The two circular pieces of silver represent the very first official currency that was produced specifically for circulation in Australia. Known as a ‘holey dollar’ and ‘dump’, the currency provided an ingenious solution to stop the newly-founded colony of New South Wales running out of money.
Initially, the colony kept itself going financially through the use of British coins. However, the settlers weren’t just dealing with British currency; foreign coins (such as Dutch, Indian and Portuguese) were also common in circulation. The problem with the foreign money was that it was impossible to keep it in the colony – it came and went with the arrival and departure of trading ships.
So, in order to create a sustainable currency, Governor Lachlan Macquarie (1762–1824) came up with a clever way to stop the coins from leaving the colony. It was William Henshall – a convicted forger, no less – to whom Macquarie turned in order to orchestrate his plan. And it was a deceptively simple solution: Macquarie organised for Henshall to cut the centres out of nearly 40,000 Spanish dollars that had arrived in New South Wales during 1812.
The central piece – known as a ‘dump’ – was valued at 15 pence, and had a new design of a crown on the obverse and the denomination on the reverse. The ‘holey’ dollar received a stamp of ‘New South Wales 1813’ on the obverse, and ‘Five Shillings’ on the reverse. The combined value of the two pieces was 25 per cent more than the Spanish dollar’s original worth.
Macquarie’s idea led to the creation of two coins that would no longer be of any use outside of the colony, and in doing so, Australia’s first currency was ‘minted’. The conversion of the Spanish dollars took a whole year to complete – and they continued in circulation until 1829.