Far away from sources of foreign monies and lacking their own, early Australia was forced to improvise. Barter was especially impractical and attempts to create a local coinage were unsuccessful until the early 20th century. Banknotes provided the solution for some parts of the country but in remote areas far from any banks, makeshift systems of currency existed through the entire 19th century. From rum to private paper money called ‘calabashes’, isolation forced people to persistently resort to seemingly mediocre currency.
In their early history, Britain’s Australian colonies suffered from a shortage of coins. Insufficient production of minted coins meant the state of the coinage in Britain itself was poor in the late 18th century. Tokens and paper notes filled the void in England and would do so in Australia as well, but in a manner even more deficient. In late-18th and early-19th century Australia, the coins of foreign countries also circulated, especially those of Spain, the Netherlands, India, and Portugal.
These coins were inadequate, not because too few existed in the world to support Australia’s needs but because trade imbalances meant that there was always an outflow of these coins from the country. Visiting merchant ships carried these valuable foreign coins away and too little remained to satisfy local needs.
Philip Gidley King, the Governor of New South Wales, proclaimed that certain coins would have values in Australia above their value abroad; thus, a coin worth one shilling abroad might be worth one shilling and one penny in Australia. There were twelve pence to a shilling so this was an 8.3% premium. The hope was that this measure would discourage export of coins; instead, the prices of imported good rose to offset this revaluation and the emission of currency continued.
Unable to use coins in internal trade, settlers transacted through various alternatives. Rum, as all spirits were then called in Australia, was commonly used in barter. Barter had already been the means of transacting with aboriginal people but as settlers found that coins were too scarce, even they resorted to barter soon after arriving. In 1796, admission to a theater in Sydney cost one shilling or an equivalent value in flour, meat, or spirits. The government even offered rum as reward for capturing escaped convicts.
Searching for an alternative to barter, another Governor of New South Wales, Lachlan Macquarie, created a new money in 1813. After importing £10,000 worth of Spanish dollars, Macquarie had their centers punched out, creating two coins, a larger ring-shaped coin and the smaller center piece. The former, called the ‘holey dollar’, was assigned a value of five shillings. The smaller core, called a ‘dump’, was worth one-fourth that or one shilling and three pence. Exporting the coin was outlawed but they remained scarce.
Paper money also filled the currency void. Some of the first paper money in Australia were receipts for grain kept in public granaries and paymasters’ bills drawn up to cover military expenses. On top of this, there were even less official sources of paper money. Private notes, in the form of I.O.U.s made by individuals, also circulated as money. It was not unheard of for just about anyone to pay for a drink at a pub by writing an I.O.U. that, unlike a bank check, would then go on to circulate as currency.
Some early issuers of these notes were the ‘squatters’. Australian squatters began the 19th century as illegal occupiers of land, often raising sheep in sparsely populated parts of the continent. Recognizing their economic contribution, the government eventually gave these squatters leases over the land they occupied and many became very wealthy, forming a kind of Outback aristocracy.
Their notes were variously called ‘shinplasters’ or ‘calabashes’, with perhaps the only difference between them being their quality. The name of the former was a reference to paper soaked in vinegar used as a dressing for bruises. Shinplasters were printed on poor quality paper, usually in denominations of no more than £1, and were accepted only close to the original place of issue. Calabashes were better-quality notes with broader acceptance.
These notes were sometimes denominated in Spanish dollars rather than in pounds, shillings, and pence. They were not true Spanish dollars though and so were not exported abroad because they were useless to foreign merchants. Anyone could issue these notes. Some bore the names of storekeepers, pub managers, or butchers; each of these could have their own paper money.
Using the shinplasters and calabashes carried an array of risks. No one could be absolutely sure that the issuer would honor the note. They were backed by no collateral and some of the circulating calabashes were issued in fictitious names or were forged versions of better respected notes. Given these risks, storekeepers would often only accept the notes at some discount to face value or were otherwise selective of they money they took. Speculators occasionally spread rumors about the financial condition of an issuer of notes so that they could acquire them more cheaply.
Some issuers strove to make their shinplasters and calabashes less likely to be redeemed; some were purposely written out on tissue paper and made payable only in Sydney, even in areas very far from the city. The notes easily fell apart in the pockets of their owner, meaning a not-insignificant income was earned by the issuer from notes that could never be redeemed. If they weren’t difficult enough to handle; their many designs made identifying a note at sight difficult; some distinct notes looked very similar.
Shinplasters and calabashes offered a limited improvement over barter because they were not interchangeable; some notes were preferred to others. One story tells of a squatter who sold sheep to another. The purchaser had accumulated the notes of the seller and paid for the sheep with these. Responding to the sight of his very own notes, the seller asked “Have you nothing better than these?”. Throughout the 19th century, governments attempted to reduce the role of these notes in Australian currency but attempts were largely unsuccessful in eliminating the need for them.
One alternative to the calabashes were banknotes. The first formal private bank in Australia, the Bank of New South Wales, was formed back in 1817 and it issued its own banknotes two years later. However, this was only issued in a small amount. Even though more banks were formed, in the Outback and any other areas far from banks, the calabashes continued to circulate and coins and ordinary banknotes were rarely seen.
There was no universal paper money in Australia until the Australian Notes Act of 1910. After that, new Commonwealth of Australia notes were issued, displacing private paper monies. Still, in remote areas like Boulia, an Outback town in Queensland then two hundred miles from the nearest bank, shinplasters and calabashes circulated until the 1930s. Eventually, a growing number of banks, and the greater connectivity brought to these remote regions by the automobile, meant the end for Australia’s monetary peculiarities.
Money, and even physical currency alone, can take many forms. In the absence of a single national legal tender, foreign currency may be imported. In places inconveniently situated far from ports and cities, local alternatives develop, often spontaneously. Whatever their shortcomings, it is no surprise that the shinplasters and calabashes were the most relied upon currencies in the isolated interior towns of 19th century Australia. They began as I.O.U.s, the evidence of promises to pay a certain amount in the future, the most intuitive reaction to a shortage of other monies that there can be.
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Read about large stones used as money on the Pacific island of Yap. North American colonies also suffered from a shortage of coins, so Quebec resorted to using playing cards as money and other colonies used seashells. Lastly, consider subscribing to this blog’s newsletter here.
1. Communications Division. “Crisis in the Colony of New South Wales.” Reserve Bank of Australia Museum.
2. Dean, George D. “A Thumbnail History of Numismatics Pertaining to Queensland.” Journal of the Royal Historical Society of Queensland, vol. 9, no. 4, 1973, pp. 44–57.
3. The Editors of Encyclopaedia Britannica. “Squatter (Australian History).” Encyclopædia Britannica, 7 May 2017.
4. Marks, Percy J. “The History of Paper Currency in Australia.” The Royal Australian Historical Society Journal and Proceedings, vol. 5, no. 3, 1919.
5. Symes, Peter. “Shinplasters of Outback Australia.” International Bank Note Society Journal, vol. 45, no. 2, 2006, pp. 32–37.