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I’m told this system made more sense back in the days where coins made of precious metals were the dominant form of money. The Spanish Dollar was made of silver

I’m told this system made more sense back in the days where coins made of precious metals were the dominant form of money. The Spanish Dollar was made of silver and had lines on it so that if you needed to make change you could simply cut it. >“The dollar was divided into "pieces of eight," or "bits," each consisting of one-eighth of a dollar.” From there it makes sense that if you needed to further subdivide an eighth of a dollar you could get another coin that is worth some fraction of an eighth of a dollar, and so on. But this starts to get a little weird because all of these other coins start using different metals and each of them have their own exchange rate that fluctuates. In any event a decimalized currency was a big innovation. So much so that we think of anything else as baffling. https://en.wikipedia.org/wiki/Spanish_dollar https://en.wikipedia.org/wiki/Spanish_dollar

_a_a_a_ 3y ago
> >“The dollar was divided into "pieces of eight," or "bits," each consisting of one-eighth of a dollar.” Well, well. So the name... TIL. FYI I believe it used to be legal in the UK (still is? Is it even possible with modern plastic currency?) to tear a note in half to pay half the value. My brother said he saw it once, used to pay a bus fair, a very long time ago.
hakfoo 3y ago
While the Spanish 8 reales was commonly cut, it actually didn't have great affordances for it. There were two common types in the colonial era-- one had the monarch's portrait, and one had two globes between two pillars. Both types featured a coat of arms that if you squinted hard might have some quadrant lines in them, but they'd be raised-- making them harder to use as cut lines. Aside from cutting the larger coins, Spanish territories also produced a lot of low-denomination silver coins. You can see this reflected in the scarcity of early US quarters; the 2-real coin was legal tender until 1857, so there was less pressure to produce quarters than dimes during the early years of limited mint capacity.

_a_a_a_ 3y ago

> >“The dollar was divided into "pieces of eight," or "bits," each consisting of one-eighth of a dollar.” Well, well. So the name... TIL. FYI I believe it used to be legal in the UK (still is? Is it even possible with modern plastic currency?) to tear a note in half to pay half the value. My brother said he saw it once, used to pay a bus fair, a very long time ago.

hakfoo 3y ago

While the Spanish 8 reales was commonly cut, it actually didn't have great affordances for it. There were two common types in the colonial era-- one had the monarch's portrait, and one had two globes between two pillars. Both types featured a coat of arms that if you squinted hard might have some quadrant lines in them, but they'd be raised-- making them harder to use as cut lines. Aside from cutting the larger coins, Spanish territories also produced a lot of low-denomination silver coins. You can see this reflected in the scarcity of early US quarters; the 2-real coin was legal tender until 1857, so there was less pressure to produce quarters than dimes during the early years of limited mint capacity.