A History of Australian Currency
From holey dollars to decimal
We all spend money, but how many of us have spent any time thinking about how our currency evolved into the fine notes and coins we use every day? We thought a little history lesson may help unfold the mystery.
A rum start to our economy
When the penal colony of New South Wales was first established in 1788, money wasn’t really an issue. The convicts didn’t receive wages and the soldiers who guarded them were fed and watered by the Government. More to the point, there was nowhere to spend cash as the early settlers valued necessities such as food and tools far more highly in those pioneering days.
But one thing was prized above everything else; rum. So that the favoured commodity that was used for bartering for goods and services. The first instance of a liquid asset, perhaps.
A credit to the nation
Before money was introduced, notes of credit were issued by government officials. However these were easy to forge as they were handwritten. As the colony grew, more and more English currency was brought in and for a while this became the de facto dosh. However, it was just as easy to take out again and currency shortages became commonplace. Another currency that was used were Spanish dollars – the legendary pieces of eight so loved by pirates (and their parrots). These were brought in by the ships that plied the trade routes and soon became the cash of choice onshore as well as on board. However, these coins were also liable to be taken off the mainland never to be seen again.
The mint with the hole
What was needed were coins that would stay put in Oz. The solution introduced was both simple and a stroke of genius. Governer Macquarie, ably assisted by a convicted forger by the named William Henshall, turned them into holey dollars.
Not the type of money that people worship – that was to come later – but polo style coins with their centres punched out. And Australia’s first ever mint was born.
The outer ring was valued at five shillings and stamped ‘New South Wales’, whilst the inner circle or ‘dump’ was handily used as a 15 pence coin and stamped accordingly. If you happen to find one behind your sofa, keep hold of it; rare coin auction site Coinworks recently sold an example for a world record price of $495,000. Not a bad return on a five shilling investment.
Making things official
But this borrowed money soon lost its shine, and things got official when the Bank of New South Wales was established In 1817. They quickly issued banknotes of five shillings, ten shillings, one pound and five pounds and paper tokens for one shilling, one shilling and sixpence, two shillings, and two shillings and sixpence.
Sterling work
In 1825, the British Government imposed the sterling standard throughout the empire and English coins began to be minted in Australia. After Federation in 1901, these coins continued to be used until 1911, when the first Australian Commonwealth silver coins were introduced.
In 1910 a national currency was brought in by the Labor Government of Prime Minister Andrew Fisher. This was called the Australian pound and consisted of 20 shillings, each of which was made up of 12 pence. Paper money became the norm in 1913 when the first ever Australian notes were issued, based on the old British imperial sterling system of £sd – they included 10s, £1, £5, and £10 notes.
1914 saw the introduction of £20, £50, £100, and £1000 notes. The £1000 note only saw limited circulation and was later confined to inter-bank use – probably because not many shops would be able to find the change for them.
Welcome back, dollars
The next major change was in 1966. The sixties were in full swing and perhaps the thought of the entire nation using L.S.D. (that’s pounds, shillings and pence) on a daily basis was just too much for the Commonwealth Government.
So Australia went decimal, whilst simultaneously deciding to take ownership of its currency and rename it. According to Wikipedia, more than 1000 submissions were made about the name of the new currency unit. The Prime Minister of the day, Sir Robert Menzies, even proposed the ‘royal’. Luckily, the dollar (remember them?) was eventually chosen as the name, and the newly christened decimal currency was introduced on 14 February 1966.
Paper to polymer
The rest, as they say, is history. Since then, notes have featured various Australian luminaries such as wool baron John Macarthur, pioneering reformer Caroline Chisholm, Aboriginal art and more on one side. Not forgetting Queen Elizabeth II on the other.
We continued to innovate with currency in 1988, when Australia introduced its first polymer bank note and in 1996 moved away from paper altogether became the first country in the world to have a complete series of polymer notes.
Now who’d have predicted that back in 1788?
Blog post originally written for Fair Go Finance and appeared on their website in 2015.
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