Zack Hill by John Deering and John Newcombe for August 12, 2014

Do you know why they started milling (putting ridges on) coins?

Coins used to worth their weight in gold, silver, copper, brass… When one paid with a coin the coin was weighed to make sure no one had removed any of the metal from the coin. There was a listing of the value of the coin (here in the colonies the coin to colonial currency varied by colony). By milling the edge of the coin it would be much more obvious if a coin had metal shaved from the edge.

The British wanted the American colonists to buy everything from them (including Scotland) so they did not send a lot of coins to the colonies. Coins in used therefore were from a variety of countries – Spanish dollars, Dutch thalers, French louies, etc. Each could be used as it’s value was the value of the metal in the coin.

Each colony issued currency (paper money) that was good in that colony. If you went to another colony you had to change your money to that of the other colony or to coins in some way. Not sure about all the colonies, but in VA they would figure out what the expenses of the colonial government (including the official church) would be for the coming year. Currency would then be printed in this amount. It would circulate during the year, being paid by the government for items needed during the year. It was acceptable as one knew that at the end of the year they could pay their tithes (taxes based on the number of workers in the household – basically all adults, except white women) with the currency. At the end of the year the taxes were paid, the currency destroyed (well, except that one time…) and new currency issued for the new year’s expenses.

A coin would be physically cut for change. It could be cut as small as 8 bits (hence pieces of 8). Two the 8 bits formed a quarter of the coin (1/8 +1/8 =1/4). Therefore a quarter is also called 2 bits, even today.