The 1813 Australian Holey Dollar

The 1813 Australian Holey Dollar

Known as the holey dollar, this coin is a wonderful – and beautiful – example of solving a problem out of necessity.

The year is 1812, and the fledgling British colony of New South Wales is barely two decades old. The colony still lacks a lot of infrastructure, including a reliable supply of money. In addition, any coins that do circulate within the colony are eventually used to pay for goods from Asia, Africa and the Americas, which takes the coins straight out of the country again.

So, how are local people and businesses meant to trade with each other?

In typically Australian fashion, Governor Lachlan Macquarie devised a solution. His goal was to produce a coin of value to the colony that had no value overseas. To that end, he imported 40,000 used Spanish ‘pieces of eight’ from Bolivia. He then commissioned the services of William Henshall, a convicted forger.

Over the course of a year, it was Henshall’s task to cut the centre from each coin, creating an outer ring which would become known as the Holey Dollar. Around the central hole were stamped the words New South Wales 1813, and on the other side, Five Shillings along with a floral embellishment and Henshall’s initial. The leftover central part of the coin was called ‘the dump’, which was valued at 15 pence. The new coins were released for general use in 1814.

By stamping out the centres of the coin, Macquarie effectively defaced the original coin which made it of no value as international currency. Hence it could not be used to pay for overseas goods and services. This ensured that the coins stayed in the new colony and were not sent overseas.

Governor Macquarie and William Henshall, effectively created the first currency minted in Australia, and in doing so, helped bring economic stability to the new colony.

Eventually, England would overcome its coin production issues and send adequate supplies to the colonies.

The Holey Dollar was finally demonetised in 1829 after 15 years’ service, and cemented itself a unique place in Australian history.

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