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Jamil Mahuad , President of Ecuador from August 1998 to January 2000 . Mahuad switched Ecuador ’ s economy from the sucre to the US dollar in early January 2000 .
onset of dollarization . In her dissertation , Making Popular and Solidarity Economies in Dollarized Ecuador : Money , Law , and the Social After Neoliberalism , Taylor Nelms wrote that the coin was “ to act as a kind of educational tool to reintroduce Ecuadorians to the use of loose change …” She also wrote , “ The merchants told me that they assumed the Sacajawea coin was ‘ Ecuadorian ’… because the North American Indian woman on the coin … looked , in the words of one vendor , ‘ Andean ’ or , in the words of another , ‘ Indian .’”
In 2017 , a Miami Herald reporter interviewed a woman in Quito , Ecuador , named Luzmilla Mita , who sold fruit and vegetables . Digging into her apron , she pulled out handfuls of golden dollars carrying the image of an American Indian upon them .
“ I always thought she was one of us ,” said Mita , as she looked at the image of Sacajawea . “ It took a long time to know she was from up there .” The report tells us that the golden dollars have “ been embraced in Ecuador , where they are preferred over paper money .” In this small Latin American nation , “ Sacajawea is ubiquitous — and something of a kindred spirt in a country where many have indigenous roots .”
Nelms wrote in her dissertation , “ The identification of the Sacajawea coins with Ecuador … points to the odd ways that identity and difference got mixed up in the dollar ’ s denominations , and in people ’ s relations with them .” She wrote that it is a “ kind of ‘ Indian money ’ that found
The Central Bank of Ecuador . On April 15 , 2002 , the bank placed five million Sacajawea dollars into domestic circulation .
widespread acceptance in the national imaginary .” Continuing , Nelms wrote , “ Sacajawea dollars were claimed as ‘ Ecuadorian ’ because of their ‘ Indian ’ face and despite their origin in the US and role in dollarization .”
The US Mint and Treasury Department sent around $ 149.1 million in dollar coins , mostly Sacajaweas , to Ecuador from 2002 to March 2017 . One can only imagine how many more have been sent since then .
Benefits to Ecuadorians ?
But what did Ecuadorians derive from the golden dollars besides a level of comfort and cultural affinity ? Their introduction into circulation halted the currency instability , which was seriously hindering foreign investment . Ecuador realized an economic boost in the early days of dollarization . Michael Porter , a Harvard business theorist , said that “ traded sectors ,” which include finance , transportation , communication , tourism and hospitality , as well as the nation ’ s important oil industry , have all reaped gains from ease in foreign transactions and increased investments . “ Local sectors ,” which in Ecuador are agriculture and other elements of traditional village economic activity , did not benefit nearly as much .
But why did Ecuador rest its economic future on the American dollar ? By using the US dollar , Ecuador is no longer susceptible to speculative attacks on the value of its domestic currency , as well as inflation . The introduction of the USD into Ecuador helped its economy enter the world market . Since the USD is widely accepted and stable , a small Latin American nation may be able to participate more fully in international trade and finance . Plus , dollarization promotes economic stability . Investors in Ecuador may feel more secure investing there , which can spur further investment .
The bottom line is that the US economy is quite resilient and well-managed . Financial markets vote with money , and despite the myriad problems facing America , investors still want to put their money in the US dollar and its robust economy .
Eric Brothers has been a frequent contributor to The Numismatist , the publication of the American Numismatic Association ( ANA ), since 2006 . Several of his articles have covered financial history , including “ Alexander Hamilton and the Panic of 1792 ” ( January 2021 ). He also writes for ANS Magazine , a publication of the American Numismatic Society in New York . This is his sixth article for Financial History .
Note
1 . Sacajawea is spelled throughout this article with a “ j ” instead of a “ g .” This is the original Shoshone spelling of her name , as opposed to the more common , but less historically accurate , “ Sacagawea .”
Sources
Nelms , Taylor Campbell Nahikian . Making Popular and Solidarity Economies in Dollarized Ecuador : Money , Law , and the Social After Neoliberalism . Dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Anthropology . University of California , Irvine . 2015 .
Schnurer , Eric . “ Outsourcing the Money Supply . What money tells us about what makes a state a state .” US News & World Report . May 2 , 2014 .
Wiener-Bronner , Danielle . “ Why the Sacajawea Dollar Coin was Such an Epic Failure — and Why the Tubman $ 20 Will Be Better .” Splinter . April 25 , 2016 .
Woodside , Christine . “ The Case of the Disappearing Coins .” The New York Times . January 14 , 2001 .
Wyss , Jim . “ Sacajawea dollar coins are everywhere in Ecuador .” Miami Herald . March 30 , 2017 .
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