Holey dollar and Dump is the name given to coins that were separated by punching out the centres and using both pieces as currency. It was used in the early history of two British settlements, Prince Edward Island and New South Wales. The Royal Australian Mint decided to strike this
On Prince Edward Island in 1813, there was a scarcity of money. The governor had all of the Spanish coins collected and cut out their centres. The middle section passed as shillings and the outer portion of the coin was denoted as five-shilling pieces. The financial worth combined of both pieces was greater on Prince Edward Island and became the authorised money for Prince Edward Island. The British Colony of New South Wales in Australia encountered a similar problem. British, Dutch, Indian and Portuguese coinage was thriving and in circulation when the colony was established. However, trading allowed much of the money to vanish and travel to new destinations by way of exporting trade ships. The Governor, Lachlan Macquarie, of the New South Wales Colony in Australia opted to utilise the same strategy as the governor of Prince Edward Island. These coins became the first authorised money for the British Colony of New South Wales in Australia in 1813. They are of a great rarity to this date and are proclaimed highly valuable even if they are in the poorest of quality.
There was a dual purpose to develop these coins for The British Colony of New South Wales. One was based on a scarcity of money and the need to establish an authorised coinage for the colony. The other was to alleviate a corrupt rum trade that had beset The British Colony of New South Wales in 1808. It is often termed the 'Rum Rebellion of 1808' (State Library NSW, 2010). The Australian government at that time under Governor William Bligh was ousted and overpowered by a military regime. They remained in control for two years until Governor Lachlan Macquarie was commissioned at the onset of 1810. The logic that precluded the rebellion was not in actuality based on the rum trade but on a three-way struggle for power between the military, the Governors and ruling aristocrats at that time. The appointed Governor at the time took instruction from the government in London. The military was recruited to support the Governor. Recruits willingly signed up with great enthusiasm based on the lucrativeness of the assignment. They were allowed to do trading in conjunction with their military duties and in essence monopolised trade within the colony based on their positions and access to food, clothing, goods and alcohol (State Library NSW, 2010).
Confrontations eventually erupted amongst Governors as well as military based on everyone's struggle to maintain their powerful positions. Governors prior to Bligh tried to dismantle the influential system that the military had devised and concluded from a complex bartering system of food, clothing, goods and alcohol (mainly rum) that was enabled due to the lack of available money. Alcohol abuse was also becoming an issue. However, the Governors were unsuccessful in their attempts to demolish the military's system. With excessive amounts of money and power to be gained efforts were futile. Bligh had been denoted as one of the more resilient and tenacious Governors but was confronted by John Macarthur, who had previously been an officer. Macarthur stood up for the military men and it was determined that Bligh be removed from office for the safety of the colony in lieu of removal of military forces. Governor Lachlan Macquarie established in 1812 The Holey Dollar and Dump initiative and subsequently stamped out the corrupt rum trading system as well as alleviated the dire need for coinage and an official currency system (RAM, 2014) .