[Editor: An article about Australia’s first coins, including the “holey dollar”; published under the category heading of “Money” in The Argus (Melbourne), 5 August 1950.]
The holey dollar
Although in the early days of its colonisation, New South Wales was a British Crown Colony, British currency was always short. Barter was the order of the day; rum and tobacco were universally accepted as a standard of value, and in the infant city of Sydney the Governors even arranged payment of public works, such as the clearing and making of early George st., in rum. It must be confessed that rum was not a stable substitute for currency; its value varied with the market, and the possibilities of big profits in the colonial black market were at the back of its almost universal acceptability. To combat the hold of rum on trade, Governor King, in 1800, issued a proclamation fixing an arbitrary price for such exotic coins as guineas, pagodas, ducats, and guilders, all of which circulated on a limited scale. English currency served mainly as a standard of exchange value to apply to other miscellaneous coinages; there was never enough of it, and a request by Governor King to the Home Government for a supply of sixpences (to be used here as shillings) failed to get a hearing.
The only countries in fact with no shortage of currency at this time were Spain and her American colonies. The practice of cutting up Spanish dollars into smaller segments for small change was common among Spanish-speaking peoples. The phrase Pieces of Eight refers to eight segments of a silver dollar. The practice of cutting a piece from the centre and stamping the extracted piece also obtained, and may have suggested an idea afterwards capitalised by Governor Macquarie.
In 1813 Governor Macquarie, determined to set exchange on a stable foundation, imported £10,000 worth of Spanish dollars.
The centres were punched out, forming a small disc. The large external portion was stamped FIVE SHILLINGS on one side, and NEW SOUTH WALES 1813 on the other. The punched-out portion was struck with the words NEW SOUTH WALES, a crown, and 1813. On the opposite side was marked FIFTEEN PENCE.
Thus a localised currency was constituted; as the rating inside the community was more than outside (a dollar worth 5/- functioning as two coins at a total face value of 6/3), it was calculated to continue to function as an internal currency. The large piece became familiarly known as the “holey dollar”; the extracted portion was known as the “dump.” Authenticated survivors of these, our earliest current coins, are prized collectors’ pieces.
The Argus (Melbourne, Vic.), 5 August 1950, p. 31 of “The Argus Weekend Magazine” supplement