This intricately engraved one-pound note was printed as part of a set issued in 1881 by Tasmania’s first bank, the Bank of Van Diemen’s Land. Established in 1823 and known as ‘the old bank’, the Bank of Van Diemen’s Land was considered to be extremely reliable, having come through recession, inflation, competition from other banks and Tasmanian population loss to the Victorian goldfields. However, the local population’s trust in commercial establishments was to be tested when the establishment failed a mere ten years after the note was printed.
The banks’ demise after 68 years of trading – reportedly due to a decline in mining ventures and defaults on loan repayments – heralded an economic crisis for the young colony, and a Royal Commission was set up to investigate associated allegations of fraudulent practice.
The ensuing major depression of 1891 marked yet another turbulent chapter in the British colony’s journey towards achieving a reliable financial sector. The lack of a standard currency when Australia was settled in 1788 had already meant 100 years of unregulated banking, and many of the banks that operated during that first century failed or were swallowed up by larger establishments.
The Bank of Van Diemen’s Land had been founded following a public meeting, with a charter similar to that of the Bank of New South Wales. One of the bank’s founders was the prominent Hobart Town merchant, Thomas Lempriere, and it had the backing of some of Tasmania’s wealthiest men and formal approval from Lieutenant-Governor Sorell.
In keeping with the dollar standard of the time, the bank’s original $40,000 capital was provided by 200 shares of 200 Spanish dollars. By 1825, it was circulating official notes, and the bank enjoyed a commercial monopoly until the creation of the Derwent Bank in 1828 while, in 1834, the company’s operations in northern Tasmania were taken over by the Tamar Bank.
The Bank of Van Dieman's Land stood on the corner of Collins and Elizabeth Streets, Hobart – was demolished in 1958 – but the lions over the original doorway now stand at the entrance to St David’s Park.