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History of Currency in Honduras

Escrito el: 18 de January de 2022 - Modificado: 18 January, 2022 - por: - en: History - Origin, Times and Periods, Historical Facts

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  • The official currency of Honduras is the Lempira , named after the chief Lempira, hero and national hero of Maya-Lenca origin who bravely defended his people from the Spanish invasion.

    In Honduras, the banknote denominations of 1, 2, 5, 10, 20, 50, 100 and 500 lempiras are currently used. In currency, the denominations of 20 and 50 cents of lempira are mostly used, 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 cents of lempira can still be found in some banks of the national financial system.

    The Central Bank of Honduras (BCH) is the regulatory entity 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.

    History of Currency in Honduras
    History of Currency in Honduras

    Table of Contents

    Below is the story of the birth of the current monetary system of Honduras:

    Period 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 Lenca peoples in Honduras and in general, all the Mesoamerican peoples used as a means of payment in their transactions “trueque”(exchange of one object for another) of stone beads, such as jade, albite or serpentine (preferably green), tobacco, skins, salt, quetzal and macaw feathers, seashells and in later times small copper axes, but especially all 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, clothing, food, in short, all the services that were offered in the markets. The chronicler gives some examples:

    • 4 cocoa beans = 8 loquats
    • 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 trade a pot for a knife, they had to find someone who had the knife and see if he was willing to take the pot. Sometimes the deal worked out: Take your boat! 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 seashell necklace and wanted to trade it for the pot.

    Then, if he managed to exchange the vessel, he would run to the house of the owner of the knife and finally exchange it for the seashell necklace.

    As you can see, this exchange was a disaster. That is why people came to an agreement, to give value to some objects and to be able to change them for what each one needed or wanted.

    Thus, through time and in various communities, certain objects and foods 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 return.

    Period Colonial

    Once the Spanish began the colonization of these lands, they brought with them the first coins: Castilian, Ducat, Doblon, Pesos, Reales, Cuartillos and Maravedís.

    By Royal Decree of May 1535, the installation of the Mint in the Viceroyalty of New Spain (Mexico) was authorized, beginning the following year with denominations of ¼, ½, 1, 2 and 3 Reales of silver, later the latter was replaced by the 4Reales (called tostón). The coins were engraved with allegories of the ruling houses, coats of arms, crowns and names of kings in Latin.

    The viceroyalties of New Spain (Mexico) and Peru, minted their own coins and in the Captaincy General of Guatemala (Central America) both circulated, and of course those that came from Spain.

    In 1728, by royal mandate, the Mint Houses of the Indies (Name given to the Mint Houses in America) were authorized to mint silver coins of the already known denominations and even those of 1, 2, 4 and 8 22 karat gold shields.

    Coming from Peru, coins with little silver content and with notorious deficiencies in engraving, roundness and thickness circulated in the provinces of the Captaincy General of Guatemala.

    The currency in the captaincy became scarce in the mid-seventeenth 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 by the name of “MACACOS” or “MACUQUINAS”, but officially they were called “CORTADAS”. Coins with trimmed edges, without cord, sealed in irregular blanks with hammer blows and roughly minted.

    By 1733, the Guatemala City Mint minted this type of coin, using silver extracted from the Tegucigalpa mines. El Corpus and later from the Yuscarán region.

    The Spanish authorities tried by all means to replace the macuquina with the ¼ brought from Spain, in order to “facilitate trade and its use”, according to royal provision of 1793; It is worth mentioning that the good or whole macuquina coins were exported to Spain.

    “Caxa Real” or “Royal Treasury” in Comayagua

    In 1739, when Don Francisco de Parga assumed the government of Honduras, he began the construction of the Palco Real or Real Hacienda in Comayagua, entrusting said construction to the architect Bartolomé de Maradiaga, which was completed in 1741, serving for the assay and smelting of silver. ; however, coin minting was done 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 Government House, after the year 1821, ceasing to function as such, because it caught fire. In its whole; by 1840 only its ceramic walls and floors were preserved.

    Of the building that was initially occupied by said mint, currently only a part of its original exterior walls remain, 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:

    “Reigning Don Felipe V el Valiente and Doña Isabel Farnesio, Catholic Monarchs of Spain and the Indies, made this Royal House their royal officers of order of the very illustrious Don Pedro de Rivera Villalón Field Marshal of the Royal 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 ends”.

    Period of Independence and Annexation to Mexico

    On September 15, 1821, the Act of Independence of the Captaincy General of Guatemala was signed in Guatemala City, which implies a new awakening for the provinces that comprise it; there was much 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, the recently incorporated were notified of the minting of a new coin, having on the obverse the bust of Emperor Agustín de Iturbide and on the reverse an eagle on a cactus. The circulation of this currency was short-lived, as was the annexation.

