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Bills, notes and money in early New South Wales, 1788–1822

Published online by Cambridge University Press:  16 November 2010

Frank Decker
Frank Decker*
Affiliation:
Universität Bremen
*
fdecker@uni-bremen.de
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Abstract

This article provides a revised account of the development of financial instruments, money and banking in the early penal colony of New South Wales. It is found that private instruments monetised the economy, while the role of state debt, coin and commodities was to finally settle remaining balances. Money originated in the form of small merchant notes. These were created by the need to pay labourers and underpinned a local pound currency standard. A detailed review of colonial court cases and currency legislation reveals that the first bank was founded, contrary to colonial orders, to remove the disruptive impact of exchange rate fluctuations and to achieve a stable private note issue at par with pound sterling bills on London.

Keywords

monetisationcolonial currenciesorigins of policyproperty economics

JEL classification

E42: Monetary Systems • Standards • Regimes • Government and the Monetary System • Payment Systems
Type
Articles
Information
Financial History Review , Volume 18 , Issue 1 , April 2011 , pp. 71 - 90
Copyright
Copyright © European Association for Banking and Financial History e.V. 2010

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