The government led the way when it issued its own notes, the first being payments to the masters of ships lying in the Derwent for the sale of goods. Small denomination currency notes (a minimum of one pound) were printed and passed into circulation. Soon afterwards, the Commissariat began paying for Government stores in notes to be consolidated at a future date. The colonists quickly reacted and soon notes of all denominations were circulating in the colony. Henry Melville in his History of Van Diemen's Land, 1835, wrote: A difficulty in the colony was that the value of these notes depended on the ability and willingness of the person(s) who issued them to honour their notes on demand. While the notes were a successful substitute for coins in the conduct of trade, it was difficult to consolidate them into hard cash. Very few notes were rejected, as most colonists were aware that there was no other medium of exchange. On 27 October, 1826, the Colonial Times advertised that booklets of 100 printed notes were available from its office - The abundance of counterfeits became a major problem associated with the circulation of promissory notes in the colony. The contemporary press, especially the Hobart Town Gazette and the Colonial Times, repeatedly warned the public to beware of the 'alarming numbers of false notes circulating. On 31 May, 1817, John Prestage in the Hobart Town Gazette notified the public that one of his servants, Thomas Berry, alias John Barry, presented 'false notes bearing the forged signature of his master, to several merchants in order to obtain goods'. The Hobart Town Gazette reported on 1 March, 1817: During the early 1820's, notes were issued in 'sterling', 'currency' or 'dollars', although mostly in sterling and dollars. The notes issued for 'currency' were taken at a discount. Currency, Sterling or Dollar ?At the beginning of 1822, Tasmania's monetary system was based on a sterling exchange standard, operating through the sale by the Commissariat of bills of exchange on the British Treasury. Two scales of reckoning prevailed, 'sterling' and 'currency'. Sterling meant payment in British coin, bills on the British Treasury, store receipts or any other official note which was convertible into sterling at par, without any large discount. Currency was the term given to private promissory notes. The value state on these notes was often subject to a significant discount when converted to a sterling equivalence. This exchange rate or standard became known as the sterling exchange.The dollar system was introduced into Van Diemen's Land in 1822. It meant the partial substitution of a dollar standard, involving the use of dollars in both private and Government transactions, and had the beneficial effect of increasing the numbers of notes in circulation. Dollar based promissory notes were issued to complement the use of Spanish Dollar coins. It was never intended that private finance would be conducted on a dollar basis. Many promissory notes were drawn specifically in dollars, many others stated the conversion rate to sterling, but a majority of the notes continued to show the value or denomination in sterling. Transfer to Sterling - Circulating Medium Act, 1826From 1 April, 1826, to comply with a Treasury instruction, all Government receipts and payments were reckoned in 'sterling' with Spanish Dollars being received and paid at 4/4 and the Calcutta or Sicca Rupee at 2/1.The Hobart Town Gazette's previous practice of quoting market prices in currency ceased and the Bank of Van Diemen's Land announced that it would express all accounts in sterling after 1 July, 1826. Eight issuers of small notes called a meeting to consider the new conditions, and to devise methods of preventing the forgery of notes for a shilling and sixpence. It was resolved that, from a date to be fixed, all merchants should take the dollar at 4/4. Since small notes were deemed to be still 'unavoidably necessary' a committee was appointed to report on the subject and invited public suggestions. Nothing came from the committee as the news of the Government's intention to prohibit the issue of small notes became known. Governor Arthur's Committee and the Sterling Money Act, 1826Governor Arthur appointed another committee of three to consider 'the policy of allowing promissory notes for small sums to be issued by the Bank of Van Diemen's Land or by individuals'. The committee reported within a week (5 August, 1826), declaring that small notes had been -Small notes in the colony were withdrawn very rapidly. The press reported that a local trader, John Briggs, called in his small notes and announced they would not be reissued. The change was so rapid that for a short while the depressed conditions of the colony were accentuated. The sudden withdrawal of the circulating paper 'money' was momentarily deflationary. However, with the opening of four new banks, namely the Tasmanian, the Derwent, Cornwall and Commercial, the new notes issued by these banks began to circulate and remedied most of the shortage of cash, except for small change. Within a very short period of time, the reckoning of transactions in dollars disappeared. But, while the basic unit of account became the pound 'sterling', Spanish dollars and other coins continued to circulate. By this time virtually all the small private promissory notes had disappeared. Currency (Promissory) Note IssuersExamples of promissory notes by a number of issuers, documented in the contemporary press, have not survived. It is possible that specimens of their notes exist, however until a specimen is verified, it cannot be considered as a known issue. The following lists show the known (verified) and recorded (unverified) issuers of currency promissory notes notes in Tasmania in the 1820's.
Tasmanian Promissory Notes - Roger V. McNeice FRNS, Hawthorn Press, SBN 7256 0035 7, 1971.
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