The story of American money is deeply intertwined with the influence of Spanish currency. Long before the United States Mint struck its first coin, Spanish silver dollars were the backbone of commerce in the American colonies. This article delves into the fascinating history of how “american money” began, exploring the crucial role “spanish money” played in shaping the financial landscape of a nascent nation and laying the groundwork for the dollars and cents we use today.
The Reign of the Spanish Dollar in Colonial America
In the 17th and 18th centuries, the American colonies weren’t a unified entity, and neither was their money. England, the ruling power, attempted to impose its monetary system, but the realities of colonial trade and coin scarcity led to a more practical, albeit unofficial, currency standard: the Spanish Dollar.
These weren’t just any foreign coins; Spanish Dollars, also known as pieces of eight or pillar dollars, were highly regarded for their consistent silver content and recognizable design. Minted from the vast silver mines of the Spanish colonies in the Americas, these coins flowed throughout the Atlantic world, becoming a trusted medium of exchange. For colonists accustomed to bartering or dealing with less reliable coinage, the Spanish Dollar was a revelation. Its stability made it the de facto “american money” of the era, facilitating trade and economic activity across the colonies.
Alt text: Obverse side of a Spanish Pillar Dollar coin from 1772, showcasing the Spanish coat of arms, reflecting the historical importance of Spanish currency in early American colonies.
The practicality of the Spanish Dollar extended to everyday transactions. To make smaller change in the absence of sufficient local coinage, the dollar was physically cut into eight pieces, known as “bits.” This practice gave rise to the term “pieces of eight” and the still-common phrase “two bits” to refer to a quarter of a dollar, a lasting legacy of the Spanish monetary system on American vernacular.
Colonial Attempts at Independence: Minting Their Own Money
While the Spanish Dollar dominated colonial commerce, the desire for economic autonomy began to surface. Massachusetts, in 1652, boldly challenged England’s prohibition on colonial coinage. This act of defiance led to the creation of the Pine Tree Shilling, one of the most iconic examples of early “american money.”
Alt text: A Pine Tree Shilling coin minted in Massachusetts in 1652, illustrating early colonial attempts to create independent currency and move away from reliance on foreign money.
The Pine Tree Shilling, and other coins in the series, were silver coins bearing the inscription “MASATHVSETS IN” around a pine tree, with “NEW ENGLAND AN DOM 1652 XII” on the reverse. Intriguingly, all Pine Tree Shillings were dated 1652, regardless of their actual year of production. This was a deliberate tactic to potentially mislead English authorities, should they discover this unauthorized coinage, suggesting no new coins had been made since that year. This clandestine operation underscores the growing sentiment for self-determination, even in monetary matters.
The Necessity of Paper Money and its Pitfalls
Beyond metal coinage, the colonies also experimented with paper money. Often termed “bills of credit,” these notes were intended to be redeemable for coin, ideally silver Spanish Dollars or other precious metal currency. However, colonial paper money faced significant challenges. Over-issuance by individual colonies frequently led to rampant inflation, quickly eroding the value of these bills. The phrase “not worth a Continental” originated from this era, referring to the worthless paper money issued by the Continental Congress during the Revolutionary War, highlighting the struggles to establish a stable “american money” system.
The Quest for a Unified National Coinage After Revolution
Following the American Revolution, establishing a stable national financial system became paramount. The Articles of Confederation, the first governing document of the newly formed nation, granted both Congress and individual states the power to coin money, leading to further monetary chaos. Leaders recognized that a unified national coinage was essential for true sovereignty and economic stability. The debate then shifted to whether to establish a national mint or outsource coin production to private entities.
The 1780s and 1790s saw numerous private coiners attempting to secure contracts with the fledgling United States government. They produced sample coins, known as pattern coins, hoping to win favor. The Washington Pieces are the most famous examples, featuring George Washington. Over twenty varieties exist, primarily in copper and silver cents, struck between 1783 and 1792. Interestingly, most of these “american money” prototypes were actually produced in England.
Alt text: A 1792 Washington Half Dollar pattern coin, made of silver, showcasing George Washington’s portrait and reflecting early considerations for national symbols on American currency.
Despite their lack of official status, the Washington Pieces ignited debate in Congress about the appropriateness of depicting a president on coins, drawing parallels to the British monarchy’s practice.
Early Minting Proposals and the First Official Coin
Robert Morris, the Superintendent of Finances, proposed the Nova Constellatio coins in 1783 as part of a new mint system. His system was decimal-based, featuring units like the mark (1000 units), quint (500 units), cent (100 units), and a copper piece (5 units). The design included an eye, thirteen stars, and “Nova Constellatio” (new constellation of stars), with “LIBERTAS JUSTITIA” (liberty and justice) on the reverse. However, Congress rejected Morris’s proposals, and the Nova Constellatio coins remained prototypes.
