The intent of the European nations’ voyages of exploration was to open up trade routes or even discover new trading partners. Such commerce, whether using the barter system or currency, means understanding the value of what is being traded. A stable currency simplifies the process for all and establishes an exchange rate for other currencies. In the Caribbean, it was Spanish currency that set the standard, first with silver and then with gold.
Spanish Silver Coins
An abundance of silver found in the New World resulted in an abundance of Spanish silver coins in the Caribbean colonies. Known as reales, Spanish silver coins were minted in several denominations. By far the most common of the silver coins in the Caribbean was the Piece of Eight, a coin worth eight reales. Set at a weight of 27.47 grams of .9305 silver, it was easily recognizable with the impression of an eight on one side. Although the term Pieces of Eight is popular in pirate lore, the more commonly used name was peso or, in English-speaking countries, the Spanish dollar.
Dividing the peso into eight reales resulted in what the colonists called bits. A one-real coin equaled one bit and a two-real coin two bits. The most stable currency in the colonies, each Spanish real contained 0.125 ounces of silver. Because Spanish coins were minted manually, none were actually round. They were flattened and stamped in a strip and pieces were snapped off to make the coins the appropriate weight.
Gold Coins and the Gold Standard
The Gold Standard, a system making gold the basis of currency, came to the Caribbean in 1704. The Spaniards minted gold coins in the same denominations as their silver coins, and these were called escudos. Each escudo contained approximately 27 grams of 22-carat gold.
One escudo was the equivalent of 16 reales, or two pesos. A pistole, a coin worth two escudos, was worth four pesos. The double pistole, or doubloon, equaled four escudos or eight pesos. The largest and most valuable Spanish coin was the quadruple pistole. This was the coin that the British referred to as the Spanish doubloon, a coin worth eight escudos or 16 Pieces of Eight.
Spanish coin currency predominated in the Caribbean until the mid 19th century. While other currencies were used and bartering of goods a common practice, the Spanish reales and escudos most frequently changed hands.
References:
- Parry, Dan. Blackbeard: The Real Pirate of the Caribbean. New York. 2006.
- Pirates of the Caribbean. Pirate Money. (Accessed November 4, 2010).
- University of Notre Dame. Spanish Coinage Circulating in the Colonies . (Accessed November 4, 2010).
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