X - CURRENCY, BANKING, AND EXCHANGE

Summary

NEW SOUTH WALES

When gold, the fruit of the first discoveries, was brought to Sydney, its intrinsic value was uncertain, as there were neither skilled assayers in the colony nor the necessary appurtenances of an assay office. In June 1851 gold dust was sold at an average price of £3: 8: 6 an ounce, and, a few months later, the Government made an arrangement with a contractor that he should buy from it all the gold received by the Treasury at the rate of £3: 8: 4 per ounce. At this price a considerable quantity was received from miners as payment for licences to dig. No attempt was made to refine the gold, practically the whole of it being sent to England in its crude state. The charge made for carrying the gold to London was ½ per cent, and, owing to the prospect of considerable shipments, the rate of exchange on private bills hypothecated against produce advanced during August 1851 to 2½ per cent discount as against the former rate of 1 per cent. Thereafter, for more than twelve months, the condition of the exchanges on London and other European countries was greatly disturbed and most unsatisfactory to the colony, the most acute phase being reached in February 1852, when the price offered by the banks for private bills drawn on London was 12 per cent discount.