Dollar

Dollar

The dollar is the official name for the United States currency, the closest approximation to a world currency, and is also the name for numerous other national currencies.

The term dollar is apparently a variation of the term thaler, a common term for coins in Germany and Eastern Europe that may have been derived from a valley named Joachimsthal where coins were minted in the sixteenth century. The coins were called Joachimsthalergroschen, soon shortened to thaler, and later to taler. In the sixteenth century the Scots adopted the term dollar to distinguish their currency from that of the English. The Scots were not always compliant subjects of the English Crown, and from the outset the term dollar bore an anti-English and antiauthoritarian connotation. Scottish emigrants brought the term dollar to the British colonies.

Although England forbade its colonies to mint coins, Spain put no such prohibition on its colonies, which were rich in precious metals. Mexico boasted of one of he world’s largest mints. Spanish coins were the most readily accepted worldwide, including in the British colonies, but the colonists called the coins dollars rather than their Spanish names of reales and pesos. The Spanish pieces of eight coins had a face value of eight reals, and in the United States the phrase “two bits’ is still used to refer to a quarter, one-fourth of a dollar.

The most common Spanish coin circulating in the British colonies was sometimes called the pillar dollar because the obverse side bore an image of the Eastern and Western Hemispheres with a large column on each side. The columns represented the Pillars of Hercules, and the words plus ultra, meaning “more beyond,” embellished a banner hanging from one of the columns. The coin was apparently a means of publicizing the discovery of America. The dollar sign probably evolved from the pillar dollar, with the two vertical parallel lines representing the columns, and the “S” shape representing the banner.

The dollar had established itself as the primary money unit of account in the 13 colonies, and the Congress of the new republic declared on 6 July 1785 that the “money unit of the United States of America be one dollar” (Weatherford, 1997). In 1794 the United States began minting silver dollars containing 371 1/4 grains of silver, an amount based on the average weight of Spanish dollars circulating in the United States. Spanish and Mexican dollars remained legal tender during the early days of the Republic.

Popular usage made dollars, whether United States, Spanish, or Mexican, the accepted currency in the New World. Canada created an official currency, the Canadian dollar, pegged at a one to one exchange rate with the United States dollar. Among the British colonies in the Caribbean, dollars became the official currency in Anguilla, Saint Kitts and Nevis, Antigua and Barbuda, Montserrat, Dominica, Saint Lucia, Saint Vincent, Guyana, the Bahamas, Belize, Barbados, the Cayman Islands, the British Virgin Islands, Trinidad and Tobago, the Turks and Caicos Islands, and Jamaica. Most Latin American countries adopted as their official currency the peso, which shares with the dollar a common ancestor, the Spanish real.

Spain also popularized the use of dollars in the Pacific basin. In the latter nineteenth century Mexican dollars dominated Pacific basin trade but both the United States and Britain issued so-called trade dollars for foreign trade with the area. The Chinese called silver dollars yuan, meaning “round things,” and yuan became the standard currency in China and Taiwan. The Japanese shortened yuan to yen and established a yen currency. Initially 1 yen approximately equaled 1 dollar.

The term dollar became the name of the official currencies in Australia, New Zealand, Fiji, the Cook Islands, Kiribati, Brunei, Singapore, Hong Kong, the Solomon Islands, Pitcairn, Tokelau, Tuvalu, the Marshall Islands, and Western Samoa. By 1994, the term dollar denoted the official currencies in 37 countries and autonomous territories. Europe, the birthplace of the original dollar, is one of the few places in the world where dollar is not a designation for an official currency. In 1991 the newly independent country of Slovenia, part of the former Yugoslavia, adopted tolar, a variation of dollar, to denote its official currency. Zimbabwe, among the latest African countries to join the ranks of independent nations, named its official currency the dollar.