Debunking the Colonial Currency Myth: No, Nails Weren’t Used as Money

As a trusted bullion dealer, we hear our fair share of myths and misunderstandings about the history of money—especially when it comes to early America. One of the most persistent (and oddly popular) claims is that nails were used as a form of money in Colonial America.

Let’s set the record straight.

The Nail Myth: Where Did It Come From?

The myth likely stems from a grain of truth. In the 17th and 18th centuries, nails were indeed considered valuable household items. They were hand-forged by blacksmiths, labor-intensive to make, and essential for building homes, ships, barns, and furniture. Colonial laws sometimes even required burned buildings to be sifted for nails to reuse them. In other words, they were important commodities—but that doesn’t mean they were used as currency.

What Was Really Used as Money in Colonial America?

In reality, the colonies had a patchwork of currency systems. Because of a chronic shortage of British coins, colonists relied on a combination of:

• Foreign coinage like Spanish pieces of eight (silver), which were widely accepted.

• Barter (trading goods or services directly).

• Commodity money, such as tobacco in Virginia, wampum in the Northeast, and even beaver pelts in the frontier fur trade.

• Colonial paper money issued by local governments to facilitate trade when coins were scarce.

  
  

Nails never made it into any official or widely accepted currency system. They were certainly valuable, but that value didn’t translate into being money.

Understanding the Difference: Commodity vs. Currency

It’s important to understand that just because something has value doesn’t mean it functions as money. For something to be considered currency, it needs to meet three basic criteria:

1. Medium of Exchange – Accepted by many people to facilitate trade.

2. Unit of Account – Standardized in terms of value and divisible.

3. Store of Value – Maintains its value over time.

   
   

Nails might have been occasionally traded or bartered, especially in remote areas, but they lacked the consistency, portability, and acceptability to function as money.

Why the Myth Persists

The idea of nails as money is romantic—it evokes a gritty, resourceful frontier spirit. But more than that, it may reflect how modern folks look back at a time when "value" meant survival, tools, and utility. Still, nostalgia doesn’t equal economic truth.

Final Thoughts from a Bullion Dealer

As professionals who work with real money every day—gold, silver, coins, bars—we know how important it is to understand what gives something lasting value. The metals we deal in have been trusted across centuries and continents because they meet the true definition of money.

So the next time you hear someone say nails were Colonial currency, you can smile, nod—and set the record straight.

Gold and silver may tarnish, but history shouldn’t.