In an article yesterday 'How the US Dollar Was the Crypto of Its Time', I explored the humble roots of the US Dollar.

I this article I explore how the Dollar sign came to be.

Whilst the origins of the term ‘Dollar’ and its transformation to common usage in the US appears to follow a well laid-out path. The evolution of the $ sign itself is somewhat more uncertain. There are a number of competing theories, each of which are seemingly possible, though some with more credence than others.

The most likely is the theory that it comes from a handwritten 'ps', an abbreviation used in correspondence as a plural form of 'Peso'. Manuscripts from the late 18th and early 19th century show the ‘s’ gradually being written over the ‘p’, and the upward stroke of the ‘p’gaining dominance over the curved upper part. This eventually developed into something resembling the ‘$’ sign. (see below)

The 'ps' symbol first occurs in the 1770s, in manuscript documents of English-Americans who had business dealings with Spanish-Americans, and it starts to appear in print more commonly after 1800.  

Other theories for the $ sign include:
  • It is inspired by the mint mark on the Spanish ‘Pieces of Eight’ coin which became known as the Spanish Dollar. The coins were minted in Potosí in present day Bolivia. The mint mark was composed of the letters "PTSI" superimposed upon each other. The mark bears a strong resemblance to the single-stroke dollar sign (see photo right). 
  • The $ sign is derived from the Number 8, whereby the Spanish Dollar was originally a ‘Piece of Eight’. The P of Peso and the 8 were said to be combined. The modification would have occurred to avoid confusion between the number and the signal. – This explanation would however seem implausible, as the confusion between a number and currency sign would have probably been too great. 
These theories seem plausible, though no one is sure for certain itseems. Even more uncertain however is where the drawing of the $ sign with 2 lines running through it derives from.
  • The sign was inspired by the Spanish coat of arms engraved on the colonial silver coins which were in
    circulation in Spain's colonies in America and Asia. These coins, depicted the Pillars of Hercules a small "S"-shaped horizontal ribbon wrapped around each pillar. For the sake of simplicity, traders might have written signs that, instead of saying dollar or peso that may have evolved into a simple S with two vertical bars. – Highly speculative though plausible. (See picture on right)
  • A dollar sign with two vertical lines could have started off as a monogram of 'US', used on money bags issued by the United States Mint. The letters U and S superimposed resemble the historical double-stroke dollar sign: the bottom of the 'U' disappears into the bottom curve of the 'S', leaving two vertical lines. Ayn Rand, the American libertarian philosopher, endorsed this theory in her novel Atlas Shrugged. However there is no documentary evidence for this theory though,. 
As for the designs and evolution of US banknotes, this is a separate and very interesting story. Time magazine prodiced an excellent article on this which can be seen here:

Article by Steven Goldstein 

Steven Goldstein is a Performance, Team and Executive Coach who focuses on Risk and Financial Markets people and businesses.

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