Dollar
United States dollar bill

The dollar (often represented by the dollar sign $) is the name of the official currency of many countries, including Australia, Belize, Canada, Ecuador, El Salvador, Hong Kong, New Zealand, Singapore, Taiwan, and the United States.

Contents

History

Etymology

On the 15th of January, 1520, the Bohemian Count Hieronymus Schlick (Czech: Jeroným Šlik z Passounu) began minting coins known as Joachimsthaler, named for Joachimsthal (modern Jáchymov in the Czech Republic), where the silver was mined.[1] (In German, thal or tal refers to a valley or dale.) "Joachimsthaler" was later shortened in common usage to taler or thaler (same pronunciation) and this shortened word eventually found its way into other languages: Czech tolar, Danish and Norwegian (rigs)daler, Swedish (riks)daler, Dutch (rijks)daalder, Ethiopian ታላሪ ("talari"), Italian tallero, Flemish daelder, Persian Dare, as well as into English as dollar.[1]

Development of use

The coins minted at Joachimsthal soon lent their name to other coins of similar size and weight from other places. One such example, the Dutch lion dollar, circulated throughout the Middle East and was imitated in several German and Italian cities. Carried by Dutch traders, this coin was also popular in the Dutch East Indies as well as in the Dutch New Netherland Colony (New York), and circulated throughout the Thirteen Colonies during the 17th and early 18th centuries. Some well-worn examples circulating in the Colonies were known as "dog dollars".[2] By the mid-18th century, the lion dollar had been replaced by Spanish dollar, the famous "piece of eight," which were distributed widely in the Spanish colonies in the New World and in the Philippines.[3] Pieces of eight (so-called because they were worth eight "reals") became known as "Spanish dollars" in the English-speaking world because of their similarity in size, weight and composition to the earlier thaler coins.

Origins of the dollar sign

The sign is first attested in business correspondence in the 1770s as a scribal abbreviation "ps", referring to the Spanish American peso,[4][5] that is, the "Spanish dollar" as it was known in British North America. These late eighteenth- and early nineteenth-century manuscripts show that the s gradually came to be written over the p developing a close equivalent to the "$" mark," and this new symbol was retained to refer to the American dollar as well, once this currency was adopted in 1785 by the United States.[6][7][8][9][10]

Adoption by the United States

By the American Revolution, Spanish dollars gained significance because they backed paper money authorized by the individual colonies and the Continental Congress.[3] Common in the Thirteen Colonies, Spanish dollars were even legal tender in one colony, Virginia.

On April 2, 1792, U. S. Secretary of the Treasury Alexander Hamilton reported to Congress the precise amount of silver found in Spanish milled dollar coins in common use in the States. As a result, the United States Dollar was defined[11] as a unit of weight equaling 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[12]). It was specified that the "money of account" of the United States should be expressed in those same "dollars" or parts thereof. Additionally, all lesser-denomination coins were defined as percentages of the dollar coin, such that a half-dollar was to contain half as much silver as a dollar, quarter-dollars would contain one-fourth as much, and so on.

In an act passed in January 1837, the dollar's alloy (amount of non-silver metal present) was set at 11%. Subsequent coins would contain the same amount of pure silver as previously, but were reduced in overall weight (to 412.25 grains). On February 21, 1853, the quantity of silver in the lesser coins was reduced, with the effect that their denominations no longer represented their silver content relative to dollar coins.

Various acts have subsequently been passed affecting the amount and type of metal in U. S. coins, so that today there is no legal definition of the term "dollar" to be found in U. S. statute.[13][14][15] Currently the closest thing to a definition is found in 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."

Silver was mostly removed from U. S. coinage by 1965 and the dollar became a free-floating fiat currency without a commodity backing defined in terms of real gold or silver. The US Mint continues to make silver $1-denomination coins, but these are not intended for general circulation.

