Colonies and Gold, Part II

As a holiday and end of year gift, I have finished up Part II of the colonial currency and gold coin rant with all due haste. I’ve got three Dominions to cover here, so it’s a bit long. Take a break after the Raj and have a festive drink or something.

Remember that handy reference guide to predecimalization system of British coinage I shared in the previous post? Well, remember it fondly, as things are about to go a bit funny in the other colonies. The general rules of how coins work holds for the rest of Britain’s colonies, but you may notice some significant differences from the American experience. TL;DR version: I think Britain never really liked America.

The Jewel In The Crown: the East India Company (EIC) and the British Raj

Let’s start with the fact that the EIC and direct rule of India by the the British Crown, the Raj, are different entities. The Raj replaced the EIC after the company was nationalized in the wake of the First War of Indian Independence in 1858 (AKA the Sepoy Rebellion, for those of us who had a more Anglocentric education). While the Raj wasn’t necessarily pretty, it was nicer than the 250 years of company rule that preceded it.

The East India Company was organized in 1600, which puts it about the same vintage as the Charter of the Virginia Company of London that founded Jamestown and they shared some corporate officers. Unlike the CVC, the EIC didn’t go bankrupt, collapse, and revert to the Crown within two decades. Part of the reason for this was a vested government interest in cracking open the tea & spice trade routes to India and the islands of the Indonesian Archipelago, prying them away from the Portuguese and Dutch who were already there obliterating the over 3000 year old Indian Ocean & Silk Road trade networks.

{HOLIDAY ASIDE: for timely history related to the colonial war games, nutmeg was so important that the Dutch were willing to cede New Amsterdam to the British in exchange for remainder of the Banda Islands the spice originated on to secure a nutmeg monopoly in the Treaty of Breda, concluding the Second Anglo-Dutch War. Really, this was everyone admitting the truth on the ground as each colonial power had effectively kicked the other out of these territories. Go enjoy some egg nog or a coquito.}

1600-1601 8 Testern reverse (image courtesy of

Of course, this calls for a new coin. In January 1601, a large silver coin, larger than anything that circulated in England was commissioned called the 8 testern, AKA the Portcullis coins because of the motif on the reverse. What is a testern? Theoretically, one testern was a sixpence, the two testern would’ve been a shilling, which meant the 8 testern was 4 shillings…WHICH EQUATED TO NO OTHER COIN. Five shillings is a half crown, not four. The broken denomination pattern is infuriating but expecting reasonable behavior out of the British government is rank foolishness. Speaking of foolishness, here is a link to a modern reissue of the testern from the extremely tasteless modern luxury brand incarnation of the EIC. Seriously, of all the brands to resurrect I’m having a hard time thinking of one more blood soaked and odius, except maybe the British African Company or the International Association of the Congo.

But why? Remember those Spanish 8 reales coins the Americans are using to the annoyance of their colonial overlords? Well, they’re over here in India too and they’re the standard for silver exchange. The 8 testern was minted with a weight and purity to be comparable with the 8 reales, except with the QE1 on it to make it good and respectable money. To the disappointment of the EIC, the merchants of Bombay & Calcutta gave precisely zero shits about the royal seal on the coin, they just wanted the silver for weight and pointed out, like a patronizing parent, “You guys do know that we do most of our commerce in gold, right? India is fabulously wealthy and you came with Poor People Money.” But it was good enough to establish trading post footholds and the return trips to England with goods made sure the EIC never had to worry about having gold to trade again.

And so, of all the British colonies, for cultural requirements and the sheer amount of gold washing around, they were the first to get gold coins locally minted. I can’t say it was with the blessing of the Crown, but rather as an act of expediency by the EIC to mint it locally in each of the presidencies (independently operated regions that franchisees of the EIC had bought or shot their way into control of). This was for their own needs, meaning there were a lot of mints and thus a lot of different coin patterns and denominations. The ulterior motive of transforming foreign coins into good and proper ones factored into it but, as the EIC was in it for the profit, they worked with locally familiar denominations to facilitate trade. Familiar coins like the rupee are there, but also the anna, mohur, fanam, pagoda, and strange to anglophone ears, the cash. I tried to build a conversion chart from these to the £/s/d system and my brain just gave up. As a physicist, unit conversion is supposed to be a bedrock skill and I just can’t do it. I am ashamed.

