Plus Ultra: Bring Back the Spanish Peso!

If the euro is going to go the way of the dodo anyhow, I think Spain should bring back the "Spanish peso". Not the peseta, not the escudo...I'm talking about a real Spanish peso (pun intended).

I can remember a handful of years ago thinking to myself that the euro currency sounded like a party at someone's house where once one guest leaves the rest will be looking to leave not long after. A little over three years ago, I wrote that, "There [was] an element of heritage and culture that was obliterated with the euro." Indeed, cultural reminiscence of former currencies remains in European countries. Last June NPR reported on cultural "identity issues in contemporary Europe" where euro to French franc conversion rates can still be found on store receipts.

With the prospect of economic problems with the Eurozone and a possible collapse of the euro, I think it is important that we try to find the silver lining on the depressing economic cloud over Europe. One silver lining is the possible resurrection of past currencies with illustrious names like the lira, drachma, and guilder. (How can you not like a currency called the "Dutch guilder"?)

And while we're speaking of silver, I think it is significant to remember that at one point in time, the Spanish peso (or real de ocho or piece of eight or Spanish dollar) was an important world currency used for trade. For centuries the Spanish peso was used for international commerce. In fact, one theory regarding the origin of the dollar symbol ($) is that it signifies the two pillars (representing the Pillars of Hercules) and the red banner that says "Plus Ultra" on the coat of arms of Spain. America's use of the currency and symbol may have added insult to injury against Britain owing to America's newfound independence. What Americans recognize as the dollar sign is also used today as the peso currency sign in various countries including Mexico or Cuba.

An example of the historical impact and the importance of the Spanish peso's history is how in the not-so-distant past stock prices were listed in fractions. A decimalized share price of 3.63 would have been 3 5/8 prior to decimalization at the turn of the century. The use of fractions for stock prices goes back to the Spanish silver dollar, which in practice could be separated into eight separate silver pieces.

And have you ever heard "shave and a haircut -- two bits" or "that ain't worth two bits"? The phrase "two bits" came from the Spanish dollar, i.e. a bit was a silver piece of the silver Spanish dollar coin. Thus, two bits is a quarter (25 cents).

In this way, the history of the Spanish dollar is tied not only to Spain and international commerce, but also to US history. At one point in time, the Spanish dollar was legal tender in the United States. Congress discontinued this practice with the Coinage Act of 1857. Nevertheless, the US dollar was based off of the Spanish dollar.

As Greece's insolvency is casting clouds over the Eurozone, this may be an opportunity for struggling European nations to reinvent themselves. For Spain, I think a return to the Spanish peso would make for a good morale booster -- perhaps to the point of spurring cultural nostalgia of when Spain was an imperialistic world power. Yes, some believe that a breakup of the euro would be catastrophic on both sides of the Atlantic, and yes, things may be looking dire for the European Union experiment, but rich cultures run deep.

And with a struggling economy and one of the worst unemployment rates in the world at 21% (rivaling countries like South Africa, Angola, and Nigeria), aside from the entire meaning behind "European solidarity", what really does Spain have to lose? If Spain must start afresh economically to the point of losing the euro, I think Spain should bring back the Spanish peso. If Spain so desired, it could even be silver. Who knows, perhaps the idea of a Spanish silver dollar being used internationally could catch on -- after all, it has happened before.

While there is talk of Greece returning to the drachma owing to the Eurozone's economic issues, if only hypothetically, I think it would be better for Spain to forgo naming its currency the "new peseta", the "escudo", or even the "españo". In the end, of course, a currency's utility does not come solely from its name. One could argue that a currency's name is irrevelant, but I believe a currency's name reflects a subtle level of psychological, sociological, or cultural confidence in the currency itself. (Would you rather buy a bottle of Coke with US dollars, Canadian dollars, or ameros?)

As the European Union phenomenon has demonstrated, there is something to be said for cultural identity and the use of a particular currency as a reflection of that cultural identity. This may extend to cultural confidence in a particular currency. As such, I believe the use of a particular currency is tied to a currency's name. For Spain, if it really comes down to it, I say the answer is clear: Bring back the Spanish peso.

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