Spanish Milled Dollars

England forbade the minting of coins in the American colonies. Early settlers used barter as a method of exchange. As traders arrived from foreign lands, coins were often demanded as payment. The most widely circulated coin in the colonies was the Spanish Milled Dollar, valued at 8 reales, otherwise known as a “Piece of eight”. The Spanish Milled Dollar was coined in many of the Spanish colonies, including Chile, Colombia, Peru, Guatemala, and Mexico. The edges of the silver coin were “milled” or patterned to prevent dishonest traders from shaving silver from the edge of the coin. Early coins were valued by their weight and content, not by their face value as they are today.

The American colonists had become accustomed to the use of the Spanish Milled Dollar, so as the Continental Congress considered a national coinage and currency, the Spanish Milled Dollar was considered as the basis. The first issue of Continental paper money provided that the notes be payable in Spanish Milled dollars or the value thereof in gold or silver. The Milled Dollar was officially sanctioned in the United States until the 1850’s.

The Milled Dollar was commonly divided into 8 pieces called reales or “bits”. By dividing a coin, the value of the piece could be used to pay more than one debt. 2 bits commonly referred to a quarter of a dollar. The familiar cheer " 2 bits, 4 bits, 6 bits, a dollar" comes from this coinage.