The History of Australian Money 17881851

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The History of Australian Money1788-1851
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Early Australia

• Australia didnt need money
• Coins were brought in soldiers pockets
• It was supposed to be a prison
• It lasted as a prison until more people were
  attracted to a new opportunity for freedom

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A Barter System

• Used to pay wages for forty years
• Convicts could barter/sell rations or clothing
  for rum (spirits)
• A reward of thirty pounds of flour for finding a
  person who is trading with a convict

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Rum Money

• Boats cost five or six gallons of rum in 1793 for
  use in the Sydney Harbor
• The rum would circulate, just as money today

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Rare Money

• Money was hardly ever used before 1800
• Men who built the first church got mostly money,
  but the rest was paid to them in goods
• The only money was that brought to Australia by
  traders

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Early Exchange

• In 1805, the King approved the use of promissory
  notes
• Along with notes, there were pennies, schillings,
  Indian rupees, Portuguese johannas, and Dutch
  guilders

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Promissory Notes

• They vary in value
• Also know as sterling in their early years
• Formed to try and erase currency from Australia

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Petty Banking

• No intention of paying what the note states
• Petty banking reduced the trust that people had
  in promissory notes

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The First Banking of Australia

• The New South Wales Bank
• Government issued loans
• Needed to control people from cheating (petty
  banking)

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Dollar System

• Established in 1822
• To give an honest value to coins that will never
  change no matter who owns them
• Government regulated
• Imported all dollars in the first months of 1822

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Problems with System

• Australians didnt want to convert from pounds
  to dollars
• Mixed forms of currency (pounds dollars)
• System didnt last long
• Government went back to pounds

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Settlement of South Australia

• Original plans stated that banks had no place
• They didnt think that there would be a need for
  banks

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Problems in South Australia

• Without banks, they had no way to pay their own
  employees
• People coming into the country didnt know what
  to bring to purchase goods from South Australia

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The Australian Slump

• It occurred from 1841-1843
• Caused by a drop in wool prices
• Caused by a rise in the costs of goods
• Good land was already settled
• A smaller scale of the U.S. Great Depression

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Resolution to slump

• Exports of wool doubled
• More goods for exports (wheat, potatoes, timber,
  etc.
• People started trusting in banks
• Deposits and notes issued doubled in a year

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Agreed Unit of Exchange

• The sterling
• Also know as a promissory note
• Custom, not law, changed the unit of exchange to
  silver
• This was done so that the country could exchange
  with other countries easier

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Questions