Piece of Eight

Piece Of Eight

Coin; 1589-1598; Potosí, Bolivia

(Photo credit: History.org)

The Piece of Eight, also known as the Spanish Dollar, is a Spanish coin that was made of silver found in South America. The coins were able to be split into eight different parts, as the American dollar is able to be split into 100 different parts, hence the name “Piece of Eight.” This has made a lasting impression on the American currency system, as seen by how we call quarters (25-cent pieces) “two bit,” four of which make up eight bits or a dollar.

The first currency that was accepted internationally was the Piece of Eight. Although it was mainly used and circulated between European Spain and South America, the use of it did go beyond these places. Because silver was universally wanted and used, everyone could trade with and for silver. Most of the silver that was used came from Potosí, a mountain in Bolivia.

Many countries have taken the old Spanish coins and cut holes into them or stamped right over them to use as their own currency. For example, around 1813, in New South Wales, Australia, the first currency they had was made from Spanish silver coins. In 1812, Governor Lachlan Macquarie took around 40000 Spanish coins to use for currency. Because they didn’t have that much material to make coins, they cut the center out of each coin so that they could use the centers, resulting in twice the number of coins they would have otherwise. The outside of the coin as known as the “holey coin,” while the center was called the “dump.” The restamped coins were then used as the currency in New South Wales., and since they were restamped, they weren’t able to be used as international currency. The silver was turned into the first currency known in Australia.

Circular coin with a hole at the centre. 'NEW SOUTH WALES 1813' is stamped around the centre ring. 'CAROLUS IIII DEI GRATIA 1796' is stamped around the outer rim.

(Photo credit: National Museum of Australia)

In 1829, these coins were no longer used as currency, and a large majority of the coins in circulation were exchanged for the actual currency at the time. Those coins were mostly melted down and turned into bullion. The only coins remaining are in the possession of people who were rich enough that they did not need to exchange their silver for money at the time of demonetisation; thus, these coins are extremely rare to find today.

Sources:

“The Age of Spanish Discovery and Settlement (1492 – 1652).” Coins and Currency in Colonial America. N.p.. Web. 2 Mar 2013.
Link: http://www.history.org/history/museums/coinExhibit/printable/section1.cfm

“Holey Dollar.” National Museum of Australia. N.p.. Web. 2 Mar 2013.
Link: http://www.nma.gov.au/collections/highlights/holey_dollar

“Pieces of eight.” BBC. N.p.. Web. 2 Mar 2013.
Link: http://www.bbc.co.uk/ahistoryoftheworld/objects/JO391t6cRtGxstjbE4EEmg

“What are Pieces of Eight?.” Wisegeek. N.p.. Web. 2 Mar 2013.
Link: http://www.wisegeek.com/what-are-pieces-of-eight.htm

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