The History of Australian Money

Early Australia Australia didnt need money Coins were brought in soldiers 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 Australians didnt want to convert from pounds to dollars Mixed forms of currency (pounds – dollars) System didnt last long Government went back to pounds

Settlement of South Australia Original plans stated that banks had no place They didnt 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 didnt know what to bring to purchase goods from South Australia

The Australian Slump It occurred from 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

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