Last month, former UQ Economics lecturer Dr Jon Stanford published a very interesting paper in the Queensland History Journal titled Queensland’s Own Money, 1893-1910: Model for the Australian Note Issue (paywalled unfortunately). Jon discusses the financial crisis of the early 1890s and associated bank failures that prompted the Queensland Treasury to issue a Government-backed Queensland currency (e.g. first image below) which could replace notes issued by private banks (e.g. second image below). When the Commonwealth Government issued a national currency in 1910, the Queensland currency was used as a model. As Jon notes (p. 837):
The similarity between the inauguration of the new Commonwealth currency and Queensland’s own money in 1893 was no co-incidence. [PM Andrew] Fisher was elected to the Queensland Parliament in 1893 as member for Gympie and to the first House of Representatives in 1901 as member for Wide Bay…
…In the second reading speech on the Bank Notes Tax Bill, Fisher stated that the purpose of the Bill was to ‘give the Government a monopoly of the Australian note issue’ and, in reply to a comment ‘to force the existing bank notes out of use’. He further stated ‘Practically, it is exactly the same proposition as was adopted by the Queensland Parliament, when the Treasury note issue was initiated in that State.’
Well done to Jon for such an interesting article highlighting an important contribution by Queensland to the development of our national economy.
A Five Pound note issued by the Queensland Treasury. (From the RBA website).
A blown up copy of a Queensland National Bank One Pound note, which hangs on the wall of the business centre at Tattersall’s Club, Queen St Mall, Brisbane.
A most interesting story, Gene and Jon.
I wonder if we are now seeing the turn of the full circle, with private (or in fact, very democratic and public) currencies issued outside of the control of the state and the power this gives the central banks.
Are the likes of Bitcoin, and the Blockchain technology on which it is based, now taking the power that PM Fisher wanted away from the central bankers and the state?
The power of the Blockchain means the global community had a dynamic say in the credibility of the currency and the counterparty risk that central banks were once supposed to protect.
Thanks for the comment, Mike. Good question about Bitcoin. I’m skeptical about just how widespread its use will become and whether it can replace existing currencies on a large scale, particularly given the volatility in its value. That said, the blockchain technology behind Bitcoin appears useful. I’ll post on this in the future.