8 Reales Madness

With the discovery of precious metals in the New World, the standard of currency went to Spanish coinage, particularly the de a ocho reales "pieces of eight", a silver coin, immediate forebear of the US dollar and the Mexican peso. The pieces of eight was called the Spanish Dollar in the United States, where it remained legal tender in much of the pre-Civil War era of the Republic. Ferdinand and Isabella, Spanish monarchs famous for financing Columbus's expedition in search of a western route to the Indies, introduced the de a ocho reales as a part of a plan to furnish Spain with a unified coinage system. Reales, Spanish for royal, was sometimes called a 'bit' in English, which explains why a quarter is two bits, or three quarters six bits. The term bits is a reference to a practice of cutting a pieces of eight into eight bits, which circulated as coins. Charles V spread the Spanish coinage system in Europe, where the pieces of eight was equal in value to the Bohemian or Saxon Thaler. In the United States it became the dollar.

The coinage of New Spain and Mexico runs into billions, and their pieces of eight and pesos served as the standard medium of exchange in the United States, the Philippines, China, and many European markets. The first, or Continental currency of the United States of America, was made payable in Spanish milled dollars. The Mexican peso and its subdivisions were legal tender in US until February 21, 1857, when by Act of Congress, all laws authorizing its circulation and acceptance were repealed. Up to June 30, 1862, the sum of $2,103,275 in Mexican coins had been accepted by the United States Federal offices. (Annual Report of the Director of the Mint, for the Fiscal year ending June 30, 1862, p.35)