Before contact with Europeans, the Haudenosaune, a group of nations in northeastern North America also known as the Iroquois, had been developing a form of communication, primarily for political purposes, that used wampum, a bead carved from seashell. Most historians have insisted that wampum was primarily a form of money. While wampum certainly did become a medium of exchange among Europeans and Haudenosaune alike, this was due to the Europeans, who misinterpreted the significance of wampum and used it solely to purchase goods from the Haudenosaune. However, the true significance of wampum for the Haudenosaune lies in its gradual development from objects with religious significance into a method for maintaining permanent peace among distinct nations. Over time wampum came to be used to record and convey key sociopolitical messages.

Wampum came in two colors, white and deep purple. Loose beads constituted the simplest and oldest form of wampum. Even in the form of loose beads, wampum could represent certain basic ideas. For example, white was associated with the sky-yearning spirit, Sapling, whose terrestrial creations, such as trees, were often beneficial to humanity; deep purple was associated with Sapling's twin brother, Flint, the earth-loving spirit whose frequent mischievous vandalism (e.g., in the form of storms) often severely disrupted human life. Legend indicates, for example, that ancient Haudenosaune anglers threw the beads into the water in which they fished to communicate with Sapling or Flint (differing versions of the Haudenosaune cosmology attribute the creation of fish to one or the other of these spirits). Later, loose beads were strung together forming string wampum. It is thought that string wampum was used to send simple political messages such as truce requests.

It was, however, the formation of the Haudenosaune Confederacy from a group of warring tribes, believed by some to have occurred around 1451, that supplied the major impetus for making wampum a deliberate system of both arbitrary and pictorially derived symbols designed primarily for political purposes. This is evident in the invention of wampum belts to encode the provisions of the Haudenosaune Confederacy's constitution. These belts combined string wampum to form icons that could be deciphered by those knowing the significance of the stylized symbols. For example, longhouses, depicted in front-view outline, usually meant a particular nation of the confederacy. Council fires, possibly indicating talks in progress, were diamond outlines that could appear alone or within trees or longhouses. Lines between humanlike figures seem to have indicated the current state of relations between peoples; belts containing such images were often used as safe-conduct passes. The arrangements of the two colors also directed interpretation of the symbols. Thus, the belts served to record, store, and make publicly available items of governmental business. Although the wampum symbol system had a limited lexicon, it served to effectively frame and enforce the law of the confederacy for hundreds of years.