The 1813 Holey Dollar is the nation's first coin, created from a Spanish Silver Dollar. This article highlights the diversity of the Holey Dollar and presents some buying tips.

The Holey Dollar is the nation’s first coin, minted in 1813 by order of Governor Lachlan Macquarie.

By 1812, the penal colony of New South Wales had reached a point in its history that a formal medium of exchange was required to underpin a burgeoning economy.

As Macquarie had no access to metal blanks to create his currency, he improvised and acquired 40,000 Spanish Silver Dollars as a substitute.

To make his new coinage unique to the colony, and to inhibit their export, he employed emancipated convict William Henshall to deface them and cut a hole in each silver dollar.

Each holed silver dollar was over-stamped on both sides, around the edge of the hole. On one side, the date 1813 and the issuing authority of New South Wales.

And on the other side, the value 'Five Shillings' with some decorative embellishments of a fleur de lis, a double twig of six leaves and a tiny 'H' for Henshall at the junction of the twigs.

The application of the counter stamps is the point at which the holed silver dollar became the 1813 Holey Dollar, the nation's first locally made coinage.

While the original intention was to create 40,000 Holey Dollars from 40,000 silver dollars, spoilage and the despatch of samples back to Great Britain saw a slightly reduced number of Holey Dollars - 39,910 - released into circulation.

Today there are approximately 200 Holey Dollars held by private collectors with perhaps 100 held in museums. The coin is a national treasure and is revered and sought after by collectors the world over.

The Holey Dollar is Australia's most intriguing coin. As it was created from another coin, no two Holey Dollars are the same. Each Holey Dollar therefore, has its own story to tell.

1. What was the date on the Spanish Silver Dollar? Who was the Spanish King at the time?
2. And where was the dollar minted? In Spain or one of the Spanish colonies in South America, Mexico, Peru or Bolivia?
3. And was it well used before it arrived in the colony?
4. And how do you rate William Henshall's job of cutting and over-stamping the holed silver dollar? Is the hole centered and are the counter-stamps 'all over the shop' or uniform? 
5. And once the Holey Dollar was created, did it circulate? Are the counter stamps showing wear from usage?

The above five points, 1, 2, 3, 4 and 5 ultimately determine the value of a Holey Dollar.

Such is the demand for Holey Dollars, that a well worn example, one that resembles a washer, is worth upwards of $50,000.

The finest and rarest Holey Dollars will command in excess of $400,000 with the most important Holey Dollar, the Madrid Holey Dollar, selling for $550,000 in 2015!

1813 Holey Dollar created from a Charles IV Spanish Silver Dollar that was issued at the Mexico Mint in 1804.

$195,000

Original coin • Very Fine, the surfaces highly reflective with subtle grey toning. Counter stamps • Good Very Fine.

Strong design details, glossy fields, the flan not distorted by the minting process, no metal fatigue.

Of particular note, the vertical alignment of the obverse counter-stamps - 'New South Wales' and '1813' - with the date '1804'. This is the optimum position of the counter-stamps and was rarely ever achieved by mint master, William Henshall.

The reverse counter stamps show the 'H' for Henshall between two twigs of leaves.

Points to consider when acquiring a Holey Dollar

1. Set your budget.

Setting a budget is the first step in the task of acquiring a Holey Dollar. The coins are available at prices across a broad dollar range, starting at $50,000 for a heavily circulated example up to the very best examples that will command around the $500,000 mark.

2. Mint & Monarch. Two factors that influence the value of a Holey Dollar.

Quality is one of the forces that determines the value of a Holey Dollar, but it is not the only force. And herein lies the intrigue of the coin. 

Lachlan Macquarie imported 40,000 Spanish Silver dollars to create Australia’s first coins. The order was not date specific, so any date would do. Any monarch would suffice, Charles III, Charles IV, Ferdinand VI or Ferdinand VII.

Nor did Macquarie purchase the coins direct from a particular mint. The shipment was ordered from the East India Company and came from Madras comprised of coins struck in the Spanish colonies of Mexico, Peru and Bolivia with some even sourced from the motherland, Spain. And the dollars all came at different quality levels, with the vast majority well worn.

So, if you are trying to work out why some Holey Dollars are valued far in excess of others you have to consider the date of the silver dollar and who was the reigning monarch that appears on the coin, because some monarchs appear more frequently than others.

You also have to consider the mint at which the dollar was struck for some mints were prolific producers of silver dollars, while others were lean on production.

• Holey Dollars featuring the portrait of Charles IV are the most readily available, followed by Charles III, Ferdinand VII with the Ferdinand VI Holey Dollar unique.

• Holey Dollars created from silver dollars sourced from the Mexico Mint are the most readily available, followed by the Lima Mint in Peru, Potosi Mint in Bolivia, with the Madrid Mint unique in private hands.

3. Quality of the original silver dollar and quality of the counter stamps

The Holey Dollar is Australia's most desirable coin. Talk to those fortunate enough to own one, either private collectors or institutions such as Macquarie Bank, National Museum of Australia and the Mitchell Library, and they will tell you that the Holey Dollar is viewed as the jewel in their collection.

It is noted that most Holey Dollars are today found well-worn with many looking like a tap washer. The reason is simply that no quality parameters were set on Macquarie’s shipment of 40,000 silver dollars. That and the extensive use of the silver dollar as an international trading coin meant that most of the coins imported by Macquarie were well worn.

As you would expect, a reduced availability correlates to an increase in price. The very reason why examples in the upper quality levels of Extremely Fine to Uncirculated are a $400,000-plus item.

And then there is the positioning and the quality of the counter stamps to consider. Excessive wear to the counter stamps reflects wide usage of the Holey Dollar.

A study of the surviving Holey Dollars reveals that Henshall's application of the counter-stamps was wildly random, that the holed dollar was not placed in a particular position between the dies. And it obviously didn't matter which side of the holed dollar was facing up. Speed was of the essence. Precision was simply not required which is why the counter-stamps of most Holey Dollars are 'all over the shop'.

The slideshow below highlights the diversity of the 1813 Holey Dollar.