The gold and silver coins of Spain played a crucial role in the commerce of England’s North American colonies for many years. After the United States declared itself independent of Britain in 1776, the “Spanish Milled Dollar” and its fractions remained the principal currency in everyday circulation. Indeed, these coins were legal tender as late as 1857, and an understanding of their history is critical to any study of United States numismatics.
The story of Spain’s money as it relates to the New World began in the latter years of the 15th Century. The marriage between Ferdinand of Aragon and Isabella of Castile and Leon united the Kingdom of Spain in 1479, and this concentration of power propelled Spain into the forefront of world events. Isabella’s patronage of Columbus led to the discovery of the New World in 1492 and, within thirty years, Spain would begin reaping its benefits. As colonies were established from Mexico in the north to Argentina in the south, the gold and silver of the Americas enriched Spain and made it the wealthiest nation of Europe for the next two centuries and more.
The coinage of Spain, once restricted almost exclusively to domestic circulation, ultimately became an international currency. This did not happen immediately, however, as the metal recovered from mines in America was usually shipped to the mother country in the form of ingots or crude, temporary coins called macuquinas.
Known in English as “cobs,” these coins were made by simply refining the ore to slightly over 90% fineness, rolling it like cookie dough into a rod shape, and then slicing off pieces to form crude flans. These were trimmed with scissors to the prescribed weight and coined by the ancient hammer method. One die was mounted on an anvil, the flan was placed atop it, and the other die was suspended above the flan with tongs. A heavy blow or two from a sledge hammer impressed the design into both sides of the flan to form the coin. Given their crude method of manufacture, it’s not surprising that cobs are usually found irregularly shaped and with only partially visible designs. Dating and attributing these coins takes an experienced numismatist, and their collecting is usually limited to those having a deep interest in history.
Cobs, like the ingots that accompanied them from America to Spain, were simply a means of accounting for the silver and gold extracted from the colonial mines. This was critical, as the king was entitled by law to twenty percent of the treasure-the “royal fifth,” which was paid to him as tribute. Since cobs were of a temporary nature and quite awkward to handle, they were not generally used as a circulating currency. Most were melted upon arrival in Europe and recoined into more conventional issues. Those which have survived intact were almost certainly recovered from the wrecks of ships bound for Spain. The minting of cobs ended by the middle of the 18th Century.
To meet the needs of those living in Spain’s American colonies, coins of a more practical type were minted as early as 1536, one year after a mint was established at Mexico City. Coinage commenced at Lima, Peru in 1768, and additional mints followed at Potosi in Bolivia, at Bogota in Colombia and at Santiago in Chile. Several lesser mints flared up briefly, producing only cobs.
The coins produced for circulation within Spain’s American colonies utilized the same denominations as those circulating domestically. The basic unit of value was the gold escudo. The legal specifications of the escudo varied over several centuries but, since its influence as an international currency reached a peak during the 17th and 18th Centuries, this is the period with which we’re most interested. In 1732, for instance, the escudo was defined as weighing 3.38 grams with a fineness of .917 gold. During 1772, this fineness was reduced to .901 to match the domestic gold coinage, and it was further reduced to .875 fine gold in 1777. The escudo was coined as a unit in itself, as well as in multiples of two, four and eight escudos. Half escudos were struck briefly during the reign of Ferdinand VII.
The basic silver unit of Spanish America was the real, and there were sixteen reales to the escudo. In 1732, the real was a coin of .917 silver weighing 3.38 grams, a direct correlation to the gold escudo. Its fineness was reduced slightly to .903 in 1772. The real was also coined in multiple units valued at two, four and eight reales, as well as fractions of one-half and one-quarter real. Both Spain and its American colonies coined copper pieces too, but these played little or no role in the money supply of the British North American colonies.
The Spanish silver coins most familiar to generations of Americans were the “Pillar” types, introduced in 1732 to replace the crude cobs and minted for the next forty years. These coins were of modern manufacture, being produced by a screw press. Their round, almost uniform planchets and rich designs made them immediately recognizable throughout Europe and America.
The obverse of this coin type features two hemispheres suspended above a sea and surmounted by a crown representing Spain’s dominion over both worlds. These are flanked by the pillars of Hercules, which represent the Strait of Gibraltar, gateway to the New World. Each pillar is topped by a small crown and bears a banner which, between them, reads PLUS VLTR[A], (more beyond). Beneath the sea is the coin’s date, flanked by duplicate mintmarks. Inscribed around the reverse periphery is the legend VTRAQUE VNUM (both are one). These various elements are separated by quatrefoils. The reverse of each coin bears the Spanish coat of arms. Within each quarter of the shield are the individual arms of Castile (a castle) and Leon (a lion). Superimposed within an escutcheon are the arms of the Bourbon Dynasty (three fleur de lis). The entire shield is surmounted by a royal crown. The assayer’s intials are to the left of the arms, the coin’s value in reales to the right. Around the obverse periphery is the king’s name in Latin, followed by the abbreviated legend DEI GRATIA HISPANIARUM ET INDIARUM REX (by the grace of God, king of Spain and the Indies).
Beginning in 1772, the obverse of each silver coin was dominated by a portrait of the reigning king. All of the basic design elements and legends were retained, with the sole exception of VTRAQUE VNUM, which was deleted. In this form the coins of Spanish America continued until the independence movements of the 1820s cost Spain most of her colonies.
The gold issues of this period were somewhat similar to the silver coins, but they bore the king’s portrait from the outset. The royal arms appear smaller to allow for the encircling collar of the Golden Fleece. Though the king’s royal titles are the same as on the silver pieces, the accompanying legends vary. The issues of 1732-47 carry the inscription INITIUM SAPIENTIAE TIMOR DOMINI (fear of the Lord is the beginning of wisdom). Beginning in 1748, this was changed to NOMINA MAGNA SEQUOR (I succeed great names). This lasted until the reign of Carlos III, when it was replaced with IN UTROQ FELIX AUSPICE DEO (with God’s guidance one is happy in each place). In such form did the gold coinage of Spanish America survive until the various colonies became sovereign states.
The greater significance of the Spanish American coins to numismatics lies in their international circulation. The silver pieces in particular comprised the majority of hard currency throughout the colonial period of what would later be the USA, and most contracts called for payment in “Spanish Milled Dollars” (the familiar eight-reales coins, or “pieces of eight”). The real, which had a nominal face value of 12-1/2 cents, was commonly known as a “bit,” and from this usage survives the expression “two bits” as slang for the quarter dollar.
The failure of the United State Mint to produce an adequate coinage of its own perpetuated the circulation of Spanish coins for decades. Contributing to this problem was that the Spanish coins, which were frequently clipped and worn, were readily spent, while the federal coins, with their higher intrinsic value, were either hoarded or shipped overseas for recoining in Europe.
From the very outset, Congress established legal tender values for each of the various foreign pieces familiar to 18th Century Americans. It was hoped that this step would be a temporary one, but practical necessity mandated that their legal tender status be renewed time and again. It was not until the 1850s that the USA had enough domestic coinage in circulation to permit withdrawl of the Spanish issues, the only foreign pieces that still maintained a large presence.
Despite the loss it would incur on the underweight Spanish coins, the Treasury began redeeming these pieces in 1857 at a modest discount from their nominal face value. Given in exchange were the new small cents first coined that year as a replacement for the large copper cents and half cents, which were also being retired with the Spanish pieces. This program was renewed through 1860, and it brought to an end the circulation of these historic coins in most of the nation, though rural areas continued to utilize the old bits as late as the 1870s