The Complex Origin of the $ Sign
Paradoxically, even though they quickly generated wealth, the American colonists suffered from quite a severe shortage of money. There simply were not enough of accepted coins or bank notes with which to purchase goods. The British coinage they brought with them was scarce and generally flowed back to England, spent on goods lacking in North America. In addition, English law forbade both the exportation and minting of the kingdom’s currency. This state of affairs persisted in one form or another from the very first days of American settlements to the Revolutionary War. In fact, the monetary difficulties were among the factors which precipitated the War for Independence.
The settlers coped in several ways. Resorting to barter, they designated certain commodities like corn, tobacco, rice and beaver skins as legal tenders to settle financial obligations. They also adopted the native currency,
wampum—beads made from certain shells—as a coin substitute. The beads served their purpose reasonably well; they required skill to manufacture, and were arranged into strings or “money” belts which could reach up to 20 feet in length. New York State discontinued the use of wampum as a legal tender in 1701. The best summary of the pre-revolutionary monetary situation in the colonies is the fact that in 1715 there were 17 official legal tenders in North Carolina.
One place where coins were more than plentiful was the Andean city of Potosi, located in what is now Bolivia. For at least a century, since the Spanish Conquistadores established it in 1545, the nearby Cerro Rico Mountain (“Rich Mountain”) housed the largest silver mine in the world. Bathing in wealth, Potosi reached a population of 160,000 in 1650 (in the 1770s the population of the United States was 2.5 million), and soon became the main supplier of silver coins to the whole world. Spanish pesos were used in North America, Asia and Europe. Even King Charles IV attempted to disseminate the Spanish coins in England in 1797 to alleviate the coin shortage.
The most popular coins minted in Potosi which circulated in North America were pesos, also called pieces of eight (“eight” referring to the coins’ weight). Resembling a large silver European coin called the thaler, they soon became known as dollars, or Spanish dollars in English-speaking countries. A credible theory of the origin of the $ sign stipulates that the symbol came from one of the designs of Spanish dollars--the so called Pillar dollars. The obverse of those
coins depicted two Pillars of Hercules draped in ribbons with the motto “Plus Ultra” (“Farther Beyond”). The ribbon wrapping the right pillar clearly traces the letter S. Indeed, changing the relative proportions of the ribbon and the pillar one readily obtains the $ sign. The two vertical bars sometimes drawn in the $ symbol may simply reflect the fact that there were two Pillars of Hercules.
References
- Arthur Nussbaum, “A History of the Dollar”, Columbia University Press New York 1957
- Glyn Davies, “A History of Money From Ancient Times to the Present Day”, University of Wales Press, Cardiff 2002
- Lewis Hanke, “The Imperial City of Potosi, an unwritten chapter in the history of Spanish America”, Nijhoff, The Hague 1956
) under the grid.