History

Origin of the word "dollar" and the history of the dollar

The origin of word dollar is derived from the Czech Republic. In 1520 , in the village of Joachimsthal (today Jachymov) people discovered rich deposits of silver. One of the owners of the mine, where silver was mined, Czech Earl Jeroným Šlik began production of coins of weight about one ounce. The coins named after the village Joachimsthaler. Name of coin - Joachimsthaler - was later shortened in common usage to taler (thaler). The name taler was further transformed and adopted also for other foreign coins of similar weights and dimensions. In other languages were: tolar (Czech), daler (Danish, Swedish and Norwegian) , daalder (Dutch) , tallero (Italian), daelder (Flemish) and finally dollar (English). Especially the Dutch merchants spread the coins name by distributing their daalder's both in Europe and several colonies, including the Dutch East Indies and New Holland (today's New York). It should be noted that the name referred only to the coins. Banknotes have not yet been invented that time.

Dutch "daalder" was soon supplanted by Spanish dollar very popular in the Spanish colonies in the New World and in the Philippines. Spanish dollar was at that time a silver coin with a value equal to eight reals. That is also origin of name in Spanish "piece of eight" - real de a ocho. In the English colonies in North America there was dramatical shortage of coins. The reason was (among other things) the doctrine of mercantilism. In accordance with the rules in force, the British authorities banned the export of gold and silver from the British Isles. Desperate colonists used the money substitutes such as tobacco leaves or leathers of small animals. Therefore, an informal currency of America soon became a dollar from nearby Spanish colonies.

In year 1690 one of the 13 American colonies released the first paper money dollars (Continentals) in order to finance military expeditions.The banknotes also began to print in other colonies. Unfortunately, they were easy to counterfeit. Without support with the precious metals, and without the support of the Spanish dollar they quickly lost value. Paper money fell completely out of the circumstance and people returned to the coins.

In 1781, Congress appointed the Bank of North America in Philadelphia, the first national bank to support the financial operations of the new government. In 1785 year (to gain independence from the British crown ) adopted the dollar as the monetary unit of the United States.




On April 2, 1792 Secretary of the Treasury Alexander Hamilton reported to Congress the first standard of the U.S. dollar (based on Spanish). American monetary system was specified in determining the value of each coin in gold, silver or copper. For example, one U.S. dollar contained 24 grams of pure silver and it was the equivalent of 1.6 grams of gold. In this year also established the United States Mint.

In 1861, for the purpose of the Civil War first time introduced to the general circulation paper american dollars . In order to finance military action against the South, the Congress decided to print notes 5, 10 and 20 dollar, all in green color. These dollars were rapidly given the nickname "greenback" due to the color. In time, for the first three denominations added other denominations. However, there was no possibility to exchange notes on metal (gold or silver). From that time, dollars become fully circulating paper currency.

Note: All notes and coins issued since 1861 are legal and have their nominal value (of course, the oldest coins and banknotes have a much higher value to collectors).