Post on 31-Mar-2015
transcript
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