How did the Dollar get its name, how did it come to be adopted as the currency of the US, and why is denoted by the ‘$’ sign?

The word 'Dollar', is derived from the German word ‘Thaler’. The ‘Thaler’ was a silver coin minted in Bohemia and in use throughout Central Europe in the 16th Century. The word Thaler itself is a shortened form of the word ‘Joachimsthaler’, a coin from the city of Joachimsthal in Bohemia, which in German literally means ‘Joachim’s valley’ or ‘Joachim’s dale’, which is where the silver for the coin was mined from. Joachimsthal today is actually located in the Czech Republic, and is known by its Czech name of Jáchymov. The original ‘Joachimsthaler’ was depicted with an image of St Joachim, the Father of the Virgin Mary.

The ‘Joachimsthaler’ coin was a great success. It had been part of a revolution in
European coinage which had been occurring since the late 15th century; new higher standard coinage was replacing the dire state of the existing coinage of the mid to late 15th Century. – The state of Europe’s coinage had become extremely poor due to repeated debasement. This debasement had seen an erosion of the silver content of coinage to help finance the costs of virtually continual wars, and by the unremitting one-way transfer, over many centuries, of silver and gold to India, Indonesia and the Far East to pay for the importation of much sought after raw materials, spices and fine cloth. The continual debasement had seen the silver content in the dominant European coinage of the time drop to less than five per cent, making them worth far less than their perceived value. (Ok, I am sure many of you are thinking current US Dollar, but let us not get distracted from the story).

Following the success of the ‘Joachimsthaler’, similar coins started to be minted from other rich seams of silver elsewhere in various valleys in the region. Soon there were many such coins in circulation; collectively they became known as ‘Thalers’. With increasing circulation, the name ‘Thaler’ found its way into various other languages. Initially into Dutch, where it was known as ‘Daalder’ or ’Daler’, then into English where it was pronounced as ‘Dollar’.

How did its usage come to be accepted as a common in North America.During the latter 16th Century the ‘Republic of the Seven United Netherlands’ issued a coin known as a ‘Rijksdaalder’ (Dutch for ‘National Dollar’). This was issued during a period known as the ‘Dutch Revolt’ which was a successful uprising by Protestants in the Low Countries against the combined Catholic forces of Spain and the Holy Roman Empire. The coin featured a half-bust of ‘William the Silent’, who I suppose didn’t have much to say for himself, and was minted to the same standards as the Thalers which were common throughout the Holy Roman Empire.

The Dutch minted another coin known as a ‘Leeuwendaalder’, or ‘Lion Dollar’; it depicted a Lion, the emblem of the ‘Union of Utrecht’, the treaty which founded the ‘Republic of the Seven United Netherlands’.

This coin had a slightly lower silver content to the ‘Rijksdaalder’, and hence was of less cost to merchants, thus it was beneficial for Dutch merchants to pay foreign debts in ‘Leeuwendaalder’, rather than ‘Rijksdaalder’. With the Dutch prominent in overseas trade, the coin soon became a favoured coin for foreign trade, particularly in their colonial province on the East Coast of North America, which stretched from the Delmarva Peninsula (Delaware, Eastern Maryland and the south-eastern tip of Virginia) to the south-western tip of Cape Cod, with the provincial capital of New Amsterdam at the southern tip of Manhattan island. From there the Leeuwendaalder’s usage spread to the Thirteen British colonies on the Atlantic coast of North America, where it was known as the ‘Lion Dollar’.

The term ‘Dollar’ soon came to be applied to other similar large silver coins which were practically identical in weight and fineness to the ‘Leeuwendaalder’, or ‘Lion Dollar’. This extended to coins minted elsewhere in Europe and used in trade in the Caribbean and North America. This included the Spanish ‘Real de a ocho’, ‘Eight-real coin’ or ‘Pieces of eight’ (Peso de ocho) and hence the Spanish Peso, the world’s first global currency. (We are probably best familiar with the term ‘Pieces of Eight’ from ‘Pirates of the Caribbean’ and various other Pirate tales).

