How the Dollar got its name

[Occams Barber]

Thalers, Pesos & Pieces of Eight
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How the Dollar got its Name
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On July 6, 1785, the Continental Congress of the United States authorised the issuance of its first official coinage – the United States dollar. While we tend to see the dollar as quintessentially American, over 20 countries use dollars as their unit of currency and the dollar’s style, value, and name, trace back five centuries to a valley in Eastern Europe…


In the early 1500s silver deposits were discovered in Bohemia, in the modern Czech Republic, near the German border. The region was named Joachimsthal – ‘Joachim’ in honour of Saint Joachim and ‘thal’ meaning valley in the local Germanic dialect. By 1518 the valley was producing large amounts of silver, which was locally refined and minted into large, high value silver coins. Given the shortage of reliable coinage throughout Europe, the quantity, quality, and consistency of silver coins from Joachimsthal led to them spreading throughout the continent as a trusted currency. These were the days when coins had an intrinsic value equivalent to their face value, based on the weight and fineness of their precious metal (gold or silver) content. Since it wasn’t unusual for coins to be clipped or forged the success of a coinage was often based on its reputation for consistent metal content and the quality of its minting.

The coins were known as Joachimsthalers later shortened to ‘thalers’ as the coins spread across Europe. The success of the Joachimsthaler prompted a number of other north European states to mint their own silver coins based on the Bohemian ‘thaler’. At various times there were Reichsthalers, Silbertalers, Albertustalers, Laubthalers, Kronenthalers, Schutzentalers etc. ‘Thaler’ based (and similarly named) coins were still being minted in the mid-19th century.

One effect of the spread of the taler was variation in its, typical Germanic, spelling and pronunciation. There was ‘taler’, ‘toler’. ‘thahler’, ‘dahler’, ‘daler’ and ‘daalder’ amongst a range of alternatives.

One variation was the ‘Leeuwendaler’ (‘lion daler’), a Dutch silver coin minted in the 16th, 17th and 18th centuries. Since the Dutch daler was imported into early Dutch/American colonies it’s use spread from Dutch settlements like New Amsterdam to other American colonies. The spelling and pronunciation of the Dutch ‘daler’ may well have prompted the linguistic shift from the Germanic ‘thaler’ to its Anglicised version, ‘dollar’.

Meanwhile Spanish conquistadors had discovered major silver deposits in Mexico, Peru and Bolivia. From 1497 this silver was refined and minted as the ‘peso’, a thaler style silver coin, and shipped back to Spain in huge quantities along with gold and other valuable cargo. The regular cross-Atlantic journeys of the Spanish treasure fleet attracted privateers and pirates in what became known as the golden era of piracy based on the Spanish Main.

From Spain the silver peso spread through Europe, Asia and North America to become a major currency of international trade and local coinage. By the end of the 16th century Spain was the richest country in Europe. The silver peso was commonly known as the Spanish ‘dollar’, milled dollar ‘piece of eight’ (i.e., coin worth eight reals) or Mexican dollar and was particularly important to the North American economy due to the acute shortage of coins. Given the dearth of small value coins, Spanish dollars were often cut into eight pieces worth around one real each.

The first United States dollar-based coins were minted in 1792 using the Spanish dollar as the model for the new currency. The value of the first U.S. dollar was established by assaying an assortment of circulating Spanish dollars and using the average as the U.S. dollar standard. The dollar standard was stipulated as “each to be of the value of a Spanish milled dollar as the same is now current”.

While there was a variety of coinage circulating in the U.S. at this time, the Spanish dollar was the most common and readily available currency used by everyday Americans. This familiarity led to the word ‘dollar’ being formally adopted as the name for the major unit of U.S. currency.

The Spanish dollar remained U.S. legal tender until the Coinage Act of 1857 - 360 years after it was first minted.

OB

For the Trivia Buffs

I started this post as an idle investigation into the origin and etymology of ‘dollar’ as the unit of U.S. currency. In the process of wandering the alleyways of the interwebs I accumulated a pile of interesting off-topic information. Rather than trying to shoehorn this riveting trivia into an already-too-long post I’ve added a second post for those readers who can never know enough.

Those of you with a short attention span may stop here.

Enjoy - OB

 

[Occams Barber]

How the Dollar got its Name

(The Trivia Addendum)​

As promised in the OP, what follows is an assortment of fascinating odds and ends picked up in the process of investigating the history and etymology of the U.S. dollar.

