From Tolar to Dollar

Remarkable Czech legacy

The world is indebted to the Czechs for many achievements, inventions and discoveries which we often take for granted: the lightning conductor, the marine screw propeller, the four blood types, the discovery of genetics, contact lenses, sugar cubes and the word robot are all the work of our ingenious countrymen.

Not many people know, however, that the Czech nation also gave the world its best-known and most widely used currency. Which one is it? The dollar, of course! Although in recent decades the dollar has lost some of its legendary lustre, it remains a truly global currency.

According to the statistics of the International Monetary Fund, over 60 percent of financial reserves world-wide are held in US dollars, 31 countries use the dollar as their official currency, and the currencies of 66 countries are pegged to the dollar. The dollar is accepted as a means of payment even, for example, in North Korea or Siberia.

People in Texas or New Zealand probably do not suspect that the roots of their renowned currency can be traced back to a little mountain town in a small country in the heart of Europe, which is precisely why we should recall this forgotten Czech legacy whose history began five hundred years ago…

History of Czech coin minting

The history of Czech minting goes back more than one thousand years. Our country was not only a land flowing with milk and honey, as the legend goes, but also boasted an abundance of silver. This allowed the ancient minters to give free rein to their artistic expression – something we admire to this day.

It was the ancient Celts who first minted coins on the territory of today’s Czech Republic, but the first coins issued by Czech rulers were mediaeval denarii. These were introduced in the 10th century by Duke Boleslaus I, known as the Cruel. He may have gone down in history as the murderer of his own brother, Saint Wenceslas, but he was, at the same time, the founder of a strong Czech state.

Around the year 1300, the legendary Prague groschen appeared. Creation of this coin was spurred by the discovery of deposits of silver ore at Kutná Hora. The Czech Lands, at that time ruled by King Wenceslas II, were one of the richest and most developed countries in the world, and the Prague groschen became a popular currency far beyond the borders of the kingdom.

In the 14th century, the Luxembourg royal dynasty began minting the first Czech gold coins – florins and ducats. The first half of the 16th century, however, saw the appearance of a new silver coin which was to outshine all the coins that had come before…

Treasure in the Ore Mountains

The Czech Kingdom abounded in silver ore, which made it a state of exceptional importance for the whole of Europe. The oldest Czech mining town was Jihlava, where silver was mined since the 13th century. Its fame was, however, to be far outshone by the town of Kutná Hora.

Another veritable silver rush was unleashed when, at the beginning of the 16th century, abundant deposits of silver were found in Western Bohemia. Indeed, it was not unusual to find silver boulders weighing up to 100 kilograms and lying just below the ground.

The location of this fairy tale wealth was the Ore Mountains, whose Czech name – Krušné hory – literally means the Harsh Mountains. That name does not, however, mean that the local inhabitants suffered hardship or deprivation, but is, rather, derived from the name of a special mining process used in the past in the extraction of precious metals. In this process, known as krušení, the rock was first heated and then cooled, causing it to fracture.

All silver discovered on Czech territory belonged to the king, who was, at that time, Louis Jagiellon, but neither the wealthy burghers nor the nobles had much respect for him. The Schlick family, who ruled the Ore Mountains, didn’t take him seriously either…

Enterprising Schlick family

The Schlick dynasty was of burgher origin, but, thanks to its exceptional entrepreneurial talent, it managed to work its way into the aristocratic elite and make its mark at the end of the Luxembourg period of Czech history.

In the 15th century, Kaspar Schlick had a brilliant career at the Imperial Court. As Czech Chancellor and simultaneously Imperial Chancellor, he played an important role in getting Sigismund of Luxembourg accepted as King of Bohemia, and, in the period following the Hussite Wars, he created links between the Czech political milieu and that of the Holy Roman Empire.

As Chancellor, he had access to the monarch’s seal, and, shortly before Sigismund’s death, after which the seal was destroyed, he managed to use it to create blank versions of royal documents, on which he and his relatives could write practically whatever they wanted. That is why, to this day, it is not clear whether the Schlicks’ claims to property in the Ore Mountains were at all legitimate.

Stefan Schlick, Kaspar’s great-nephew, saw the discovery of silver in the Ore Mountains as an exceptional opportunity to make money. From the German side of the mountains, he invited investors, engineers and experienced miners, and, in 1512, he started mining. Although, according to the law, he had no right to do so, the prospect of profit proved to be far stronger than any fear of being punished by the feeble Jagiellonian king…

Shady business with Czech silver

Europe hungered for Czech silver. In the Ore Mountains, the Schlicks were mining plenty of the precious metal, but, according to the law, they were not allowed to export it in its raw state, so the crafty noblemen started to use the silver to mint their own coins unofficially. These coins could be exported.

The Schlicks’ impudence knew no bounds. Not only did they appropriate silver which belonged to the king and turn it into coins, something they had no right to do, they also put their own family emblem on them. They were the very first coins to bear the coat of arms of an ordinary aristocratic family, something which had hitherto been completely impossible. All other coins had borne either the emblem of the country or the coat of arms of the ruling dynasty.

Despite everything, people soon took to these “bogus” coins. Unlike legal tender, in which the content of silver had been intentionally reduced over the centuries in order to enrich the rulers who issued it, these coins were pure. They weighed 29.33 grams, and the content of silver in their alloy was 93.05 %. To give you an idea of their value, in those days you could buy a horse for 50 to 60 silver coins.

