Q: Why are early Spanish coins called cobs, and what is a bit? During Spain`s 300 years of colonial rule, huge silver and gold deposits were discovered in the New World. Rather than ship this silver back to Spain in its raw state, Spain established mints in the Americas to produce the irregular coinage we now call cobs. Spanish silver was so uniform in quality that it was the standard by which other coins were measured. The Spanish eight reale coin weighed 423.9 grains of 93% fine silver. The coins were not only uniform, they were also abundant. They circulated worldwide including in the American colonies. Rather than going to the trouble of rolling out the silver into sheets and stamping coins, the coins were simply cut from bars. Each piece cut was of uniform weight, and these small chunks were then hammered between crude dies to produce coins. The Spanish word "cabo" refers to the end, or in this instance the clump of silver that was cut off the bar. These cobs were very irregular, but each was of uniform weight.

Sometimes if there was a shortage of coins of smaller denominations the larger coins were cut into pieces, sometimes referred to as bits. A two bit piece would be a quarter of the original size. The expression, "two bits, four bits, six bits, a dollar" referred to this unit of measurement. In the early days of our country all small trade was conducted in bits, not dimes, quarters, or half dollars. Even the government recognized "bits" as evidenced by this letter mailed in 1826. The official government postal rate at that time for a letter traveling 80 to 150 miles was 12 1/2 cents, or one bit. Shorter distances were charged 6 1/4 cents, or one half a bit. These crude but accurately weighed cobs were important in the spread of commerce throughout our young country. A fur trader in Kentucky as well as a river boat captain in Ohio would be certain the bag of Spanish cobs in his pocket would be recognized in any transaction. The start of commerce in the United States depended heavily on the Spanish cob, our country`s first unofficial currency.