The First American Dollar

The first American dollar, an example of which appears above, was actually coined under the authority of the King of Spain. Struck in Mexico City, the Spanish Milled Dollar was in wide circulation in the British colonies of North America.

So... Spanish coins circulating freely in English colonies... what's wrong with this picture?

Chalk it up to the restricive monetary policy of the British crown. Britain's American colonies were not supplied with British coins of either gold or silver. Even copper coins were restricted to a thin supply of copper tokens.

In an effort to monopolize trade with its colonies, Britain prohibited the manufacture of coinage within those colonies. American merchants turned to the widely respected coinage of New Spain, as the Spanish possessions in Central and South America were known.

By the dawn of the American Revolution, the colonies dared to print their own paper money. Many of these issues were expressly redeemable in "Spanish Milled Dollars" which you can clearly read on the example below.

Some years after winning the Revolutionary War, the American Congress authorized production of the first official United States silver dollar. The coin was designed with imagery associated with the pride of the new nation - the Liberty Head with flowing hair, and an eagle, the bird selected as a national symbol by those who could not abide the wild turkey suggested by Benjamin Franklin.

Although the design of the US dollar, an example of which appears below, was fresh and new, its diameter, weight, and the purity of its silver closely resembled the Spanish coin.

Even after the appearance of the first official US dollar coin (like the one above), the Spanish coin continued to circulate.

For one thing, it was more plentiful. And it would be many years before the US Mint could produce coins in quantity.

Not only that, the Spanish dollars had a 70 year head start!