Bit (money)
The word bit is a colloquial expression referring to specific coins in various coinages throughout the world.
In the United States, the bit is equal to one eighth of a dollar or 12 1⁄2 cents. In the U.S., the "bit" as a designation for money dates from the colonial period, when the most common unit of currency used was the Spanish dollar, also known as "piece of eight", which was worth 8 Spanish silver reales. One eighth of a dollar or one silver real was one "bit".
With the adoption of the decimal U.S. currency in 1794, there was no longer a U.S. coin worth 1⁄8 of a dollar but "two bits" remained in the language with the meaning of one quarter dollar, "four bits" half dollar, etc. Because there was no one-bit coin, a dime (10¢) was sometimes called a short bit and 15¢ a long bit. (The picayune, which was originally 1⁄2 real or 1⁄2 bit ( 6 1⁄4¢), was similarly transferred to the US 5¢-piece.)
In addition, Spanish coinage, like other foreign coins, continued to be widely used and allowed as legal tender by Chapter XXII of the Act of April 10, 1806 until the Coinage Act of 1857 discontinued the practice.
Robert Louis Stevenson describes his experience with bits in Across the Plains, (1892) p. 144:
"Two bits" or "two bit" continues in general use as a colloquial expression, primarily because of the song catchphrase "Shave and a Haircut, two bits." As an adjective, "" can be used to describe something cheap or unworthy.
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