A little over three hundred years ago, according to an intriguing new theory, the cluster of Dutch settlements that was to become New York City was brought to its financial knees—not by uncontrolled welfare costs, increased labor costs, budgetary bungling, or general mismanagement, but by small beads no more than 9.5 millimeters long and 3.2 millimeters in diameter. Strung together in six-foot lengths (called fathoms), these tiny ornaments, in the view of anthropologist Lynn Ceci of Queens College, New York, were a major cause not only of the Pequot Indian War of the 1630’s but also of a great wampum crisis of the 1660’s that ended in Dutch New Amsterdam’s becoming British New York without a shot being fired.

For the beads were wampum, which is to say, money, and for a time wampum, backed by the “Fur Standard,” was the principal medium of exchange in a region that had little other coinage. Most of the beads were made from certain mollusk shells by coastal tribes from Rhode Island to New Jersey and traded to the Dutch of New Amsterdam and the English of New England for cloth and other European goods. The whites then used the wampum to buy furs from the Iroquois and other inland tribes who valued the beads.

In 1637, when the Pequots of Connecticut had established control over many of the wampum-making tribes, the British, according to Ceci’s new interpretation, launched war against the Pequots to seize control of the source of the wealth for themselves. They were successful, and the consequent availability of large amounts of cheap wampum in their own hands gave the New Englanders a great advantage over their Dutch fur-trading rivals. That advantage was strengthened in 1652 when the Massachusetts Bay Colony began minting the pine tree shilling, which quickly replaced wampum as the medium of exchange among the British colonies. These were only too happy, however, to use wampum in trading with the Dutch, and the result was inflation of profound dimensions as the British “dumped” thousands of fathoms of wampum into the Dutch economy. “Dutch farmers, laborers, and soldiers,” Ceci notes, “were impoverished as the cost of goods and wages soared in New Amsterdam, the price of bread and shoes, for example, rising as much as 400 percent.”

By the 1660’s New Amsterdam was staggering, and when the Duke of York decided to seize the territory in 1664, the Dutch were helpless to resist. New Amsterdam thus became New York—the creation of a bunch of beads.