During the eighteenth century British Honduras made use of mahogany logs as the chief circulating medium of exchange and standard of deferred payment. Mahogany log currency was bulky, and part of the motivation for legally sanctioning mahogany log currency was a desire to create additional demand for a locally produced product.
The first legal sanction to mahogany log currency seems to have come in April 1765 with an act that read: “[W]hoever shall be found guilty of profane cursing or swearing shall forfeit and pay for every such offense the sum of 2s. 6d. in Jamaica currency or the same value in merchantable unchipped logwood.”
Further legitimacy to logwood currency was added in May 1766 when all debts were made payable in logwood, except in contracts specifying another means of payment. One estimate suggests that logwood currency was officially overvalued relative to Jamaica currency on the order of 300 percent, causing a Gresham’s law action in which bad money (overvalued logwood) drove out good money (Jamaica currency), and aggravating the shortage of metallic currency evident in all colonies and remote areas.
Creditors had just cause to complain of repayment of debts in overvalued logwood, and in 1784 the government resolved that all future business dealings would be conducted in Jamaica currency, and that debts could be repaid in logwood but at an official rate that mirrored current prices of logwood.
Mahogany log currency belongs in the same category as tobacco currency in Virginia and sugar currency in the West Indies. In remote areas that are short of metallic currency a staple export earning metallic currency in foreign trade was the next best thing to metallic currency itself.
