Currency of Spanish America
This great realm was divided into the Viceroyalty of New Spain (capital: Mexico City), which came to include all Spanish territory north of Panama, the West Indies, Venezuela, and the Philippines, and the Viceroyalty of Peru (capital: Lima), which included Panama and all Spanish territory in South America except Venezuela.
The monetary system of Spanish America, originally identical to that of Spain, soon diverged and took on a distinctive character of its own, which it passed on to the independent nations that followed after.
The first distinctive coins minted for Spanish America were copper 4-maravedí pieces authorized for Santo Domingo by Ferdinand on December 20, 1505 (later confirmed by his daughter, Johanna, on May 10, 1531).
These coins were minted in Spain (at Burgos and Seville) and shipped to Santo Domingo (Hispaniola), and subsequently also to Mexico and Panama.
Ferdinand died in 1516, and Johanna's son Charles became King Carlos I of Aragon and Regent of Castille, so the last coppers struck in the early 1520s had a Carlos-Johanna monogram.
Charles, who was also Holy Roman Emperor (as Karl V), reformed the gold coinage in 1537, replacing the ducado with the escudo or corona, essentially a debased ducat.
A sort of "coin" was produced at Mexico City: gold discs stamped with their weight and fineness and sometimes with royal countermarks.
Mexico City was growing and by 1525 it was petitioning the crown for a mint to produce coin locally in order to facilitate trade.
: two crowned columns (pillars of Hercules) with PLVS (for plus ultra) on a banner and the value (dots or a number) between them, the rim continuing the inscription with HISPANIARVM ET INDIARVM.
The reverse of the design was modified in 1542, when waves were placed between the two pillars and the full motto PLVS VLTRA, without a banner, appeared across the field.
Vellón (copper) coins of 2 and 4 maravedíes were minted at Mexico City (and evidently at Santo Domingo 1542–1556), authorized June 28, 1542 by Viceroy Mendoza.
(The reason why copper coinage was not utilized in the Spanish colonies as small change is unresolved and a matter of dispute among economic historians.
From 1565 until 1821 there was an annual galleon convoy (Galeones de Manila-Acapulco) that crossed the Pacific from Acapulco loaded with silver coin, which was exchanged at Manila in the Philippines for Oriental goods, chiefly for spices, silk, tea, porcelain, and lacquerware.
The output of the American mines was usually shipped to Spain in the form of ingots or of crude, temporary coins (known as macuquinas in Spanish and as "cobs" in English).
The 1566 reform also provided for a silver 8-real coin, the real de a ocho or peso duro (which had already been minted in Spain in limited number).
: the crowned Habsburg arms, with mintmark and assayer's initial left and the value right, the rim inscribed PHILIPVS II DEI GRATIA.
: the quartered arms of Castile and León inside a quatrefoil design, the dividing lines emphasized, looking like a cross, the rim inscribed REX HISPANIARVM ET INDIARVM.
Struck at Mexico City 1572–1734, Santo Domingo 1572–1578, Lima 1572–1650, La Plata 1573–1574, Potosí 1574–1650, Panama 1580–1582, Cartagena (Colombia) 1622–1650, and Bogotá 1622–1650.
Denomination: 1, 2, 4, and 8 reales[1] Trade with the Far East and bullion shipments to Spain required ever greater quantities of processed silver.
These roughly made lumps of silver, irregular in shape and thickness but of standard weight and fineness, conveniently served as temporary coins (macuquina or "cobs").
Potosí, where the position of mint assayer was auctioned off to the highest bidder, only began dating coins in 1617, after a scandal involving an illegal debasement of the cob coinage (1610–1617).
Coin types found in abundance, such as "blancas" of the Catholic Monarchs, were likely drivers of early commerce, and not mere keepsakes of the immigrants.
After the failure of numerous attempts to correct this situation, the currency finally underwent a major reform on October 14, 1686, when Spain devalued silver by ≈20% and adopted a dual coinage standard.
The piece of eight had the same intrinsic value as the thaler and by the end of the 17th century it too was being called dollar (and was so designated in Jamaican monetary legislation of 1738).
The British East India Company had established a regular trade with China by 1720, paying for goods with Spanish silver.
Technical problems and local resistance to design change delayed the adoption of milled coinage at Lima and Santiago until 1751.
The inscription on the gold coins of Charles III was changed to IN UTROQ FELIX AUSPICE DEO (and remained thus until the American colonies gained independence).
The British East India Company dominated this trade and paid for its purchases with Spanish Carolus dollars, which were accepted in China for more than the 4s:2d sterling that was considered their intrinsic value.
Chinese merchants gradually became accustomed to the dependable weight and fineness of Spanish milled silver and, instead of melting the coins down, they began to use them as currency, often with a chop (seal, countermark) to guarantee its acceptability.
The coinage of the American colonies, which had already assumed great importance in international trade, was left untouched, and the 1497 silver standard continued in use (until 1728).
