Dollar

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Canadian (Loonie) one-dollar coin

United States one-dollar bill

Australian one-dollar coin

A New Zealand One Dollar coin

One New Taiwan dollar

500 old Zimbabwean dollars

The dollar (often represented by the Dollar/Peso sign: "$") is the name of the official currency in several states, including Australia, Canada, the Eastern Caribbean territories, Hong Kong, Singapore, Ecuador, Panama, and the United States.

History

Etymology

In the 1500s, Count Hieronymus Schlick of Bohemia began minting coins known as Joachimstalers (from German thal, or nowadays usually Tal, "valley", cognate with "dale" in English), named for Joachimstal, the valley where the silver was mined (St. Joachim's Valley, now Jáchymov; then part of the Holy Roman Empire, now part of the Czech Republic)).^[1] Joachimstaler was later shortened to taler, a word that eventually found its way into Danish and Swedish as daler, Dutch as daalder, Ethiopian as talari, Italian as tallero, Flemish as daelder, and English as dollar.^[1]

Development of use

The name dollar is historically related to the bohemian tolar (16th century) and much later also slovenian tolar (1991), daalder in the Netherlands, Reichsthaler in Germany, and daler in Sweden, Denmark, and Norway. Guldiner can be traced to 1486 when Archduke Sigismund of Tyrol, a small state north of Venice, issued a dollar-sized coin which was referred to as a "Guldiner." Silver supplies were small which limited coinage.^[2]

The German silver Thaler coins that were first minted in 1520 from silver taken from a mine at Joachimsthal, Bohemia, in the Holy Roman Empire. Not long after issuance, these coins gained the name Joachimsthalers. Subsequently, coins of similar size and weight were called Thaler, or dollar regardless of the issuing authority^[3], and continued to be minted until 1872.

The Dutch lion dollar circulated throughout the Middle East and was imitated in several German and Italian cities. It was also popular in the Dutch East Indies as well as in the Dutch New Netherland Colony (New York). The lion dollar also has circulated throughout the English colonies during the 17th and early 18th centuries . Examples circulating in the colonies were usually fairly well worn so that the design was not fully distinguishable, thus they were sometimes referred to as "dog dollars."^[4] This Dutch currency made its way to the east coast due to the increased trading by colonial ships with other nations. By the mid-1700s, it was replaced by the Spanish 8 reales.^[5]

The Spanish peso or pieces of eight (real de a ocho) also became known as the Spanish dollar in the English speaking world because of their similarity in size and weight to the German silver Thaler coins. It was worth eight reals (hence the nickname "pieces of eight"), and was widely circulated during the 18th century in the Spanish colonies in the New World, and in Spanish territories in Asia, namely in the Philippines. The use of the Spanish dollar and the Maria Theresa thaler as legal tender for the early United States and its fractions were the mainstay of commerce. They are the reasons for the name of that nation's currency.^{[citation needed]} By the American Revolution in 1775, these Spanish coins became even more important. They backed paper money authorized by the individual colonies and the Continental Congress.^[5]

However, the word dollar was in use in the English language as slang or mis-pronunciation for the thaler for about 200 years before the American Revolution, with many quotes in the plays of Shakespeare referring to dollars as money. Spanish dollars were in circulation in the Thirteen Colonies that became the United States, and were legal tender in Virginia. These coins were the standard money then in use in the United States. On April 2, 1792, Alexander Hamilton, then the Secretary of the Treasury, made a report to Congress having scientifically determined the amount of silver in the Spanish Milled Dollar coins that were then in current use by the people. As a result of this report, the Dollar was defined^[6] as a unit of measure of 371 4/16th grains (24.057 grams) of pure silver or 416 grains of standard silver (standard silver being defined as 1,485 parts fine silver to 179 parts alloy^[7]). Therefore paper is not the dollar, instead, it is 'worth', not 'is', 1 dollar (US Silver certificate.) In section 20 of the Act, it is specified that the "money of account" of the United States shall be expressed in those same "dollars" or parts thereof. All of the minor coins were also defined in terms of percentages of the primary coin — the dollar — such that a half dollar contained 1/2 as much silver as a dollar, quarter dollars contained 1/4 as much, and so on.

Coins known as "Thistle dollars" were also in use in Scotland during the 17th century, and there is a claim that the use of the English word, and perhaps even the use of the coin, began at the University of St Andrews. This explains the sum of "Ten thousand dollars" mentioned in Macbeth (Act I, Scene II), although the real Macbeth, upon whom the play was based, lived in the 11th century, making the reference anachronistic; however anachronisms are not rare in Shakespeare's work.

In the early 19th century, a British five-shilling piece, or crown, was sometimes called a "dollar," probably because its appearance was similar to the Spanish dollar. This expression appeared again in the 1940s, when US troops came to the UK during World War II. At the time a US dollar was worth about 5s., so some of the US soldiers started calling it a dollar. Consequently, they called the half crown "half a dollar."

In an act passed on January 18, 1837, the alloy was changed to 11%, having the effect of containing the same amount of silver but being reduced in weight to 412 1/4 grains of standard silver which was changed to 90% pure and 11% alloy. On February 21, 1853 the amount of silver in the fractional coins was reduced so that it was no longer possible to combine the fractional coins to come up with the same amount of silver that was in the dollar.

Various acts have been passed over the years that affected the amount and type of metal in the coins minted by the United States such that today, there is no legal definition of the term "Dollar" to be found in any Statute of the United States.^[8][9][10]

Today, the closest definition to a dollar comes from the United States code Title 31, Section 5116, paragraph b, subsection 2, "The Secretary [of the Treasury] shall sell silver under conditions the Secretary considers appropriate for at least $1.292929292 a fine troy ounce." However Federal Reserve banks are only required to deliver credits instead of money. The silver content of US coinage was mostly removed in 1965 and the dollar essentially became a baseless free-floating fiat currency, though the US Mint continues to make silver $1 coins at this weight.

Continued Chinese demand for silver led several countries, notably the United Kingdom, United States, and Japan, to mint trade dollars in the 19th and early 20th centuries, often of slightly different weights to their domestic coinage. Silver dollars reaching China (whether Spanish, Trade, or other) were often stamped with Chinese characters known as "chop marks," which indicated that that particular coin had been assayed by a well-known merchant and determined genuine.

Related names in modern currencies

• The tala is based on the Samoan pronunciation of the word "dollar." Likewise, the name of the smaller unit, seneiti, equates to "cent."
• The Slovenian tolar had the same origin as dollar, i.e. thaler.

National currencies called "dollar"

Prior to 1873, the silver dollar circulated in many parts of the world, and with a value in relation to the British gold sovereign of roughly $1 = 4s 2d. Following the US Coinage Act (1873), the value of silver declined in relation to Gold, and the USA went unto a 'de facto' gold standard. Canada and Newfoundland were already on the gold standard, and the result was that the value of the dollar in North America increased in relation to the silver dollars that were being used elsewhere in the world, notably in Latin America, and the Far East. By the year 1900, the silver dollars had fallen to 50 cents in relation to the gold dollars. Following the abandoning on the gold standard by Canada in 1931, the Canadian dollar began to drift away from its parity with the US dollar. It returned to parity a few times, but since the ending of the Bretton Woods system of fixed exchange rates that was agreed in 1944, the Canadian dollar has been floating against the US dollar. As regards the silver dollars of Latin America and South East Asia, they began to diverge from each other as well during the course of the twentieth century. The Straits dollar adopted a gold exchange standard in 1906 after it had been forced to rise in value against the other silver dollars in the region. Hence, by 1935, when China and Hong Kong came off the silver standard, the Straits dollar was worth 2s 4d sterling, whereas the Hong Kong dollar was worth only 1s 3d sterling.

Existing dollar units today are the Bahamian dollar, the Barbados dollar, the Belize dollar, the Bermuda dollar, the Brunei dollar, the Canadian dollar, the East Caribbean dollar, the Guyanese dollar, the Hong Kong dollar, the New Taiwan dollar, the Singapore dollar, the Trinidad and Tobago dollar, the United States dollar. The only ones on this list that have still retained their original parity from the days of the universal Spanish dollar are the Singapore dollar and the Brunei dollar.

Other countries in recent times have adopted the name dollar for their national curency, but these are not true dollars as such. They are in fact half-pound units of countries that had been using a sterling based system prior to adopting the decimal system. Examples of these kind of dollars are the Australian dollar, the New Zealand dollar, the Jamaican dollar, the Cayman Islands dollar, the Fiji dollar, the Namibian dollar, the Rhodesian dollar, the Zimbabwe dollar, and the Solomon Islands dollar.

See also

Numismatics portal

• Eurodollar
• Amero
• Dollar/Peso sign
• List of circulating currencies
• Petrodollar

References