How Many Pieces of Eight Were Equivalent to an English Pound in 1715?
Top: Pieces of Eight (Cob). Images courtesy of Robert and April Knecht, Cannon Beach Treasure Company, Palm Coast, Florida
Bottom: British Coin – Anne Stuart, AR Shilling, Dated 1702. Images courtesy of Classical Numismatic Group, LLC. http://cngcoins.com.
Shortly after Columbus returned from his second of four voyages, Spain and Portugal divided the New World. In the Treaty of Tordesillas (1494), a line was drawn from pole to pole down through the Atlantic Ocean. Land east of the line would belong to Portugal and land west of the line would belong to Spain. As a result, Portugal received Africa and Brazil while Spain received the Americas with the exception of Brazil. England, France, and the Dutch Republic were not signatories and therefore they ignored the treaty.
Spain claimed the larger islands surrounding the Caribbean Sea—Cuba, Hispaniola, Puerto Rico, and Jamaica—and began to enslave the native population. They were put to work on the sugar plantations.
As the Spanish and Portuguese were developing their sugar plantations, the Caribbean Islands were becoming the staging grounds for Spain’s conquest of Central and South America. Hernán Cortéz sailed from Cuba and landed in the Yucatan where he established a port at Vera Cruz in what is now Mexico. After conquering the Aztec Empire, an alliance of three city-states that ruled in and around the Valley of Mexico, he sent a force south to conquer what remained of the Mayan Civilization. Neither the Aztecs nor the Mayans had mines. Their gold came from panning riverbeds or from trade with distant sources.
Francisco Pizarro, on behalf of Spain, began the conquest of the Inca Empire that covered a large portion of western South America, centered in the Andean mountains. Pizarro learned that the Incas also had no mines. Their silver and gold came entirely from surface sources found as nuggets or panned from riverbeds. The year after Pizarro began his conquest, Spain established Cartagena as a port on the northern coast of Colombia on the Caribbean.
In 1545, the Spanish discovered silver mines at Potosi in modern Bolivia. This region, high in the Andes, was rich in mineral ore. Cartagena became a main port for exporting Bolivian silver.
The next year, silver was found in Zacatecas, Mexico. Over the next few years, other silver deposits were found in Mexico. At the same time, sources of gold were being discovered, although in lesser quantities. Vera Cruz became a main port for shipping Mexican silver and gold.
In 1597, Porto Bello (now Colon) on the Isthmus of Panama was founded to serve, along with Vera Cruz, as a port to ship silver from Bolivian and Peruvian mines to Havana and Spain.
In 1623, the English began settling Saint Kitts and France and the Dutch Republic soon followed by settling the smaller Caribbean Islands. In 1655, England conquered Santiago, a large island about 200 nautical miles south of Cuba, and renamed it Jamaica. The Caribbean was becoming multinational although Spain still controlled three of the four largest islands and the mainland from the northern border of Florida to Brazil.
North of Cuba, northwest of Hispaniola and the Turks and Caicos Islands, southeast of Florida and east of the Florida Keys lies the Bahamas, over 3,000 islands, cays, and islets in the Atlantic Ocean. Although originally claimed by the Span. The islands in the Bahamas gradually came under English control. The islands of the Bahamas were sparsely settled and largely ungoverned. The Bahamas together with the over 700 islands, reefs and cays of the Caribbean form the West Indies.
The silver from the mines in Bolivia, Peru and Mexico was smelted near the mines and turned into ingots. Many of these ingots were used to produce the peso, commonly referred to as a piece of eight (eight reales in a piece of eight) or Spanish dollar. The ingot was melted and the liquid silver poured into thin strips. The strips were beaten by hand to the desired thickness and cut to the approximate size of the coin. The blank was placed between the halves of a die with the top being the imprint of the head of the coin and the other the tail of the coin. The die was struck with a hammer and the coin weighed. If the coin was overweight, small smips would remove the excess. Pieces of eight were called cob because they were irregularly shaped and crudely struck.
The Spanish mines produced vast quantities of silver and English coinage in the British colonies and the Caribbean was scarce. The Spanish piece of eight, otherwise known as the Spanish dollar and the peso, became the first international currency. It was generally uniform in weight and purity of silver.
Although local transactions could be conducted through barter, the exchange of a commodity or service for a specified commodity or service, or “on account” where a value for the commodity or service was established and payment at a later date was by an unspecified commodity, service, or coinage. Some transactions, however, did require coinage and those in the Americas were forced to turn to the Spanish pesos minted in the Americas that were in abundance.
