Defining Moments in Australian History: Our first holey dollar
During the early years of the New South Wales colony, its economy was plagued by a lack of currency. With no local currency available, foreign coins were commonly used. British coins circulated along with Dutch guilders and ducats, Portuguese johannas, and Indian mohurs and rupees. Many of these had a fleeting circulation in the colony as a result of trade with visiting merchant ships.
Governor Lachlan Macquarie set out to secure a reliable supply of coins for the colony by importing 40,000 Spanish dollars, also known as ‘pieces of eight’, which arrived from Madras (now Chennai), in southern India, aboard the Samarang on 26 November 1812. These Spanish coins were at the time used as a de facto international currency.
Macquarie was likely aware of an earlier system used in the British West Indies, where captured Spanish dollars were cut and counterstamped so they could not be re-exported. By stamping out the centres of these coins, Macquarie distinguished them as belonging to the colony of NSW and prevented them from going straight out again. In doing so, he created the first currency minted in Australia.
Convicted forger William Henshall was chosen to cut and counterstamp these coins. Henshall had arrived in NSW in 1806. Seventeen months earlier he had been sentenced to seven years’ transportation for his involvement in counterfeiting. He had worked as a metal plater and cutler in England, but on an 1811 NSW muster list he was listed simply as a ‘convict’, without reference to his trade.
Macquarie probably learnt of Henshall’s metalworking skills by reputation. He provided authorities with information about other forgers and ways of combating the crime in exchange for an assurance his wife and family would accompany him to NSW.
Henshall was granted an absolute pardon on 12 September 1812, six months before his sentence was due to end. Macquarie provided him with a workshop in the basement of a building known as The Factory to make the holey dollars (the coins with a hole punched out) and dumps (the punched-out centre of the coin).
This building, used by government printer George Howe, was near the corner of Bridge and Loftus streets, by the eastern bank of the Tank Stream. It was effectively Australia’s first mint, and Henshall Australia’s first mint master.
Macquarie initially anticipated the task of converting the 40,000 Spanish coins would take three months, but the project took more than a year to complete. Henshall had to experiment with making the necessary machinery, which proved difficult.
It seems Henshall used a drop hammer, as opposed to a screw press, to stamp the coins with their new value and the words ‘NEW SOUTH WALES 1813’. He incorporated his ‘H’ initial into the spray of leaves in the counterstamp design and also inscribed his initial between the words ‘FIFTEEN’ and ‘PENCE’ on the reverse of the dump.
The first batch of new coins was delivered to Deputy Commissioner-General David Allen on 25 February 1814. The final batch was delivered in August of the same year.
Henshall left the colony for England in 1817. It is not known what became of him.
By the 1820s England had improved coin production and adequate supplies were made available to its colonies. Local banknotes and paper tokens were issued by the Bank of New South Wales and circulated from its establishment in 1817.
In 1853 Queen Victoria consented to the establishment of a branch of the Royal Mint in Sydney. Other branches followed in Melbourne in 1872 and Perth in 1899.
Australia’s first gold sovereigns and half sovereigns were turned out in 1855. By the late 1870s, Sydney and Melbourne gold coins were accepted as legal tender in Britain and most other colonies using British coin.
The mining of gold from the 1850s triggered prosperity and the development of banking across Australia. In 1851 there were eight trading banks and 24 branches.
By 1890, 33 new banks had been launched and the number of branches exceeded 1500. Commercial banks issued bank notes but they did not constitute a national paper currency and the public remained wary.
A banking crisis in the early 1890s led to calls for a national or central bank, uniform banking laws and a national currency. During the debates over Federation, the matter of a national currency was left unresolved and Australia’s currency remained a mixture of British copper, silver and gold coins.
It wasn’t until 1910 that an official Australian currency was introduced, marked ‘Commonwealth of Australia’, and British currency was progressively withdrawn. In 1966 Australia switched to a decimal currency, which featured coins and notes with Australian imagery while retaining an image of the British monarch.
‘Our first holey dollar’ forms part of the National Museum of Australia’s Defining Moments in Australian History project.
