Jamaican Dollar - History

History

The history of currency in Jamaica should not be considered in isolation of the wider picture in the British West Indies as a whole. See British West Indies dollar. The peculiar feature about Jamaica was the fact that it was the only British West Indies territory to use special issues of the sterling coinage, apart from the four pence groat coin which was specially issued for all the British West Indies, and later only for British Guiana.

The earliest money in Jamaica was Spanish copper coins called maravedíes. This relates to the fact that for nearly four hundred years Spanish dollars, known as pieces of eight were in widespread use on the world's trading routes, including the Caribbean Sea region. However, following the revolutionary wars in Latin America, the source of these silver trade coins dried up. The last Spanish dollar was minted at the Potosí mint in 1825. The United Kingdom had adopted a very successful gold standard in 1821, and so the year 1825 was an opportune time to introduce the British sterling coinage into all the British colonies. An imperial order-in-council was passed in that year for the purposes of facilitating this aim by making sterling coinage legal tender in the colonies at the specified rating of $1 = 4s 4d (one Spanish dollar to four shillings and four pence sterling). As the sterling silver coins were attached to a gold standard, this exchange rate did not realistically represent the value of the silver in the Spanish dollars as compared to the value of the gold in the British gold sovereign, and as such, the order-in-council had the reverse effect in many colonies. It had the effect of actually driving sterling coinage out, rather than encouraging its circulation. Remedial legislation had to be introduced in 1838 so as to change over to the more realistic rating of $1 = 4s 2d. However, in Jamaica, British Honduras, Bermuda, and later in the Bahamas also, the official rating was set aside in favour of what was known as the 'Maccaroni' tradition in which a British shilling, referred to as a 'Maccaroni', was treated as one quarter of a dollar. The common link between these four territories was the Bank of Nova Scotia which brought in the 'Maccaroni' tradition, resulting in the successful introduction of both sterling coinage and sterling accounts. In 1834, silver coins of threepence and three halfpence (1½ pence) were introduced, valued at ½ real and ¼ real. The three halfpence coins came to be called "quartiles" or "quatties." These in particular were used in church collections due to a feeling by the black population that copper coins were inappropriate for that purpose. Hence, they came to be called "Christian quatties".

In 1839 an act was passed by Parliament declaring that as of December 31, 1840, only British coinage would be legal tender in Jamaica, demonetizing all of the Spanish coins, with the exception of the gold doubloon which was valued at £3 4s. Coins in use were thus the farthing (¼d), halfpenny, penny, three halfpence (1½d), threepence, sixpence, shilling, florin (2s), half crown (2s 6d), and crown (5s).

The emancipation of the slaves in 1838 increased the need for coinage in Jamaica, particularly low denomination coins, but the blacks were still reluctant to use copper. The solution was to use cupronickel, adopted in 1869. Penny and halfpennies were minted for use in Jamaica, becoming the first truly Jamaican coins. Beginning in 1880, the farthing was also minted in cupronickel.

In 1904, the first government-authorized banknotes were produced in the denomination of 10s. Banknotes of £1 and £5 were also being circulated by chartered banks. In 1918 denominations of 2s 6d and 5s were authorized. The 2s 6d note proved to have a short life, being withdrawn in 1922. In 1940, the government bank began producing £1 and £5 notes.

In October 1960, the Bank of Jamaica was given the sole right to mint coins and produce banknotes in Jamaica. Their notes were released on May 1, 1961 in the denominations of 5s, 10s, £1 and £5.

On January 30, 1968, the Jamaican House of Representatives voted to decimalize the currency by introducing the dollar, worth 10 shillings, to replace the Jamaican pound. Coins and banknotes went into circulation on September 8, 1969. The introduction of a decimal currency provided the opportunity for the introduction of a complete Jamaican coinage as formerly, the coins (with the exception of the penny and halfpenny), were the same as those used in the United Kingdom. The reverse of the decimal coinage was designed by Christopher Ironside, O.B.E.. These coins were in circulation from 1969 to cir. 1990.

From its introduction, the Jamaican dollar has fallen from a peak of J$0.77 to US$1 in its first few years of circulation to a series of new lows exceeding J$89 to US$1 during 2009. It was a huge setback to their economy.

The new Jamaican dollar (and the Cayman Islands dollar) differed from all the other dollars in the British West Indies in that it was essentially a half-pound sterling. All the other dollars either began on the US dollar unit or the Spanish dollar unit.