MT: Foreign Coins as Legal Tender in the United States
ANA
February 28, 2000
FOREIGN COINS AS LEGAL TENDER IN THE UNITED STATES
by David Vagi
Finding a Canadian quarter in change is about as close as we get
today to spending foreign coins. But before 1857, foreign coins were more
plentiful - and sometimes, more readily accepted than our own.
If you think about it, it makes sense that coins from Europe and
Spanish America supported our economy before the United States became a
nation. But you may be surprised to learn that our dependency on foreign
coins continued for more than half a century.
The tiny output from our own mints, and some old habits which were
hard to break, kept foreign coins legal tender in our country until 1857 .
. . 64 years after we began producing our own coins. Our nation relied on
these foreign coins until we could get enough of our own coins in
circulation.
Toleration of foreign coins was voluntary--and it was regulated by
the weight and purity of the coins. That meant some foreign coins were not
legal tender in the United States.
The most famous of all the foreign coins that circulated in the U.S.
was the fabled Spanish "Pillar Dollar" or silver "piece of eight." This
dollar-sized silver coin was the main commercial coin in the Americas
during the 18th and 19th centuries. It was made at Spanish mints in what
are now the modern-day nations of Mexico, Peru, Bolivia, Chile and
Guatemala - so there was always a steady supply.
The slang term "two bits" comes from the "Pillar Dollar." Since the
dollar-sized Spanish coin consisted of eight "reales," two "reales" equaled
a quarter of a dollar . . . that's where we get the nickname "two bits."
Eventually, the time came for Congress to give the old "heave-ho" to
foreign coins.
Today's program was written by David Vagi. "Money Talks" is a
copyrighted production of the American Numismatic Association, 818 N.
Cascade Ave., Colorado Springs, CO 80903, 719/632-2646, a...@money.org,
http://www.money.org. Take a tour of ANA's virtual Money Museum on the web
at www.money.org.