Chapter 3: Early Dollars, Historical Background Table of Contents

CHAPTER 3

Historical Background

THE EARLY DOLLARS OF THE U.S. 1794-1804

by R.W. Julian

 

Coinage Background

With the fall of Rome in the fifth century of our era, there arose in Europe a collection of petty kingdoms. It was not until the age of Charlemagne (768-814) that the practical concept of the great nation once more was seen in Europe. Under this ruler trade was encouraged, and coinage was used by the common man for the first time in centuries.

Prior to Charlemagne, traders and merchants were more accustomed to using gold coins, but beginning about A.D. 755 the French issued small thin silver coins called deniers. A few years later, King Offa of Mercia (an early English kingdom) struck high-quality silver pennies. For centuries the English were known for issuing the best coinage in Western Europe, and it was widely imitated in other countries.  

As European trade began to expand there was a need for a larger coin than just the simple penny or one of the numerous equivalents struck throughout the continent. In 1202 the city-state of Venice introduced the grosso. By the end of the century most European nations had issued similar coins. Beginning in 1280, for example, King Edward III of England struck the groat, equivalent to four pennies. (The groat is minted today for special ceremonial purposes, for use in British Maundy sets. It has not been used as currency since the nineteenth century.)

With the introduction of the grosso and its imitations, trade became less confined. Payments were made easier for larger amounts. Gold began to be struck in quantity during the thirteenth century, although West Europeans had used Byzantine gold for centuries. However, the power of Constantinople was visibly declining during this period, and its coinage was increasingly debased.

The First "Silver Dollar"

A combination of small gold coins and larger silver served Europe reasonably well into the fifteenth century, but the ever-growing trade within the Continent and abroad mandated increased supplies of coin. In 1486 Archduke Sigismund of Tyrol struck the first dollar-sized silver coin. Its formal name was guldengroschen, but this was soon shortened to gulden or guldiner. It was meant to be equivalent with the gulden, one of the important European gold coins.

Sigismund was a pioneer in the field of large silver coins and proved to be well ahead of his time. It was not until about 1520 that the counts of Schlick in Bohemia (later part of Czechoslovakia) took the guldiner concept to its logical conclusion and began the striking of large silver coins on a regular basis.

Most of the silver for the Schlick coinage came from rich mines in the valley of St. Joachim Joachimsthal). These coins became known as Joachimsthalers, which was soon shortened to thalers (or talers). By the middle of the sixteenth century large silver coins, based on the thaler, were being struck all over the continent. Many of the countries simply used a derivative name to show the value of their coinage. Sweden, for example, struck dalers while Dutch provinces coined Leeuwendaalders (lion dollars) from 1575 to about 1713. Petty German states in particular coined thalers, and even multiple thalers became almost common. These coins were frequently used as commemoratives and royal propaganda for the ruling house.

Spanish-American Silver Coins

In Spain, where vast wealth from the New World was pouring into her coffers, the government chose to coin pieces of eight reales, roughly equivalent to the thaler. Mints were established in the Americas to coin silver, and it was not long before the eight reales denomination was struck there also. However, most of the silver struck until the middle of the eighteenth century at Spanish-American mints was in the form of the extremely crude "cob" coins, well known to collectors. Such silver pieces were made by slicing planchets off the end of long silver bars, or "cobs." Mexico City was the first (in 1732) of these mints to abandon the old hammered coinage in favor of the screw press.

Coins of the American Colonists

In what is now the United States permanent settlements from England were established as early as 1607 at Jamestown, but it was decades before the colonists had much in the way of coined gold or silver. Prior to 1650 most trade in this country was on the barter system, and coins were as rare as the proverbial hen's teeth.

In 1652, in an effort to bring stability to the marketplace and also provide a circulating medium to the hard-pressed colonists, the Massachusetts General Court authorized the famous "NE" silver coinage. These first crude coins, which were struck for only a short time, used Spanish eight reales as well as Dutch daalders for their raw material. The Massachusetts coins were lighter than their British counterparts to keep them from circulating outside Massachusetts Bay. Later issues of Massachusetts silver had a tree on the obverse ("pine tree shillings," etc.). The coinage ended about 1682.

 

Chapter 3: Early Dollars, Historical Background Table of Contents