Dictionary of Traded Goods and Commodities 1550-1820. Originally published by University of Wolverhampton, Wolverhampton, 2007.
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Squirrel chain is a term not found in the dictionaries and only once in the Dictionary Archive among a list of knick-knacks and TOYs [Tradecards (1698)]. Probably it was similar to a WATCH CHAIN or SCISSORS CHAIN, being decorative, but suitable for keeping small items of value or use safe when carrying them on ones person.
Not found in the OED online