April 13th marks the birthday of Thomas Jefferson. Of course we all know the American forefather as our third president. Additionally, coin and currency buffs know him from the nickel and the $2 bill. But few people know how the famed politician and thinker earned his place in U.S. currency history.
When Jefferson wasn’t penning the U.S. Constitution, he was busy creating our modern monetary system. After the American Revolution, the thirteen colonies were still trying to figure out a currency system. Up to that point, the colonies used Spanish, Portuguese, and English coins for financial transactions. A few of the colonies minted their own coins, but most weren’t officially recognized. All of these coin’s denominations were based on a silver dollar, in a monetary system from Spain, known as a real. But once the colonies got ahold of these coins, each colony assigned the coins a different value. This made trade between colonies incredibly difficult. So it was decided that the U.S. colonies would create their own currency, with their own monetary system. But deciding on a monetary system proved to be a challenge. Which is where Jefferson’s excellent diplomacy skills came in handy.
Jefferson had the rational idea to create a decimal-based currency system. Meaning that money should be based on the number ten. The word for one hundred in Latin is cent, so Jefferson suggested that the word for a 1/100th of a dollar be “cent.” The Latin word for “one tenth” is dime; so again, Jefferson suggested that as the name for the 1/10th of a dollar coin. The five-cent coin would become known as the half dime and then later, the nickel.
In April of 1784, Jefferson put these recommendations down on paper in a document titled, “Notes of the Establishment of a Money Unit and a Coinage for the United States.” His suggestions were given to the government, which, after extensive discussion, decided to use Jefferson’s ideas. And his ideas are still used today. In fact, many European countries followed suit, and now countries all over the world use Jefferson’s decimal-based monetary system.
Like this? Read Four Ways Abraham Lincoln Changed U.S. Currency.
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