History of the Currency in Honduras
The official currency of Honduras is the Lempira, named after the cacique Lempira, a national hero and hero of Mayan origin -Lenca who bravely defended his people from the Spanish invasion.
In Honduras, the denominations of 1, 2, 5, 10, 20, 50, 100 and 500 lempiras are currently used in bills. In currency, the denominations of 20 and 50 lempira cents, while the 5 and 10 cent coins are used to a lesser extent every day. The so-called «centavitos» which are copper coins with a denomination of 1 and 2 lempira cents can still be found in some banks of the national financial system.
The Central Bank of Honduras (BCH) is the regulatory body for monetary policy in Honduras. It is responsible for formulating and directing the country’s monetary, credit and exchange policy.
The BCH is responsible for ensuring the maintenance of the internal and external value of the national currency, the proper functioning of the payment system and promoting the stability of the financial system in Honduras.
Here is the history of the birth of the current monetary system of Honduras:
Pre-Columbian Period
In America, before the arrival of the Spanish and according to the documentation left by the first European chroniclers, it is known that the ancient Mayan and Lencas in Honduras and in general, all the Mesoamerican peoples used “barter” as a means of payment in their commercial transactions (exchange of one object for another) of stone beads, such as jade, albite or serpentine (preferably in green tones), tobacco, furs, salt, quetzal feathers and macaw, sea shells and in late times copper hatchets, but mostly cocoa beans.
The Spanish Chronicler Gonzalo Fernández de Oviedo, said that among some indigenous peoples of Central America, cocoa beans were used as currency and with them you could buy slaves, clothes, food, in short, all the services offered in the markets. The chronicler gives some examples:
- 4 cocoa beans = 8 medlars
- 10 cocoa beans = 1 rabbit
- 100 cocoa beans = 1 slave
Of course, not everything was so simple. To exchange one object for another, you first had to agree, for example:
If someone wanted to exchange a pot for a knife, they had to look for someone who had the knife and see if he was willing to receive the pot. Sometimes the deal was done without a hitch: Take your pot! Give me my knife!
But other times, the owner of the pot, who was interested in the knife, had to find someone who had a necklace of seashells and wanted to trade it for the pot.
So, if he managed to change the vessel, he would run to the house of the owner of the knife and finally barter for the necklace of seashells.
As you can see, this exchange was a mess. That is why people agreed, to give value to some objects and to be able to exchange them for what each one needed or wanted.
Thus, through time and in various communities, certain objects and food were used as money to buy and sell merchandise. Also, when someone helped or served another, they could receive a number of these objects in exchange.
Colonial Period
Once the Spanish began colonizing these lands, they brought with them the first coins: Castilian, Ducado, Doblón, Pesos, Reales, Cuartillos and Maravedis.
By Royal Decree in May 1535, it was authorized to install the Mint in the Viceroyalty of New Spain (Mexico), starting the following year the minting with denominations of ¼, ½, 1, 2 and 3 Reales de silver, later the latter was replaced by 4Reales (called tostón). The coins were engraved with allegories of the reigning houses, coats of arms, crowns and names of kings in Latin.
The viceroyalties of New Spain (Mexico) and Peru minted their own coins and both circulated in the Captaincy General of Guatemala (Central America), and of course those that came from Spain.
In 1728, by royal mandate, the Mints of the Indies (Name given to the Mints in America) were authorized to mint silver coins of already known denominations and even those of 1, 2, 4 and 8 Escudos of 22 carat gold.
From Peru, coins with little silver content and notorious deficiencies in engraving, roundness and thickness circulated in the provinces of the General Captaincy of Guatemala.
Current currency in the captaincy became scarce in the middle of the 17th century, forcing the miners to fragment the extracted silver and use it as currency in order to cover the expenses of their operations.
These coins were known as “MACACOS” or “MACUQUINAS”, but were officially called “CORTADAS”. Coins with cut edges, without ribs, stamped in irregular blanks with a hammer blow and roughly minted.
In 1733, the Guatemala City Mint minted this type of coin, using silver extracted from the Tegucigalpa mines. The Corpus and later from the Yuscarán region.
