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TheSpanish dollar, originally known as thepiece of eight (Spanish:real de a ocho,peso duro,peso fuerte orpeso), and much later alsodólar is asilvercoin of approximately 38 mm (1.5 in) diameter worth eightSpanish reales. It was minted in theSpanish Empire following a monetary reform in 1497 with content 25.563 g (0.8219 ozt) fine silver. It was widely used as the firstinternational currency because of its uniformity in standard andmilling characteristics. Some countriescountermarked the Spanish dollar so it could be used as their local currency.[1]
Because the Spanish dollar was widely used in Europe, the Americas, and the Far East, it became the first world currency by the 16th century.[2][3][4]
The Spanish dollar was the coin upon which the originalUnited States dollar was based (at 0.7735 troy ounces or 24.06 grams), and it remainedlegal tender in the United States until theCoinage Act of 1857. Many other currencies around the world, such as theJapanese yen and theChinese yuan, were initially based on the Spanish dollar and other 8-real coins.[5] Most theories trace the origin of the"$" symbol, which originally had two vertical bars, to the pillars of Hercules wrapped in ribbons that appear on the reverse side of the Spanish dollar.[6]
The term peso was used in Spanish to refer to this denomination, and it became the basis for many of the currencies in the former Spanish viceroyalties, including theArgentine,Bolivian,Chilean,Colombian,Costa Rican,Cuban,Dominican,Ecuadorian,Guatemalan,Honduran,Mexican,Nicaraguan,Paraguayan,Philippine,Puerto Rican,Peruvian,Salvadoran,Uruguayan, andVenezuelan pesos. Of these, "peso" remains the name of the official currency in the Philippines, Mexico, Cuba, the Dominican Republic, Colombia, Chile, Argentina, and Uruguay.
In the 16th century, CountHieronymus Schlick ofBohemia began minting a silver coin known as aJoachimsthaler or simplythaler, named afterJoachimsthal, the valley in theOre Mountains where the silver was mined.[7] The wordthaler was borrowed into English asdollar and came to be used for a number of European coins, including the Spanish peso or piece of eight.[8]
TheJoachimsthaler weighed 451 Troygrains (29.2 g; 0.94 ozt) of silver. These coins' success led to similarthalers being minted inBurgundy and France and their ultimate succession by the long-livedReichsthaler of theHoly Roman Empire, used from the 16th to 19th centuries, of 25.984 g (0.8354 ozt) pure silver.
The Netherlands also introduced its own dollars in the 16th century: the Burgundian Cross Thaler (Bourgondrische Kruisdaalder), the German-inspiredRijksdaalder, and the Dutch lion dollar (leeuwendaalder). The latter coin was used for Dutch trade in the Middle East, in the Dutch East Indies and West Indies, and in theThirteen Colonies of North America.[9]
For the English North American colonists, however, the Spanish peso or "piece of eight" has always held first place, and this coin was also called the "dollar" as early as 1581. After theDeclaration of American Independence, theUnited States dollar was introduced in 1792 at par with this coin at 371.25 grains = 0.7735 troy ounces = 24.0566 g.Alexander Hamilton arrived at these numbers based on a treasury assay of the average fine silver content of a selection of worn Spanish dollars.[10]
The termcob was used in Ireland and the British colonies to mean a piece of eight or a Spanish-American dollar, because Spanish gold and silver coins were irregularly shaped and crudely struck before the machine-milled dollar was introduced in 1732[citation needed].
After the introduction of theGuldengroschen in Austria in 1486, the concept of a large silver coin with high purity (sometimes known as "specie" coinage) eventually spread throughout the rest of Europe. Monetary reform in Spain brought about the introduction of an 8-real (or 1-peso) coin in 1497, minted to the following standards-
This was supplemented in 1537 by the goldescudo, minted at 68 to a mark of gold 0.917 fine (fineness reduced to 0.906 in 1742 and 0.875 in 1786). It was valued at 15–16 reales or approximately 2 dollars. The famedGold Doubloon was worth 2 escudos or approximately 4 dollars.
From the 15th to the 19th centuries the coin was minted with several different designs at various mints in Spain and theNew World, having gained wide acceptance beyond Spain's borders. Thanks to the vast silver deposits that were found mainly inPotosí in modern-dayBolivia and to a lesser extent in Mexico (for example, atTaxco andZacatecas), and to silver from Spain's possessions throughout the Americas, mints in Mexico andPeru also began to strike the coin. The main New World mints for Spanish dollars were atPotosí,Lima, andMexico City (with minor mints atBogotá,Popayán,Guatemala City, andSantiago), and silver dollars from these mints could be distinguished from those minted in Spain by the Pillars of Hercules design on the reverse.
The dollar or peso was divided into 8 reales in SpanishLatin America until the 19th century when the peso was divided into 100 centavos. However, monetary turbulence in Spain beginning under the reign ofKing Philip II resulted in the dollar being subdivided as follows in Spain only:
Spain's adoption of thepeseta in 1869 and its joining theLatin Monetary Union meant the effective end of the last vestiges of the Spanish dollar in Spain itself. However, the 5-peseta coin (orduro) was slightly smaller and lighter but was also of high purity (90%) silver.
In the 1990s, commemorative 2,000-peseta coins were minted, similar in size and weight to the dollar.
