I have always wanted to know where terms we hear every day or terms we hear once in a while come from. It's fascinating how language invents it's words and realistically speaking many of the words the common person invents have value but never make it in the dictionary until "everyone" is using it.

I invent words all the time, as do others, they call this lingo, and every organization including hubpages does this. Hubtivity is a good example. When enough people use a word or phrase enough it makes it into the movies, then into the dictionary.

So where in the world did that phrase, "two bits" come from?

Spain.

This term is the spawn of a currency merging and evolved naming schemes. It all goes back to the days of the Spanish currency reform of 1497 (yea, it's that old)...

The interesting part is that this reform happened around the same time as the Columbus trip to find a new trade route ending in finding America (he was not the first but he was the most famous founder after the fact).

Back when Spain took over Mexico, the Mexicans had hoards of silver. During those days following the take over of Mexico by Spain, there were a lot of changes going on. The Spaniards mated with the Mexican Indians, (Aztecs), and over time a new breed of people immerged. The currency reform changed quite a few things going forward.

The Spanish started making the "dollar" which was also the same as the "peso" which translated literally to mean "weight". The peso was worth (at the time their was a known currency called "reales") eight "reales,". The peso was worth about the same as a German currency known as the "thaler''. Later, this became widely known as the "dollar" in France and England currency (and United States currency as well).

Still with me? o.k. Here comes the climax.

The peso, (and dollar) were the equivalent of eight reales. People started to refer to them as "pieces of eight." These pieces were broken into quarters, which later became known as "eight bits," (eight bits = one American Dollar so each 2 bits is a quarter).

This was done as a way to make change to pay for small purchases or to take care of small transactions. In many ways this was the birth of our modern currency format (penny nickel dime quarter, half dollar, "silver" dollar (Susan B, Anthony dollar and gold dollar not real silver dollars))

"Two bits" was then on known in the United States as a "quarter dollar", prior to the American Revolution. Because of English financial/fiscal policies, an acute shortage of English money was very apparent, and colonists started conducting their trades using the Spanish dollar instead of reales.

The beauty of the Spanish dollar, what came later to be known as eight bits, or pieces of eight, were in fact silver coins, backed by the currency of their inherent silver value. Their value wasn't a matter of format, or maintaining the look, feel, size, and shape, or even the printing on it, it was a simple matter of the value of silver at the time!

To fully comprehend the concept of "Bits" as it was understood in the old days you have to realize that money is not now what it used to be.

Money these days is practically worthless, it's not even worth the paper or copper alloy it's made out of. It's really as rediculous as putting a 3,000.00 price tag on a car that is barely worth 300.00 and that's only because a few parts can be sold off it.

These days and going back a few generations actually money is not checked by the properties it's made of, you can bite a quarter and it won't do you any good, but back in the day you could test a quarter or gold peice to see if it was real or counterfiet. It was as simple as knowing if it was made out of the real elements gold or silver, who cared what it said on it.

Today the printing is worth more than the materials in determining if it's counterfiet, although their is still special paper used for paper money, you get my point.

People used to actually cut money and this was legal because it didn't tarnish the value of the coin. The printing was just a luxury.

This was back when coins or "Bits" were worth as much as the going rate per the weight of the coin so cutting a coin in half back then made it still worth half it's value, not to mention this was not considered "defacing currency"! Today if you have less than 80% of a dollar bill, or 95% of a coin it's worthless and nobody will accept it anyway.

The old system was true bartering only you were using valuable stock, money was valuable but still you were trading real value for something, now when you trade money for things your not sure what your trading for, the dollar may go down in value tomorrow. You reall notice when you go to exchange US dollars for foriegn currency!

Back then money was backed by its inherent silver value, unlike today's quarters, dimes, nickels and silver dollars, half dollar pieces which are worthless if you cut them in half or alter them in any way. Although the current state of currency made making change easier it ultimately made these "pieces of eight" practically worthless also leading to the dollar no longer being backed by gold and silver certificates. (this wasn't the only reasons as you'll read below)

So that's how the term "two bits" came about, although if you really think about it it is no longer a valid term hence why it's rarely used by anyone anymore. I noticed that a lot of the baby boomers and older folks use it a lot but they were around when you could actually melt down a quarter and create "two bits" worth something- or could cut it in half to make change. they were made of real silver just like the "bits" were.

If you can find a bunch of real silver coins you can still do this however, but the reason they stopped using silver and gold to back currency or to make currency out of was a few good reasons. Which I'll discuss in the conclusion of this hub next.

What prompted coins to stop being made of silver and gold?

In the 50's and early 60's coins were made of real silver for the most part. Their value was based on what the coin said on it but back then a quarter dollar (quarter) was worth exactly the amount of silver that it was made out of. Silver however, started to fluctuate in value BEYOND the .25 cents.

This was part of the problem, the other was the quarters. Being made of real silver many people didn't really look at the coin too closely to see if it weighted exactly the right amount to be worth the silver it was printed on. People began shaving off the edges of all their coins and over years collected a nice investment of silver shaving they simply melted into molds and later sold. It was even worth more money when they sold it than the shavings were when they "ripped it off" of the coin.

This was free money!

The reality was it was stealing and making the real coins worth less, which people started to notice and shops wouldn't take the coins if they were "defaced" or shaved. Over time they became noticeably smaller than the untouched counterparts and stores started to check them, as the banks did weigh them and gave them less money for them before recycling them as invalid currency.

This couldn't go on so at first the solution was to put those nice little ridges we now see on our coins. The ridges are on dimes and quarters because these were made out of real silver where as nickels were made of- NICKLE!

It made it impossible to shave the edges off without destroying the ridges and stores began to take only coins with the ridges.

Of course people got cleaver, shaving the ridges and making new ones but this made it noticeably smaller in size and the shaving of the ridges by the US mint removed value from the coin (very tiny amount but still).

In time they decided it was too risky to use silver and because silver was fluctuating up in our economy at the time so a quarter was now worth 50 cents if you melted it down and sold it so our currency was in danger of being melted down!

It almost started an epidemic. Now although the silver content is no longer enough to make it worth melting down a quarter, the ridges became a sign of our money, a way to remember our coins history, they don't have any reason to be there anymore but if you notice ONLY American money has these ridges. Now you know why they are there! Cool huh?

This hub started when I heard in the background on TV a western movie playing and heard them say "I'll take two bits for that" and I looked up two bits and the ridges thing I learned years ago... Hope you enjoyed this hub. Comments are below :)

Jerrico