Once the reorganization happened in 1858 for direct rule by the Crown, one uniform monetary system was established for the Raj, with the gold rupee at the top of it. Please note, at no point was it questioned that gold coinage would be used and minted in country under either the EIC or the Raj.

The Great White North: The Canadas

At about the same time Britain was trying to kick the Dutch and Portuguese out of India for spices, they were doing about the same to the French in North America to wrestle the fur trade and fishing rights away. Canada, as we know it today, didn’t exist until 1949 when Newfoundland and Labrador finally joined the confederation and, as a whole, Canada didn’t get full sovereignty until 1982. Speaking as a frustrated geologist, dominions and provinces slowly accreted onto The Canadas until it looks like it does today, kinda like the geology that assembled the land itself. The big difference is that the North American craton doesn’t speak French, unlike the people on top of it who very much shaped the colonial experience. Imagine if the 13 American colonies were regularly invading & murdering each other, mostly using local Native American tribes as proxies, rather than somewhat ignoring each other and instead spending their time murdering their local tribes. That’s the difference between Canada and America.

The French had a somewhat enlightened point of view toward money in all their colonies. As the first settlers in the region, with their network of farmers & voyageurs canoeing hither and yon, the deal went like this: bring us furs, and we will pay you in the same currency we use at home. Of course, sous from La France weren’t terribly helpful out in the beaver ravaged lands of the Quebecois frontier, so the trappers preferred to take trade in kind and, of course, blow their cash in the big city of Montreal (pop. ~1000). The local tribes that the French had established good relations with didn’t particularly care about coins either, preferring to receive good steel, gunpowder and muskets instead.

1842 Bank of Montreal Token Obverse, image courtesy of

1842 Bank of Montreal Token Reverse, image courtesy of

But to fast forward a bit through a lot of killing, Canada had a monetary & economy problem much like colonial America did. Like many countries before them and after, the answer was to make proxy currency. The various merchants and banks started making tokens that were effectively business cards, but also because the metal and size were right, would get used as pennies. Keeping in mind that Canada wasn’t quite Canada until at least the early 20th Century, the colonies/provinces were each figuring out their own proxy money to maintain internal economy while they were separated from the larger confederation. But, really, when you get down to it, it all comes to the Hudson Bay Company being happy to maintain debt ledger tables in the background of what looks like a pure barter system. They were the broker of good faith that let the fur to blankets and trinkets trade happen as if money was unnecessary. Of all the original Crown chartered colonial companies from the 17th century, the Hudson Bay Company is still kicking around and you may not be remotely surprised about how much they still own in the 21st century.

Once the Acts of Confederation went through and the Dominion of the Canada was established, they got their own currency and they decided to go with a decimalized system like the United States. As I mentioned in the previous post, they were already used to thalers, so dollars made sense. What Canada DID NOT get was permission to mint gold. For reasons I haven’t quite found the answer to, Newfoundland, who didn’t join the confederation, was permitted to have $2 gold coins during Queen Victoria’s reign. The $2 coin also was struck with a value of “200 cents/100 pence” as an early attempt at bridging the conversion to from the £/s/d system to decimalized in one coin.

And then the Klondike Gold Rush happened.

It was felt that processing the proceeds of the Canadian side of the Klondike Gold Rush into local currency might imbalance the Dominion/Home Country power relationship. Having already lost one major colony on the North American continent over issues of money and taxation, they weren’t up for a second. Canada didn’t get permission mint gold coins of their own until 1912 out of paranoia, despite all the gold coming out of the Klondike. But after two years brief years of making the $5 gold coin, Canada had to quit in minting it in 1914 because all that gold was needed to pay for war preparations as World War I broke out. Vimy Ridge wasn’t gonna pay for itself and mere blood wasn’t going to be enough to cover the tab. Much like Gallipoli taught Australia and New Zealand they weren’t just “British but far away”, Vimy taught that to Canada.

