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Credit and Ledgers


As the colonies grew, products from agriculture and manufacturing were sold to pay for farming and business supplies as well as personal needs. Bills of exchange representing credit for products grown or manufactured were issued to the farmer of tradesman—similar to our present-day concept of credit. Colonists usually used this credit for purchases rather than cash. The credit could not be transferred from store to store or colony to colony as it can today. Rather, it could be compared to how a gift card would work today. Gift cards are only available to be used at the store for which it is intended. You may purchase items from that store for the amount that is available on your card (ledger). When it is "empty", you must get another card, reload the card, or pay by another method. Similarly, the colonial plantation owner or tradesman would need to provide more agricultural or manufactured product to receive more credit.


In this lesson, students:

  • Explain how colonists purchased items using credit.
  • Describe how colonial businesses recorded transactions using ledgers and waste books.
  • Read a scenario and record entries into a waste book and individual ledger to simulate colonial credit transactions.


    Download Lesson Materials (PDF)

  • Merchant Activity Directions
  • Waste Book worksheet
  • Ledger worksheet
  • Benjamin Powell Waste Book (for lesson extension)
  • Benjamin Powell Ledger (for lesson extension)


  1. Discuss with students the process of using a gift card to buy things. The credit on the card is only good for that particular store, and the amount each item costs is deducted from the total amount on the card.
  2. Explain that the colonies didn't have many coins or much paper money, so most people used credit to buy things. Using the information in the Introduction, explain how credit works in the eighteenth century, comparing to a gift card. People would exchange their crops for credit, which they could use at particular stores.
  3. Ask students, "How would a store keep track of purchases without a computer?" In the eighteenth century, each storekeeper would keep track of how much credit a person had left to spend by writing it down in a ledger. They wrote down everything they sold, and to whom, in a waste book.
  4. Distribute the Merchant Activity Directions as well as the Waste Book worksheet to each student. Using the merchant activity, have the students record the transactions in the "waste book." Explain to students that although the colonists would have been using pounds, shillings, and pence, they will be using dollars for this activity. Note to teacher: This may be more beneficial to do as a whole group activity so students get the information recorded correctly.
  5. Tell students that at the end of the day, merchants would transfer the information from the waste book into individual ledgers to keep track of each person's accounts. Today each gift card is barcoded so that the remaining amount is recorded in a computer. In the eighteenth century, merchants had to write down in their ledgers how much each customer had left to spend at the merchant's store.
  6. Distribute the Ledger worksheet for the students to complete. Students should now transfer the information from the waste book into the individual colonists' ledger. Students should write the correct item on the correct ledger and subtract the amount of credit used, then total the balance of credit still available to the colonist on the bottom of the individual ledgers.
  7. To close the lesson, assign students to ask an adult with whom they live how they keep track of the household budget. Discuss their findings during the next class period.

Lesson Extensions

  • Have students examine the Benjamin Powell Waste Book and Ledger and interpret the transactions listed there.
  • Student may create a small ledger for their personal use extending through one week of school. They need to record "income" by listing allowances, earnings, lunch money, etc. and to record "expenditures" for anything they purchase.

This lesson was written by Shawn Cunlisk, Vancouver, WA, and Bill Neer, Baldwinsville, NY.