It is no wonder then that, in the end, the Schlicks got official authorisation from the local parliament, the Bohemian Diet, to carry on their business. That was in the year 1520 – five hundred years ago…

Birth of the Jáchymov tolar

The little town in the Ore Mountains, where the Schlicks’ coins were minted, soon became one of the richest and most populous Czech settlements. Indeed, only Prague, with 50 thousand inhabitants, was larger.

The miners named their famed town after Saint Joachim, the grandfather of Jesus Christ, perhaps to ensure his protection. Known today in Czech as Jáchymov, its German name was Joachimsthal, meaning “Joachim’s valley”.

The locally made coins were known in German as “Joachimsthalerguldengrosch”, meaning “guldengroschen from Joachimsthal”. This impractically long and unwieldy name was gradually shortened – first to “Joachimsthaler”, then to “Thaler”, and finally, in Czech, to “tolar”.

Before the envious Habsburg Emperor Ferdinand I abolished their right to mint coins in 1528, the Schlicks managed to produce millions of tolars from Jáchymov silver. However, in countries without their own source of silver, most of those coins were melted down and used to manufacture new coins in other currencies. That is why original Schlick tolars are very rare today, highly prized and sought after…

New global standard

As the Jáchymov tolars rolled across Europe, their original local name started to be used as a generic term for all large silver coins of high purity.

Anyone and everyone attempted to imitate the successful standard set by the Schlicks, and the name of their coin mutated into various national variants: in Hungary it became tallér, in Poland talar, in Greece tàliro, in Italy tallero, in Persia dare, in Island dalur, and in Norway, Sweden, Denmark and Holland daler. The Russians started using coin known as yefimok, also named after Saint Joachim, who is known in Russian as Yefim.

The tolar was not spurned by the land of its birth either. Habsburg Emperor Maximilian II ordered the minting of the so-called Reichsthaler, which was used in the Holy Roman Empire from 1566 on. For two whole centuries it was the universal means of payment across a vast territory, used by people of all nationalities with only minor variations in design – something like Euro coins today.

The most successful tolar coin was the Maria Theresa Thaler, which, in the 18th century, became the most widespread silver coin in the world. In Ethiopia, for example, it is still used, unofficially, to this day. A truly hard currency from honest silver…

Birth of the American dollar

Thanks to the boom in international trade in the 17th and 18th centuries, European coins found their way to the four corners of the world. Dutch dalers, derived from Czech tolars, were used as currency in, for example, the Near East, Indonesia, and the Dutch colony in the New World which was later to become New York.

In the original thirteen British colonies, which later became independent and formed the United States of America, a whole range of various coins was in circulation – not only Dutch ones, but also Spanish ones of similar weight and shape. People started to use the same name for all these coins, which gave rise to the name of the American currency that we know today. The Dutch pronunciation of the word daler is strikingly similar to the English pronunciation of the word dollar.

The first true American dollar coin was minted in 1794 and it borrowed from its Czech ancestor not only its name, but also its weight and the purity of the silver used in its manufacture.

As a matter of interest, in 2013, a surviving example of the first American dollar was auctioned for a staggering 10 million dollars, making that rare coin the most expensive piece of money in the world…

Forgotten pedigree

It is five hundred years since the first Jáchymov tolars, which through an accident of history gave rise to the American dollar, were minted in the Czech Lands. Unfortunately, though, the world has forgotten the little mountain town where the story began.

The Czechs too have forgotten. While in its heyday around the year 1520, about 18,000 miners and minters lived in Jáchymov, today the town has only 2,500 inhabitants.

American tourists who by chance find themselves in Jáchymov are surprised to learn the history of the town, and say that if their compatriots knew where the dollar originated, they would come to Western Bohemia in their hordes.

Fortunately, brighter days lie ahead. In 2019, the whole area was declared a UNESCO World Heritage Site. Centuries of mining and processing ores – ranging from silver to uranium – have transformed the region of the Ore Mountains into a unique mining landscape. The dense network of mining towns, with their diverse structures both above and below the ground, is a testament to the massive historical influence of this region, which has given the world many innovations in the fields of mining, metallurgy and coin production…

Story comes full circle

The Czech Mint is proud to continue the tradition of the mintmasters of Jáchymov. It is the only mint in the Czech Republic today with the right to mint coins. The company’s headquarters is, like the Jáchymov mint of yore, located in a mountain region, but in the Jizera Mountains not the Ore Mountains. Its location is, to be precise, in the town of Jablonec nad Nisou.

The Czech Mint was established after the division of Czechoslovakia in 1993. During more than a quarter century of its existence, it has minted over three billion coins. For the Czech National Bank, it produces all the coins that jingle in Czech pockets, i.e. the 1, 2, 5, 10, 20 and 50-crown coins, as well as all the commemorative coins made from precious metals.

It is appropriate that, alongside coins with a face value in Czech crowns, the Czech Mint also mints coins with values in dollars. The company has succeeded in acquiring a licence to produce New Zealand, Fijian, and Samoan dollars, which it uses especially for the production of bullion coins made from gold and silver. You too can invest your financial resources in these co-called Czech lions, shrewdly and with confidence.

After five centuries, the story has come full circle, and the dollar has returned to the place of its birth…

Narrative investment

The brand new bullion coin of the Czech Mint, which commemorates how the Czech tolar became the American dollar, presents a clever and stylish means of storing funds in precious metals.

While the reverse side is dedicated to the most beautiful Jáchymov tolars from 1526, the obverse side depicts the first U.S. dollars from 1794.