Pre-Decimal Banknotes

Lot 2815    Session 10 (7.30pm Thursday)    Pre-Decimal Banknotes

Estimate $1,200,000
Bid at live.noble.com.au

TEN SHILLINGS, Collins/Allen (1913) M000001, red serial numbers with prefix M (R.1a, Vort-Ronald 1a, Nicholson 1-ii), printed 1st May 1913, presentation note to Hon Judith Denman. The first Australian Commonwealth banknote and thus of incalculable value. Nearly uncirculated.

Ex Judith Denmam, daughter of the Governor General, presented by the Prime Minister Andrew Fisher.

The origins of the first Commonwealth note issue can be found in the Australian Constitution, enacted at Westminster in 1900. Section 51 (xii) granted parliament the power to legislate with respect to 'currency, coinage and legal tender'.

Support for Commonwealth paper currency began soon after federation. The existing system of private bank and Queensland Government issues was perceived as detrimental for a variety of reasons, including its impediment to the free flow of commerce due to cross-border exchange costs. Additionally, the banking crisis of 1902-3 saw many banks close their doors with a resultant depreciatory effect on paper. A bill proposed in 1907 with the view to authorising a Commonwealth issue of notes 'payable on demand' was dropped after confidential consultation with the banks raised unequivocal opposition. It was the Labor Prime Minister, Andrew Fisher, who revived the concept in a policy speech at Gympie, Queensland on 30 March 1909 and reported in The Argus the following day. In his address Fisher declared 'The time has arrived when the Commonwealth should have a note issue of its own.' To Fisher it was clear the Commonwealth required a stable paper currency to faciliate its economic growth.

Labor's victory in the election of 1910 delivered to the party a majority in both houses of Parliament and saw Australia's (and the world's) first majority federal Labor government. Fisher's previous statement of policy was brought to action in the form of the Australian Notes Bill, which was read and debated in parliament following the election. Opponents were fuelled partly by the common perception of Labor's naivety in matters of finance. An editorial in The Argus on 20 July 1910 alleged 'whenever Governments have issued paper money they have never known where to stop, and disaster has followed in every case.' and described the 'thirst for legal tender notes' as 'alcoholism in the body politic'. The bad paper money of wildcat republics in Spanish-America, the Confederate States of America and the Romanov monarchy were all cited as historic precedents.

Despite opposition, the Australian Notes Act was proclaimed on 1 November 1910. The act banned state-issue currency and authorised the Treasury to issue Australian notes in denominations of 10s, £1, £5, £10 and any other multiple of ten pounds. An obligation to hold a gold reserve of not less than one fourth of the total value of issued notes was put upon the Treasury. Then, in order to force out existing currency, the Bank Notes Tax Act was assented on 10 October 1910 and stipulated a tax of ten percent per annum on private bank notes not redeemed. The strength of the measure coupled with the Commonwealth's unpreparedness to effectively circulate a currency issue meant proclamation was deferred until 11 July 1911.

The first 'Australian notes' circulated on 1 December 1910 were not original designs but rather Government superscriptions printed on private bank forms. The denominations of sixteen different private banking institutions were used resulting in dozens of varieties. As an aside, it is a curiosity that the Government relied heavily on private banks to circulate its own legal tender issue, and in doing so sought to destroy the banks' existing currency.

Prior to the introduction of Superscribes, however, planning was already underway for original design banknotes. A public competition for designs was announced in the Commonwealth of Australia Gazette on 5 November 1910. Despite several winning entries being selected and prizes of £50 paid, none were deemed suitable and the task was contracted to the worldrenowned engravers Bradbury Wilkinson & Co of London.

The selected location of physical infrastructure for printing and storing banknotes was King's Warehouse, Flinders Street Extension, Melbourne. Preparation, including the installation of machinery and security devices, was carried out during the years that followed.

A ceremony to commemorate the first distinct Commonwealth issue took place at King's Warehouse at 3.00pm on 1 May 1913. The gathering included many of Australia's most eminent public figures, including Governor General Denman and family, Prime Minister Andrew Fisher, Minister for Customs (Mr. Tudor), Acting Post-Master-General (Senator Findley), Vice-President of the Executive Council (Senator McGregor), Melbourne's Lord Mayor (Mr Matthews) and Governor of the Commonwealth Bank (Mr Denison Miller). Several members of the press and a photographer were also present to record the historic moment. Once the printing process had been demonstrated and a batch of ten shillings notes prepared, the task of numbering the notes by machine-press was handed over to the assembly. Governor- General Denman's young daughter Judith was given the honour of numbering the first note, pulling the lever and impressing the red serial M000001. The note was then presented to little Miss Denman by the Prime Minister.

Approximately equal to a day's wages, ten shilling was a generous souvenir, even for the privileged Judith. To this day, the note is found together with an envelope inked 'Judith's 10/-'.