Captain Bligh’s Bounty: Australia & New Zealand

Okay, once again, we’re over 1500 words in and I haven’t had a poop joke yet. So let’s jump directly into DUMP COINS. HURHURHUR, dump.

Australia had a bad case of being very far away from Ol’ Blighty, which means the logistics of getting the money all the way there was hard. Considering that Australia was a series of penal colonies, how much effort do think they were willing to expend? Right, zero, go find some rancid whale blubber to chew on, transportee. Of course, even in Australia, an economy did develop, even if it was sheep and blue gum based at first and the sheep isn’t the best medium of exchange (NOTE: the traditional Irish denominations of sheep/cow/wife based currency will disagree with me here).  So, the lazy answer was to go grab the nearest convenient money and re-mint it into proper British coin. Now, would you like to melt down and restrike these coins? Goodness no! Did you forget we’re colonial strivers from Mother England (AKA the Sterling), being lazy out in the colonies “running the place” lest the native born prisoners’ children think they’re in charge?

1813 5 shilling “Holey Dollar”, image courtesy

1813 15 pence DUMP COIN, image courtesy

No, the answer was to take an 8 reales coin, punch the center out of it (AKA “the dump”) to strike a new coin out of that, value of 1 shilling and threepence, and do that again to the remaining ring as well (AKA “the Holey Dollar”) with a value of 5 shillings. Because why make things easy? I should note that this creative answer, which Governor Macquarie authorized, was carried out by a convict who had been transported for the crime of forgery. Australia similarly used merchant tokens as proxy currency in the absence of the real stuff. I’m to understand that one mid-19th century Tasmanian draper’s token circulated as a penny well into the 20th. That’s effectively deciding that your dry cleaning claim ticket is good enough to function as money.

1894 Half Sovereign, Melbourne mint, I got this with casino winnings in Auckland, along with a complete set of pre-decimalization NZ coins. All of them. I got really lucky that day.

A bit later, there were several gold rushes which made Australia even more worthwhile to Mother England, except the same very, very far away problem reared it’s head again. It was decided that the prudent course of action was to mint all this bullion into sovereigns before shipping it to the other side of the globe. If you were going to engage in piracy to steal this gold, you were going to have to exert effort to change it into your own coinage. Melbourne, Perth, and Sydney all got to have mints to handle the flux of gold, but little of it actually stayed in Australia.

Meanwhile, in New Zealand, they had the structural benefit of not being settled by convicts, but they were even less convenient than Australia. They got the full suite of non-gold British coinage minted for them, just not often. To the New Zealanders reading this, please don’t take this as an insult, but your country is a cultural backwater, much like Alaska and New Hampshire (NH is a goddamn numismatic oddity, I tell you what). As this is a hydrological metaphor, what it means is that things brought to New Zealand somehow don’t leave. Coins that circulated throughout the British Empire just kinda…stopped…when they got to New Zealand and after that only circulated within the islands. What gold coins New Zealand received were all minted in Australia.

Then New Zealand had a gold rush of their own on the South Island. And so, the mint Dunedin was set up to make the largest gold coin the world has ever seen, the Golden Moa, and… sorry, no, I’m lying. Because the Crown had already solved the remote gold rush problem with mints in Australia, all of New Zealand’s gold was shipped to Australia for minting. Australia already had enough sheep, so New Zealand got to keep those.


Frankly, these were the ones that merited special treatment. Hong Kong was a odd in that it had dollars rather than the normal British system or a hybrid with the local traditional coinage. They tried a hybrid for one year before selling the entire mint to the Japanese as their coins didn’t impress the Chinese merchants in Shanghai at all. Shanghai was already used to 8 reales, they were already minting dollars for Canada, so why not do it for Hong Kong too?

