Sunday, May 29, 2011

One Pieces of Eight and the Two Bit Coin

In colonial days the common folk did their reckoning in pieces-of-eight. Pieces-of-eight were large silver coins cut into eighth which the folk called "bits."

A bit was a substantial piece of change. One could buy a pint of ale for one bit, a plate of grub for two bits and a bed for the night for four bits.

In the Coinage Act of 1792, the United States weighed the pieces-of-eight in circulation and took their average to create a monetary unit called the US dollar. The US dollar is often symbolized with a barred S as follows: $

The Americans sought to create a decimal based currency with new coins. The larger coins matched up well. A dollar equaled a piece-of-eight. A half dollar was equal to four bits and the quarter equal to two bits. New coins included the silver disme that was worth a tenth of a dollar and a penny worth one hundredth of a dollar.

In this new coinage, four bits equaled 50 cents. Two bits equaled 25 cents. The bit equaled an awkward 12.5 cents. So, the coinage act included a half disme worth five cents and a half penny. In practice, proprietors used to reckoning in bits were known to accept a disme as a short bit, accepting the loss of the odd bit as the price of doing business.

The old common currency was legal tender through 1857 when Congress finally outlawed the use of foreign currency, making the dollar the sole legal tender of the land. Later acts set the dollar as a fiat currency with built in inflation.

In 2011, The Utah Legislature passed a symbolic statement called the Legal Tender Act which doesn't do anything because Federal laws regulate currency.

On passage of the law, I looked up the current price of silver. The price of silver changes daily. I discovered that a silver quarter was worth about $7.00 and the silver half dollar was worth about $14.00.

I was astounded to realize that a basic meal at a diner was still worth two bits.

So Utah's Legal Tender Act of 2011 led me to ask the question: "What is the best two bit diner in Utah?"

A two bit diner is a restaurant with a special that could be bought for the two bit coin (a silver quarter.

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