Spain's seafaring currency

Spain's currency mirrored the rise and fall of its empire

When Long John Silver's parrot of Treasure Island fame squawked, "Pieces of eight, pieces of eight" he was referring to an ancestor of the peseta - the Spanish currency now being replaced by the euro.

The peso, from which the peseta was derived, was, in its full form, the "peso de ocho" or piece of eight reals - a currency established in the late 15th Century.

It's no surprise that the peso should have appeared in Robert Louis Stevenson's children's classic tale of pirate adventures, for the currency had a seafaring history.

King Juan Carlos on a 5,000 peseta note

The Spanish conquistadors, arriving in South America, found great reserves of precious metals. This wealth was soon streaming across the Atlantic to fill Spanish coffers.

In the mid-1530s the first mint was set up in Mexico and started churning out the silver peso. The discovery of silver in Peru led to an exponential growth in production.

In the first half of the 17th Century between five and six million pesos a year are estimated to have been struck in Potosi, in Peru.

Shipwrecks

But the quality of the minting was poor, which led to the belief in Europe that the coins had been struck in haste during the ocean voyage.

The coins became known as ship's or pirate money - perhaps because they were often found on shipwrecks.

Franco's image appeared on coins after the civil war

Having crossed the Atlantic, the coins spread quickly across Europe due to the massive debts and trade deficit Hapsburg Spain accrued through its constant waging of wars.

Trade between Mexico and the Philippines also spread the peso to the far East. It became the leading currency in world trade, with a role similar to that of the US dollar nowadays.

But the demise of the Spanish empire led to a parallel fall of the peso, though the name lived on in the subsequent South American currencies.

But at the same time coins also continued to be struck which showed the imprisoned Bourbon King, Ferdinand VII and, additionally, special coins were issued for the British soldiers who fought on the Iberian peninsula.

Birth of the peseta

The peseta emerged in place of the peso in 1868 as Spain prepared to join one of the euro's precursors - the Latin Monetary Union which linked the currencies of France, Italy, Belgium, Switzerland, and later Greece.

King Juan Carlos will also appear on some Spanish euro coins

However, as things turned out, Spain never joined the union.

War has also marked the more recent history of the currency.

Separate peseta coins were issued by the republican and nationalist factions during the civil war in the 1930s and the nationalists refused to accept the validity of the republicans' coins.

But when General Franco established control of Madrid, and therefore the main mint, new coins were issued which bore his head and the Spanish coat of arms.

King Juan Carlos replaced the dictator on the peseta when the monarchy was restored in 1975.