South Africa, for the early years, didn’t get any special coins of their own because they were on the way back and forth to India and Australia. The challenge for Cape Town was exchanging back and forth between all the different, but equally valid, coins of the British Empire washing through their port. For the west and east African colonies, the authorities followed the British currency model pretty strictly, with the exception of the guinea entering circulation from the British African Company (BAC) which had taken control of the gold fields of Ghana. The location of the former BAC headquarters in London is what gives the Elephant & Castle underground station it’s name, as the corporate heraldry (and the early guinea coins) featured an elephant and castle.

The Caribbean, as the sugar part of the triangular trade, never had much call to develop an independent economy that deserved its own coinage independent of Britain’s. “Molasses to Rum to Slaves” as the song goes, not much room for coins in that.

Money Rant: Colonies, Coinage, and Gold

In my continuing efforts to share my odd view of American history through the medium of our money, it’s time to talk colonies and gold. Since the Lydians first introduced the concept of coinage to the world ~3000 years ago and the first larger nation-states organized, there has been bickering about who is allowed to have which coins and made of what.

Until quite recently, the logistical systems to keep money well distributed throughout a realm were difficult and this regularly lead to money shortages, particularly at the periphery. This is extra bad for the periphery because you have troops there defending the frontier and, if you don’t pay them, pretty soon your frontier isn’t where you left it. When you add long overland or ocean journeys to these frontier locations it gets even worse and you start to wonder how it was, exactly, that any imperial/colonial power ever actually functioned.

The solution was to create local mints that could strike coins to pay the local troops and, more importantly, transform filthy foreign currency and freshly mined bullion to good, wholesome “real” currency with the correct ruler’s head on it. This was a calculated risk. Sending bullion out to local officials and giving them the power to mint coinage or less invited secession and civil war (all you have to do is change the dies and now it’s your face on the coins and BAM! Instant Legitimacy). If you now have you own treasury, what makes you financially beholden to the Crown? The answer is simple: the Crown has waaaaaay more money than you and can buy your rebellion out several times over. Why does the crown have so much more you ask? The answer to that is also is relatively simple: you were only given brass & copper to work with for your coinage, maybe silver if you were important. The Crown’s treasury and mint was the only one that got to strike gold.

As you move forward through time, the perennial complaint from the colonies is that they send their gold to the capitol but only silver comes back. Then the next complaint is that what silver they get vanishes quickly into other people’s hands. The colony is underpaid for the raw materials being extracted and finished goods from the home country are overpriced. The solution is to make your own finished goods right? AHAHAHAHAHAH, that’s illegal, you colonial scum. The point of a colony is to enrich the the charter owners back home, not the colonists. Jeez. C’mon. Get with the program.

I want to focus this primarily to Britain’s colonial children, particularly America, but thematically the behavior of other colonial/imperial powers regarding their subordinate regions has been quite similar over the millennia. In the British context, the thing that dictated what colonies could and could not do was called the Royal Prerogative. In an abbreviated and not terribly legalistic sense, the Royal Prerogative was the collection of powers directly vested in the monarch, not in Parliament, and certainly not any of the local colonial assemblies. To this day, if you have QE2’s face on your coins, you are still subject to some residual bits of the Royal Prerogative, as exercised by the Governor-General with the tacit approval of HM Gov’t. And as coins are why I am writing, here’s the topics where the Royal Prerogative held longest and/or still hold:

  1. Monopoly on Force & Diplomacy – you don’t get to independently declare war & peace and you don’t get to organize armed forces without the Crown’s say so. If you have more than one army without a single, unitary command, you very soon have a civil war between rival generals. SEE ALSO: most all of history, particularly Rome, Persia, and China.
  2. Citizenship/Immigration – only the Crown gets to say who is a subject of the Crown. NOTE: this can get ugly and racist very fast.
  3. Currency – The only money that counts is what has been issued by the Crown. We’ll let you know if we feel like setting up a local Royal Mint in your colony, but that’s for our convenience, not yours.

