Interesting story and a few lessons from the past that can equally apply to the present regarding money, inflation and crooked government or kings.
In centuries past, since there were no banks, one of the ways to protect one’s wealth was to hide it, or bury it somewhere. Just like in a Robert Louis Stevenson novel, pirates buried their loot; not in the large quantities romanticized in Pirates of the Caribbean, but they did bury their personal caches, giving us a tiny glimpse into the life of a lonely pirate long dead.
When Spanish galleons were lost to hurricanes, salvage crews were often dispatched to try to recover the king’s precious gold and silver cargoes. The crews set up camps on nearby islands. The work was backbreaking, and a crew member was paid only two “pieces of eight” per month. When we explore these camps in modern times, small caches of coins have been discovered, perhaps indicating that a sailor or two had kept a little of the king’s treasure for himself.
In other cases, during times of civil unrest, or for safe keeping, people secreted caches of coins in the walls, or buried them around colonial period buildings, from South America to the United States. In 1982, a construction crew in New Orleans un-earthed three wooden boxes full of Spanish, Mexican and American silver coins that had been buried in the early 1840s. More recently, another hoard of Spanish and French colonial coins (that had been buried about 1825) was discovered on private property in the roots of an old oak tree which fell over during Hurricane Katrina. Cannon Beach Treasure Company was fortunate enough to acquire this entire cache, and we affectionately dubbed it the Lafitte Hoard as the coins were found not far from where the pirate Jean Lafitte and his brother had their base of operation during the early 1800s.
Now here is a lesson for all governments today. Either diluting the silver content, removing it entirely and printing paper money doesn’t work in the long run.
So how are these lost Spanish coins related to the coins we now use in the United States? When King Ferdinand II of Aragon and Queen Isabella I of Castile got married, uniting their kingdoms to become Spain, perhaps little did they realize that their union would change the world. There were very few domestic silver mines and Spain’s monetary system was in trouble. Previous monarchs had devalued the currency by “watering down” the coin’s silver with other alloys, keeping the pure silver for themselves. This created inflation, as the actual silver content did not match what the government said the coins were worth. Sound familiar? Trade, on both land and sea, needed a “common currency” that was reliable, and could be traded all over the world at the same value. Besides approving and partially funding Christopher Columbus’ expedition in 1492, in 1497 the king and queen commanded the Spanish mints to start producing coins with a much higher silver content, modeled after the German thaler which was 27 grams of .930 fine silver. This, in combination with the gold and silver starting to flow into the royal coffers from New World mines, secured Spain’s place in global economics for the next 300 years. The Spanish 8 reale, or “Piece of Eight,” soon became recognized the world over, prized by kings, merchants and pirates.
In the colonial days of America before the Revolution (1775-1783), the colonists were forced to mint their own small currency, or use other countries currency, since England refused to provide gold, or silver or small change of any kind for the colonists’ convenience. And since there was no “official” mint in the American colonies before
1792, numerous kinds of currency, from countries such as France, England, Germany and the Netherlands, was used for trade. But the most common was the Spanish “piece of eight,” minted mainly as an easy form of accounting to keep track of the enormous amounts of silver being transported back to Spain.
Minted in denominations of one quarter (not very common) one half, one, two, four and eight reales, the eight reale coin comprised 80 percent of the coins that flowed out of New World mints. Less than 20 percent of the coins were smaller denominations – thus their rarity. The Spanish one reale was worth 12-½ cents in the U.S. and was known as a “bit.” Hence, we have all heard “two bits, four bits, six bits a peso, all for Zorro stand up and say so!” The two reale, or twenty five cents, was known as “two bits.” Due to their value, eight reales were not meant for normal circulation in daily commerce, and the term “piece of eight” is thought to come from when the coins were cut into pieces to make change.
In the course of a America becoming independent of England, Thomas Jefferson recommended to the Continental Congress on September 2nd, 1776, that the new country adopt the silver Spanish milled dollar as its monetary unit of value. And that is why you can take a Spanish “piece of eight” minted in Potosi, Peru, in 1622 and weigh it right next to a U.S. Morgan silver dollar and they will weigh the same! In fact, Spanish currency was legal tender in the United States up until 1859, right before the U.S. Civil War.
These lost caches of coins leave us wondering who buried the treasure and why did they never return to retrieve them? And what fantastical stories could these coins tell if they could speak? And owning one of these amazing pieces is a way to touch the by-gone days of piracy, when kings ruled the land and pirates ruled the seas!