Buying Power of a Piece of Eight When Compared with an English Pound Sterling
In 1715, the English pound (£) was twenty shillings (s) and each shilling was twelve pence (d), or 240 pence in a pound. [The British monetary system converted to a decimal system on February 15, 1971.] In 1702, Sir Isaac Newton, the Master of the Royal Mint, advised Queen Anne that the British pound sterling should be produced with 420 grains of .925 fine silver. [One grain (gr) of silver equals 0.065 grams (g) of silver.] In 1704, the queen issued a proclamation to this effect and in 1707 the English Parliament followed the queen’s proclamation. The pound was 925 parts pure silver to 75 parts copper thereby giving a silver coin a hardness. All pounds sterling were produced at the British Mint and all were machine made giving them a uniform round shape and a number of narrow ridges or reeds milled into the edge of the coins.
The Spanish peso or Spanish dollar was divided into eight reales thereby leading to its name, piece of eight. The Spanish government authorized the peso to be produced at about 420 grains of .9350 fine silver. Therefore, a British coin of fine silver had less fine silver than 420 grains of a Spanish coin. Unlike British pounds, Spanish pesos were minted at various locations, often near where the silver ore was mined and the coins were formed by hand and were irregular in shape. Although the peso was to have 420 grains of .9350 fine silver, the coins minted in Peru were noted as having less silver (underweight) than coins minted in Mexico and Colombia. Also, the Spanish coins, because they were created by hand, had irregular shapes and were softer than the British pound, could more easily be clipped, thereby further reducing its total silver content.
In 1704, Queen Anne issued a royal proclamation that was passed by parliament in 1707 that specified that a full weight Spanish peso would be valued at 54d (4s6d) in Britain and the same peso would pass in the colonies at 72d (6s) or a third (18d) above the British sterling rate. The colonists were prohibited from trading any silver coins at more than this third above the British 54d rate. Therefore, theoretically if an item was selling in the colonies for 216d, the buyer would pay 3 Spanish pesos or 4 British pounds.
Each colony functioned independently creating its own laws and regulations and the value of a pound, shilling and pence were not the same as in Britain. Every colony was different. British exporters demanded payment in silver and that caused silver coin to be traded at a premium.
The colonists ignored this Parliamentary legislation and the peso continued to fluctuate based on the legislated rates in the colonies rather than Parliament’s rate. Each colony had a legislative rate of exchange but because the Spanish peso had a higher silver content when compared to the pound, it traded at a higher than the legislative rate.
The British Pound Legislative Rate 54d (4s6d)
Carolina Legislative Rate: 81d (6s7.5d) – 50% over the pound sterling
1691-1712 (not divided into North and South Carolina until 1712)
Maryland Legislative Rate: 72p (6s) – 33% over the pound sterling
Massachusetts Legislative Rate: 72d (6s) – 33% over the pound sterling
1705 Traded Rate: 83.6d (almost 7s) – 55% over the pound sterling
New York Legislative Rate: 81d (6s9d) – 50% over the pound sterling
1684-1700
Pennsylvania
1700 Legislative Rate: 94d (7s10d) – 74% over the pound sterling
1709 72d (6s) – 33% over the pound sterling
Virginia Legislative Rate: 65.6d (5s5.5d) – 21% above the pound sterling
1708 60d (5s) underweight
1710 Legislative Rate 72d (6s) – 33% over the pound sterling
During the 1600 and 1700s, Jamaica was central in the currency activities of the Caribbean and Bahamas. The dominant silver coinage was the piece of eight (Spanish dollar, peso or eight reales). The dominant gold coinage was the escudo and doubloon.
Silver currency
Peso (piece of eight) 8 reales
Gold currency
Escudo 2 pesos (16 reales)
Pistole 2 escudos (4 pesos or 64 reales)
Doubloon 4 pistoles (8 escudos or 16 pesos or 128 reales)
In 1681, the Jamaican House of Assembly established the value of the Spanish peso in circulation against the British pound sterling.
Piece of eight minted in Spain or Mexico 5s
Piece of eight minted in Peru 4s
Between 1707 and 1722, the value of eight reales (a piece of eight or peso) was raised to 6s3d.
Jamaica 1707 6s3d (75d)
Britain 4s6d ((56d)
Colonies 6s (72d)
The Jamaican rate was 19 pence higher than the British rate and 3 pence higher than the Colony rate.
Sources
Ron Michener, Money in the American Colonies (https://eh.net/encyclopedia/money-in-the american-colonies/) citing McCusker, John J., Money and Exchange in Europe and America, 1600-1775: A Handbook, Williamsburg, VA: University of North Carolina Press, 1978.
Colonial Currency: The Comparative Value of Money between Britain and the Colonies, A Procject of the Robert H. Gore, Jr. Numismatic Endowment, University of Notre Dame, Department of Special Collections
(https://coins.nd.edu/ColCurrency/CurrencyIntros/IntroValue.html
Baylus C. Brooks, Dictionary of Pyrate Biography 1713-1720 (2020) 193 (for the commissions).
Bank of Jamaica, Currency History (https://boj.org.jm/core-functions/currency/history/)