What you get to mint and where it’s minted is where the story gets fun and starts running face first into the comedy of errors we like to call History. If you don’t already have some familiarity with the predecimalization system of British coinage, here is a handy reference guide. But I’ll warn you, that’s only a starting point for the headscratching multitude of money choices that Britain made for her many colonies.

Britain’s Largest Failed Colony: America

Well, that’s a bit wrong, it wasn’t just one colony and there were more than thirteen. Colonial “America” is better regarded as a collection of failed commercial enterprises that the Crown took over directly, the descendants of some religious nutbars & emigres from the English Civil War who had a relationship with the Crown best described as “tense and complicated”, and Stuff Stolen From The French/Dutch. In the early days of the British colonization of America, only Virginia was a Crown Colony directly ruled by the king, hence its nickname “Old Dominion”. New England was made up of royal charter colonies where a contract had been written up with the Crown to dictate how the place would be ruled somewhat autonomously in the Crown’s name (no one loves arguing a good charter/contract law more than a Puritan). Then there were the proprietary colonies (Pennsylvania, Maryland, New York) which had been granted to loyal courtiers as fiefs to develop as they pleased with absolute power over them. Lastly, were the colonies that were corporate concerns (Georgia and the Carolinas) which were established by companies paying a royalty to the Crown for the pleasure of extracting whatever they could. NOTE: at this point in history, what we now consider Canada was also “America”. Early British Canadian colonial history and organization ran similarly to Virginia’s as Crown Colonies, but with a whole lot more fighting with the French. I’ll get back to The Canadas in the next post.

Stunningly High Quality “1652” Massachusetts Pine Tree Coin, which may have been minted any time bewtween 1667 to 1682. Don’t ask, its a very complicated story. – Photo by Phil Arnold/

Prior to the revolution, America functioned on an incredibly limited amount of coinage provided from the home country and on rare occasions they were allowed to mint their own coins locally like the Pine Tree Coin. Instead they had paper Colonial Currencies that were despised as being not quite worth the paper they were printed on and, doubly annoying, not easily transferable between colonies. This is one reason why the Interstate Commerce Clause is in the US Constitution: to make sure silly tariffs and trade barriers, much less independent currencies, didn’t pop up between states. For coinage, most all of it was copper in the farthing to penny range with the occasional silver threepence, sixpence, or LIVING LARGE big shilling-style. They were also explicitly forbidden to mint gold, which was an easy enough order to follow because there hadn’t been a gold strike in the colonies yet (America’s first gold rush in Georgia wouldn’t happen until after independence). English merchants weren’t even supposed to even bring gold coins to America.

The good news for the colonies is they didn’t particularly need to mint higher denomination silver because their world had been awash with very pure silver coins for almost 200 years at this point in the form of the Spanish 8 reales, AKA thalers. It was, unfortunately, very Spanish and the British hated that, considering trade from the colonies was supposed to be exclusively with British merchants. Technically, you weren’t supposed to use them. If you ever wondered why America and Canada have dollars rather than pounds, it’s because they were so used to the term: dollar is an English corruption of the German word thaler. But the importance of the 8 reales coin to American and world history is a topic for another time.

With no one in the colonies allowed to mint anything of higher denomination than a shilling, it is damn hard to run an internal economy. Consider trying to go buy a new car with small change; this is about the same problem of trying to commission a vessel to then ship anything within the colonies. For the most part, all the colonies worked on local credit systems and borrowed the term “wampum” from the New England tribes to describe debt-signifying goods and notes, which suffered bad inflationary problems and frequent devaluation. I highly recommend reading Graeber’s “DEBT: the First 5000 Years” to explain how debt exchange systems are the basis of economies and currency, not barter. Barter is what the Britain wanted the colonies to function on, with the mother country as the only acceptable trading partner for finished goods.

