The History of Australian Money 1788-1851. Early Australia Australia didnt need money Coins were brought in soldiers pockets It was supposed to be a prison.

The History of Australian Money

1788-1851

Early Australia

Australia didn’t need money Coins were brought in soldier’s

pockets It was supposed to be a prison It lasted as a prison until more

people were attracted to a new opportunity for freedom

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

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

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

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

Promissory Notes

They vary in value Also know as “sterling” in their

early years Formed to try and erase currency

from Australia

Petty Banking

No intention of paying what the note states

Petty banking reduced the trust that people had in promissory notes

The First Banking of Australia

The New South Wales Bank Government issued loans Needed to control people from

cheating (petty banking)

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

Problems with System

Australian’s didn’t want to convert from pounds to dollars

Mixed forms of currency (pounds – dollars)

System didn’t last long Government went back to pounds

Settlement of South Australia

Original plans stated that banks had no place

They didn’t think that there would be a need for banks

Problems in South Australia

Without banks, they had no way to pay their own employees

People coming into the country didn’t know what to bring to purchase goods from South Australia

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

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

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

Questions