Usage in Great Britain

The word dollar had been in use in the English language as a variant for thaler for about 200 years before the founding of the United States, with many quotes in the plays of Shakespeare referring to dollars as money. Coins known as "Thistle dollars" were in use in Scotland during the 16th and 17th century,[16] and use of the English word, and perhaps even the use of the coin, may have begun at the University of St Andrews.[citation needed] This might be supported by a reference to the sum of "ten thousand dollars" in Macbeth (Act I, Scene II) (an anachronism because the real Macbeth, upon whom the play was based, lived in the 11th century).

In 1804, a British five-shilling piece, or crown, was sometimes called "dollar". It was an overstruck Spanish 8 Real coin (the famous 'piece of eight'), the original of which was known as a Spanish dollar. Large numbers of these 8-real coins were captured during the Napoleonic Wars, hence their re-use by the Bank of England. They remained in use until 1811.[17] During World War II, when the US dollar was (approximately) valued at 5 shillings, the half crown (2s 6d) became nicknamed a "half dollar" by US personnel in the UK.

Usage elsewhere

Chinese demand for silver in the 19th and early 20th centuries led several countries, notably the United Kingdom, United States and Japan, to mint trade dollars, which were often of slightly different weights to comparable 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.

Other national currencies called "Dollar"

Australian one-dollar coin

Prior to 1873, the silver dollar circulated in many parts of the world, with a value in relation to the British gold sovereign of roughly $1 = 4s 2d (21p approx). As a result of the decision of the German Empire to stop minting silver thaler coins in 1871, in the wake of the Franco-Prussian war, the worldwide price of silver began to fall.[18] This resulted in the US Coinage Act (1873) which put the United States on to 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 silver dollars being used elsewhere, particularly Latin America and the Far East. By 1900, value of silver dollars had fallen to 50 percent of gold dollars. Following abandonment of the gold standard by Canada in 1931, the Canadian dollar began to drift away from parity with the US dollar. It returned to parity a few times, but since the end of the Bretton Woods system of fixed exchange rates that was agreed in 1944, the Canadian dollar has been floating against the US dollar. The silver dollars of Latin America and South East Asia began to diverge from each other as well during the course of the 20th century. The Straits dollar adopted a gold exchange standard in 1906 after it had been forced to rise in value against 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 (11.5p approx) sterling, whereas the Hong Kong dollar was worth only 1s 3d sterling (6p approx).

Existing dollar units today are the Bahamian dollar, the Barbados dollar, the Cayman Islands 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, and 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.

The term "dollar" has also been adopted by other countries for currencies which do not share a common history with other dollars. Many of these currencies adopted the name after moving from a £sd-based to a decimalized monetary system. Examples include 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.

500 old Zimbabwean dollar bill

Economies which use the dollar

Economies currently using the dollar

Countries Currency ISO 4217 code Date Established Preceding Currency
 Antigua and Barbuda East Caribbean Dollar XCD
 Australia and its external territories Australian Dollar AUD 1966-02-14 Australian Pound
 Bahamas Bahamian Dollar BSD Bahamian Pound
 Barbados Barbados Dollar BBD
 Belize Belize dollar BZD 1973 British Honduran Dollar
 Brunei Brunei dollar BND
 Canada Canadian Dollar CAD 1858
 Dominica East Caribbean Dollar XCD
 East Timor United States Dollar USD
 Ecuador United States Dollar USD 2001 Ecuadorian Sucre
 El Salvador United States Dollar USD 2001-01-01 Salvadoran colón
 Fiji Fiji Dollar FJD
 Grenada East Caribbean Dollar XCD
 Guyana Guyana Dollar GYD
 Hong Kong Hong Kong Dollar HKD 1863 Rupee, Real (Spanish/Mexican), Chinese cash
 Jamaica Jamaican Dollar JMD 1969 Jamaican pound
 Kiribati Kiribati dollar along with the Australian Dollar N/A/AUD
 Liberia Liberian Dollar LRD
 Marshall Islands United States Dollar USD
 Federated States of Micronesia United States Dollar KWD
 Namibia Namibian Dollar along with the South African rand NAD 1993 South African rand
 Nauru Australian Dollar AUD
 New Zealand and its external territories New Zealand Dollar NZD 1967 New Zealand pound
 Palau United States Dollar USD
 Saint Kitts and Nevis East Caribbean Dollar XCD
 Saint Lucia East Caribbean Dollar XCD
 Saint Vincent and the Grenadines East Caribbean Dollar XCD
 Saint Pierre and Miquelon Canadian Dollar, unofficial[19] CAD
 Singapore Singapore Dollar SGD
 Solomon Islands Solomon Islands Dollar SBD
 Suriname Surinamese dollar SRD
 Republic of China (Taiwan) New Taiwan Dollar TWD
 Trinidad and Tobago Trinidad and Tobago Dollar TTD
 Tuvalu Tuvaluan dollar along with the Australian Dollar TVD/ AUD
 United States and its territories United States Dollar USD
 Zimbabwe United States Dollar[20] USD Zimbabwean Dollar

