The History of Money Part 5

Dollars and Pieces of Eight - Makes Cents


April 17, 2015

In Part 4 of our series on the History of Money, we saw how money evolved in England and in the British Empire. English money was one of two types of money that were used in the English colonies. The other was Spanish - they were here first (the native Americans were really here first, but they did not mint coins, and the colonists probably would not have cared if they did). The third point of the triangle trade (aside from New England and Great Britain) was the Spanish Islands of the West Indies. So, a history of American money begins with a history of Spanish money.

But the Spanish money was influenced by a Dutch coin, also in circulation in the colonies. This Dutch coin was a copy of a Bohemian coin, so we are back to the Germans. While the British Pound had evolved from the coins of the Anglo Saxon tribes, it was a coin of Bohemia that eventually evolved into our American money.

We can date the first Dollar to the Kingdom of Bohemia, minting a silver coin on January 15, 1520. The silver came from a mine called Joachimsthal. The coins were called Joachimsthalers. This was shortened to Thalers. These coins were copied by other countries including the Netherlands, where Thaler became Daler.

In the new world, the Dutch Daler was the primary monetary unit of currency in New Amsterdam. New Amsterdam became New York, and the Dutch Daler was accepted throughout the English colonies along with the British Pound and the Spanish Peso. Because the Peso had the same weight and shape as the Dutch Daler, they came to be called Spanish Dollars in the British colonies while they remained Pesos in Mexico. The main sub-division of the Spanish Dollar was a coin worth 1/8 of a dollar. It was sometimes referred to as a bit (eight bits to a dollar, and you thought there were eight bits to a byte, didn't you) and sometimes as Pieces of Eight. "Two bits" is still a slang term sometimes used for a quarter dollar.

Because of the aforementioned triangle trade, Spanish Dollars were used in the colonies as often as British Pounds, and when the revolution came , the new country was at war with Britain but had an alliance with Spain. When it became time to define the standard American unit of currency, the Dollar was a natural choice.

The official sub-division of the American Dollar is the cent (1/100th of a dollar). It is often referred to as a penny, but this is really a nickname as a real penny is 1/240th of a pound.

The following table shows a list of all of the official coins (not counting collector coins) and bank notes that have been issued by the United States of America.

Name Value Years in Circulation
Half Cent 1/200th of a dollar 1792-1857
Cent 1/100th of a dollar 1793 -
2-cent 1/50th of a dollar 1864-1873
3-cent 3/100ths of a dollar 1851-1889
Half Dime (Silver) 1/20th of a dollar 1792-1873
5-cent Nickel 1/20th of a dollar 1866 -
Dime 1/10th of a dollar 1792 -
20-cent 1/5th of a dollar 1875-1878
Quarter 1/4th of a dollar 1796 -
Half Dollar 1/2 of a dollar 1794 -
Dollar Coin $1 1794 -
Gold Quarter Eagle $2.50 1792-1929
Three Dollar Piece $3 1854-1889
Four Dollar Piece $4 1879-1880
Half Eagle $5 1795-1929
Eagle $10 1795-1933
Double Eagle $20 1850-1933
Banknotes Current/Latest Portrait Years of Issue
$1 George Washington 1862 -
$2 Thomas Jefferson 1862 -
$5 Abraham Lincoln 1862 -
$10 Alexander Hamilton 1862 -
$20 Andrew Jackson 1862 -
$50 Ulysses Grant 1862 -
$100 Benjamin Franklin 1862 -
$500 William McKinley 1862 - 1928
$1,000 Grover Cleveland 1862 - 1934
$5,000 James Madison 1878 - 1928
$10,000 Salmon Chase 1878 - 1934


Woodrow Wilson


This concludes our five-part series on the History of Money. Next, we'll tackle the History of Lending. Stay tuned!