Small Change in Early America
JohnHarper
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On September 29, 1792, Thomas Jefferson recorded an expense of $.166. What coin would he have carried that was equal to 1/6 of a dollar?
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Nice job Boiler78.
Lots of people, including merchants, carried shears for the task. Halves, quarters and eighths were much more common but I see no reason why a sixth wouldn't be plausible either.
<< <i>You could easily make a sixth of a dollar but cutting a dollar into sixths
Lots of people, including merchants, carried shears for the task. Halves, quarters and eighths were much more common but I see no reason why a sixth wouldn't be plausible either. >>
Why bother when English shillings were available?
Capt. Henway: <<ccording to Eric P. Newman's "Early Paper Money of America," Virginia money of account after 1783 had 6 shillings equal to 1 Spanish Dollar.>>
Really, I wonder how this "money of account" was figured. The relevant "Spanish Dollar" would have been the Spanish-Mexican 8 Reales coin. During the 1700s, this coin weighed 26.074 grams and its fineness varied, though 90% would be a fair approximation for a group of such coins in the U.S. from 1783 to 1792. An uncirculated British Shilling then weighed 6.02 grams and was .925 fine.
In terms of gross weight, one-sixth of a Spanish Dollar would have been 27.0674/6 = 4.51 grams. In terms of approximate silver content, a Shilling had 5.5685 grams, while 1/6 of a Spanish-Mexican Dollar contained around 4.06 grams of silver.
GoldenEye: <<You could easily make a sixth of a dollar but cutting a dollar into sixths. ... Lots of people, including merchants, carried shears for the task. Halves, quarters and eighths were much more common but I see no reason why a sixth wouldn't be plausible >>
I wholeheartedly agree.
Capt. Henway: <<Why bother when English shillings were available>>
It is not clear how many people really valued a British Shilling at 1/6 of a dollar, as the Captain indicates. Why would they? Besides, during those times, there was a lot of paper money that was not accepted at par, or not taken seriously.
The British were still regarded as 'the enemy' and tensions were high. For various reasons, there was a strong tendency for U.S. citizens to view Spanish Colonial 8 Reales coins as money and as the monetary standard. The first U.S. silver dollars were similar in size and silver content to Spanish 8 Reales coins. Indeed, most Spanish-Mexican 8 Reales coins then weighed 26.074 grams = 417.7 grains, when struck; U.S. 1794 dollars were specified to weigh 416 grains. British silver Crowns were much heavier (463.13 grains) and were 92.5% silver.
SaorAlba: <<Pennies, shillings and pounds sterling were units of account in America until the 1830s or so>>
While somewhat true, this statement is a little misleading. Spanish Colonial coins and coins otherwise related to Spain constituted a large percentage of the silver coins that circulated in the U.S. from 1790 to the 1830s. In regard to consumers, the percentage of circulating coins in the U.S. that were British was very small and, during the 1800s, not a large number of U.S. citizens kept records in British Pounds.
In the minds of people spending or receiving money, the U.S. Dollar based decimal system gradually replaced the Spanish system that featured multiples and factors of eight.
1792 Half Dismes, Part 1: Origins and Meaning
PCGS Certfied, U.S. 500 Unit Silver Pattern of 1783 (Type 2 Quint)
PCGS certified, Rare 1681 silver Halfcrown of King Charles II, with mark of the Royal African Company
While I'm certainly not an expert in Colonial-era money, I believe that CaptHenway is referring to Virginia shillings, not British shillings. As I recall, each (or most) of the original Colonies had their own money of account (all of which had different values in relation to the Spanish milled dollar), which is why Robert Morris originally promoted a currency plan calling for a "Mark" composed of 1,440 "units".
(See "Fractional Money" by Neil Carothers for a nice summary, along with many other books on the subject.)
Also, while the British were the enemy during the Revolution, feelings against them varied by region. In any event, Americans were very eager to resume trade with England, which they did almost the minute after the treaty ending the Revolution was signed.
(See "For Each, The Strength of All" by J.T.W. Hubbard - a history of banking in New York, for some details, along with other books on the subject.)
