The Almighty Dollar and Other Coins
The Almighty Dollar is an American institution, but dollar itself originally referred to Spanish money. The word comes from German thaler, the term for a silver coin. In colonial America the most common coins in circulation were Spanish pesos, or "pieces of eight" from Mexico. Mexican dollars had a value of eight reales, the basic unit of Spanish currency. Reales went by various names in different locations—shillings in New York, levys (short for elevenpenny pieces) in Phildelphia and Baltimore, and bits in much of the South and West.
After the break with England, Americans needed a new system for reckoning up their pounds, shillings, and pence, and in 1785 the Continental Congress decided to keep the name dollar for the standard American monetary unit. As Thomas Jefferson pointed out, "The . . . dollar is a known coin and the most familiar of all to the mind of the people. It is already adopted from south to north." Jefferson also favored adopting the Spanish dollar as the American monetary unit because the division of the dollar into tenths—a convenient number for mathematical reckoning—would result in coins close to the value of the already familiar Mexican bit.
Because of a chronic silver shortage, Mexican coins continued to circulate until the middle of the nineteenth century. Even after they were decisively outlawed, the terminology lingered. At this time, a real was worth 12½ cents, or an eighth of a dollar. Twenty-five cent pieces were thus commonly known as two bits, especially in the West. One observer, writing in 1907, remarks, "On the Pacific coast the man who says a quarter, or twenty-five cents, is sized up for a tenderfoot. The Forty-niners and their descendants would say two bits."
The term almighty dollar was popularized by the early American author and inveterate word coiner Washington Irving. In an 1837 story titled "The Creole Village" he writes of "The almighty dollar, that great object of universal devotion throughout our land . . ." A similar phrase occurs a year earlier in the December 2, 1836 issue of the Philadelphia Public Ledger: "'The Almighty Dollar' is the only object of worship."
The word dollar turns up in several American expressions: dollars to doughnuts, another day another dollar, dollar diplomacy, look like a million dollars, and bet your bottom dollar. In the 1870s, the United States stopped coining silver dollars. This act led to the Free Silver Movement, whose supporters demanded unlimited production of silver coins. They referred to the old silver dollar as the dollar of our fathers, claiming it was the preferred coin of the founding fathers. Opponents of the Free Silver Movement ridiculed this notion by talking about the dollar of the daddies. When the government did begin coining silver dollars again in 1878, these same opponents derisively called the coins buzzard dollars, a reference to the eagle on the back. For another American coin, see plug nickel.