The Spanish Peso itself had become widely acceptable as one of the world’s major trading currencies; Spain had control of most of the world’s silver reserves following its conquest of Mexico, Peru and Bolivia. As a shortage of official British coins impacted the British North American colonies, itself leading to one of the many disputes between Britain and its North American colonies, so the Spanish peso (known in the British North American Colonies as the ‘Spanish Dollar’) began to circulate widely in North America. When the United States gained its independence, the new nation chose the "Dollar" as the name of its currency rather than keeping the British pound. This was formalised in 1792 when the United States chose the Dollar as the official American currency.

The US decided to opt for decimalisation whereby the Dollar was sub-divided into 100 cents (shortened version of the Latin ‘centum’ meaning a hundred). This was in preference to using the British system, whereby the pound was divided into 20 shillings and 20 shillings was divided into 12 pence, meaning 240 pence equalled a pound.– In this respect the US followed the lead of Russia who had been the first state to adopt decimalisation nearly a century earlier. (A system we in the UK did not stubbornly adopt until 1971).

Where did the ‘$’ sign come from?

Whilst the origins of the term ‘Dollar’ and its transformation to common usage in the US appear to follow a well laid-out path. The evolution of the $ sign itself is somewhat more uncertain. There are a number of competing theories, each of which are seemingly possible, though some with more credence than others.

The most likely is the theory that it comes from a handwritten 'ps', an abbreviation used in correspondence as a plural form of 'Peso'. Manuscripts from the late 18th and early 19th century show the ‘s’ gradually being written over the ‘p’, and the upward stroke of the ‘p’gaining dominance over the curved upper part. This eventually developed into something resembling the ‘$’ sign. (see below)

The 'ps' symbol first occurs in the 1770s, in manuscript documents of English-Americans who had business dealings with Spanish-Americans, and it starts to appear in print more commonly after 1800. - This does not however explain why sometimes the $ sign is drawn with 2 lines running through it. 

Other theories for the $ sign include:

• It is inspired by the mint mark on the Spanish ‘Pieces of Eight’ coin which became known as the Spanish Dollar. The coins were minted in Potosí in present day Bolivia. The mint mark was composed of the letters "PTSI" superimposed upon each other. The mark bears a strong resemblance to the single-stroke dollar sign (see photo right). 

• The $ sign is derived from the Number 8, whereby the Spanish Dollar was originally a ‘Piece of Eight’. The P of Peso and the 8 were said to be combined. The modification would have occurred to avoid confusion between the number and the signal. – This explanation would however seem implausible, as the confusion between a number and currency sign would have probably been too great. 

• The sign was inspired by the Spanish coat of arms engraved on the colonial silver coins which were in
  
  circulation in Spain's colonies in America and Asia. These coins, depicted the Pillars of Hercules a small "S"-shaped horizontal ribbon wrapped around each pillar. For the sake of simplicity, traders might have written signs that, instead of saying dollar or peso that may have evolved into a simple S with two vertical bars. – Highly speculative though plausible. (See picture on right)

• A dollar sign with two vertical lines could have started off as a monogram of 'US', used on money bags issued by the United States Mint. The letters U and S superimposed resemble the historical double-stroke dollar sign: the bottom of the 'U' disappears into the bottom curve of the 'S', leaving two vertical lines. Ayn Rand, the American libertarian philosopher, endorsed this theory in her novel Atlas Shrugged. However there is no documentary evidence for this theory though,. 

There it is then, the mighty US Dollar: Threatened as it is today by fears over its future purchasing power due to financing continual costly wars and the continual outflows to Asia and the Far-east. Yet it owes its name to a coinage which came into existence to replace a currency which had been heavily debased to pay for the need to finance costly wars and continual outflows to Asia and the Far-East. Who knows,perhaps the Bitcoin could become today's Joachimsthaler
‘Investment – Nest Egg’image courtesy of jscreationzs / FreeDigitalPhotos.net".