BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Programmes: Working Lunch  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Working Lunch Wednesday, 11 June, 2003, 12:32 GMT 13:32 UK
Cosmopolitan currency
The euro's major competitor is the dollar.

The impression is that the mighty greenback is the all American currency while the euro is a hotchpotch of all the European currencies.

But the dollar is in fact far more cosmopolitan than you think.

A look at the history of the two currencies reveals some striking similarities.

Cowboys didn't use dollars at all

Cowboys

Early American cowboys didn't actually use any dollars at all. They used a combination of all sorts of different currencies from the English Shilling to Spanish Reals.

What is more, the currency adopted in one part of the country wasn't necessarily accepted in other parts.

It was a monetary chaos; what they needed was some sort of monetary unification.

War and unification

It took a dramatic event to bring that unification and create a single currency.

The revolutionary wars with the British had to be financed, but the Americans had no power to raise taxes, and they had no currency of their own.

So the Continental Congress invented a currency and called it the Continental.

To ensure its adoption, people were forced to accept it and fined if they refused.

But a century later, the situation had barely improved.

Too many currencies

In the 1700's the Congress may have managed to create its own currency but by the 1800s there were once again a whole variety of monies in daily use.

Each bank was now issuing its own notes.

Banks in the East issued different notes from those in the West and the currency tended to lose value the further it travelled from its issuing bank.

This in turn gave rise to an industry of so called shavers.

Banks all issued their own notes
These were men who would buy non-local bills cheaply then travel to the issuing banks and get its full face value back, making a nice profit on the deal.

The Euro of course, is also issued by lots of different banks in different places but law states it can only have one value, however far it goes from the issuing bank.

International

The dollar may seem to symbolise all things American.

But it grew out of different European currencies.

The South was called Dixie because New Orleans bills, in the mainly French colony, were marked "dix" as well as "ten".

Even the dollar's name is not very American.

Its roots are Germanic; dollar comes from the word thaler which was an Austrian currency.

The Scandinavians took the word and turned it into Daler and the Americans started using it to describe Spanish silver coins.

Over time it became known as the dollar.

A shining example

So in many ways, the dollar experience is remarkably similar to the euro.

Both come form a need to create order in a growing single market.

They both have very international influences.

Today the dollar has a character of its own, quite separate from the currencies it grew out of.

And since America adopted the gold standard in 1900, the dollar has virtually conquered the world.

It's the national currency, but widely used abroad. And for years it has been both strong and safe.

Will the same be said of the Euro in a 100 years time?


 E-mail this story to a friend

Links to more Working Lunch stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes