The Rum Rebellion 

11th of April, 2019

Scoundrels and Ratbags

Australia was first settled by the British Empire’s scoundrels and ratbags. The laws of 17^th century were harsh and by 1770’s the number of prisoners in English jails had caused serious overcrowding problems.

To help ease the problem convicts were sent halfway around the world to Terra Australis, Latin for “Land of the South”.

Whether this was the only reason is up for significant debate. There is a serious argument that transportation to and from the colonies was a cover for a much bigger plot.

It’s thought by many that Sydney was to become the Royal Garden of Earthly Delights, the Pot growing capital of the Commonwealth ensuring the Empire’s maritime fleet had continuous supply of hemp, ropes and sails that their naval power was so heavily reliant upon.

An interesting story that I may write about one day…

Anyway, harsh and undignified conditions met the scum of English society when they arrived in Australia and it was often thought difficult to differentiate the Felons from those in charge?!

Hardened criminals like Mary Wade, were sentenced to hang for pawning a stolen dress. Luckily for her in 1789 King George III celebrated his cure from “unnamed madness” by commuting all the sentences of those women on death row to transportation to the promised land – quite an adventure for an 8-year-old girl!

Its claimed that when Mary died, she had over 300 living descendants and now tens of thousands of descendants including, the likes of Kevin Rudd who can call her Great Ma…

But I digress. Life was hard and a colonist had to be both industrious and resourceful to survive the consistent problems they faced.

In a very Australian type of way, Rum was one of the first currencies that greased the economic wheels of growth. Well, that was until December 1807 when the fourth Governor of NSW, William Bligh, sent orders prohibiting the use of Rum and other Spirits as payment for commodities.

Australia’s Rum Rebellion

John Macarthur worked with the NSW Corps and “allegedly” distributed large quantities of imported rum. “The officers of the Corps were able to use their position and wealth to buy all the imported rum and then exchange it for goods and labour at very favourable rates, thus earning the Corps the nickname – The Rum Corps”. (see Wikki).

This created great wealth and power for the officers and good times and headaches for the punters.

Clearly, Bligh’s prohibition of Rum trading was seen to upset both the officers and the punters alike. How dare Bligh restrain one’s ability to guzzle the devil’s poison – or at least that’s how the history books portray it…

“It is true many had made good profits from rum trading in the 1790s, partly because they were the only ones who could afford to buy wholesale from visiting ships. But by 1800 their monopoly had been broken by the rise of ex-convict entrepreneurs such as Simeon Lord and immigrant businessmen like Robert Campbell.” wrote Alan Ramsey in the Sydney Morning Herald.

If we look a little closer as to the potential root cause of Australia’s Civil uprising lo and behold what do we find as a more likely underlying reason for Australia’s first and only armed takeover of government?

It Starts with “L”

Governor Bligh was not well respected or liked by many. It is said that during his term he greatly restricted the approval of land grants. In fact, he only granted a little over 1,600ha – his predecessor, Governor King, assigned 24,000ha. The economic driver of a Government Licence for land had been withdrawn and that, of course, did not sit well with the wealthy Rum traders as it greatly restricted both their ability to diversify and advance their fortunes.

To add insult to injury and stick it right up these boozy barons, Bligh just happened to allot more than half of the 1600ha to himself and his daughter?!

Abuse of power – who would have ever thought? This of course is just typical of the behaviour we continually see throughout history by those in a position of privilege.

And herein lies a more likely reason for Australia’s “Rum Rebellion”. LAND – shh don’t mention the “L” word…

History tells us that Bligh was removed and Governor Macquarie was the next cab off the rank to be appointed Governor of NSW.

It’s all about the Cash

The new colony continued to struggle for money. No provision for currency had been made as it was thought Australia would only ever be a penal colony with an unsophisticated economy and administered by government to control yeomen, ex-convicts and scallywags. The thought of a flourishing and vibrant economy of enterprise and opportunity was non-existent.