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DaveG: << As I recall, each (or most) of the original Colonies had their own money of account (all of which had different values in relation to the Spanish milled dollar), ... >>
Yes and no, the units of account were, in large part, political assertions of sovereignty by individual States and related, to a great extent, to taxes and government documents. I concede that it is true that small transactions were often figured in 'State' units of account.
After 1776, thinking among major businessmen tended to be in accordance with the Spanish-Colonial monetary system and then mathematical adjustments were made when needed.
As an admittedly very imperfect analogy, consider that during the 20th century, businessmen in many third world nations tended to calculate their respective wealth and substantial transactions in U.S. Dollars, though businesses had to keep 'books' in their respective local currencies. Indeed, in many such countries, local currencies were considered much less desirable than US Dollars and often traded at a discount in relatively unregulated conditions.
In dozens of third world countries, during the 20th century, the value of a local currency was measured in U.S. Dollars, which were on the minds of traders and other businesspeople. The value in Spanish Colonial Dollars likewise was on the minds of people in the U.S from 1776 to 1800.
A point that I had hoped to imply an above post is that, in substantial transactions, businessmen in the newly indepedent U.S. were primarily focused on precious metals, and secondarily on calculations in Spanish-Colonial 'dollar' terms. 'State' units of acccount tended to be a lagging consideration in most (not all) cases.
DaveG: << ... which is why Robert Morris originally promoted a currency plan calling for a "Mark" composed of 1,440 "units".>>
Not exactly, the use of a small unit as a common denominator was a selling point to encourage politicians from various States to support the measure. It was really a third-tier reason for the Morris system. The primary reason was the connection to Spanish-Colonial 'dollars,' which I explain in my article on the Type 2 Quint. According to Morris himself, there were 1440 Morris units in a Spanish-Mexican 8 Reales coin, a point which is very consistent with my statements in this thread.
PCGS Certfied, U.S. 500 Unit Silver Pattern of 1783 (Type 2 Quint)
I should have emphasized in this article that, because a Morris unit was 0.25 grain of silver, it was easy to calculate values of various foreign coins, especially British, coins, in Morris units, a system based on the Spanish Dollar. So, Morris' first purpose was basing his system on the Spanish-Mexican 8R coin and his second purpose was enabling various other foreign coins to be easily measured. Its potential relation to State currencies, which would have been awkward in actuality, related to lobbying politicians in the short run, not to the main long-run advantages of the system.
DaveG: <<Also, while the British were the enemy during the Revolution, feelings against them varied by region.
Obviously, the feelings, though, were negative on the whole. The "War of 1812," during which the British invaded Washington and burned down the White House, was not a surprise to people who were familiar with the political climate in the 1790s and early 1800s.
In any event, Americans were very eager to resume trade with England, which they did almost the minute after the treaty ending the Revolution was signed.
Americans tend to be capitalists who would trade with most anyone. For example, private firms in the U.S. legally traded extensively with the Soviet Union during the Cold War.
In sum, for multiple reasons, the Spanish-Mexican system was the basis for the United States Dollar and for the monetary amounts in the minds of leading businessmen during the era from 1776 to 1800. Even as late as the 1830s, most of the silver coins in circulation in the U.S. were Spanish Colonial, were from Spain, or were minted in nations that were former Spanish colonies.
In earlier eras, British denominations were dominant:
The 1615-16 Coins of Bermuda (Sommer Islands): The First English Coins of North America
The First Coins Struck in The Original Thirteen Colonies: Massachusetts (‘NE’) Silver of 1652
<< <i>According to Eric P. Newman's "Early Paper Money of America," Virginia money of account after 1783 had 6 shillings equal to 1 Spanish Dollar. >>
At this time “shilling” meant the Spanish one real silver coin. In Virginia, and certain other states
such as Connecticut, there were 6 shillings to the dollar while some states, such as Pennsylvania,
used 7 shillings 6 pence to the dollar. The 16.6 cents noted by JohnHarper is therefore merely
the value of a one real coin in Virginia.
There were no English silver coins in circulation in the United States at this time. In point of fact
none was circulating in England either. No silver for public use was struck at the Royal Mint from
about 1760 until after 1810. British gold, on the other hand, was widely used and even President
Washington carried gold guineas (worth 21 shillings) for his traveling expenses.
Continental notes were not used after 1781.
