By Jacquie Foote In the 1700s, the Spanish came out…
By Jacquie Foote In the 1700s, the Spanish came out with a silver coin of almost exactly the same size and weight as a thaler.…
By Jacquie Foote
In the 1700s, the Spanish came out with a silver coin of almost exactly the same size and weight as a thaler. It represented eight Spanish gold reals and was therefore called a piece of eight. In the marketplace, merchants referred to this as the Spanish dollar. To make change, they would cut a dollar into eight pieces or bits. These began to be known as two bits (for a quarter), four bits (for fifty cents) and six bits (for seventy-five cents). The Colonial American market accepted the Spanish dollar as its basic unit of value. It was minted in Mexico and called a piece of eight, or a peso. The words Spanish peso are said to have been abbreviated into an S and a P with one written over the other. This was further abbreviated to a $ sign.
But, the United States began with money troubles … even before it was the United States.
The Revolutionary War was on and wars are very expensive, even if it is a patriotic cause. In spite of the self-sacrifices of patriots and the money raising efforts of many, funds were often short. So, the Continental Congress issued about $240 million in Continentals. (Thats what the paper money put out by the Continental Congress was called.) It was understood that the Continentals could be redeemed in gold or silver by the states after the war.
The states themselves thought this was a great way to get money, so they issued vast quantities of their own paper currency (also backed with promises). When the British saw what was happening, they printed up bales of counterfeit Continentals, using them in European markets and even going so far as to actually use them to buy supplies from Americans.
Naturally, there simply was not enough gold or silver to back these bills. Before long, confidence in the Continentals had sunk so low that by 1780 they were worth next to nothing … leading to the saying, Not worth a Continental. The recovery from this unfortunate and dangerous situation was so difficult that no further paper money was issued by the United States for over eighty years.
It became obvious that a form of government was needed for the fledgling country. And so in July 12, 1776, the first draft of what is known as the first constitution in our nations history, the Articles of Confederation, was presented to the Continental Congress. It was adopted by that Congress on Nov. 15, 1777, and two days later was submitted to the states with a request for immediate action. On July 21, 1778, North Carolina delegates signed the ratification of the Articles of Confederation, followed by Georgia and New Jersey. On May 5, 1779, Delaware signed and on March 1, 1781, Maryland did also. That year saw the ratification by all 13 states.
In 1785, under the Articles of Confederation, and two years before the Constitution was written, the Congress, using the powers given it in Article IX, accepted the Spanish dollar as the official unit of value for the United States and determined that all foreign coin would be evaluated in terms of the Spanish dollar. This move helped stabilize the monetary situation in the United States.
In 1786, the year before the Constitution was adopted, the Board of Treasury fixed the silver weight of the adopted dollar at 375 and 64/100s grains of fine silver. The value of gold coins or any other coins was to be calculated in terms of the silver dollar of this weight and fineness.
The Constitution, therefore, was ratified at a time when monetary stability was growing, but, obviously, more work had to be done.
For information on the events at the Geauga County Historical Society’s Burton Century Village Museum, call 440-834-1492 or visit www.geauga
historical.org.
