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standard money

Dollar

[dol-er]

The dollar (often represented by the dollar sign: "$") is the name of the official currency in several countries, dependencies and other world regions. All nations that have the dollar as their currency have their notes and coins in circulation containing various metals and substances.

History

The German name Thaler came from the Bohemian coin minted from the silver from a rich mine at Joachimsthal - Jáchymov (St. Joachim's Valley) in Bohemia north of Karlovy Vary (Karlsbad). Not long after issuance, these coins gained the name Joachimsthalers. From there, coins gained the name "thaler" regardless of the issuing authority. The name is historically related to the tolar, in Germany Reichsthaler, Slovenia (Slovenian tolar) and Bohemia, the daalder in the Netherlands and daler in Sweden, Denmark, and Norway. "Guildiner" 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 "guildiner". Silver supplies were small which limited coinage.

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 Netherlands 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. 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.

The name "Spanish dollar" was used for a Spanish coin, the "real de a ocho" and later peso, worth eight reals (hence the nickname "pieces of eight"), which 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 the nation's currency. 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. 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.

Coins known as 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 this is 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 U.S. troops came to the UK during World War II. At the time a U.S. dollar was worth about 5s., so some of the U.S. soldiers started calling it a dollar. Consequently, they called the half crown "half a dollar", and the expression caught on among some locals and could be heard into the 1960s.

In the early days of the United States, the term "Dollar" was commonly known as a coin minted by Spain called the Spanish Milled Dollar. These coins were the standard money then in use in the country. On April 2, 1792 Alexander Hamilton, then the Secretary of the Treasury, made a report to Congress that were the result of his task to scientifically determine 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 (See the Act of April 2, A.D. 1792 of the Senate and House of Representatives of the United States of America in Congress assembled, Section 9) as a unit of measure of 371 4/16th grains of pure silver or 416 grains of standard silver. (Standard silver being defined as 1,485 parts fine silver to 179 parts alloy; See Section 13 of the Act.). Therefore paper is not the dollar, instead, it is 'worth', not 'is', 1 dollar (U.S 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, 1/4th etc. In an act passed on January 18, 1837 the alloy was changed to 10% thus 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 10% 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. [Sources for this paragraph include the United States Statutes at Large, A Guide Book of United States Coins by R.S. Yeoman, MONEY - Ye shall have honest weights and measures by James E. Ewart.]

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 prejudiced to deliver tax credits instead of money. The silver content of U.S. coinage was mostly removed in 1965 and the dollar essentially became a baseless free-floating fiat currency; though the U.S. Mint continues to make silver $1 bullion 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"

Some of these are called dollars in English, but by a different name in the native language of the country. See the navigational box below for a complete list.

The name has also been applied to the international dollar, a hypothetical unit of currency that has the same purchasing power that the U.S. dollar has in the United States at a given point in time.

Various science fiction writers used "Dollar" as the name of currencies in the future worlds they depicted (see List of fictional currencies#Names adapted from real-world currencies).

See also

References

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