Following independence in 1821, Mexican coinage of silver reales and gold escudos followed that of Spanish lines untildecimalization and the introduction of the peso, worth 8 reales or 100 centavos. It continued to be minted to Spanish standards throughout the19th century, with the peso at 27.07 grams (0.955 oz) of 0.9028 fine silver, and the escudo at 3.383 grams (0.1193 oz) of 0.875 fine gold. TheMexican peso or 8-real coin continued to be a popular international trading coin throughout the 19th century.[citation needed]
After 1918, the peso was reduced in size and fineness, with further reductions in the 1940s and 1950s. Coins of 2- (1921), 5- (1947), and 10-peso (1955) denominations were also minted during the same period, with sizes and fineness similar to the old peso.[citation needed]
After thecolony of New South Wales was founded in Australia in 1788, it ran into the problem of a lack of coinage, particularly since trading vessels took coins out of the colony in exchange for their cargo. In 1813, GovernorLachlan Macquarie made creative use of £10,000 in Spanish dollars sent by the British government. To make it difficult to take the coins out of the colony, and to double their number, the centres of the coins were punched out. The punched centre, known as the "dump", was valued at 15pence, and the outer rim, known as the "holey dollar", was worth fiveshillings. This was indicated by overstamping the two new coins. The obverse of the holey dollar was stamped the words "New South Wales" and the date, 1813, and the reverse with the words "five shillings". The obverse of the dump was stamped with a crown, the words "New South Wales" and the date, 1813, and the reverse with the words "fifteen pence". The mutilated coins became the first official currency produced specifically for circulation in Australia.[12] The expedient was relatively short lived. TheBritish Parliament passed the Sterling Silver Money Act in 1825, which made British coins the only recognised form of currency and ended any legitimate use of the holey dollar and dump in the Australian colonies.[13]
TheCoinage Act of 1792 created theUnited States Mint and initially defined theUnited States dollar at par with the Spanish dollar due to its international reputation:
By far the leading specie coin circulating in America was the Spanish silver dollar, defined as consisting of 387 grains of pure silver. The dollar was divided into "pieces of eight," or "bits," each consisting of one-eighth of a dollar. Spanish dollars came into the North American colonies through lucrative trade with the West Indies. The Spanish silver dollar had been the world's outstanding coin since the early 16th century, and was spread partially by dint of the vast silver output of the Spanish colonies in Latin America. More important, however, was that the Spanish dollar, from the 16th to the 19th century, was relatively the most stable and least debased coin in the Western world.[14]
TheCoinage Act of 1792 specified that the U.S. dollar would contain 371.25 grains (24.057 g) pure or 416 grains (26.96 g) standard silver. This specification was based on the average weight of a random selection of worn Spanish dollars whichAlexander Hamilton ordered to be weighed at the Treasury. Initially this dollar was comparable to the 371–373 grains found in circulating Spanish dollars and aided in its exportation overseas.[15] The restoration of the old 0.9028 fineness in theMexican peso after 1821, however, increased the latter's silver content to 24.44 g and reduced the export demand for U.S. dollars.
Before theAmerican Revolution, owing to Britishmercantilist policies, there was a chronic shortage of British currency in Britain's colonies. Trade was often conducted with Spanish dollars that had been obtained through illicit trade with theWest Indies. Spanish coinage was legal tender in the United States until theCoinage Act of 1857 discontinued the practice. The pricing of equities on U.S. stock exchanges in1⁄8-dollar denominations persisted until theNew York Stock Exchange converted first to pricing in sixteenths of a dollar on 24 June 1997, and then in 2001 to decimal pricing.
In Egypt, Spanish dollars with the pillars of Hercules on the back had amuletic and magical significance. These pillars were interpreted as cannons by Egyptians, which are made of iron. Iron is useful in defending against jinn, leading to the magical association.[16]
Long tied to the lore ofpiracy, "pieces of eight" were manufactured in theSpanish Americas andtransported in bulk back to Spain, making them a very tempting target for seagoing pirates. In theFar East, it also arrived in the form of thePhilippine peso in thePhilippines as part of theSpanish East Indies of theSpanish colonial empire through theManila galleons that transportedMexican silver peso toManila in theManila-Acapulco Galleon Trade,[17][18] where it would be exchanged for Philippine andChinese goods,[19][20] since silver was the only foreign commodity China would accept. In Oriental trade, Spanish dollars were often stamped with Chinese characters known as "chop marks" which indicated that particular coin had beenassayed by a well-known merchant and determined to be genuine. The specifications of the Spanish dollar became a standard for trade in the Far East, with later Western powers issuingtrade dollars, and colonial currencies such as theHong Kong dollar, to the same specifications.
The firstChinese yuan coins had the same specification as a Spanish dollar, leading to a continuing equivalence in some respects between the names "yuan" and "dollar" in the Chinese language. Other currencies also derived from the dollar include theJapanese yen,Korean won,Philippine peso,Malaysian ringgit,French Indochinese piastre, etc. since it was widely traded across theFar East in theEast Indies and theEast Asia.[21]
Contemporary names used for Spanish dollars in Qing dynasty China includeběnyáng (本洋),shuāngzhù (雙柱),zhùyáng (柱洋),fóyáng (佛洋),fótóu (佛頭),fóyín (佛銀), andfótóuyín (佛頭銀). The "fó" element in those Chinese names referred to the King of Spain in those coins, as his face resembled that of images of the Buddha (佛 in Chinese); and the "zhù" part of those names referred to the two pillars in theSpanish coat of arms.
In modern pop culture and fiction, pieces of eight are most often associated withthe popular notion of pirates.
