The Adelaide Pound: When South Australia produced its own currency
South Australia’s always been a bit parochial. But pressing our own currency has to be among our more audacious acts of state nationalism.
What do you do when nearly half of your male working population pack up their swags and head to Victoria, taking the lion’s share of the colony’s money with them? That’s a question South Australia faced in early 1852 as the Victorian gold rush took hold and plunged our fledgling economy into freefall.
The solution was a frantically devised Hail Mary that culminated in the creation of the colony’s own form of currency: the ‘Adelaide Pound’. The first gold coin struck in Australia, this pecuniary quick-fix was a ballsy move that risked treading all over the authority of the Crown and invoking the scorn of the colony’s British superiors. So how did it come to be minted on November 26 1852?
For the first two decades the colony’s economy was an at-times bumpy ride, with mining often proving a make-or-break force. The 1845 discovery of copper at Burra provided a handy source of wealth for the colony after years of ambitious, if costly, infrastructure investment under Governor George Gawler. That’s all well and good, but when it’s your neighbour who’s struck it rich, the results can be potentially ruinous.
The discovery of gold at Victoria’s Mount Alexander led to an exodus of would-be gold-diggers heading east with dollar signs in their eyes, leaving streets half-empty and manpower scarce. With them went around two-thirds of South Australia’s circulating currency to the tune of around £120,000 by January 1852. Which, for those left behind, made the regular and essential everyday tasks of “selling” and “buying” things with “money” nigh on impossible, leaving the colony’s economy adrift without a paddle. To make things worse, those that did return came not with legal tender but pockets full of gold, only to find there was nothing to trade it for.
Keen to keep the economy flowing – and obviously prevent their own wealth and profits from stagnating – members of Adelaide’s banking and business community lobbied Lieutenant-Governor Henry Young with a novel solution: a temporary Bullion Act that allowed gold itself to be exchanged for bank-issued notes, which could then be traded as legal tender. Young took some convincing, wary of overstepping his legal authority but also keen to assuage the anxieties of the unhappy and very vocal colonists under his watch. And, after all, communication with Britain could take months by ship – this coinage conundrum required a much timelier solution.
Young relented, and the bill was passed by the Legislative Council in a staggeringly quick two hours. The act allowed a newly constructed Assay Office to operate from the government’s King William Street offices, which enabled people to have their gold smelted into £3 11s ingots and officially stamped with their tradable value, to be then deposited into banks in exchange for notes.
Additionally, a mounted police escort to and from the gold fields was initiated to better encourage and secure the supply of this new wealth back to South Australia. “Your gold is no longer an unmarketable drug”, proclaimed a message imploring prospecting colonists to return with their loot.
We weren’t quite out of the woods yet, however. While the fixed value of gold that the ingots created helped restart economic activity back home, the banks grew restless as more and more of their notes were issued into circulation, with the Assay Office processing just over 11.5 tonnes of gold, at a value of £143,761. With the initial Bullion Act due to expire, calls were made to create a new form of stop-gap currency that would alleviate this pressure.
An additional measure was flagged: the gold would be pressed into ‘tokens’ – coins. Set at a value of £1, this allowed the gold itself to be released into circulation in lieu of bank notes (denominations of £2 and £5 were also flagged but never produced en masse). This, however, proved too much for the Colonial Government back in England, who despite happily endorsing the original Bullion Act now baulked at the prospect of a raft of new mints cropping up all over Australia (indeed, New South Wales and Victoria were soon calling for their own). They immediately ordered Young repeal the new measures, but, being the mid-1800s however, the message took weeks to reach Adelaide.
Luckily, by the time their despatch arrived in South Australia the moment had passed: the last of the tokens were released in February, 1853, and by the end of that month the Assay Office had ceased accepting gold due to the slowed rate of importation from Mount Alexander and the newly stabilised local economy.
Which leaves us with the coin itself, now a curious anachronism, and a rare one too given its limited circulation and penchant for being melted down again for its raw gold. These days, they can fetch hundreds of thousands of dollars – ironically, the Global Financial Crisis proved a boon for the coin market as some investors recognised a greater concrete value in vintage coins than real estate or stock. For the rest of us though, the coins are a reminder that despite what American rapper Biggie Smalls says about Mo’ Money, having no money can present problems of its own.