Outside of the trade or barter that may have existed
during Amerindian times, one may say that our first economy was created by the
Europeans' contact with the natives of these islands. The first
"industry" to have been developed was pearl diving, so much so that
the Gulf of Paria became the Gulf of Tears, so named for those who died there
diving for pearls.
This industry, together with the capture of tribal
people and their sale into slavery to the larger islands to the north, drove
both the pearl-bearing in the Gulf and the Amerindians to virtual extinction by
the end of the 16th century. The economy to follow was largely one of imaginary
nature: the quest for El Dorado. It lead to the burning of the port settlement
of Puerto d'España and the sack of the island's capital, San José de Oruna, by
Sir Walter Raleigh. During this period, the most widely used commercial coin
changed hands in these waters.
Ferdinand and Isabella of Spain introduced a new
monetary system in 1497. The system included the eight "reales"
piece, which was to become famous as the romantic "piece of eight".
The coin provided an almost universal currency at the time, and it is from this
"piece of eight" that the Latin American "peso" derives,
which was also in use in Spanish Trinidad.
These coins were struck with the "Pillars of
Hercules", i.e. the Straits of Gibraltar, and the legend "More
Beyond". It was from this mark that the "$", the dollar sign,
derived: the figure 8 between two pillars. In quill-written form, this sign
took the form of an S with two lines. The pillar dollar was originally minted
in Mexico and was also in use in Trinidad. It is, in fact, the origin of our
Trinidad and Tobago dollar. The word "dollar" is derived from the
word "Taler" or "Thaler", which was the currency used in German-speaking
Europe throughout the Middle Ages.
The Cedula of Population of 1783 introduced French
colonists, Free Black people and African slaves to Trinidad in quantity and
inaugurated the plantation economy. In this system, there was little need for
money since food, shelter and clothing were provided by the plantation. There
was little development for the development of a retail sector. Since there was
no paid labour force, nobody had money to spend, and transactions were mostly
in kind. Transactions between planters and Europe were handled in the main by
bills of exchange and book entries. Services necessary to provide for the
shipping and sale of goods and for management of income were provided by the
merchant banker who operated at the metropolitan centre. He provided ships to
move the produce. The proceeds were used to settle the planters' financial
commitments, such as pensions and mortgages, and to procure supplies to be
shipped to the plantation. The residual was placed in a bank.
With this pattern of trade, money was needed for
transactions only at the metropolitan end. Transactions at the colonial end
required no cash, and were in fact no more than book entries. The produce
served as the unit of account and the medium of exchange, and could therefore
be regarded as a form of money. Goods which were available in Europe, such as
lumber, grain, livestock, were also in the main bought bills of exchange.
For the most part, money was used as a measure of
value for the payment of outstanding balances only as necessity arose. The
volume of currency was small and consisted of a wide variety of coins of
fluctuating value. As such, one may say that the slave population was outside
of the economy and, being "owned" by the plantation, they themselves
were a unit of account and a medium of exchange.
During this period, local currency in Trinidad
operated under very complicated circumstances, such as the transition of the
government from Spanish to English and the influence of the French on the
composition of the population. It was brought about as a direct result of those
circumstances: several types of coins were brought to Trinidad and Tobago by
the West Indian immigrants, ranging from Spanish, American, French, on to
Mexican and Dutch currency.
By 1803, there was an attempt to regularise the value
of all the various coins in Trinidad, as well as to consider the problems
arising from the necessity of readily available change. In 1804, the
"Coinage Proclamation" made a cut silver half-bit valued at 6 d.
currency, and a cut silver quarter of a bit at 3 d. currency legal tender.
During 1811,
silver coins became a rarity, as England drained Trinidad and Tobago of its
silver species. Because of this, a
hole was pierced in the middle of the coin. This "plug", as it was
sometimes called, was stamped with the letter "T" and was worth 1
bitt. The dollar ring was valued at 9 s. or 9 bitts.
In 1816, the T bitt were ordered by government to pass
by weight only, and by 1823 T bitts were decried. The dollar ring survived up
to the 1860s, valued at 3 s. 9 d. sterling, or 90 cents. Out of this confusion
of currencies the dollar emerged, valued at 4 s. and 2 pence, and may well be
the last remnant of our Spanish past.
