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The origin of the "Dollar"
In the 1500's a silver unit called "Joachimsthaler" was minted in Bohemia. Later in the 1600's this was shortened to "thaler" in German and became the origin of the Spanish word "talero".
A German Thaler from 1629. Looks like something out of Lord of the Rings Source
The Danish and Swiss called it "daler" and it became known in English as the "dollar". The Spanish piece of eight silver coin became commonly referred to as the "dollar" in the United States. Source
Silver is Lawful Money
Back in colonial times, there were few to no mints producing silver coins for currency. The easiest way of trading a metal (money) was by using coins from other countries.
Spanish dollars came into the North American colonies through lucrative trade with the West Indies. The Spanish silver dollar had been the world's outstanding coin since the early 16th century, and was spread partially by dint of the vast silver output of the Spanish colonies in Latin America. More important, however, was that the Spanish dollar, from the 16th to the 19th century, was relatively the most stable and least debased coin in the Western world. Source
That means the original silver dollar in the US was Spanish! It was the most common silver coin in circulation during colonial times. Everyone knew and could rely on the fact that it contained 416 grain of standard silver. Silver (no mater who mints it) is lawful money.
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; US Constitution Article 1 Section 10
Before the American Revolutionary War, coins from many European nations circulated freely in the American colonies, as did coinage issued by the various colonies. Chief among these was the Spanish silver dollar coins (also called pieces of eight or eight reales) minted in Mexico and other colonies with silver mined from Central and South American mines. These coins, along with others of similar size and value, were in use throughout the colonies, and later the United States, and were legal tender until 1857. Source
The origin of the "$" Dollar sign.
It is theorized that the dollar symbol comes from the design on the back of the Spanish Piece of Eight. Featured there are the "Pillars of Hercules" with a ribbon wrapped around it. A quick way of referencing the Spanish Piece of Eight (or the 'dollar') was with an "S" with a line through it. Sometimes it's shown with two lines to show the thickness of the pillar.
The origin of Quarters.
They were cut into "quarters" which is where we get our modern quarter from. We became accustomed to 'quarter dollars' so we created a coin to represent a "quarter" and don't have a 5/10/20 denominations like with paper money.
Shave and a haircut... two bits!
The "quarters" were also cut into "8ths" which is were we get idea of the "Piece of eight". They were also called bits. So a shave and a haircut cost $0.25
It was all based on weight value. Silver was the value, not the coin itself.
The first (symbolic) US Silver Dollar
In 1794 the first US silver dollar was minted. It was treated as a silver token, valued only according to it's weight in silver, which was exactly the same as the Spanish Piece of Eight. They were not used for money, but were distributed to dignitaries as souvenirs. They were not impressed:
The VIPs were not impressed with what they saw. The dollars were struck on the largest press the mint possessed, but the machine was originally intended for cents and half dollars. The only way it had proved adequate for striking the copper pattern was by striking the piece twice. The impressions it gave with a single blow were weak, a situation not helped by the fact that the obverse die was damaged early on and had to be polished down along one part of its circumference. This resulted in its making an even weaker impression. So the new federal dollar was not a brilliant success. But it was a first - and sometimes that's success enough. Source
The first silver dollar was described in a news paper as such:
“Some of the new dollars now coming at the Mint of the United States have found their way into this town. A correspondent put one into the editor’s hands yesterday. Its weight is equal to that of a Spanish dollar, but the metal appears finer. One side bears a head, with flowing tresses, encircled by Fifteen stars and has the word “LIBERTY” at the top, and the date, 1794, at the bottom. On the reverse, is a Bald Eagle, enclosed in an Olive Branch, round which are the words “One Dollar, or Unit, Hundred Cents.” The tout ensemble has a pleasing effect to a connoisseur; but the touches the graver are too delicate, and there is a want of that boldness of execution which is necessary to durability and currency.” Source
Other silver dollars and designs were issued and they were primarily used for trade with the orient.
Silver is Still Lawful Money
Generations of Americans have used silver for trade because anything else was just a piece of paper. Silver has been known to have tradeable value for centuries, even millennium.
The way to introduce paper money is to make them IOU's, certificates exchangeable for a silver dollar.
Certificates for Physical Silver
It's a tough sell, switching from silver coins to paper money. It got to the point where the paper money became an advertisement about their own worth. Below is a five dollar silver certificate from 1886 that bears the image of the silver dollars you could exchange the promissory note for:
See the silver coins? You can exchange this for a real silver coins. See? Look this paper is valuable! Image Source
1914 Federal Reserve Note: Redeemable for Lawful Money
What a change.
Shortly after the Federal Reserve Act of 1913, the first Federal Reserve Notes began being printed. This is a $5 Federal Reserve Note from 1914.
It simply states: AUTHORIZED BY FEDERAL RESERVE ACT OF DECEMBER 23, 1913
Who can argue with all capitalized letters?
