Chilean peso (1817–1960)

The Chilean peso (symbol: $) was the legal tender of Chile from 1817 until 1960, when it was replaced by the escudo, a currency that was itself replaced in 1975 by a new peso.^[1]

It was established in 1817, together with the country's independence, and in 1851 the decimal system was established in the peso, which was made up of 100 centavos. It remained legal tender in Chile until 1 January 1960, when it was replaced by the escudo.^[2] It was manufactured by the Mint of Chile (1743) and regulated by the Central Bank of Chile (1925), in charge of controlling the amount of money in circulation.^[3]

Although the adoption of the peso to replace the colonial real dates back to 1817, with the beginning of the New Fatherland period, the Spanish currency system continued to be used, in which 8 reales were equal to 1 peso and 2 pesos to 1 escudo. In 1835, copper coins denominated in centavos were introduced, but it was not until 1851 that the real and escudo denominations ceased to be issued and new issues in centavos and diezmos (worth 10 centavos) began. The custom of using the old Spanish monetary system persisted in Chile until January 9, 1851, when the decimal system was adopted by law, in which 1 peso was made up of 10 diezmos or 100 centavos.^[4]

Also in 1851, the peso was set at 5 French francs, or 22.5 grams of pure silver. However, gold coins were issued to a different standard than in France, with 1 peso equal to 1.37 grams of gold (5 francs equaled 1.45 grams of gold). A gold standard was adopted in 1885, pegging the peso to the British pound sterling at a rate of 13+1⁄3 pesos = 1 pound (1 peso = 1 shilling and 6 pence); this was reduced in 1926 to 40 pesos = 1 pound (1 peso = 6 pence).

In 1925, money circulation was controlled by the newly created Central Bank of Chile. The Monetary Law, published in the Official Gazette on September 16 of that year, established the peso as containing 6 pence of gold and that 10 peso units would constitute "one condor"; It was also established that every coin of 10 pesos or more would have its value in pesos stamped in letters and numbers, and its equivalent in condors in smaller letters.^[5][6]

Beginning in 1932, the value of the peso began to gradually decline, and by the 1940s, inflation began to increase rapidly; as a result, Law 11885 of September 15, 1955 established that all obligations would be paid in whole pesos, without cents.^[7]

In the context of a policy of national economic sanitation and inflationary control undertaken by the government of Jorge Alessandri, between 1960 and 1975 the peso was replaced by the escudo (Eº).^[8] The conversion rate was 1000 pesos for 1 escudo.^[2]

Between 1817 and 1851, silver coins were issued in denominations of 1⁄4, 1⁄2, 1, and 2 reales and 1 peso (also denominated 8 reales), with gold coins for 1, 2, 4, and 8 escudos. In 1835, copper 1⁄2 and 1 centavo coins were issued. A full decimal coinage was introduced between 1851 and 1853, consisting of copper 1⁄2 and 1 centavo, silver 1⁄2 and 1 décimo (5 and 10 centavos), 20 and 50 centavos, and 1 peso, and gold 5 and 10 pesos. In 1860, gold 1 peso coins were introduced, followed by cupronickel 1⁄2, 1 and 2 centavos between 1870 and 1871. Copper coins for these denominations were reintroduced between 1878 and 1883, with copper 2+1⁄2 centavos added in 1886. A new gold coinage was introduced in 1895, reflecting the lower gold standard, with coins for 2, 5, 10 and 20 pesos. In 1896, the 1⁄2 and 1 décimo were replaced by 5 and 10 centavo coins.^[9]

In 1907, a short-lived, silver 40 centavo coin was introduced following cessation of production of the 50 centavo coin. In 1919, the last of the copper coins (1 and 2 centavos) were issued. The following year, cupronickel replaced silver in the 5, 10 and 20 centavo coins. A final gold coinage was introduced in 1926, in denominations of 20, 50 and 100 pesos. In 1927, silver 2 and 5 peso coins were issued. Cupronickel 1 peso coins were introduced in 1933, replacing the last of the silver coins. In 1942, copper 20 and 50 centavos and 1 peso coins were introduced. The last coins of the first peso were issued between 1954 and 1959. These were aluminum 1, 5 and 10 pesos.^[9]

Gold bullion coins with nominals in 100 pesos were minted between 1932 and 1980 (i.e. they survived into the periods of two later currencies).^[10] In addition, there was a special issue of gold coins (100, 200 and 500 pesos) in 1968.^[11][12]

Coins issued in values of 5 and 10 pesos from 1956 onwards, as well as bullion coins of 20, 50 and 100 pesos issued from 1925 to 1980 (exceeding the validity of this monetary standard by 20 years) also bring such equivalence in condors, being 10 pesos per condor.^[11]

The first Chilean paper money was issued between 1840 and 1844 by the treasury of the province of Valdivia, in denominations of 4 and 8 reales. In the 1870s, a number of private banks began issuing paper money, including the Banco Agrícola, the Banco de la Alianza, the Banco de Concepción, the Banco Consolidado de Chile, the Banco de A. Edwards y Cía., the Banco de Escobar, Ossa y Cía., the Banco Mobiliario, the Banco Nacional de Chile, the Banco del Pobre, the Banco Sud Americano, the Banco del Sur, the Banco de la Unión, and the Banco de Valparaíso. Others followed in the 1880s and 1890s. Denominations included 1, 2, 5, 10, 20, 50, 100, and 500 pesos. One bank, the Banco de A. Edwards y Cía., also issued notes denominated in pounds sterling (libra esterlina).^[12]

In 1881, the government issued paper money convertible into silver or gold, in denominations of 1, 2, 5, 10, 20, 50, 100, and 1000 pesos. 50 centavo notes were added in 1891 and 500 pesos in 1912. In 1898, provisional issues were made by the government, consisting of private bank notes overprinted with the words "Emisión Fiscal". This marked the end of the production of private paper money.^[12]

In 1925, the Banco Central de Chile began issuing notes. The first, in denominations of 5, 10, 50, 100, and 1000 pesos, were overprints on government notes. In 1927, notes marked as "Billete Provisional" were issued in denominations of 5, 10, 50, 100, 500, and 1000 pesos. Regular were introduced between 1931 and 1933, in denominations of 1, 5, 10, 20, 50, 100, 500, 1000, 5000, and 10,000 pesos. The 1 and 20 peso notes stopped production in 1943 and 1947, respectively.^[13] The remaining denominations continued production until 1959, with a 50,000-peso note added in 1958.^[12]

Notes issued after 1925 show the equivalence in condors, which was at the rate of 10 pesos per condor. The following are the banknotes issued since 1932:^[14]

• Economic history of Chile