First Australian-made coins from government assay in Adelaide using South Australians' gold found in 1850s Victoria

Joshua Payne who designed Australia's first gold coinage at the South Australian government assay office in 1852, using gold sent back by South Australian prospectors in Victoria.

The Adelaide pound was part of the first Australian-made currency in 1852, with gold coins struck at the South Australian government assay office, Adelaide, using gold brought back from South Australian diggers' finds in the Victorian gold fields. The currency the colony produced by South Australia was technically illegal as it hadn’t been approved in Britain but saved it the colony from bankruptcy.

South Australia’s 1840s copper boom was interrupted dramatically in 1851 by gold being discovered in Victoria. A third of South Australia’s men rushed off, taking a huge amount of gold sovereigns, causing a run on South Australian banks and hitting the economy.

South Australian governor Henry Edward Fox Young led a rescue mission. George Tinline, temporary manager of the South Australia Banking Company, convinced the government to place its money at the Adelaide banks.

A fixed price of £3/11/- an ounce for gold dust, more than the Victorian rate, was authorised by the government for all gold sent back to the colony by South Australian prospectors. To further attract guaranteed deliveries of gold to Adelaide, a monthly armed escort under zealous police inspector Alexander Tolmer was set up to bring the gold from Victoria.  The first escort arrived at the government treasury building in Flinders Street, Adelaide city, in 1852.

To deal with the incoming gold, the South Australian government – at that stage, only operating with a Legislative Council – acted urgently and uniquely in Australian history. The Bullion Act No.1 was one of the quickest pieces of legislation ever passed, on January 28, 1852. The bill was read, promptly passed three readings and forwarded to the lieutenant governor, immediately received his assent – all in less than two hours.

Thirteen days later, on February 10, 1852, the government assay office opened at the treasury building. The ofice was effectively Australia's first mint. Its sole purpose was to assay gold nuggets brought from the Victorian goldfields and reshape them into ingots.

But its work was unofficial because it was producing without British government permission or Queen Victoria’s approval. Its creators felt the time involved in gaining permission from London to set up a mint was too great a risk to the economy. To validate getting around royal protocols, South Australian legislators passed the Bullion Act by finding a loophole in regulations that allowed them to create their own mint and strike gold ingots.

The assay office melted and purified each prospector’s gold into a ingot stamped only with its weight. The banks issued certificates for the ingots as legal tender for 12 months. Within the first two weeks, deposits at the assay office totalled £24,000.

To fix issues with the unpopular ingots, the Bullion Act was amended nine months after it was passed (leaving only three months before it expired) to allow 10 shilling and £1, £2 and £5 gold pieces to be struck by the assay office. The office fortunately had engraver and die sinker Joshua Payne, only arrived in the colony in 1849, to do the coins' intricate designs. 

In the rush to produce them, the first designs failed, with around 50 to 100 coins (later called Adelaide Pound Type I) having a severe die crack on the reverse side. A new die quickly replaced it, the only big change being a crenelated inner circle on the reverse instead of Type I’s beaded inner circle.

Within a week, 600 gold Adelaide pounds had been delivered to the South Australian Banking Company and 100 sent to London. Adelaide Pound Type II had 24,648 copies struck but it’s believed only a small percentage circulated when it was found the coins had almost two shillings of intrinsic gold value above the £1 and were withdrawn and or melted by profiteers or official decree.

The remaining Adelaide pounds continued to be sought worldwide for their rarity but also the story behind them.

By the time London approval for South Australian coinage was received, production had ceased, thanks to a shipment of official sovereigns arriving.