You are looking at the first step towards US Fiat money. AUTHORIZED. That's it. AUTHORIZED. Where are the advertisements now? Where is the certification that five silver dollars back up this piece of paper? Nothing. Just an explanation that this note can be redeemed for lawful money, ehem physical gold or silver certificates for physical silver.
"This note is receivable by all national and member banks and Federal Reserve Banks and for all taxes, customs and other public dues. It is redeemable in gold on demand at the Treasury Department of the United States in the city of Washington, District of Columbia or in gold or lawful money at any Federal Reserve Bank."
They admit that this is not lawful money. You can redeem this Federal Reserve Note for gold or lawful money. But why would I do that if I'm already holding lawful money? Because this is not lawful money. It's just a "note" that has been "authorized" by an "act".
1928 Federal Reserve Note: Redeemable for Lawful Money
The Federal Reserve note doesn't claim to be lawful money, but is redeemable for lawful money or gold.
1934 Federal Reserve Note: Redeemable for Lawful Money
For years, Federal Reserve Notes have been redeemable for lawful money, but in 1934 during the great depression, Federal Reserve Notes became "Legal Tender", still redeemable in lawful money, but tradable as if they were lawful money to satisfiy debts.
Legal tender is a medium of payment recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender is variously defined in different jurisdictions. Formally, it is anything which when offered in payment extinguishes the debt. Source
At this point, you can still exchange these "notes" for lawful money. We are also told that these notes are "legal tender" for transactions on their own. Legal tender is NOT lawful money. Only Silver and gold is "Legal Tender" for payments of debts.
No State shall ... make any thing but gold and silver Coin a [Legal] Tender in Payment of Debts; US Constitution Article 1 Section 10
Source Google Images
THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE AND IS REDEEMABLE IN LAWFUL MONEY AT THE UNITED STATES TREASURY OR AT ANY FEDERAL RESERVE BANK
Ut oh, we have a problem. These notes state that Federal Reserve Notes are "Legal Tender".
1963 Federal Reserve Note: NOT Redeemable for Lawful Money
Federal Reserve Notes, which were redeemable for lawful money, come 1963, simply are not anymore. The bearer of this note will no longer be paid five dollars of lawful money on demand. We must treat this "note" as if it was five dollars! Even if it's NOT lawful money, it's "legal tender".
Source Google Images
THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE
"Let it be. Fiat Money."
When the US Dollar became a fiat money, it was no longer redeemable for "lawful money".
Fiat money is a currency without intrinsic value established as money by government regulation. It has an assigned value only because the government uses its power to enforce the value of a fiat currency. The term derives from the Latin fiat ("let it be done") used in the sense of an order or decree. Source
I find it an interesting coincidence that this single by the Beatles was released in 1970, just seven years after the introduction of "Let it be done" (fiat) money.
The silver run of 1962 - 1964
It's interesting that the most commonly used paper currency (the one dollar bill) remained silver certificates, backed with real silver until 1964.
Until 1964, U.S. citizens could redeem paper money known as silver certificates for silver dollars at a U.S. Treasury mint on demand. In 1962, an individual redeemed a silver certificate and received a rare and valuable Morgan dollar in exchange. The coin was from a bag of silver dollars in the vault of the Philadelphia Mint. This incident triggered huge interest, and between November 1962 and March 1964, millions of Morgan and Peace dollars were sold to the general public. The demand to exchange silver certificates for silver dollars was so great that lines formed outside of the Treasury Building in Washington, D.C. Some people in line were pushing wheelbarrows. Source
Last chance for these dollars (for a dollar) was in 1964:
The Modern US Dollar
Source Google Images
Gone is the "Pay to the Bearer on Demand" and "Redeemable for Lawful Money". Now we are left with paper that is worth only what the market demands it be worth. By the AUTHORITY of the Federal Reserve ACT in 1913.
Thankfully, we are still able to exchange these "Notes" on the market for physical silver and gold. It may not always be this way.
Lawful Money
According to the US Coinage Act of 1792, one dollar is 416 grains of standard silver or 371 grains pure silver. This is about 0.77 Troy oz of .999 pure silver.
So how many troy oz of silver do you possess? Divide by 0.77 to find out how many DOLLARS of "Lawful Money" you have.
This is what is meant by "Lawful Money". Physical silver or gold, or certificates backed up with silver or gold. Or something like #goldmoney where the wealth is backed up with precious mentals.
1 Troy oz silver eagle is worth 1.30 dollars of Lawful Money. How much Lawful Money do you have on hand?
Conclusion
I hope that this has been an interesting journey from the original dollar to what we have today. I encourage everyone to invest in real money, tradeable assets to preserve your wealth for the day that the we find "Let it be done" becomes "Let it be undone."
