As anyone who knows anything about Britain knows, the United Kingdom uses a currency
known as the Great British Pound.
Also, look at that empire they once used to control.
Impressive, right?
Well, what about some of their former colonies?
Do they use pounds?
Well, Egypt does, but what about the others?
Well, obviously America uses the US Dollar, but look at this… the Canadian Dollar, the
Australian Dollar, the Singaporean Dollar, the Malaysian Ringgit (well, formerly Dollar)...
and it’s all over the place, the Bahamas, Jamaica, Guyana, Hong Kong?!
What’s going on here?
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Well, if we’re going to talk about the history of currencies of the British Empire, we might
as well talk about Britain itself.
In Anglo-Saxon times, England started using currencies inspired by Charlemagne’s empire,
which used a currency called the “livre”, from the Latin “libra”, which was translated
into the English “pound”.
Nowadays, in the UK of course, a pound is a measurement of currency, whereas in the
US it’s a measure of weight, but in these times, the currency was called a pound because
it was literally a pound of silver.
Of course, much like the imperial system that bore the pound weight, England’s currency
system also didn’t make any sense.
A pound was divided into 20 shillings, which was further divided into 12 pence, and then
a penny was finally divided into 4 farthings.
Simple, right?
I mean, to be fair the whole thing was Charlemagne’s idea, so…
Then blah-blah-blah, the pound sterling was soon after also established, and then the
Bank of England was also founded in 1694, and a whole lot of other stuff happened currency-wise,
until it was time for the empire stuff.
In 1707, England and Scotland united, and the pound Scot was merged with the pound sterling.
Same thing happened when Ireland was brought in in 1801, though the Irish pound still circulated
until 1826.
However, when Britain started to export its ways of eating tea and dunking crumpers around
the world, there wasn’t necessarily a single currency all around the British Empire.
This is because, back in these days, the pound sterling was a kind of commodity money, meaning
it had to be backed by silver or gold.
Unfortunately, not everywhere around the world had the same amount of these metals as back
home, so many of Britain’s colonies established their own currencies, even if they still accepted
pound currencies.
Okay, let’s go through this region-by-region.
Britain’s first colonial holdings were on the east coast of North America, specifically
the colonies that would later form the United States and Canada.
In the early days, each of the colonies had their own currencies, which were not equal
to each-other, although they were still denoted as pounds, shillings, and pence.
Then, in 1775 as the 13 colonies were fighting for their independence, the Continental Congress
established the Continental currency… which was kind of a complete disaster due to runaway
inflation.
Later, the Coinage Act of 1792 properly established the United States Dollar, coming from the
Low German term “Thaler”, from the city of Joachimsthal, the Joachimsthaler, a little
like how we call these “burgers” as their recipe comes from Hamburg.
This is also the origin of the name of the Spanish dollar, more on all this later in
the video.
Canada, which had much the same history of a confusing mess of different currencies by
the early 19th century, would later face a decision-- when trying to unify these currencies--
between using the pound sterling or using a currency more linked to that used in nearby
America.
I’ll let you guess which one they picked.
And when Canada broke off from Britain in 1867, they finally established their own national
currency with its value determined as a kind of compromise between the US Dollar and the
British sovereign.
Story of Canada, in a nutshell.
Okay, so what about Britain’s next big colonies, Australia and New Zealand?
I mean, they drive on the left, call fries chips, and don’t talk anything like Americans
do, so why don’t they use their own versions of pounds?
Well, Australia’s first currency was indeed the Australian pound, introduced in 1910.
However, the big question came in 1966, when the currency was to be finally decimalized,
and not that weird abomination from 1,000 years prior that you saw about 3 minutes prior.
This meant a big change for the currency, and so Prime Minister Robert Menzies (yes,
that is how it’s pronounced) suggested the name “royal”, which won out over names
like the austral, roo, kanga, emu, digger, kwid, and several other weird suggestions
that I swear I’m not making up.
However, later PM Harold Holt found out that this was not a popular choice amongst the
public, and so basically said, “screw it, we’re going with the dollar”.
The Australian Dollar was initially fixed to the Pound sterling, as Australia remained
part of the sterling area for one more year until being pegged to the US Dollar, and then
becoming a free-roaming currency of its own.
If you want to learn more about the Australian dollar, BrainCraft made a really good video
all about it.
Go check it out (and tell Vanessa I said hi)!
New Zealand followed a similar path around this time, also suggesting alternative names
to replace the New Zealand pound, like the kiwi, fern, and zeal, but the name dollar
won out anyway.
Lastly, we move onto two more prominent former British colonies, this time two in Asia that
were somewhat small in physical size, but still big in financial power.
First, let’s go with Singapore.
In the late 19th and early 20th centuries, the colonies of Malaya, Singapore, Sarawak,
Sabah, etc. used the aforementioned Spanish dollar, but in 1826 it was decided that the
Indian rupee would now be used in trade, but this wasn’t deemed a suitable currency for
trade in the region, and the Straits dollar was introduced when these colonies broke off
from British India.
Singapore then used the Malayan dollar from 1939, and then the Malaya and British Borneo
dollar from 1953.
When Singapore joined Malaysia, their currencies were joined in a currency union, until two
years after Singapore was kicked out, when Singapore just decided to go their own way.
It’s a lot more complicated than that, but so are all these stories.
In Hong Kong however— despite being once part of the British Empire and now technically
kind of part of China— they use the Hong Kong dollar, the world’s most interesting
currency (I will fight you on this).
Initially, when Hong Kong was taken over by the British and established as a trading port,
they didn’t really have a currency, and just used whatever was used around them.
However, after trying to influence Canada’s currency situation previously, London decided
that maybe enforcing the pound sterling everywhere wasn’t the best idea, and so instead made
a new, separate currency for Hong Kong, this time also immediately going for the silver
Spanish dollar system which had also been popular here.
Of course, there are numerous other dollar currencies in use all around the world, regardless
of whether or not they were a British colony, and not always because of influence from the
US.
As previously mentioned, the term “dollar” came from Joachimsthaler, as Joachimsthal
was where the Kingdom of Bohemia got the silver to mint all its coins.
The word Thaler spread all around Europe, twisting and turning until it reached the
Netherlands, who established the leeuwendaalder (lion dollar) for international trade.
Then the lion dollar was gradually replaced by the Spanish peso, which was often called
the Spanish dólar, as they looked a lot like the old lion dollar.
The $ sign likely even comes from the word peso, specifically as a sloppily drawn PS.
Of course, the history of currencies and economics can be just as long-winded and confusing as
the histories of the nations and empires that used them, so of course this is just a simple
summary of how everything went down.
If you want to read more, I have a crap-ton of Wikipedia articles in the description for
you to read more on, but I just wanted to talk about why all these currencies are called
dollars.
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