Although it is true that Spanish dollars were sometimes cut into fractional parts this was very rarely
done in the United States. Such pieces were mostly seen in the Caribbean islands.
Marketplace prices in early America were in pounds, shillings, and pence for several decades after
the coinage act of 1792. The exact value, however, depended upon the number of “shillings” in the
Spanish dollar for a given state.
<< <i>Nothing to add, but very interesting discussion. Thanks everyone who shared! >>
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Denga: <<At this time “shilling” meant the Spanish one real silver coin. In Virginia, and certain other states such as Connecticut, there were 6 shillings to the dollar while some states, such as Pennsylvania,used 7 shillings 6 pence to the dollar. >>
This statement is illuminating and fascinating. Is Denga saying that, during the late 1770s and 1780s, State Governments consistently used a standard British term, "shilling," to refer to a specific Spanish-Colonial coin and monetary unit, the One Real? If so, the definition of a "dollar" in the early U.S. varied from State to State, but the main component of each "dollar," the standard monetary unit was the Spanish One Real coin, which was called a "Shilling" by State governments!
I am not following the logic employed by the various State legislatures in determining variable dollars with constant One Real monetary units called Shillings? Why refer to One Real coins as Shillings? This must have been confusing to people who were accustomed to the concept of a British Shilling. In regards to silver coins, the British monetary system did not change much between 1551 and 1816.
Rare 1681 silver Halfcrown of King Charles II, with mark of the Royal African Company
Besides, why would a Virginia Dollar be markedly different from a Pennsylvania Dollar. What were the pertinent legislators thinking in regard to such matters?
If, as Denga informs us, a State "Shilling" was a One Real Spanish-Colonial silver unit, why not consistently refer to such a U.S. "Shilling" as one-eighth of a dollar?
In response to a different point that was earlier and unfairly raised by DaveG, I wish to point out that much material in Neil Carothers' main book is consistent with the points that I made above.
In reference to the Continental Congress and money that was used in the U.S. starting in 1775, Carothers says:
<The resolution of June 22, 1775, which authorized the first emission of [paper money via the Continental Congress] provided that the notes be payable in "Spanish Milled Dollars of the value thereof in gold and silver." Circumstances [meaning conflict with the British] had forced Congress to adopt a new standard. As a working basis, it was impossible to adopt any other currency than the Spanish dollar. The nominal shilling standard was a variable throughout the country, worth one sum of Spanish coin in one State, another sum in others. The only currency common to all the states was the Spanish dollar.> Carothers, Fractional Money, pp. 37-38
Analyst,
I'm not sure why you think my earlier post raised a point unfairly.
In any event, perhaps this quotation from Carothers (speaking about the pre-Revolutionary period on page 34 of Fractional Money) will help clarify denga's comments and the monetary situation for you (and any boardmember who may be similarly confused):
"It is likewise clear that the Spanish silver coins in the colonies greatly exceeded the total volume of English coins of all kinds, gold, silver, and copper. The metallic standard, in whatever sense there was a standard, was the Spanish dollar. Yet the colonists in the English settlements persistently held to the English standard and the English reckoning. In all the paper money issues for three-quarters of a century there were only two in terms of Spanish money, and these two, one in Maryland and another in New York, were insignificant temporary emissions. Using one kind of money in exchanges and another kind in calculations and accounts is a confusing practice at best. In the colonies it was especially difficult because the English and Spanish systems were not easily reconciled. The Spanish dollar, divided into half-dollars, quarters, and eighths, was not easily adjusted to the pound, divided into 20 shillings of 12 pence each. Neither system was decimal. A shilling from the British mint was not a shilling in any colony. In Georgia it was 1 shilling and 3 pence, in Massachusetts 1 and 6, and in New York 2 shillings. A Spanish real was 1 shilling in New York, 9 pence in Virginia, and 11 pence in Pennsylvania.
Colonial ratings of British half-pence were not always in accord with their actual values as British coins. Accounts were always kept in shillings and pence. The children of the colonists were taught to convert the Spanish coin values into English moneys and to know the diverse ratings in neighbor colonies. The few journals of the period customarily published tables of conversion rates."
Later, in the next paragraph, he says:
"The real was valued at 1 shilling in New York in the entire colonial period. When a national coinage was adopted the real was the equivalent of 12 1/2 cents, and the people of New York used the term 'shilling' to designate this value."
