History::Bermudian dollar


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History For nearly four hundred years Spanish dollars, known as "pieces of eight" were in widespread use on the world's trading routes, including the Caribbean region.{{#invoke:Footnotes|sfn}} However, following the revolutionary wars in Latin America, the source of these silver trade coins, dried up.{{#invoke:Footnotes|sfn}} The United Kingdom had adopted a very successful gold standard in 1821, and so the year 1825 was an opportune time to introduce the British sterling coinage into all the British colonies.{{#invoke:Footnotes|sfn}} An imperial Order in Council was passed in that year for the purposes of facilitating this aim by making sterling coinage legal tender in the colonies at the specified rate of 1 Spanish dollar to 4 shillings, 4 pence sterling.{{#invoke:Footnotes|sfn}} As the sterling silver coins were attached to a gold standard, this exchange rate did not realistically represent the value of the silver in the Spanish dollars as compared to the value of the gold in the British gold sovereign.{{#invoke:Footnotes|sfn}} Because of this, the conversion had the opposite effect in many colonies, and actually drove sterling coinage out of circulation, rather than encouraged its use.{{#invoke:Footnotes|sfn}}

Remedial legislation had to be introduced in 1838 so as to change over to the more realistic rating of $1 = 4s 2d. However, in Jamaica, British Honduras, Bermuda, and later in the Bahamas also, the official rating was set aside in favour of what was known as the 'Maccaroni' tradition in which a British shilling, referred to as a 'Maccaroni', was treated as one quarter of a dollar. The common link between these four territories was the Bank of Nova Scotia which brought in the 'Maccaroni' tradition, resulting in the successful introduction of both sterling coinage and sterling accounts. It wasn't however until 1 January 1842 that the authorities in Bermuda formally decided to make sterling the official currency of the colony to circulate concurrently with Doubloons (64 shillings) at the rate of $1 = 4s 2d. Contrary to expectations, and unlike in the Bahamas where US dollars circulated concurrently with sterling, the Bermudas did not allow themselves to be drawn into the U. S. currency area. The Spanish dollars fell away in the 1850s but returned again in the 1870s following the international silver crisis of 1873. In 1874, the Bermuda merchants agreed unanimously to decline to accept the heavy imports of U.S. currency except at a heavy discount, and it was then exported again. And in 1876, legislation was passed to demonetise the silver dollars for fear of them returning. In 1882, the local 'legal tender act' demonetised the gold doubloon, which had in effect been the real standard in Bermuda, and this left pounds, shillings, and pence as the sole legal tender.

The pound sterling remained the official currency of Bermuda until 1970, though the Government of Bermuda did issue its own pound banknotes.{{#invoke:Footnotes|sfn}} With U.S. and Canadian coins regularly appearing in circulation in Bermuda and the possibility of the devaluation of the pound sterling, Bermuda was compelled to adopt its own decimal currency.<ref name="25 years">{{#invoke:citation/CS1|citation |CitationClass=news }}</ref> On 6 February 1970, Bermuda introduced a new decimal currency in the form of a dollar. The nascent Bermuda dollars circulated in conjunction with the new British decimal coinage a year before it was introduced in the United Kingdom.<ref>{{#invoke:citation/CS1|citation |CitationClass=news }}</ref> By adopting decimalisation early, Bermuda was also able place orders for the coinage from the Royal Mint before other Commonwealth countries seeking to decimalise could.<ref name="25 years"/> The link between the Bermudian dollar and the pound sterling was not broken until 31 July 1972, which allowed Bermuda to align to a one-to-one exchange rate with that of the United States.{{#invoke:Footnotes|sfn}} The decision for Bermuda to peg its dollar to the U.S. dollar added convenience for the multitude of American tourists and businesses with whom Bermuda largely relied on.{{#invoke:Footnotes|sfn}}

File:Bermudian Fifty Cent Coins.jpg
Bermudian 50-cent coins

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