• The 1792 United States Coinage Act stipulated that U.S. coinage comprise coins based on five separate currency units using three precious/semi-precious metal standards:

• Copper: The ‘mill’ (1/10 of a cent) and the ‘cent’ (1/100th of a dollar). The Philadelphia Mint made half cent coins worth five mills between 1793 and 1857. A copper three-cent coin was minted between1865 – 1889, The five-cent copper/nickel alloy coin known colloquially as a ‘nickel’, wasn’t minted until 1866. The original five-cent coin was silver.
• Silver: ‘Dimes’ (10 cents) and ‘dollars’ (10 dimes) along with half dimes (five cents), half dollars and quarter dollars.
• Gold: The ‘Eagle’ valued at $10. ‘Eagle’ coinage included the eagle ($10), quarter eagle ($2.50) and half eagle ($5). Double eagles ($20) were first produced in 1849. Eagles were discontinued in 1933.

• In the U.S. Coinage Act of 1792 ‘dimes’ were referred to as ‘dismes’. This wasn’t a spelling mistake. ‘Disme’ is an Old French word meaning ‘1/10th part’ and is the origin of ‘dime’.

Key documents in the history of gold, 1: (U.S. Coinage Act of 1792)​

• According to the Bureau of Engraving and Printing of the U.S. Department of the Treasury the dollar symbol ($) was originally the symbol for the Mexican peso and predates the U.S. dollar dollar | Search Online Etymology Dictionary (etymonline.com)

• From their face value of eight Spanish reals, Spanish dollars were also known as ‘pieces of eight’, a term later locked into pirate lore by the raucous squawking of Long John Silver’s garrulous parrot.

• Doubloon is another Spanish coin associated with the pirate era. Doubloon comes from Spanish ‘dobla’ (double) based on its value of two ‘escudos’. Since an ‘escudo’ was worth two Spanish dollars and a dollar equalled eight reals – a gold doubloon was valued at 32 reals.

• Corsair, privateer, buccaneer, freebooter, filibuster, sea-rat, sea-wolf, are all synonyms for ‘pirate’. Buccaneer comes from ‘boucan’ - a grill, used by French settlers in the Spanish West Indies, for smoking meat. These settlers, who were prone to the odd act of piracy, were known as ‘boucanier’. A related Haitian word, ‘barbacoa’, is the origin of ‘barbecue’.

• Another word for pirate was ‘filibuster’ (seriously) derived from an unpronounceable Dutch word (‘vrijbueter’ = ‘plunderer’) which is also the source of ‘freebooter’. It isn’t clear how ‘filibuster’ later came to describe a political talkathon although it may relate to the sense of someone ‘pirating’ a political debate.

• A ‘privateer’ is a private individual, licensed by ‘Letters of Marque’, to conduct acts of water-based warfare against a nation/state’s enemies. Famous examples include Francis Drake and Walter Raleigh who were authorised by Queen Elizabeth 1 to attack Spanish ships and ports in return for a share of the proceeds. ‘Corsair’ has a similar meaning but tends to refer to Barbary pirates based on the North African Mediterranean coast often acting under Turkish/Ottoman licence.

• Article 1; Section 8; Clause 11 of the U.S. Constitution gives the U.S. Congress the power to “declare war, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water”. In other words, Congress can issue pirate licences.

• Spanish dollars were often cut into eight wedges (like a cake) resulting in eight, one real, bits. Since two real bits were equivalent to a quarter of a dollar, a quarter dollar became known colloquially as “two bits”. The sense of ‘two bits’ being cheap probably dates from the 1920s.

• In the early 1800s new Australian colonies were also suffering a severe shortage of coinage. The then Australian colonial Governor imported 40,000 Spanish dollar coins from Madras and doubled the colony’s coinage by cutting out the centre section of each coin. This created two coins; the ‘Holey’ Dollar’ worth five shillings and the centre ‘dump’, assigned a value of 15 pennies.

• The Chinese yuan was also derived from the Spanish dollar in 1889.

• The U.S. dollar was not the first decimal (i.e., based on multiples of 10) currency. The Russian rouble was decimalised in 1704 when it was divided into 100 kopeks,

OB

 

[d taylor]

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Ok but can you find the owl (US dollar)

 

[Occams Barber]

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Ok but can you find the owl (US dollar)

In my part of the world we don't tend to carry US $1 dollar notes.

(I thought the infamous 'owl' was actually a spider?)

OB

 

[d taylor]

In my part of the world we don't tend to carry US $1 dollar notes.

(I thought the infamous 'owl' was actually a spider?)

OB

I have always known it as a owl.