Pieces of Eight – Not Just Pirate Money

The Most Commonly Used Coin in Colonial America

Aug 12, 2009

The Spanish silver dollar, or piece of eight, was legal tender in the United States until just before the Civil War.

Before the Revolution, the British colonies in America had relatively little money in circulation. With some minor exceptions, they were not allowed to produce their own coins or paper money, and it was illegal to take British money (pounds, shillings, pence, etc.) out of Britain. Most major purchases in the colonies, therefore, were made on credit, based on the estimated value of the buyer’s crops or other goods. When there was a need for what they called “ready money,” the colonists used the foreign coins that were obtained in the process of trading with other nations. Such coins were acceptable in the British colonies because they were made of gold, silver, or other metals with intrinsic value. Therefore, it made no difference to a merchant where a coin came from or what its face value was; it was simply a piece of gold or silver, worth whatever its weight determined. A coin could even be cut into pieces and the pieces used separately – merchants had coin scales to determine the value of whatever coin or part of a coin was offered as payment.

What Exactly Were Pieces of Eight?

Because of the many Spanish colonies in Central and South America, Spanish coins were the most common ones circulating in British North America. And the most common of those was the silver coin the Spanish called the peso de ocho reales, the “piece of eight reals” or “eight-real piece” – just as a dime might be called a “ten-cent piece.” There were one-real pieces, and two-real pieces, and so on, but the eight-real piece was made of precisely one ounce of sterling silver. The American colonists often called this coin a “Spanish milled dollar” – the term “milled” referring to the grooves around the edge of the coin which prevented anyone from shaving off slivers of it and then passing it off as whole. Today, people often think the term “pieces of eight” means that the coin was (or could be) cut into eight pieces. It could be, and frequently was; but that’s not what the term means. A “piece of eight” was a single coin; several such coins were “pieces of eight.”

Pieces of Eight and Pirates

Silver was mined in New Spain (now Mexico) and made into pieces of eight and other coins before being shipped back to the royal treasury in Spain. These treasure ships were often preyed upon by pirates, eager to capture the chests full of pieces of eight; hence the frequent occurrence of that term in pirate stories. It is possible to obtain genuine pieces of eight today without the trouble of locating a pirate’s buried treasure chest; coin dealers and online auction sites are readily available sources. And those sources will usually know where each particular coin came from – whether a sunken Spanish galleon which had taken it from the mines of Mexico, or a sunken pirate ship which had taken it from a galleon.

Colonial History on a Coin

The “tails” side of the piece of eight contains various symbols of Spanish power. The two hemispheres of the earth are shown topped by a Spanish crown, indicating that Spain ruled the whole world. On either side of this symbol is a column, the two together representing the Pillars of Hercules, an ancient name for the Strait of Gibraltar, the boundary of the known world. Beyond this point, it was thought, lay nothing; ancient maps therefore had printed on or near the Pillars, Ne Plus Ultra, Latin for “Nothing More Beyond.” On the piece of eight, though, the Pillars are wrapped in scrolls bearing the words Plus Ultra, “More Beyond,” another symbol of Spanish sovereignty. Some people believe that the scroll wrapped around the right column is the origin of the US dollar sign ($). This may or may not be true, but certainly the coin was so common for so long that Americans would have become quite familiar with it. The piece of eight was in such widespread use in the United States that it remained recognized by the federal government as legal tender until 1857.

Pieces of eight are not just part of American history; their influence can be seen in very recent years in at least two interesting ways. If you were to cut a “piece of eight reals” into eight equal parts, each part, obviously, would be worth one real. Since this was the smallest unit of the coin, each such part was known in colonial times as a “bit.” So two bits would make up one quarter of the whole coin, or dollar, four bits would make up one half, etc. Later, after Americans had adopted a 100-cent dollar as their currency, they still referred to one quarter of that dollar as “two bits.” Hence the phrase (still heard occasionally) “two bits” to mean twenty-five cents; and the adjective “two-bit,” as in “just a two-bit affair,” to refer to something of little value, practically worthless. Also, when the New York Stock Exchange first opened in 1792, one bit (one-eighth of a Spanish milled dollar) was the minimum value that could be traded; and prices of stocks were still quoted in eighths of a dollar until the year 2000.

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The copyright of the article Pieces of Eight – Not Just Pirate Money in Colonial America is owned by Darryl Hamson. Permission to republish Pieces of Eight – Not Just Pirate Money in print or online must be granted by the author in writing.