The need for the creation of some type of banking system
in Trinidad and Tobago became evident following the emancipation of the slaves,
which had the effect of requiring the planter to pay for many of the services
which were formally rendered by the slaves. The full economic impact of
emancipation was, however, cushioned by the fact that it was accompanied by a
six-year apprenticeship scheme, which provided that the ex-slaves were only
paid wages for work done in excess of 40 hours a week.
In 1838, when the islands' some 20,656 former slaves
were fully free, the planters lost control of the labour force. They as well as
their merchant bankers in London were fully aware that full emancipation, when
it came, would increase the number of transactions in cash. An acute need for
working capital arose, and it was felt that it would be best met by the
establishment of a bank.
The abolition of slavery also meant that the state
would grow at the expense of the plantation. Bureaucracy expanded and a
consistent need to pay the civil servants as well as public sector projects
arose. Taxes had to be levied in cash, and the economy had to monetised. Throughout
the British Caribbean, planters had been compensated for the freeing of their
slaves by receipt of £ 20,000. There was money making the rounds. This lead
entrepreneurs to believe that it was a good idea to establish a bank so as to
absorb this excessive liquidity.
The practice of money-lending at exorbitant interest
rates was a vital necessity. Money loaned and mortgages of the estates made
many rich. In May of 1837, however, the Colonial Bank, owned and operated by a
"Court" comprising the commercial interest of the City of London,
shipped seventy boxes of dollars on board the "Harriet" to Port of
Spain. Each box contained between 3,000 and 5,000 coins; the total being $
250,738.50.
The secretary of the bank noted:
"Those contained in boxes no. 60 to 62 are
Spanish pillar dollars. These dollars stand in on board about 50.5 pence per
dollar, exclusive of interest and charges that may be incurred on arrival."
Banknotes ordered from Perkins, Bacon & Co. Ltd.
of London came in the denominations of $ 5, $15 and $ 20. 1,025,000 notes in
all, they had, when signed, counter-signed and issued, a redeemable value of no
less than $13,125.00.
Thus was the origin of currency in Trinidad, and by
extension in the British Caribbean. With it, the period of plantation economy
was over, and the epoch of commerce began. There was, however, no guarantee for
the survival of the island's economy, which had all but collapsed after the
abolition of slavery. Various experiments were attempted with labour: Chinese,
then Portuguese immigrants were brought, without much success. Only with the
advent of labour from the Indian sub-continent was the situation saved.
Despite the ups and downs of the sugar market, Trinidad
and Tobago's sugar economy was to save the day between the 1840s and the 1880s.
It was worked by indentured Indian labourers, who received a pittance.
By the 1870s, another economy began to emerge, which
was to have a broad and deep effect on society. This was cocoa. As the result
of the industrial revolution, Europe had produced a quickly growing middle
class. One of the things that this class enjoyed was chocolate. These islands
became the main suppliers. If the cane economy was the property of the wealthy
British firms, cocoa was every mean's mean of gaining wealth. From 2 to 5 acre
holdings to 1,000 acre under cocoa: the cocoa economy had a tremendous effect
on the prosperity of these islands. Minority groups, such as the French Creoles,
became commission agents. Others, such as the Chinese and Portuguese, became
shopkeepers on the estates. The trickle-down effect of the cocoa economy meant
the emergence of an educated middle class society, which in turn produced a
generation of the islands' first crop of professionals, mainly in the fields of
law and medicine, but also teachers, chemists, civil engineers, and surveyors.
Within a generation, another economy was to make and
impact on the lives of Trinidadians and Tobagonians. It was oil. By the 1930s,
despite the terrible world recession, Trinidad's economy was underpinned by a
very strong foundation. The petroleum economy impacted on the island's
infrastructure in terms of roads, water, electricity, which had to be geared to
an industrial-based economy. In every island in the Caribbean, including
Tobago, all the roads lead to the beaches. Their economies became dedicated to
the visitor. In Trinidad, the roads lead into the interior, where the oilfields
and the plantations are.
The industrial-based economy impacted on the nature of
education, producing engineers and scientists to operated the petrochemical
sector. From this economy, institutions such as the trade union movement was
born. This, in turn, gave rise to the type of political movements that took the
country into independence.