Countries and regions which have previously used the dollar

Other territories which currently use the dollar

Countries which accept the dollar[clarification needed], but do not use it as their official currency

See also

References

  1. ^ a b National Geographic. June 2002. p. 1. Ask Us.
  2. ^ "Lion Dollar — Introduction". http://www.coins.nd.edu/ColCoin/ColCoinIntros/Lion-Dollar.intro.html. 
  3. ^ a b Julian, R.W. (2007). All About the Dollar. Numismatist. pp. 41. 
  4. ^ Lawrence Kinnaird (July 1976). "The Western Fringe of Revolution," The Western Historical Quarterly 7(3), 259.
  5. ^ "Origin of Dollar Sign is Traced to Mexico", Popular Science 116 (2): 59, 1930, ISSN 0161-7370, http://books.google.com/books?id=4ykDAAAAMBAJ&printsec=frontcover#PPA59,M1 
  6. ^ Florian Cajori ([1929]1993). A History of Mathematical Notations (Vol. 2), 15-29.
  7. ^ Arthur S. Aiton and Benjamin W. Wheeler (May 1931). "The First American Mint", The Hispanic American Historical Review 11(2), 198 and note 2 on 198.
  8. ^ Nussbaum, Arthur (1957). A History of the Dollar. New York: Columbia University Press. p. 56. 
  9. ^ Riesco Terrero, Ángel (1983). Diccionario de abreviaturas hispanas de los siglos XIII al XVIII: Con un apendice de expresiones y formulas juridico-diplomaticas de uso corriente. Salamanca: Imprenta Varona, 350. ISBN 84-300-9090-8
  10. ^ Bureau of Engraving and Printing. "'What is the origin of the $ sign?' in FAQ Library". http://www.moneyfactory.gov/faqlibrary.html. Retrieved December 14, 2010. 
  11. ^ 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.
  12. ^ Section 13 of the Act.
  13. ^ United States Statutes at Large. 
  14. ^ Yeoman, RS. A Guide Book of United States Coins. 
  15. ^ Ewart, James E. Money — Ye shall have honest weights and measures. 
  16. ^ Handbook of the Coins of Great Britain and Ireland in the British Museum, by Herbert Appold Grueber [1]
  17. ^ http://wiki.answers.com/Q/What_is_the_value_of_an_1804_British_Dollar
  18. ^ Monetary Madhouse, Charles Savoie, 2005
  19. ^ While the Canadian dollar is widely accepted in St. Pierre and Miquelon (especially at tourism destinations), the euro (€) is legal tender.
  20. ^ Alongside Zimbabwean dollar (suspended indefinitely from 12 April 2009), Euro, Pound Sterling, South African rand and Botswana pula. The US Dollar has been adopted as the official currency for all government transactions.
  21. ^ Wojtanik, Andrew (2005). Afghanistan to Zimbabwe. Washington, DC: National Geographic Society. pp. 147. 
  22. ^ Alongside Panamanian balboa coins

External links


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