Trades and Barter
South Berwick Central School Hike through History
Trades Hike: Barter in Early America
Inroduction by Nina Maurer, OBHS
In early America, when the District of Maine was still part of Massachusetts, people had little cash to spend. The only money was in gold, silver, and copper coins, mainly from England and Spain. The shortage of coins was a hardship for people living in the American colonies, since it limited their ability to buy what they needed. Silver coins were made in Massachusetts to solve this problem, but the supply was too small. Paper money was printed by local banks, but people could not always trust its worth.
As a result of this lack of cash, most business was done by barter. Barter is trading goods (like potatoes) for other goods (like a tin lantern) without the use of money. Services (like driving a wagon or chopping wood) can also be traded. Here is an example of bartering done by a farmer in South Berwick more than 200 years ago, long before Maine became a state.
Benjamin Gerrish owned a farm beside the Great Works River. He grew corn, potatoes, barley, flax for making cloth, and hay for feeding his animals, which were cows, sheep, pigs, and chickens. He also had a vegetable garden and an apple orchard. One spring day, about this time of year, he decided to rebuild his old farmhouse, but he needed lumber for the new kitchen. He traded a bushel of potatoes that he had stored in his cellar to carpenter Alexander Gerrish, who cut timbers and framed the kitchen walls. For building a new brick chimney, he paid mason Noah Goodwin 500 pounds of hay. The tanner, Richard Shackley, who made leather from animal hides, traded the finished leather needed to make a pair of shoes for a calf skin from Gerrish’s farm. Neighbor Ichabod Lord cut slender branches, called withes, for constructing fences, and in return Gerrish loaned him a team of oxen to haul logs from the forest. The blacksmith, Thomas Chadbourne, made iron parts--shoes for Gerrish’s oxen, runners for his wagon sleigh, and iron fittings for the new chimney—but we don’t know if he worked for barter or cash!
Barter is a useful way to exchange goods when cash is scarce. But trading by barter has one big disadvantage. You and your partner must have matching needs. If you have potatoes and want an iron pot, but the person with an iron pot wants only corn, you cannot trade. Barter is costly because people spend a lot of time searching for matching needs. Money solves that problem by offering people something valued in any exchange.