Q. David Bowers
This first coinage by the English colonies in America was due to the interregnum in England. King Charles I had been beheaded in 1649 and the government was effectively controlled by Oliver Cromwell, soon to become the Lord Protector. Cromwell did not especially concern himself with colonial affairs, unlike the royal government, and many of the colonies were virtually independent until Charles II recovered the throne in 1660.
Most of the Spanish and Dutch silver coin that was brought to the colonies came from the well-known-and illegal-commerce with the West Indies and Africa, the so-called triangular trade. Slaves and rum were key ingredients, and profits were taken in silver and, to a lesser extent, gold. The English government had enacted strict mercantile laws to keep the colonists from trading with areas reserved for English merchants, while Spain forbade all Englishmen to trade with their colonies. Neither prohibition was very effective against the Yankee ship captains, however.
By the 1690s at the latest, the term "dollar" was in widespread use throughout the English colonies in America to describe the Spanish eight reales and the Dutch daalder. The latter was usually called a Lion Dollar to distinguish it from the Spanish dollar of eight reales. Contracts requiring monetary payment in silver coin almost always stipulated the Spanish or Lion dollar by name because of their reputation for quality.
The Dutch, for internal political reasons, began to strike fewer Lion dollars toward the end of the seventeenth century, and by 1700 they were virtually a thing of the past. In America the Spanish dollar gradually became the single accepted standard of value and the yardstick by which all other monies were judged. Colonies had begun to issue paper currency in the 1690s, and its circulating value depended upon the rate of conversion into Spanish silver coin.
It should be noted that the Spanish dollar was not the only silver coinage to be used in the colonies. The Mexico City Mint-as well as several others struck a considerable number of fractional pieces, such as half real, real, and two reales coins} Other denominations were made but never achieved widespread use.
In November 1766 Maryland authorized the issuance of paper money with dollar denominations. These were issued early in 1767 and constitute the first official use of the dollar as the name for a monetary unit in the colonial American economic system. Values from 1/9th of a dollar to $8 were issued. It was a historic moment when the Maryland government officially recognized what the public had been using in terminology for decades.
For some curious reason little numismatic attention has been paid to this first issue of "dollars." There were 12,000 printed of the $1 value. For those who collect the dollar, there could be no finer way to begin a collection than with the Maryland issue of 1767. In due course other colonies adopted this policy, and in 1775 the Continental Congress ordered currency printed in dollar denominations.
One of the great numismatic mysteries of the colonial era is the so-called Continental "dollar" of 1776. Almost certainly the original dies were prepared in order to strike a silver dollar, equivalent to the Spanish eight reales. It did not take long for those behind this issue to realize that bullion was going to be a problem, not to mention the potential of inflation from ever-increasing amounts of paper being issued. Those who believe that the 1776 Continental dollar was semi-official can point to the fact that the Continental Congress did not issue a one-dollar bill from 1776 to 1778, perhaps in hopes that a dollar coin could circulate.
The rapid inflation in the United States after 1777 doomed any proposals for a hard currency until the rebellion was over. With the coming of peace in early 1783, official thoughts turned to coinage once more. Minister of Finance Robert Morris, on his own authority, had patterns of silver and copper made. None of these, however, was of dollar size.