    In this same year, a formal request was made to the Emperor Iturbide, so that he could establish the Mint in Tegucigalpa, since it was the silver mines in this place that supplied almost all of the Guatemalan Mint and in amount acceptable to the Mexican Mint.

    Even with the previous events, they continued to use Spanish coins.

    On June 24, 1823, in Guatemala City, 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 power. colonial.

    Central American Federation

    On September 15, 1821, the Act of Independence of the Captaincy General of Guatemala was signed in Guatemala City, which implies a new awakening for the provinces that comprise it; there was much 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, the recently incorporated were notified of the minting of a new coin, having on the obverse the bust of Emperor Agustín de Iturbide and on the reverse an eagle on a cactus. The circulation of this currency was short-lived, as was the annexation.

    In this same year, the Penal Code against currency counterfeiters is formed.

    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”, minting 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 form and maintain an army to establish peace. This coin was half silver and half copper, known as “Media Leche”.

    The 1 and 2 reales coins, on the obverse bear, in the center, the mountain range of five volcanoes, the rising sun behind the first volcano, around the edge the legend: “MON. OF THE PROVISIONAL EAST. DE HON.” On the reverse, 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, it was only minted in copper, causing problems in its acceptance and even despite this inconvenience, more circulating coins of this type continued to be minted.

    Period Republican

    In 1840, when the Central American Federation was dissolved, the new development model of the Republic was constituted for each of the Central American States, due to the fact that there was no group strong enough to identify the Federal State as the representative institution of the interests nationals.

    In 1860, with respect to the income and expenses of the Public Treasury, provisions were made to regulate and disclose a table of quotations in relation to foreign currencies: Sterling Pound or English Sovereign, French Franc, New Zealand Guilder, North American Dollar, Eagle, Chilean Condor, Spanish Doubloon, Costa Rican Ounce, Sevillana, Florin, Pennies and Shillings.

    In 1861, the Casa de la Moneda was leased to individuals, granting the Government the necessary exemptions to introduce copper in paste, since it was depleted in the minerals of Cedros and Minas de Oro.

    In 1862, during the administration of the liberal Victoriano Castellanos, whose party, at that time called Coquimbos (Red Party), legally approved and put into circulation the new provisional copper coins minted in England (in denominations of 1, 2, 4 and 8 pesos), known by the people as “coquimbas”, for their bright red color; which, due to their excessive number minted, allowed their value and circulation to fall and disappear.

    The Constitution issued in 1865 still expressed regulations on the currency and its respective law, this shows that the problems on the circulation of the different foreign currencies continued.

    An official report from 1869 stated: “…the need that is felt in all the towns for their own currency for commercial transactions and that at the same time, for its legitimate value, can compete without any loss in markets such as that of the currencies of other nations.

    Faced with this situation, the government signed a contract with French bankers for the supply of coins, which meant the first time that the “nickel coins” were brought. With this coinage it was also intended to replace the “provisional” ones, given the falsifications that were made of them.

    In 1871, in the North American city of Philadelphia, a contract was made to manufacture and send to Honduras – via Amapala – several 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 House” established in the city of Tegucigalpa for the minting of gold, silver and copper coins; using, through Article No. 2, converted to the Decimal Monetary System and declares as a monetary unit, the SILVER PESO, fractionable in 100 cents.

    During the administration of President General Don Luis Bográn (1883-1891), the Mint was leased to a national private company (Messrs. Agurcia, Soto and Lazo), gold coins were minted for the first time in Honduras (1886) 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, managed to transfer the Capital of the Republic, from Comayagua to Tegucigalpa, due to the fact that in the latter important buildings for the residence of the Government were found in the city, such as: “The Main Warehouse of the War, The Mint and the National Printing House”.

    1 Honduran silver lempira
    Silver Lempira from 1934. The groom gave it to the bride at the wedding ceremony, as a symbol of the arras of marriage.

    Period Contemporary

    Currently, the monetary policy of Honduras is governed by the Central Bank of Honduras.

    The Monetary Issuance is fundamental and regulated by laws and regulations, which constitute the legal framework through which the Central Bank of Honduras exercises the function of issuing entity of banknotes and coins.

    The Constitution of the Republic of Honduras in Article 342, literally contemplates that: “Monetary issuance is the exclusive authority 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 indicate 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 Power.”

    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 banknotes and coins issued by the Central Bank of Honduras will have legal force and unlimited liberating 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.

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