A History of the Loonie, in Eight Pieces

The bird is hot. That flaxen-hued coin in your pocket is worth more than it has been since it was created in 1987. Economists predict it will fetch ninety cents or more against the US dollar before the end of the year, thanks to high prices for commoditie
The bird is hot. That flaxen-hued coin in your pocket is worth more than it has been since it was created in 1987. Economists predict it will fetch ninety cents or more against the US dollar before the end of the year, thanks to high prices for commodities such as gold, natural gas, and, of course, oil.

Ironically, Canada’s signature coin is something of an endangered species. In a North American economy forged by silver, the loonie is the last of its breed: a one-dollar coin in wide circulation. But it is losing its lustre, as Canadians increasingly pay for everything from popcorn to parking meters with electronic cash. Canada leads the world in debit-card use, and Dexit, an electronic small-transaction system, arrived in Toronto in late 2003, and now has 50,000 users. As we flock to digital dollars, the loonie may join the joachimsthaler, the Real de a Ocho, and the holey dollar, as part of our country’s currency past.



All sorts of objects were used as currency by primitive economies. Beads, eggs, feathers, ivory, oxen, pigs, rice, salt, and vodka have each been used as money in one place or another. One of the first items to circulate internationally was the cowrie shell, which flowed from the Maldive Islands to wide circulation in West Africa, and to ports as far away as Europe and China.


Precious metals replaced pigs and vodka because they lastedlonger and there was less temptation to consume one’s profits. Silver coins appeared in the Greek city states in about 500 BC; Athens issued one depicting its patron goddess, Athena, on one side and her sacred bird, the owl, on the reverse. These popular tetradrachms, which became known as “owls,” remained in use until the time of Christ. Fowl faded from common currency during the Roman Empire, as emperors preferred coins depicting themselves.


The early sixteenth century saw a major cash crunch. So great was the need for currency that, beginning in about 1519, a Bohemian nobleman began secretly minting silver coins inside his castle. The Holy Roman Empire soon adopted the idea, building a mint in the nearby town of St. Joachimsthal. Its silver coins, which weighed about thirty grams, could soon be found in every corner of Europe.


The Bohemians found it too bothersome to say, “I’ll give you two Joachimsthalers for that cow,” so they called the coins “thalers.” The Dutch called them “daalders,” the Danish “dalers,” and the English “dollars.”


In the New World, Spanish conquistadores found silver deposits dwarfing those near St. Joachimsthal. For the next 300 years, these vast mines supplied an estimated 85 percent of the world’s silver. At Mexico City, Lima, and Potosi (in what is now Bolivia),the Spanish minted a river of real (royal) coins. With galleons freighting Spanish silver throughout the world, the eight-real coin became the first truly global currency. New money punished old businesses, however, and the flood of silver depressed prices throughout Europe, destabilized the Ming Empire, and triggered the decline of great African cities such as Timbuktu.


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