The Salvadoran colón

Who printed the notes before the central bank

From 1880 until 1934, private banks printed El Salvador's paper money. The Banco Internacional de El Salvador, founded under a contract of 5 April 1880, received the right to issue notes payable to the bearer, exclusively for 25 years, according to the Central Reserve Bank's own history. Others followed, and by the early 1930s three local banks held the privilege of issue: the Salvadoreño, the Occidental and the Agrícola Comercial.

On 19 June 1934 the Banco Agrícola Comercial became the Banco Central de Reserva de El Salvador, and note issue passed to it alone. It began as a mixed company. The banks that gave up issuing took part, and so did the Asociación Cafetalera de El Salvador and private shareholders. The constitution of 1950 reserved the power to issue money to the state, to be used directly or through a public issuing institute.

Why the currency carries Columbus's name

The government of Carlos Ezeta opened a national mint on 28 August 1892. Five weeks later, on 1 October, the legislature reformed the monetary law and renamed the peso the colón, after Cristóbal Colón, the Spanish name of Christopher Columbus, as a tribute to the discovery of America. Wikipedia also dates the colón's replacement of the peso, at par, to 1919, and says the 1 and 5 centavo coins struck before 1919 went on being issued with no change of design.

The first rate was 2 colones to the US dollar. El Salvador left the gold standard in 1931 and the colón floated.

What the Monetary Integration Law changed

The Legislative Assembly passed Decree 201, the Ley de Integración Monetaria, on 30 November 2000, and it took effect on 1 January 2001. Its first article fixed the rate at 8.75 colones to the dollar and called it fixed and unalterable. The dollar became unrestricted legal tender. Deposits, loans, pensions and the books of every bank moved to dollars. Wages and prices could still be stated in either currency, and for the first six months shops had to show both.

The assembly acted under the constitution, which gives it the decision over admitting foreign money into circulation. Article 5 of the law keeps colón notes and coins issued before it as unrestricted legal tender, permanently, and obliges banks to exchange them for dollars whenever they are presented, with no commission. The Central Reserve Bank supplies the dollars for that swap.

Which notes and coins the colón had

The Central Reserve Bank put its first uniform family of notes into circulation on 31 August 1934, in 1, 2, 5, 10, 25 and 100 colones, replacing the notes of the three issuing banks. It authorised a 50-colón note on 3 May 1979 and a 200-colón note on 18 April 1997. Salvadoran notes carried a validation overprint on the reverse, dated later than the issue date on the front. The habit dated from the years when the government supervised commercial issues, and from 1961 to 2001 the Superintendency of Banks handled it. The 1997 series dropped the overprint.

Coins were struck in centavos, the hundredth of the colón. Cupro-nickel 10 centavos appeared in 1921, silver 25 centavos in 1943 and silver 50 centavos in 1953; nickel replaced the silver in 1970. Nickel-brass 2 and 3 centavos followed in 1974 and a 1-colón coin in 1984, and one 1985 issue of that coin was struck in Mexico City by the Mexican Mint. US coins now circulate in their place.

Why the code SVC stays on the list

ISO 4217 still carries SVC, numeric 222, with two decimal places, and the record for El Salvador lists it beside the US dollar. Wikipedia notes that the code was never moved to the historical list, and describes the colón as legal tender that is no longer in circulation.