a response

Please enter your response.

Your details

Please enter a valid email address.

Conflicting interests

Do you have any conflicting interests? *