The Decimal Currency System
When the United States declared independence from Great Britain, the founding fathers wished to differentiate the new country from its Old World counterparts. The new nation would feature a new set of laws, freedoms and system of government. To further separate itself from its European roots, the United States also adopted a completely new unit of measurement for currency: the decimal system. While the decimal system may seem universal today, it was actually highly unconventional in the 18th century.
Before the dollar was adopted as America’s currency, foreign coins dominated everyday commerce. A merchant in the thirteen colonies would expect to deal in Spanish Pieces of Eight, British Farthings, French Ecus, German Thalers and such. These coins were not always denominated in easy-to-handle numbers. In the British coinage system, for example, 240 pence made a pound, four farthings made a penny, twelve pence made a shilling, etc. Remembering the relationship between the various denominations was exceedingly difficult and taxing on one’s mental math abilities.
The United States wanted its currency to be easy-to-understand and practical. The founding fathers decided to use the decimal system, which had been devised centuries earlier but remained somewhat obscure. Russia had adopted the decimal system for its currency in 1704, but nowhere else in the world was it used.
Thomas Jefferson recommended that the base unit be the cent, which would approximate the size and weight of existing copper coins already circulating in North America. The dollar would be equal to 100 times the one cent coin. His proposal was accepted and, by 1792, the United States Mint began releasing coins in this new decimal format. One of the first coins struck was the silver Disme (pronounced “disme”) which was named after the French word for a tenth. This was the predecessor to the Dime.
The new system was lauded by the public for its simplicity and ease of use. Just three years later, France scrapped its arcane coinage system and adopted a new decimal system after its country’s revolution. The other European nations were less amenable to change, as their currency systems were typically centuries old. One of the last holdouts was Great Britain, whose bizarre denominations did not confirm to the decimal system until 1971!
Just as other nations have come to emulate America’s system of government, constitution and free market society, so too have other countries adopted our decimal coinage system. Despite being commonplace around the world today, it was virtually unheard of in 1784 when Thomas Jefferson advocated its use.