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Media of Exchange in 16th Century New Spain and the Spanish Response

There were many kinds of money in use in New Spain from the time of the conquest to the opening of the mint in Mexico City in 1537. Some was Spanish; other was Indian and dated back centuries before the arrival of the Spaniards. After the conquest, Spanish coins were the official media of exchange, but there were very few in New Spain. Once the mint was in operation, Spanish coins became the first legal tender in the New World—begun 256 years before the first authorized coin was struck at Philadelphia. Furthermore, these “Mexican” coins served as a medium of exchange the world over. The real circulated freely in the Orient; many specimens bear “chop-marks” indicating the official validation of each individual bank through which they passed. In fact, the Spanish real became the standard of the currency of the United States and circulated with official sanction until 1857. One real was equal to twelve and one-half cents and was called a bit. A quarter of a dollar or twenty-five cents was equal to two bits, hence the present day expression.