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In 1536 the first mint in the New World was established by the Spaniards in Mexico City. The coin that was minted in the greatest quantity was a large silver piece with a value of 8 reales. This coin soon became the most acceptable trade coin throughout the world. During its history it was given several names: piece of eight, Spanish dollar and pillar dollar. It is the coin most frequently mentioned in pirate stories and tales of buried treasure.
The silver from Mexican mines was initially formed into a crude, temporary coin called a "cob". A cob was made by refining silver ore to slightly over 90% fineness, rolling it like cookie dough into a rod shape, then slicing off pieces to form crude flans (planchets). These were trimmed with scissors to the prescribed weight and coined by the ancient hammer method. One die was mounted on an anvil, the flan was placed atop it, and the other die was suspended above the flan with tongs. A heavy blow or two from a sledge hammer impressed the design into both sides of the flan to form the coin. Cobs were primarily a means of accounting for the silver extracted from the silver mines. This was critical, as the king was entitled by law to twenty percent of the treasure - the "royal fifth" which was paid to him by tribute.
In 1732, after new dies and associated equipment arrived from Spain, minting of a new coinage began. The individual coins were no longer struck by hand, but with a new machine called a screw press (using watermills for power). No longer was each coin unique in size and shape, but rather all coins were uniform, and beautifully so.
Each coin, by virtue of the new method of manufacture, was of the same size, shape, weight and appearance. Additionally, the coins were manufactured with a milled edge (with a wreath-like chain of blossoms).
The original design of the Pillar Dollar was produced from 1732 to 1772. Such was the success of this design - especially for its weight and silver content - that it enjoyed the popularity of being accepted as "coin of the realm" by several European nations and the American colonies.
The silver 8 Real coin was often cut into 8 pieces or "bits" to make change. Each bit was worth 12 1/2 cents. Though rapidly fading, the expression 2 bits still refers to a quarter dollar.
Following the Mexico City mint, other mints were established at Lima, Peru, Potosi, Bolivia, Bogota, Columbia and Santiago, Chile.
The name "Pillar Dollar" comes from the two crowned columns that symbolize the "Pillars of Hercules" , the Straits of Gibraltar and the gateway to the New World, where the Atlantic Ocean and Mediterranean Sea meet.
Between the pillars are two hemispheres, symbolizing the "Old World" of Spain's metropolis and the "New World" of their South American colonies suspended above a sea and surmounted by a crown representing Spain's dominion over both worlds.
Each column is topped by a small crown and bears a banner that between them contains the motto "PLUS VLTR[A]" (More Beyond) indicative of Spain's continuing colonial expansion.
Beneath the sea is the coin's date, flanked by duplicate mint marks (M with the small o on top).
Inscribed around the obverse periphery is the legend "VTRAQUE VNUM" (both are one). These various elements are separated by quatrefoils.
The reverse displays the crowned Coat of Arms of Spain, along with the Latin legend "PHILIP V-D-G-HISPAN-ET IND-REX (Philip V - By the grace of God, King of Spain and the Indes).
A royal crown surmounts the entire shield. The magnificently styled crowned shield of Spain adorning the reverse boasts the strength of the union of the kingdoms of Castile and Leon and, with the Bourbon Crest centered in the shield, puts to rest any doubts that Philip's family was in control of the home country. Within each quarter of the shield are the individual arm of Castile (a castle) and Leon (a lion). Superimposed within an escutcheon are the arms of the Bourbon Dynasty (three fleur-de-lis).
The assayer's initials [MF] are to the left of the arms, the coin's value in reales to the right. The assayers mark guaranteed the coins were of proper weight and purity.
Spanish Pillar Dollars in the US:
In the pre-US colonies, the Spanish Milled Dollar (including the Bust dollar that followed the Pillar Dollar), was the basis of what was to become the US monetary system.
In 1776 the gold and silver coins of Spain played a crucial role in the commerce of England's North American colonies for many years. After the United States declared itself independent of Britain in 1776, the Spanish Milled Dollar and its fractions remained the principal currency in everyday circulation.
Spanish dollars continued to be legal tender in the United States up until 1857. The Treasury began redeeming these pieces in 1857 at a modest discount from their nominal face value. Given in exchange were the new small flying eagle cents first coined that year as a replacement for the large copper cents and half cnets, which were also being retired with the Spanish pieces. This program was renewed through 1860, and it brought to an end the circulation of these historic coins in most of the nation, though rural areas continued to utilize the old bits as late as the 1870's.
Authenticating Pillar Dollars:
The 8 reales coin normally weighs between 26.5 grams and 27.3 grams. The exact legal weght was 27.0642 grams with an allowance of 0.1996 g. Note that most dollars weigh on the lower side or are slightly underweight. Sea salvaged coins are usually substantially underweight.
Most coins are between 38-39 mm, but vary as small as 37 mm and as large as 42 mm. These generally vary by mint.
The edge is an intricate laurel pattern that repeats 41 to 43 times in either one direction or bi-directional. These are very difficult to replicate.
Check for washed out details, cast bubbles, unusual toning or surface corrosion.
Compare the individual devices with those of an original photo or coin. Many of the counterfeits do not contain the proper assayer's initials, mintmarks, king's name, size of pillars or dates.
If the coin appears to be very rare [for example, a 1732 or 1733] it should be authenticated by a third party grading service. Today, even moderately expensive coins are being counterfeited, so third party grading is highly recommended.
To learn more about Spanish American Pillar Coinage, an excellent book to read is "The Milled Columnarios of Central and South America - Spanish American Pillar Coinage, 1732 to 1772" by Frank F. Gilboy