The colony of New South Wales had a currency shortage so severe that Governor Lachlan Macquarie had to buy his own house with 200 gallons of rum. This was clearly unsustainable for a fast-growing society.
Lacking the silver discs to strike a coinage, Governor Lachlan Macquarie improvised by importing 40,000 Spanish Silver Dollars.
To stop the coins leaving the colony in payment for imports, he emulated his colleagues in the Americas and West Indies and re-minted each coin, declaring them a legal tender but only in the colony.
He enlisted the services of an emancipated convict, William Henshall, with instructions to deface each silver dollar and create two coins out of one.
A hole was punched in the centre of each silver dollar creating an outer circular ring and a small inner disc. The outer ring was re-stamped around the inner circular edge of the hole and became the 1813 Holey Dollar with a value of five shillings.
The inner disc was not wasted but became the 1813 Dump, taking on a lesser value of fifteen pence.
By re-cutting the Silver Dollars, Macquarie not only doubled the number of coins in circulation but increased their total worth by 25 per cent. By proclaiming them legal tender, but only in the colony of New South Wales, he also reduced the likelihood of the coins leaving the colony in payment of imports.
Macquarie’s order for 40,000 Silver Dollars did not specify dates. Nor were they minted in the one year. Moreover Macquarie was not concerned about the various mints at which the coins were struck, Mexico, Peru, Bolivia, Spain, Guatemala, Chile or Colombia.
The condition of the dollars was also inconsequential.
There are also, of course, very different degrees of quality. The extensive usage of the Spanish Silver Dollar as an international trading coin means that most Holey Dollars are found well worn.
And it is the combination of mint and monarch of the original Spanish Silver Dollar combined with the sophistication of Henshall’s cutting and re-stamping process that makes every Holey Dollar an individual piece, each offering a different degree of rarity.
That’s why we say that while all Holey Dollars are rare. Some are far rarer than others.