Chip Howell forwarded this article from the
Journal of the American Revolution. Thanks. -Editor
"Pennies make dollars” is a phrase that has been
around a long time and we all know what it means. But, how many
pennies does it take to make a dollar? Silly question you may
say—it’s one-hundred, of course. That’s the right answer for
today’s America, but that would not necessarily be the right
answer if you lived in Revolutionary America. The United States
dollar as we know it came into existence with the passage of the
Coinage Act in 1792 which based the dollar on a decimal system
and said that coins would be a certain number of one-hundredths
of a dollar—half-dollar equals fifty cents, quarter-dollar equals
twenty-five cents, etc. Prior to that, however, the dollar had a
different structure.
There is a major point that must be understood in any
discussion of Revolutionary War era economics. All parts of the
United States today are connected within a single economy. Prior
to the completion of independence in the 1800s, however, America
consisted of hundreds of individual economies ranging from small
villages to large groups of merchants—the latter with close
connections to the economies of Europe. Being quite limited in
scope, most of these systems operated independently of each other
and experienced minimal, if any, influence from the outside
world. Each set values and prices had a basis in the local
conditions. The coming of war forced the nascent United States to
attempt to develop our first true national economy.
In the eighteenth-century western world, the economies of all
countries relied to some extent on silver and gold coins (called
“specie” or “hard money”) minted by each country. England and the
British colonies based their system on pounds, shillings, and
pence—one pound (1£) consisted of twenty shillings (20s) and each
shilling had twelve pence (12d). A common form of expressing
amounts in this system displayed £.s.d and this format will be
used in this article.
To our modern decimal-oriented monetary mind this may look to
be a complicated system but it does have a distinct advantage.
Comprised of 240 pence, a pound can be evenly divided by several
numbers—2, 3, 4, 5, 6, 8, 10, 12, 15, 16 and so on. Try dividing
a dollar of one-hundred cents by 3, 6, 8, 12, 15, 16, etc.—it
cannot be done without some fraction left over. In a society
without calculators conveniently at hand, having money that could
be quickly and evenly divided in many different ways made life a
bit simpler.
To read the complete article, see:
THE DOLLAR IN REVOLUTIONARY AMERICA
(https://allthingsliberty.com/2016/09/dollar-revolutionary-america/)
Wayne Homren, Editor
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