THE DOLLAR IN REVOLUTIONARY AMERICA

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V22 2019 INDEX E-SYLUM ARCHIVE

The E-Sylum: Volume 22, Number 4, January 27, 2019, Article 30

The Journal of the American Revolution published an article back in 2016 that made the rounds this week in a forum for colonial coin collectors, and it sheds some additional light on the British system of pounds, shillings, and pence. -Editor

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.

I was interested to read the guide to the British system. It was not complicated at all! Children just learnt 12 pennies to the shilling and twenty shillings to the pound just as you knew twelve inches to a foot and three feet to the yard. It was the decimal money that was complicated! Twenty and twelve easily divide into halves and quarters but ten does not. This meant there was no equivalent for the sixpence and threepence coins which continued in use. The old sixpence was not demonetised until 1980.

Nearly fifty years on some people have not got used to decimals!

To read the earlier E-Sylum article, see:
HOW BRITISH MONEY WORKED (https://www.coinbooks.org/v22/esylum_v22n03a26.html)