Alt text: A 1783 Nova Constellatio copper cent pattern coin with pointed rays, illustrating early decimal system proposals for American currency and the symbolic imagery considered.
In 1787, the United States finally issued its first official coin, the copper Fugio Cent. Designed to address the dire shortage of small change, the Fugio Cent was contracted to James Jarvis for 300 tons. Congress specified the design, featuring thirteen linked circles, “United States,” and “We Are One” on one side, and a sundial, “Fugio” (Latin for “I flee,” referring to time), the year 1787, and “Mind Your Business” on the other. Despite being the first official US coin, the Fugio Cent failed to circulate widely and was ultimately sold at a loss.
Alt text: Obverse side of a 1787 Fugio Cent coin, the first official coin of the United States, featuring linked circles and the motto “We Are One,” symbolizing national unity.
The Coinage Act of 1792: Establishing a National Mint
The Constitution of 1787 granted Congress the exclusive power to coin money, paving the way for the Coinage Act of 1792. This landmark legislation established a national mint in Philadelphia and outlined the foundational US coinage system. The act adopted the decimal system and combined Alexander Hamilton’s bimetallic standard with Thomas Jefferson’s dollar-based unit. Silver denominations included half dimes, dimes, quarter dollars, half dollars, and dollars. Gold coins were quarter eagles ($2.50), half eagles ($5), and eagles ($10). Copper cents and half cents were also authorized, though not granted legal tender status.
Early Challenges with Copper and Silver Coinage
The Half Cent, first minted in 1793, was unpopular due to its low value and inconvenience in transactions. Merchants often refused them, leading to its discontinuation in 1857. The Large Cent, introduced in 1792, was also cumbersome due to its size and poor quality copper. Despite its unpopularity, it remained in production until 1857, eventually replaced by a smaller cent.
Silver coinage began in 1794, with half dollars and dollars being the most consistently struck. Smaller denominations were only coined upon request. Early US silver coins lacked denomination markings, relying solely on size for value differentiation. Quarters were not minted until 1796, and production was sporadic for years. The 1804 quarter was the first US silver coin to explicitly include its denomination, “25c,” on the reverse.
Early Gold Coinage and its Limitations
Gold coins appeared in 1795, but early gold coinage faced challenges. Gold was undervalued relative to silver, leading to hoarding and export. Early US gold coins are characterized by the cap Liberty wears in their designs, often accompanied by a heraldic eagle. Similar to early silver coins, denominations were initially absent.
The half eagle ($5 piece), introduced in 1795, became the dominant early gold coin. Early half eagles featured two designs, one introducing the heraldic eagle and the motto “E PLURIBUS UNUM.” Denominations appeared on gold coins starting with the 1807 half eagle, marked “5D.” The quarter eagle ($2.50) proved unpopular, while the eagle ($10) was discontinued in 1804 due to export issues.
The First Mint’s Struggles and Legacy
Despite the Coinage Act, the first Mint struggled to establish its coins as the primary national currency. Incorrect metal value ratios and the unpopularity of copper hampered circulation. While facing criticism, the Mint narrowly survived, and in 1833, a larger, modern facility was built, reaffirming the nation’s commitment to its own coinage.
Enduring Symbols: Liberty and the Eagle
Liberty and the eagle, featured on early US coinage, became enduring national symbols. Public sentiment initially opposed using leader portraits on coins, reminiscent of British monarchical practices. Liberty’s first appearance was on the 1793 Large Cent, the “flowing hair” design, which was poorly received. Public criticism led to the replacement of the original chain design on the reverse with a wreath, marking the first design change due to public opinion.
Subsequent Liberty designs evolved, including the “liberty cap,” initially mistaken for a symbol of freedom but later identified as a fashionable headdress. Gilbert Stuart, a renowned portrait artist, created a more refined Liberty design modeled after Mrs. William Bingham, marking the first instance of a living woman inspiring Liberty on “american money.”
Liberty’s image continued to evolve over decades, appearing in diverse forms until her last appearance on the 1947 half dollar. She has since reappeared on modern American gold coins minted since 1986. The eagle, too, has undergone transformations but remains a constant presence on US coinage. Early gold coins featured a “natural” eagle design, adapted from a Roman cameo. By 1796, the heraldic eagle, based on the Great Seal of the United States, became standard on gold and silver coins. The eagle’s depiction has varied over time, from flying eagles to naturalistic eagles on branches, even incorporating a moon to commemorate the Apollo 11 mission.
In conclusion, the journey of “american money” began not in a vacuum, but with a strong foundation laid by “spanish money.” The Spanish Dollar’s prevalence in colonial America shaped early commerce and even influenced our language. While colonial and early US coinage efforts faced numerous hurdles, they ultimately paved the way for a stable and uniquely American monetary system, one that continues to evolve while still echoing its fascinating and diverse origins.
