ECONOMY

Australia’s Very First Coin Had a Hole in It

Did you know that Australia’s very first coin had a hole in it? The fascinating story of the holey dollar reflects Australia’s equally interesting history. Just as Australia is a unique country and continent, so is its first form of currency. While Prince Edward Island in present-day Canada and some islands in the Caribbean had their versions of the holey dollar, the New South Wales holey dollar is one of the most coveted and highest valued in the market. The holey dollar consists of two parts: holey coin itself and the punched-out part, known as the “dump”, which had a combined nominal value of 6 shillings and 3 pence. So, how did the holey dollar gain its notoriety? To answer that, let’s take a look at the holey dollar’s storied life. 

The Birth and Death of the Holey Dollar

The Holey dollar was created and used in the colony of New South Wales, which was founded in 1788. In its infancy, the colony used various foreign currencies, such as Portuguese, Dutch, British and Indian coins. However, after a while, New South Wales experienced a lack of coinage due to the majority of the foreign coins sailing off with visiting merchant ships. The shortage became so problematic that colonists had to resort to old-fashioned bartering. One of the most common products they bartered with one another was rum, which actually became an unofficial currency in the colony. However, Governor Bligh prohibited the usage of rum as currency in 1806. This highly controversial decision cost the governor his post in the most dramatic fashion. The amusingly named Rum Rebellion led to the overthrow of the government. 

Seeing that the coin shortage situation has become so dire that insurrections were occurring, Governor Lachlan Macquarie initiated the use of 40,000 Spanish dollars, or 10,000 in British pounds, which was sent over by the British government via the East India Company. The shipment of Spanish coins came with a stipulation, however: it was not to leave the colony. In order to ensure that no such happened, Governor Macquarie consulted with officials, including the Judge Advocate, and hired a convicted forger to cut out the center of the Spanish coins and counter-stamp them. 

The talented inmate, William Henshall, thus became part of history. His work ensured that the new coins would essentially be useless outside of the colony. Henshall re-struck the “dump”, or punched out piece of the coin, with a crown on the front and the denomination (15 pence) on the other side. Meanwhile, the holey dollar itself was over-stamped around the whole with “New South Wales 1813” on the front and “Five Shillings” on the reverse. 

The combined nominal value of the holey dollar and the dump was six shillings, and three pence, which was 25% more than the original Spanish dollar’s value, making it unprofitable to export the coins beyond the colony.  This massive undertaking took over a year to complete. Once the project was finished, 39,910 holey dollars and an equal number of dumps were created and, thus, Australia’s first ever coin was born. It is believed that the remaining amount of the 40,000 Spanish coins were lost during the process. 

In 1813, Governor Macquarie proclaimed the newly minted holey dollar to be legal tender. The following year, the it officially went into circulation. The holey dollar was the currency of New South Wales for over a decade. However, in 1822, the government began to gradually phase out the holey dollar. The recalled holey dollars were replaced with sterling coins. It was a gradual transition and slow death for Australia’s first coin. Finally, unceremoniously, the holey dollar and its associated dump was demonetized in 1829. 

The Holey Dollar Today

After its demonetization in 1829, a large percentage of the remaining holey dollars and dumps were exchanged for legal tender, and then melted into bullion. Today, it is estimated that only 350 Holey dollars and 1,500 dumps exist, making it a rare collector’s item. It is this rarity—along with its storied history and significance—that makes the Holey dollar quite valuable. In fact, it the coins and the dumps are so valuable that even those in poor condition could still sell for a lot of money. 

In fact, the coin known as the “Lima Holey Dollar” had set the world record for early Australian coins when it was sold to a coin collector for $495,000 in 2013. The next year, another Lima Holey Dollar was valued at around $300,000. Unfortunately, it was stolen from the NSW State Library. As you can see, collectors and historians aren’t the only ones who want to get their hands on this rare item.

It’s stories like these that continue the crazy life and afterlife of the Holey dollar. That’s what makes the coin so interesting. There are numerous stories of how these rare coins and dumps find themselves in the hands of both unknowing people and those who study and obsess over them. If there’s one thing we are sure of, it is not uncommon for holey dollars to be found in strange circumstances. 

Tips on Acquiring a Holey Dollar

1. Set a budget. You have to keep in mind that due to the Holey dollar’s rarity, the prices at auctions, both online and in-person, will be quite astronomical. Of course, this will depend on the quality, but remember that even holey dollars in poor condition could sell for thousands. That’s why it’s essential for you to set a budget and do your research on the holey dollars that have sold recently. That why, you can get an idea of the price range you can aim for. For example, it is typical for a holey dollar to go for $50,000. On the higher end, a holey dollar sold for $550,000 by Coinworks, which broke records at the time in 2015. 

2. Face value. You have to remember that when it comes to the Holey dollar, there are multiple factors in determining its value. For example, its condition, year, monarch it depicts, and where it was struck. This is because the 40,000 Spanish silver dollars imported by Governor Macquarie had various dates of minting. Likewise, the monarchs varied (Ferdinand VI, Ferdinand VII, Charles III, Charles IV). Additionally, the original coins, even before conversion, came in different conditions. These coins were struck in then-Spanish colonies like Bolivia, Mexico and Peru. Some even came from Spain itself. In fact, many of the coins were already worn out to begin with. Keeping these various factors in mind, the value of the holey dollar being sold could vary wildly. 

3. Rarity. Here’s a tip: some monarchs are more common than others. For instance, Charles IV coins are the most frequently seen. The second most common is the one with Charles III, followed by Ferdinand VII. The rarest coins are the holey dollars that feature Ferdinand VI. The other factor to consider is the rarity of the mint. The most common ones were struck in Mexico. The second-most frequent are the Lima (Peru) editions. The Potosi Mint (Bolivia) is less common. The rarest are the coins known as the Madrid Mint, which were struck in the motherland of Spain itself. Keep in mind that rarity, or reduced availability, and condition are the main forces that drive the price. For example, Extremely Fine and Uncirculated holey dollars can sell for over $400,000. 

sudarsan

Sudarsan Chakraborty is a professional writer. He contributes to many high-quality blogs. He loves to write on various topics.