Did you ever think of how the US Dollar evolved with through time to the present day? The dollar’s history is a long time event involving varying continents. The word in itself is older than the American currency unit. It is Anglicized from the word thaler. Thaler is a name that was first given to the coins which were initially minted in the year 1519. The raw material to facilitate this was silver which was locally mined in Bohemia. Joachimsthal is a small town where the silver was mined to be specific on the location of the mines. Thaler was thus a short form of the term which the coin made was given- - Joachimsthaler. The English later came on to transform the name to the present day well known dollar, a term that was not only limited to the coins from Bohemia, but also those from other coin manufacturing mine centers.
Those coins came to circulate vastly in Britain’s North American colonies. This was facilitated by a wanting shortage of British coins for use and that was the reason why after United States gained its independence, the new independent nation preferred the Dollar as the official and globally recognized name for its currency. They therefore opted to abandon the pound in the favor of the dollar. It is also of importance to note that the Dollar was still being used in Britain quite a long time before the creation of the United States. Actually, in a deeper analysis, it is easy to note that the English colonization of North America had barely begun.
As earlier indicated, the United States Dollar came into its rise during the colonial times. At the time, the official British coinage was in short supply yet the economy of the British Colony’s activities demanded more. This made the colonists use and circulate whatever foreign coins they could obtain. During the Independence War, some continentals were denominated in British units and dollars, and in 1792, the newly independent U.S chose the dollar, subdivided into 100 cents as the unit of American currency in preference to the pound.
After the creation of the U.S. dollar, the American administration turned its focus on the monetary issues. The Coinage Act (1834) changed the silver to gold ratio from 15:1 to 16:1, so as to reduce the coinage weight. Similar but more advanced renovations were experienced over time, to the extent witnessed today.
Later, the U.S. adopted a gold standard, as a result making both gold and silver the legal tender coinage of the U.S. There was later the uprising of the silver standard, where these silver bits were used as representative money as part of paper currency. Eventually, U.S. had to devalue the money. This was a significant and complex economic transition period, which later came to be known as the Nixon Shock. This marked the dollar’s transition from the gold standard to a fiat currency. You didn’t know? Now you are in the know.