Saturday, July 6, 2013

Jul 6 (1785) Happy Bday US Dollar! "Surely my eyes do not deceive me -- It certainly must be a Dollar!"

On this day in 1785, the Continental Congress approved the dollar as the official monetary unit of the United States. The term "dollar" was short for Spanish milled dollar, which had the most consistent milling process and therefore uniform value of any monetary unit in circulation. The "$" symbol most likely had its origins in the Spanish dollar. Unlike the Spanish dollar, which had a nominal value of eight Spanish reals, the US dollar would be based on a decimal system.

A January 15, 1785 proposition to the Continental Congress strongly advocated for the dollar.

"Another plan has been offered, which proposes, that the money unit be one dollar; and the smallest coin is to be of copper, of which 200 shall pass for one dollar. This plan also proposes, that the several pieces shall increase in a decimal ratio; and that all accounts be kept in decimals, which is certainly by much the most short and simple mode. 

In favour of this plan it is urged, that a dollar, the proposed unit, has long been in general use. Its value is familiar. This accords with the national mode of keeping accounts, and may in time produce the happy effect of uniformity in counting money throughout the union."

The image is from the Library of Congress, entitled "Ghost of a Dollar" with this summary:

A caricature of Philadelphia merchant and financier Stephen Girard, here called "Stephen Graspall, Banker & Shaver." He stands behind a counter with a small slot in it, staring at an apparition of an 1806 Spanish dollar which hovers before him on the left. He says: "Surely my eyes do not deceive me -- It certainly must be a Dollar! -- I declare I have not seen such a thing since I sold the last I had in my Vaults at 18 per Cent Premium -- If thou art a real Dollar do drop in my till and let me hear thee Chink -- As I have been sued for payment of part of my notes in Specie I must collect some to pay them for quietness sake or the game would be up at once." Behind him hangs his signboard, advertising "Paper Wholesale and Retail. NB No foreign Bank notes taken on Deposit except such as are about 5 per cent above par."

Further Reading
Money in Colonial Times - Federal Reserve Bank of Philadelphia
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Flannery O'Connor

You shall know the truth and the truth shall make you odd.