Sunday, August 23, 2015

The 64 Million Shilling Question


     While making still another attempt to clean up the computer files here at Ellie's Ancestors tonight, I came across the copy of a receipt my 4th great-uncle Milo Galloway received in 1830 when he supplied lumber to the Erie Canal to shore up their banks in Palmyra, NY.  Rereading it, I noticed the terms were 10,000 feet of lumber at 5 shillings per 100. Why was a shilling being used as legal tender in 1830?  Why didn't this question occur to me earlier?  It probably did, but I got side tracked--(I do that alot, I'm supposed to be organizing files right now, not writing a blog...see what I mean?).  This time, I pursued the question and I'd like to share what I found.

     The USA had switched to it's own currency years before 1830, but there was still in use here something called a New York Shilling. Just to be clear, the shilling being discussed was not British coinage, in fact it wasn't a coin at all.  Rather it was, "a unit of accounting used to keep track of sales, store accounts and the like, and even issued as bank script for trade".  
New York 10 Shilling Note 1786

      Some other states had similar monetary units and all were valued at different rates, in New York a shilling was worth 12 1/2 cents.  I did the math, (even working mathematical equations is better than cleaning up files), and it indeed worked out to $62.50.

     A further search found that as late as 1846, thirty years after the USA began issuing it's own money, the shilling was still being used, and so was the pence!  That year the Boston & Providence Railroad was paying it's employees in shillings and pence, with carpenters raking in six shillings, ninepence per diem. How odd!  Even when the workers were paid in dollars they were often expressed in fractions like $1.58-1/3 which equated to British shilling and pence, odder still!

     I was unable to find a satisfactory answer as to why this was the case. In an article written in 2006, the author inquired of Professor John J. McKusker, author and noted expert in US currency and economics, why these monetary units were being used at that time by a large US corporation like the railroad?  The professor expressed surprise and had no answer, but if I was a gambling woman, I'd bet there was some economic advantage to the company for doing so.

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