On This Day In Finance: July 6 - The United States Adopts The Dollar

By Joseph Nguyen | July 02, 2009 AAA

On July 6, 1785, the dollar was adopted as the monetary unit of the United States. The term dollar traces its origin back to the name of a European silver coin, the "thaler" which is a German name meaning "valley" and refers to the location of the mines from which it originated. At the time, the U.S. wanted to get away from British influence as well as the British monetary unit, the pound. The adoption of the dollar began in 1782 when Thomas Jefferson suggested the U.S. adopt the dollar because the thaler was already circulating in many areas in the Spanish and British colonies of North America.

Although the dollar was adopted in 1785, it wasn't until 1792 that a bill was passed which established the mint. Further, it wasn't until 1794 that the first American dollars began to appear in circulation. With regard to the symbol "$" for the dollar, there are many theories as to how it was chosen to represent the dollar. One theory suggests that the symbol is a combination of the letters p and s, which at the time was the abbreviation for the peso. Another theory suggests that the symbol was based on the letters U and S, which stands for the United States. Further yet, another theory believes that the symbol is representative of the Pillars of Hercules which appeared on the Spanish dollar.

Wherever its origins, the U.S. dollar is one of the most used currencies today, with several countries using it as their own currency and many using it in international trade. The dollar is also commonly referred to as greenbacks or bucks. (For a related reading, check out Unofficial Dollarization and The Greatest Currency Trades Ever Made.)

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