Australia's Currency | Part 1
February 14th, 1966 marked an economic shift where Australia adopted a decimal currency system, effectively shutting its doors on the long-lived British custom of pounds and shillings.
But before Australia crossed the bridge to today’s decimal system, its currency moved through different faces. Here, we’ll go through the history of Australia’s currency, dating back to its very first form—rum.
Settlement: A Call For Currency
In 1788, the first settlers of the New South Wales colony had much need for a monetary system. For years they took to bartering for basic needs—rum being a popular form of payment and eventually an unofficial form of currency. Only a small amount of foreign coins were available to the first inhabitants, but most of these coins were lost with payments to passing merchant ships. Soon rum was banned as currency by governing bodies, leading to a rebellion. Now, more than ever, was a need for a distinct monetary system.
To quell the fires of rebellion, the government began to issue handwritten notes. These notes were approved by the English Treasury, but it soon became apparent that they were relatively easy to counterfeit. Every so often, forms of currency were shipped from England, but wealthy merchants and other notables retained much of the wealth, leaving the mass number of colonists out of the pot.
1813: The Holey Dollar and The Dump
To keep coins in the hands of colonists and prevent wealth from leaving the shoreline, then-Governor Lachlan Macquarie needed a new system. In 1813, he opted for Spanish coins to be sailed in by the British government and decided to brand them with a set of restrictions. Each coin had a hole stamped out of the center, thereby creating two coins—a punched center, known as “the dump” and a larger round coin with a hole in the center, known as the “holey dollar.” A combined value of both coins totaled six shillings and three pence. This customized coinage voided any potential for barter or payment anywhere but New South Wales and was the first official currency system for the growing colony.
1825: The Sterling Standard
In 1825, British currency became the official currency of Australian colonies. Ships of coins were imported in 1824 and 1825 and the British government imposed the sterling standard, or the pound sterling, on its empire, rendering the holey dollar and the dump useless. The Bank of New South Wales was finally established, which quickly took to issuing banknotes in varying denominations of shillings and pounds.
In 1849, low-denomination coins were in scarce supply. Because of this, common merchants created their own copper coins to trade for everyday items. These coins offered the same functionality as English copper coins and were of a comparative purity and weight.
1901: Federation Paves the Way For Commonwealth Coins
In 1900, delegates from six colonies met in London ready to negotiate Federation. A Constitution Bill was passed, and with assent from the Queen, the colonies united as The Commonwealth of Australia on January 1st, 1901.
Following Federation, Australia kept British gold and silver coins in circulation for nearly a decade. But in 1910, silver Australian Commonwealth coins were brought into the fold, followed by bronze pennies and half pennies a year later—all based on the sterling system. And in 1913, an initial round of Australian notes were drafted. These continued on for approximately fifty years, until the AUD decimal system was born.
by Morgan Sliff