Were tobacco warehouse receipts an economic form of money during part of the Colonial period in Virginia?

Abstract

This article examines the special use of tobacco warehouse receipts as a store of value, medium of exchange and unit of account in Virginia during part of the British Colonial period. These receipts met the three criteria necessary for them to be a type of money. When confidence in a system of currency with coins is present, this more conventional form of money takes precedence. A respected economic form of currency with coins has all three elements of money: medium of exchange, store of value and unit of account. Tobacco warehouse receipts were used as a form of money in Colonial Virginia. They were used since there was insufficient gold or silver for the commerce in British Colonial Virginia at that time. Also, the concept of store of value is examined in detail.

Rice as an Early form of Money in the Economic Sense: Satisfying Store of Value, Unit of Account and Medium of Exchange Requirements

“…Similarly, different quantities of warehouse receipts served as money during part of the colonial period in Virginia. Moreover, receipts for tobacco during part of the time era of colonial Virginia, did satisfy all three requirements for something being money (Gentle, 2018). The store of value requirement would be at least somewhat satisfied by cigarettes in prisoner of war camps in Germany (Radford, 1945).…”

“…Rothbard, (2002), maintains that when other forms of money are not available or do not inspire enough confidence, then people may have confidence in certain commodities to serve as a type of money. For instance, during part of the history of colonial Virginia, warehouse receipts for tobacco were used between people as a form of money, since receipts were backed up by 100 percent tobacco (Brock, 1975;Rothbard, 2002, Gentle, 2018. A comparable example would be rice in colonial South Carolina (Rothbard, 2002).…”

“…Beaver fur pelts were used and still are to some extent, as part of apparel. The tobacco is useful in tobacco products and as the basis for warehouse receipts, used as money in the Virginia colony for a time (Gentle, 2018). Gentle (2020b) explains how stone money was used at one time in the island of Yap.…”

“…So stored tobacco is a whole different product compared to cigarettes. Furthermore, stored tobacco holds its value longer than cigarettes do (Nettles, 1964;Gentle, 2018). Nonetheless, Wampum was made of shell beads and was thus more durable, than cigarettes or stored tobacco.…”

“…Nonetheless, Wampum was made of shell beads and was thus more durable, than cigarettes or stored tobacco. Tobacco warehouse receipts held their value, served as a medium of exchange and met the unit of account trait necessary to be money (Gentle, 2018). Therefore, one would probably wonder about gold and silver.…”