Machine-Struck Credit: The Pillar Dollar
Two pillars topped by a crown flank two hemispheres. From a distorted lump of silver to a perfectly round coin. A single innovation applied to the edge ended a long-standing malady and built the foundation for worldwide credit.
Lumps of Silver, Shaved Away
Silver coins once struck in the colonies were called cobs. They were irregularly shaped lumps, simply cut from a silver bar and struck with a hammer. The shape differed from piece to piece, and their quality had declined over many years.
These silver coins had a chronic problem. Their edges were shaved off, and silver was gradually removed. Anyone who handled them had to question their weight and fineness each time. The empire's credit rested on these distorted fragments of silver.
The Decisive Blow: A Notched Edge
In response to this situation, the new dynasty reformed the very way coins were made. In 1728 and 1730, two decrees ordered the overseas mints to cease hand-striking and switch to machine-struck coinage.
In 1732, the first machine-struck eight-reales silver coin was produced at the Mexico City Mint. This was the silver coin that people would come to call the 'Pillar Dollar'. The edge of this perfectly round coin was decorated with a cord-like pattern. It seemed like a small innovation, but this was the decisive blow. If a reeded edge is shaved, it is immediately obvious. The long-standing malady of clipping ended here.
The Two are One
On the obverse of the Pillar Dollar are engraved two Pillars of Hercules topped by a crown, and two hemispheres. The accompanying motto is 'VTRAQUE VNUM'—meaning 'The two are one'. It is a declaration that the Old World and the New World are under one crown.
Let's look at an actual example. This is a silver coin struck in 1768 at the Potosí mint. Mechanization at Potosí had begun the previous year, in 1767. This single coin heralded the beginning of a new era.
The Silver Coin Called 'Dollar'
A silver coin of uniform quality, with no fear of being clipped. Its credit crossed the seas. Eventually, this silver coin came to be called by another name: Dollar.
In the United States of America, it continued to be used even after independence and was legal tender until 1857. The United States Coinage Act of 1792 even based its own dollar on the 'Spanish milled dollar then in circulation'. Even as the finances of the issuing empire declined, the eight-reales as a coin continued to be a success.
More in Reading a coin
The Fate of Gold, Divided by Its Use
The Toyotomi faction converted the gold and silver left by Hideyoshi into military power, while Tokugawa Ieyasu established a monetary system valid throughout the country. This is the story of how gold and silver from the same era met completely opposite ends depending on how they were used.
The Value of the Yen as Defined by the 20 Yen Gold Coin
The old 20 yen gold coin was the highest denomination established by the New Coinage Act. The value of this coin, which equated one yen to 1.5 grams of pure gold, was halved in the 30th year of Meiji. Behind this was the war indemnity left in London.
The Fate of Paper Inscribed with "Time Flies"
In the center, "FUGIO" (time flies) and a sundial; below it, "MIND YOUR BUSINESS." Printed to finance the War of Independence, the Continental currency, contrary to its motto, lost its value and left an idiom in the English language.
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Everything in these pieces comes from the material itself.