Abstract
This case study illustrates how a diverse array of domestic and foreign currencies satisfied the money demands of the many interregional and international trade circuits articulated around New Orleans (the most important Southern port of trade) right before the American Civil War. It also explores how the plurality of currencies provided liquidity when it was the most needed, especially during and after the panic of 1857, through adjustments of currency exchange rates. Discounts and premiums of state banknotes provide information about the patterns of spatial division of labor and the imbalanced regional specialization of the American economy right before the Civil War. The nominal exchange rates of foreign currencies in New Orleans such as the British sterling pound, the French franc, the Austrian thaler, the Mexican peso, the Spanish and the Spanish American “patriot” doubloons inform our understanding of the integration of the American slaveholding, staple-exporting South to the world economy of the long nineteenth century.
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Notes
- 1.
Mundell Robert, “A Theory of Optimum Currency Areas.” The American Economic Review 51, 4 (1961) :657–665.
- 2.
Helleiner Eric, The Making of National Money. Territorial Currencies in Historical Perspective. (Ithaca, NY: Cornell University Press, 2003).
- 3.
Kuroda Akinobu, “Review of Thomas J. Sargent and François R. Velde, The Big Problem of Small Change.” International Journal of Asian Studies 2, 1 (2004):179–81.
- 4.
Friedman Milton, “The Case for Flexible Exchange Rates” in Essays in Positive Economics, ed Milton Friedman, (Chicago, IL: The University of Chicago Press, 1953), 157–203.
- 5.
Chew Morris, History of the Kingdom of Cotton and Cotton Statistics of the World, (New Orleans, LA: W. B. Stansbury & Co, 1984), 67.
- 6.
Buck Norman Sydney, The Development of the Organization of Anglo-American Trade, 1800–1860, (New Haven, CT: Yale University Press, 1925), 4–29.
- 7.
Sellers Charles, The Market Revolution. Jacksonian America, 1815–1846, (New York, NY: Oxford University Press, 1991), 24, 71.
- 8.
Fishlow (1965: p. 287).
- 9.
Hammond Bray, Banks and Politics in America. From the Revolution to the Civil War. (Princeton, NJ: Princeton University Press, 1957), 684.
- 10.
Fishlow (1965: pp. 273–74).
- 11.
Beckert Sven, Empire of Cotton: A Global History, (New York, NY: Alfred A. Knopf, 2014), 199–241.
- 12.
Robert Greenhalgh, The Rise of New York Port, (New York, NY: Charles Scribner’s Sons, 1970).
- 13.
Gorton Gary, “Reputation Formation in Early Bank Note Markets.” Journal of Political Economy 104, 2 (1996): 355.
- 14.
Shambaugh Jay, “An Experiment with Multiple Currencies: The American Monetary System from 1838–60.” Explorations in Economic History 43 (2006): 623.
- 15.
Schweikart Larry, Banking in the American South from the Age of Jackson to Reconstruction, (Baton Rouge, LA: Louisiana State University Press, 1997), 277.
- 16.
Greaves Bettina Bien, Free Market Economics. A Syllabus, (Auburn, AL: The Ludwig von Mises Institute, 2007).
- 17.
North Douglass , The Economic Growth of the United States, 1790–1860. (Englewood Cliffs, NJ: W. W. Norton, 1961).
Further Reading
Gorton, G. (1999). Pricing free bank notes. Journal of Monetary Economics, 44, 33–64.
James, J. (2016). Payment systems. In C. Diebolt & M. Haupert (Eds.), Handbook of cliometrics (pp. 353–373). Berlin: Springer.
Kuroda, A. (2008). What is the complementarity among monies? An introductory note. Financial History Review, 15(1), 7–15.
Shambaugh, J. (2006). An experiment with multiple currencies: The American monetary system from 1838–60. Explorations in Economic History, 43, 609–645.
Bibliography
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Helleiner, E. (2003). The making of national money. Territorial currencies in historical perspective. Ithaca: Cornell University Press.
Kuroda, A. (2004). Review of Thomas J. Sargent and François R. Velde, The big problem of small change. International Journal of Asian Studies, 2, 1.
Mundell, R. (1961). A theory of optimum currency areas. The American Economic Review, 51, 4.
North, D. (1961). The economic growth of the United States, 1790–1860. Englewood Cliffs: W. W. Norton.
Schweikart, L. (1997). Banking in the American South from the age of Jackson to reconstruction. Baton Rouge: Louisiana State University Press.
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Shambaug, J. (2006), An experiment with multiple currencies: The American monetary system from 1838–60. Explorations in Economic History 43.
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Bautista–González, M.A. (2016). The Many Monies of King Cotton: Domestic and Foreign Currencies in New Orleans, 1856–1860. In: Batiz-Lazo, B., Efthymiou, L. (eds) The Book of Payments. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-60231-2_5
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