The Spanish authorities tried by all available means to replace the Macuquina with the ¼ one brought from Spain, in order to “facilitate trade and how to use it”, according to the royal provision of 1793; It is worth mentioning that the good or whole Macuquinas coins were exported to Spain.
“Caxa Real” or “Royal Treasury” in Comayagua
In 1739, upon taking over the governorship of Honduras, Don Francisco de Parga began the construction of the Caxa Real or Royal Treasury in Comayagua, entrusting said construction to the architect Bartolomé de Maradiaga , which was completed in 1741, being used for testing and smelting silver; however, the minting of coins took place at later dates.
In 1774 and 1809, there were two earthquakes, severely damaging the Caxa Real, leaving the building almost completely destroyed, later it was restored, serving as a Government house, after the year 1821, ceasing to function as such, due to because it caught fire in its entirety; by 1840, only its ceramic walls and floors were preserved.
Of the construction that was initially occupied by said coining house, currently there is only a part of its original exterior walls, with window frames, and two portals, of which the inscription is still preserved, on its lintel, in the main portal , which translates to the following:
“During the reign of Don Felipe V, the courageous and doña Isabel Farnesio, Catholic Monarchs of Spain and the Indies, made this Royal House their royal officers by order of the most illustrious Mr. Pedro de Rivera Villalón field marshal of the royals armies Governor and Captain General of this kingdom and President of the Royal Avenue of Guatemala, being Governor and Captain General of this province Lieutenant Colonel Don Francisco de Parga: The year of 1741 is over.”
Period of Independence and Annexation to Mexico
On September 15, 1821, the Declaration of Independence of the Captaincy General of Guatemala was signed in Guatemala City, implying a new awakening for the provinces that formed it; there was a lot to plan, organize and direct.
On January 5, 1822, the Annexation of the Central American provinces to Mexico was formalized, to commemorate the two events, it notified the newly incorporated minting of a new coin, with the bust of Emperor Agustín de Iturbide on the obverse and on the reverse an eagle on a nopal. The circulation of this coin was short-lived, as was the annexation.
In this same year, a formal petition was raised to Emperor Iturbide, to establish the Mint in Tegucigalpa, since it was the silver mines of this place that almost totally supplied the Mint of Tegucigalpa. Guatemala and in an acceptable amount to the Mexican Mint.
Even with the previous events, Spanish coins continued to be used.
On June 24, 1823, in the city of Guatemala, the National Constituent Assembly was installed, which proclaimed the absolute and definitive character of the Independence of Central America, not only with respect to the Spanish and Mexican empires, but also before any other colonial power.
Central American Federation
In 1823, the Central American States adopted the Federal Government system and the monetary problem once again took on emergency overtones, in consideration of the evils caused by the false currency that circulated in the State, and even in the other countries that made up the Federation.
In March 1824, the Constituent Assembly meeting in Guatemala, considered prohibiting the minting of all kinds of coins with busts, coats of arms and any other emblem that would identify the Spanish monarchy and would adopt one whose obverse would have a mountain range of five volcanoes and a rising sun, plus the legend REPÚBLICA DEL CENTRO DE AMÉRICA, on the reverse a tree as an emblem of freedom and the inscription LIBRE, CRESCA, FECUNDO.
In the same year, the Criminal Code against counterfeiters was created.
On August 2, 1831, «La Casa de la Moneda» was installed in the city of Tegucigalpa (former premises of the National Typography), which was previously called «Caja Real» or «Casa de Rescates», coining coins of 1/4, 1/2, 1 and 2 Reales.
In 1832, as a result of the invasion and seizure of the ports of Omoa and Trujillo by enemies of the Federation, the State of Honduras was forced to mint «provisional currency» to raise and maintain an army that would establish peace. This coin was half silver and half copper, known by the name of «Media Leche».
The 1 and 2 real coins, on the obverse, have, in the center, the mountain range of five volcanoes, the rising sun behind the first volcano, and around the outline the legend: «MON. PROVISIONAL DEL EST. DE HON.» On the back, in the center a cedar tree (as an emblem of freedom) and on the circumference: «LIBRE CRESCA FECUNDO. T. 1832. F». Later, with the scarcity of silver, only copper was minted, causing problems in its acceptance and even despite this inconvenience, more coins of this type continued to be minted.
