The Spanish Pieces-of-Eight, the Silver Standard, and the U.S. Silver Dollar
Spain was initially the most successful of the European colonialists in terms of territory gained and wealth plundered and with this came the extraction of a large amount of silver. Mines primarily in Potosi (present day Bolivia) and Mexico produced massive amounts of silver. The silver was minted in Spain along with in the colonies of Potosi, Lima, and Mexico City along with much smaller mints in Bogotá, Popayán, Guatemala City, and Santiago into Pieces-of-Eight.
Pieces-of-Eight were designed at 1.5 inches in diameter and worth eight Spanish reales. The Pieces-of-Eight grew in acceptance worldwide due to their uniform size and acceptance as well as their large volume as a result of the massive for the time silver deposits discovered by Spain in the New World.
The prolific spread of Piece-of-Eight resulted in the establishment of a silver standard where most international trade was conducted in silver as opposed to gold. Gold was of course still used but the basis of the currency’s value was counted or weighed in silver.
The U.S. “dollar”’ is derived in name from the Bohemian word thaler for the silver coin made there called the Joachimsthaler. In the Coinage Act of 1792 it was specified that the U.S. dollar would contain 24.057 g pure or 26.96 g standard silver. This weight was derived from Alexander Hamilton ordering the averaging of the weighing of a certain number of worn Pieces-of-Eight coinage in circulation at the time.
Analysis: Pieces-of-Eight silver were so prolific and commonly used that they had created a global silver standard from which the average weight of in circulation Pieces-of-Eight were utilized to derive the weight of the first U.S. Silver Dollar. The story of the Pieced-of-Eight demonstrates the dominance of Silver from the Age of Discovery or Colonial Period into the rise of the United States of America. Pieces-of-Eight were a sort of reserve currency of the world that would lead to the U.S. Dollar which eventually became the reserve currency, and it all had a basis in SILVER.
The most important point thought is that a Silver Standard was more common throughout history than not, meaning that the time period we live in now is the aberration, not the historically natural state of the World’s or the United State’s monetary system.
