1500s: The “dollar” originates in Bohemia as a one-ounce silver coin known as the “Joachimsthaler.” The uniformity and fineness of these so-called “Thalers” earns them such popularity that similar coins are minted across Europe. The general term for large silver coins becomes “thalers,” which later transliterates into “dollars.”
1700s: The most widely circulated coin in Colonial America is the Spanish “Piece of Eight” or “Spanish Milled Dollar.” By the War of Independence, it is adopted as the de facto monetary unit of the American people.
1775-1779: The Continental Congress emits bills of credit ostensibly redeemable in Spanish Milled Dollars, but far more promises to pay are issued than can be honored. The bills rapidly depreciate and become worthless by 1781. Hence the phrase, “Not worth a Continental.”
1792: The U.S. “dollar” is officially created by the Coinage Act of 1792 and defined as a fixed weight of silver equal to that of a current Spanish Milled Dollar: 371.25 Troy grains. The Act also creates a fixed legal exchange ratio between silver and gold of 15 to 1 by defining 24.75 grains of pure gold (the market equivalent of one Spanish Milled Dollar) as being equivalent to one dollar.
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