Republican Period
In 1840, when the Central American Federation was dissolved, the new development model of the Republic was established for each of the Central American States, due to the fact that there was no dominant group strong enough to identify the Federal State as the institution representative of national interests.
In 1860, with respect to the income and expenses of the Public Treasury, provisions were made to regulate and disclose a quote table in relation to foreign currencies: Pound Sterling or English Sovereign, French Franc, Newland Guilder, North American Dollar , Eagle, Chilean Condor, Spanish Doubloon, Costa Rica Ounce, Sevillana, Florin, Pennies and Shillings.
In 1861, the Mint was leased to private individuals, granting the Government the necessary dispensations to introduce copper paste, since it was exhausted in the Cedros and Gold Mines.
In 1862, during the administration of the liberal Victoriano Castellanos, whose party, at that time was called the Coquimbos (Red Party), gave legal approval and put into circulation, the new provisional copper coins minted in England ( in the denominations of 1,2, 4 and 8 pesos), known by the people as «coquimbas», due to their bright red color; which, due to their excessive number of coins, allowed their value and circulation to drop and disappear.
The Constitution issued in 1865 still stated regulations on currency and its respective law, this shows that the problems regarding the circulation of different foreign currencies continued.
An official report from 1869 stated: «… the need felt in all towns for their own currency for commercial transactions and at the same time, due to its legitimate value, it could compete without any demerit in markets such as currencies of other nations».
Faced with such a situation, the government signed a contract with French bankers for the supply of coins, which meant the first time bringing “nickel coins”. With this coinage, an attempt was also made to replace the «provisional» one, in view of the counterfeits that were made of them.
In 1871, in the North American city of Philadelphia, a contract was signed to manufacture and send to Honduras – via Amapala – various dies. These arrived at the end of the same year, but in combats between troops from Honduras and El Salvador on the Isla del Tigre, the accessories were taken to El Salvador, being returned in 1877 by efforts of the President, Dr. Marco Aurelio Soto.
In 1879, Dr. Marco A. Soto through Decree No. 46, Article No. 1, declared «The National Mint» established in the city of Tegucigalpa for the minting of gold, silver and copper coins; likewise, through Article No. 2, he adopted the Decimal Monetary System and declares the SILVER WEIGHT as the monetary unit, divisible into 100 cents.
During the Administration of President General Don Luis Bográn (1883-1891), while the Mint was leased to a national private company (Messrs. Agurcia, Soto and Lazo), it was minted for the first time in Honduras ( 1886) gold coins in the denominations of 1, 5, 10 and 20 pesos.
It is worth mentioning that on October 30, 1880, through Decree No. 11, the National Constituent Assembly during the Government of Dr. Soto, agreed to transfer the Capital of the Republic, from Comayagua to Tegucigalpa, due to the fact that in In this last city there were important buildings for the residence of the Government such as: «The Main Warehouse, the Mint and the National Printing House».
Contemporary Period
Currently, the monetary policy of Honduras is governed by the Central Bank of Honduras.
The Monetary Issuance is based on and regulated by laws and regulations, which constitute the legal framework through which the Central Bank of Honduras exercises the function of issuer of bills and coins.
Article 342 of the Constitution of the Republic of Honduras literally contemplates that: «Money issuance is the exclusive power of the State, which will exercise it through the Central Bank of Honduras».
Likewise, in the Law of the Central Bank of Honduras, Article 26 and the Monetary Law in its Article 5, they state that: «The Central Bank of Honduras will be the only issuer of legal tender coins and bills in the territory of the country and for this it will be governed by this law and by the regulations on the matter issued by the Board of Directors and approved by the Executive Branch.»
On the other hand, Articles 1 and 3 of the Monetary Law establish the Lempira as the monetary unit and that the obligations to pay in money will be settled and executed in Lempiras.
The bills and coins issued by the Central Bank of Honduras will have legal force and unlimited release power in the territory of the Republic.
Persons or entities that circulate objects or documents in order to serve as conventional currency will incur the penalties established by the Penal Code for cases of counterfeiting.
Links
- Rigoberto Rojas Numismatic Museum
- Creation of the Central Bank of Honduras
- Central Bank of Honduras
- National Financial System