Stunningly High Quality Silver Continental Currency – Photo by Phil Arnold/

So, before 1775, the coins in America may be described as old, badly worn, low denomination, often foreign and, largely, counterfeit. Counterfeiting is a problem but, well, when you’re short of coins in the first place, you work with what you’ve got. When your colonial masters are squeezing you for more taxes (because war with the French is expensive even when you keep winning), but you don’t have any legitimate money to pay it, they flatly refuse to let you mint more locally, you have no representation in the Parliament to try to change their mind, and then Parliament decides colonial tea merchants still need to pay import duties but the East India Company awash in gold does not, what do think happens? This would also be why more or less the first order of business for the Continental Congress, right after slapping together the Continental Army (violating Royal Prerogative 1), was to work on making a Continental Currency (violating Royal Prerogative 3). One of the other things that Paul Revere did, as a silversmith, was volunteer bullion and his skills as an engraver to the Continental Congress to start minting coinage.

Please note that the Continental Currency didn’t actually have a denomination, it was just called The Continental. There weren’t many of the coin versions made because Congress was perennially short of bullion, so they printed paper Continentals to pay for the army. The only thing backing the paper Continental was the good faith and promises to freely exchange them for coins, as soon as we had some, which meant the value of the Continental was very much tied to the success of armies in the field and that was pretty poor for most of the Revolutionary War. Accordingly, the term “as worthless as a Continental” was thrown around, but for entirely different reasons, by both Tories and Patriots. Also, because I’ve gone nearly 2000 words without a poop joke, Continental was also slang for toilet paper. The American grumble* about fiat currency vs. bullion based is older than the country itself. 

But what about the other British colonies? Did they get screwed with as badly as the backwater of America? What did America do when it had colonies of its own? FIND OUT NEXT TIME ON PHIL’S MONEY RANTS!

* there is no internet helldive deeper into the truly disgusting depths of the American psyche than Precious Metals social media and forums. There isn’t enough whiskey in the world for me to take the Journey to the Goldbug’s Lair again and it has some worrying overlaps with the cryptocurrency communities. When you see XAU to BTC price quotes at the top of a website, run. Don’t look back. Never look back. Just run.

The Last Minute, 2017 Edition

Apologies if you came here looking for some information on the blog side of the house here at Funranium Labs this week; there was a bit of a server crisis and had to spend a while reconstructing things. Still putting some older stuff back together, but I’ve got most of my bullshitting back up again. Double apologies for those that have been anxiously awaiting the upcoming money rant (all three of you) because the crash seems to have eaten the draft.

But on to the information, you actually want…

The number of remaining Steins of Science dwindles away quickly. Still, don’t have a good replacement supplier to keep prices down for the future, so enjoy the “low” prices while they last.

All the order slots for the BBotE production window that closes on the 16th are gone. I’ve opened a short BBotE production window which ends on December 23rd and will crank out as much as I possibly can as fast as I can next week to get things to people in time for Christmas but we’re now at the whim of the United States Postal Service. That said, if you place your order on the 21st you better order express mail if you expect to see it before the 25th. For international orders, you’re probably out of luck at this point to get it in time for Christmas unless you’re lucky enough to live in Perth or Melbourne in Australia as the BBotE Ambassadors there have been recently resupplied.

Worse come to worse, you can always give a gift certificate to folks and let them order the BBotE they’d like. You’ve got options. (I apologize in advance for the different themes, haven’t quite figured out how to change those in the module. I’m working on that.)


When you are insane with genius, time management skills are the first thing to go. (Dr. Dinosaur courtesy of Scott Wegener & Brian Clevinger)


After Xmas, the next normal two-week production window will run until January 6th before I head to the Consumer Electronics Show for ridiculousness in Las Vegas. I look forward to mixing many fine cocktails, learning the dumbest new tech for 2018, and yelling at people for illegal lasers & physically impossible snake oil “prototypes”.