In 1682 Massachusetts reduced the rate to 66d (5s6d) per Spanish dollar, so it would be on par with Massachusetts silver but in 1692 they once again raised its value back to 72d (6s).
Interestingly, even before the Boston mint closed in 1682 the colony of Massachusetts Bay had raised the value of Spanish silver to a level above the 22% "upcrying" of their own coins! In 1672 Massachusetts valued the Spanish dollar at 72d (6s) or 33% above par (parity with Britain). But even at this level of "upcrying" the value of silver coins continued to increase. When Massachusetts began minting silver coins in 1652 they reduced the British sterling standard by 22% from 92.6 grains per shilling to 72 grains to keep their Massachusetts silver coins in the colony. Three months later, on September 27th the value was further increased to 60d (5s) or 11% above the London rate.
The first legislated premium was passed by the Massachusetts General Court on Jincreasing the value of the Spanish dollar by 3% to 56d (4s8d).
The premium above the 54d level was termed the "crying up" of the coinage. 925 fine silver) the value of a Spanish dollar was 54d (4s6d). Based on the British standard that one troy ounce of silver was valued at 62d (5s2d) in British sterling (that is. The Spanish silver dollar was authorized to be produced at about 420 grains of. As the demand for silver coinage far exceeded the available supply, silver coins traded at a premium. Colonial merchants needed to pay British exporters in silver, resulting in a severe drain on an already scarce commodity. However, these substitutes were not acceptable to British exporters providing colonial merchants with British goods. The eight reales was the highest unit of Spanish silver in the New World, similar in size and weight to the thalers of the various German states, the French écu, the Portuguese cruzado and the ducatoon of Holland colonists called the eight reales coin a "dollar," from the Dutch "daalder" (a derivative of the German thaler).Īs there were not enough of these coins in circulation to sustain commerce, the first colonists turned to barter transactions as well as the use of wampum and commodity monies like tobacco as mediums of exchange. The most widely used coin in the colonies was the eight reales (piece of eight), primarily clipped underweight examples that had made their way north from Mexico through the Bahamas. This problem was critical as it adversely affected local commerce and forced the colonists to turn to foreign coins, primarily Spanish American silver produced in Mexico and Peru. The result of this policy was that British silver coins were quite scarce in the North American colonies. Toward this end parliament enacted laws prohibiting the export of British silver coinage as it was felt the colonies should be providing Britain with precious metals rather than draining them away. In return the colonies would be protected by British arms and civilized by British rule. Basically, British policy was guided by the supposition that its colonies would contribute revenue and stimulate industrial growth by providing both raw materials and markets for British mercantile expansion.
This appeared to be a simple transplantation of economic units, but due to British colonial policy the situation became quite complex. When the English colonists arrived in America they naturally continued to use the monetary units of Britain, namely the pound, shilling and pence for which £1 equalled 20s and 1s equalled 12d. The Comparative Value of Money between Britain and the Colonies
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