When currencies became divorced from the gold and silver that used to determine their value, their utility ceased to be global in extent. From then on, currencies became national phenomena. However, there was a time when the precious metal content of a coin was the sole determinant of its value. In that era, money was accepted across, and not just within, national boundaries and several currencies often existed in any one nation simultaneously. Austrian coins changed hands in the Netherlands, Dutch coins in Spain, and Spanish coins in America. The legacy of this era lies in the words by which we refer to money.
Consider that while Americans refer to their currency as the ‘dollar’ and Romanians refer to theirs as the ‘leu’, these words share a common origin. Indeed, the currencies of these and still many other countries all share a common ancestor, the ‘thaler’ of Central Europe. Of course, currencies evolve over time and so calling any currency the first in a family of monies is usually an exercise in semantics. But this is an interesting history to investigate regardless. The names by which we refer to our money reflect centuries-old patterns of trade and politics.
In Europe during the Late Middle Ages, precious metals were increasingly hard to come by. That changed with a series of silver discoveries in the late 15th century in the Austrian Tyrol and Bohemia. In 1518, a coin began being struck called the ‘joachimsthaler’. This coin, which would be the first of many referred to as ‘thalers’, was the creation of a Bohemian Count named Hieronymus Schlick. Its long name derived from the place it was minted, the town of Joachimsthal in Bohemia, the western half of today’s Czech Republic. This thaler was a fairly large silver coin, weighing 29.2 grams.
Besides its name, there wasn’t too much significant about the joachimsthaler. It was just the latest in a lineage of silver coins minted over the centuries, since the first coins were struck in Anatolia two thousand years earlier. In Central Europe, a popular coin called the ‘guldengroschen’ was minted prior to the thaler and was widely used in trade. However, the joachimsthaler replaced the guldengroschen in part because its size conveniently corresponded to the system of weights and measures common to Europe at the time.
For example, a single joachimsthaler weighed one German ounce, eight thaler weighed a German mark. Indeed, a ‘mark’ was a unit of weight before it became the name of a currency itself. The guldengroschen by contrast was based on the local system of measures from Tyrol where it was minted and weighed a bit more than an ounce. This inconvenience gave an advantage to the thaler and helped make it popular for trade and its use spread all over Europe, influencing other currencies for decades and centuries to come.
Germany and the Netherlands
Uniform coinage with high purity of precious metal turned out to be a popular concept. Later in the 16th century, the joachimsthaler was replaced by various copy-cats minted in the style of this thaler from Bohemia. For wider use in the Holy Roman Empire, which spanned much of Central Europe, the ‘reichsthaler’ was introduced in 1566. It weighed 29.2 grams like the joachimsthaler, but was just 88.9% silver by composition. As such, the coin continued to weigh one ounce but contained just one-ninth of a German mark of silver.
Farther north, thaler coins were struck in the Netherlands and Scandinavia. In Holland, the ‘thaler’ morphed linguistically into the ‘daalder’ when the ‘rijksdaalder’ was introduced with a weight of 25.6 grams. It matched the weight of the Spanish dollars, more popularly known today as the ‘pieces of eight’ horded by Caribbean pirates. This makes considerable sense since Spain ruled the Netherlands at the time. However, in 1575, while the Dutch were rebelling against Spanish rule, a new coin was minted even lighter than the rijksdaalder, named the ‘leeuwendaalder’, so-called because of the lion depicted on the coin (‘leeuw’ is ‘lion’ in Dutch). As the Netherlands grew to the peak of its commercial and military power in the 17th century, the coin spread all over the world.
The Thaler’s Later Heirs
It is from the leeuwendaalder specifically that many currencies got their name. These include the Romanian Leu and Bulgarian Lev, still used in their respective countries today. As the Dutch leeuwendaalder became more common in trade, they proliferated even in the most unlikely places. The Dutch coins were introduced into Southeastern Europe through their use in trade with the Ottoman Empire. Besides modern-day Turkey, the Ottomans controlled Bulgaria and their political and commercial influence continued up the Black Sea coast through Romania and Moldova, all the way to Crimea. In fact, use of the leeuwendaalder was so widespread it virtually replaced Ottoman coinage in parts of the Balkans.
Not surprisingly given the similar names, the dollars of the United States, Canada, and Australia also derive from the Dutch leeuwendaalder. Of course, this means that the American dollar and the Romanian leu share a common etymological ancestor, something hardly obvious at first glance. In the 17th and 18th centuries, Dutch ‘daalder’ coins circulated in Britain’s North American colonies. The absence of locally minted coins meant foreign coinage comprised the early American money stock. Indeed, American coinage was initially based on the Spanish peso, a coin even older than the joachimsthaler but of similar size.
The world dollar though was introduced via the Dutch coins. Americans began to call all similar coins ‘dollars’, including the Spanish pieces of eight that served as legal tender in America even after independence. Following the American example, other English-speaking countries began to call their currencies dollars too, from Canada in the 1850s to Australia in the 1960s, following the decimalization of their currency.
Of course, the thaler was born in Central Europe and thalers continued to circulate there for centuries after the original joachimsthalers were minted. Austria continued to mint new thalers and they were historically significant coins in their own right. One of these, the Maria Theresa thaler, began circulation in 1741 and went on to be used in trade far from their home country, in Africa and the Middle East. The Maria Theresa thalers were used as currency in Eritrea and Ethiopia even well into the 20th century. Beyond Austria, direct etymological decedents of the joachimsthaler were used as currency in the rest of German-speaking Europe through to the 19th century. Slovenia’s pre-euro currency, the ‘tolar’, was the last of Europe’s currencies to bear nearly the exact name of its Bohemian ancestor. That said, less direct heirs continue to be used by hundreds of millions of people, the vast majority scarcely familiar with the linguistic origins of their monies’ names.
It may seem that tracing the origins of the names of currencies is an etymological, and not an economic or financial, exercise. Consider that it may very well be both. The evolution of coinage, both in regards to their names and composition, usually tell an economic story, one of exchange between sometimes distant corners of the globe. Whether it be how late medieval coins usually were minted to correspond with systems of weights and measures (after all, how did the pound, livre, and peso get their names) or how currencies did not always respect national borders even then, there is a lot to be enlightened of in studying the history of money.
More from the Tontine Coffee-House
1. “Antique Coins – the Thaler.” Golden Eagle Coins Blog, 25 Apr. 2019.
2. Connections, Homeschool, director. The Dollar and St Joachim: History in a Minute. YouTube, 30 Jan. 2018.
3. Davies, Glyn. A History of Money: from Ancient Times to the Present Day. University of Wales Press, 2016.
4. Moore, Michael Scott. “A Brief History of the Dollar.” Pacific Standard, 11 Aug. 2010.