When Carothers speaks of what each colony valued the British shilling at, he's referring to the value established by that colony's legislature (for things like payment of taxes and in-colony commercial transactions). Since, at this time, the colonies were cash-poor, each colony established a legal value for coins (usually in excess of their 'real' value) in hopes of attracting more gold and silver to their colony.
It was the equivalent of one modern store advertising "5% discount for cash payments" and the store across the street advertising "7% discount for cash payments." Each is hoping to attract more shoppers and more payments in cash.
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A Virginia shilling is to a Pennsylvania shilling as a US dollar is to a Canadian dollar or an Australian dollar. Same name, but that's it.
All of these early American moneys of account (i.e. systems of money that only existed on paper) were pegged to the Spanish milled dollar, also known as the 8 reales. The 8 reales was "worth" the same amount everywhere in the late 18th century, which is to say it had the same amount of silver in it. That silver content defined its real-world value across all borders.
In Virginia, six Virginia shillings equalled an 8 reales coin. The same rate was standard in New Hampshire, Massachusetts, Rhode Island, and Connecticut. So a piece of Virginia colonial paper money denominated as "1 shilling" was really a "$1/6" note. In 1775 and 1776, Virginia actually issued a piece of currency denominated as 1 shilling 3 pence "or a pistareen." A pistareen was a Spanish mainland two reales, struck at a different fineness standard than those coined in the Americas, that circulated at 5 to a dollar.
In New York and North Carolina, 8 New York (or North Carolina) shillings equalled the same 8 reales coin. Was a 8 reales worth more in New York City than it was in Williamsburg? Of course not. It was the same weight and fineness in both places. Today, an identical Euro is worth a different amount in dollars depending upon whether you're in New York or Toronto -- the Euro is the same, it's the dollars (U.S. vs. Canadian) that are different.
In the above case, you can see why a one real coin was called a "shilling" in New York. A New York shilling was 1/8th of a Spanish dollar, just like a one real. Easy peasy.
In Pennsylvania and those in its currency sphere (Delaware, NJ, and Maryland), there were 7 shillings sixpence in an 8 reales. With 90 Pennsylvania pence to a dollar, it made adopting cents (100 to a dollar) pretty easy and explains why we still call the damn things pennies.
South Carolina and Georgia were weird then and are weird now. When Robert Morris made up his system trying to find a lowest common denominator for all these nonsensically different values, he just plain ignored South Carolina -- it was too far out there.
In London, 4 shilling sixpence in sterling (i.e. London shillings) made up an 8 reales. Thus, 4 English shilling coins and one English sixpence coin was equal to an 8 reales. In London, sterling was actually real money (i.e. manifested in physical coins) not just a money of account. The closest thing the colonies had in the late 18th century was the Chalmers shilling which, based upon its weight and fineness, was actually amazingly close to being worth exactly one Maryland shilling. Good work, John Chalmers!
Hope this helps.
Betts medals, colonial coins, US Mint medals, foreign coins found in early America, and other numismatic Americana
This statement is illuminating and fascinating. Is Denga saying that, during the late 1770s and 1780s, State Governments consistently used a standard British term, "shilling," to refer to a specific Spanish-Colonial coin and monetary unit, the One Reale? If so, the definition of a "dollar" in the early U.S. varied from State to State, but the main component of each "dollar," the standard monetary unit was the Spanish One Reale coin, which was called a "Shilling" by State governments!
I am not following the logic employed by the various State legislatures in determining variable dollars with constant One Reale monetary units called Shillings? Why refer to One Reale coins as Shillings? This must have been confusing to people who were accustomed to the concept of a British Shilling. In regards to silver coins, the British monetary system did not change much between 1551 and 1816.
Yes, the Spanish one real was consistently referred to (by the general public) as a shilling in both Colonial
and post Colonial days. In fact, this was true until the 1850s in many parts of the U.S. Marketplace prices
were often in pounds/shillings/pence even though Spanish money was used. As late as 1837 in New York,
for example, more than 80 percent of the circulating silver was Spanish or Mexican.
The value of the Spanish dollar in currencies of the various states or colonies depended upon financial
matters in a given area.
Latin American Collection