So those early settlers had to rely on the few coins, rum and their bartering skills to exchange produce, goods and services.

The persistent shortage of coins led to the increased use of promissory notes or IOUs. This wasn’t without issue and they soon became known as “shinplasters, a term describing a paper currency thought to be only worth soaking in vinegar as a poultice for bruises.” https://museum.rba.gov.au/displays/before-federation/

Such notes had the added problem, or benefit, it just depended on if you were the recipient or issuer, of falling apart and deteriorating, thus avoiding the issuer of the need to repay the promise.

Out of Coins. Out of Rum!

Faced with a significant cash crisis, in 1813 Governor Macquarie ordered the importation of 40,000 Spanish Silver Dollars, which was recognised as an international currency of the time.

Macquarie however quickly realised that this cash injection wouldn’t be sufficient, so he came up with the ingenious idea of creating his own coinage by punching a hole in the centre of the Spanish dollar – thus creating two coins from one. Macquarie was effectively using his Government Licence to “mint” two coins from one, effectively doubling the number of coins in circulation that was supported by the NSW Government “Reserves.” – he was the first Australian to apply quantitative easing….

The holed coins were known as the “Ring”, although colonists liked to refer to them as Holey Dollars.

And in a very Australian response, the leftover disk affectionately became known as the “Dump”….

This is the story and inspiration behind Macquarie Bank’s name and logo. On this matter the Macquarie website reads:

“Adopting the holey dollar as its symbol, along with the name of its creator, Macquarie Group embodies its pursuit of practical approaches with profitable outcomes.” https://www.macquarie.com/au/about/company/holey-dollar/

In recent years these rare Holey Dollars have sold for as much as $550,000AUD at auction.

Society and the economy are always based around Government Granted Licenses and in this story, Land and Rum are the two topics of focus.

Although Macquarie introduced a Rum licensing system the continual lack of currency continued to be a problem and he was often forced to pay for public works with liquor.

Sydney Hospital was one such project entirely funded on rum. Macquarie, on the government’s behalf, granted the contractors a monopoly license to import rum and used troops to prohibit the landing of spirits anywhere else but the hospital docks which proved to be a lucrative license for those in possession of it.

Dawn of a Polymer Era

Australia’s financial, economic and monetary system has significantly advanced since our sketchy Rum driven days.

Just like Macquarie’s ingenious response to the shortage of currency, in recent years Australia is seen as a real innovator in currency development.

Like many inventions, the Polymer Bank Note was first developed in Australia; a joint venture between The Reserve Bank of Australia and CSIRO.

As they are extensively more durable, these Polymer based notes not only overcame the early issues faced by our colonists of damage and deterioration of their notes, but they also have many advanced security features, like the ability to use metameric inks, which isn’t available in paper notes.

But like rum, the Spanish Dollar and the Dump, Australia’s Polymer Bank Notes will soon be a thing of the past. As the global financial crisis showed us, there is no way even the diligent CSIRO chemist could possibly produce anywhere near the amount of physical currency that Helicopter Ben Bernanke created with a couple of taps on his keyboard flooding the world economies with his quantitative easing party!

Credit Cards, Bitcoin, After and Applepay, along with the central banks quantitative easing adventures have almost rendered society cashless as currency is now created and deleted within the ether.

It’s just another way technology and man’s ingenuity finds a solution to a problem that is then rendered obsolete as technological advancements continue to occur.

Remember its “Same Same. But Different”

The Rum Rebellion was all about land.

So was Bernanke’s cash avalanche.

It’s always about the land, but you should know that by now.

And it ALWAYS manifests through Calnan Flack’s Five Underlying Drivers.

Oh and if you care to look and think about history, access to land and natural resources will ALWAYS be behind any rebellion, uprising, war or civil disobedience. It’s just that history is never framed that way…

 Who uses Polymer Bank Notes?

Countries using Australia’s Polymer Bank Note technology include Brunei, Canada, New Zealand, Papua New Guinea, Romania, Vietnam, United Kingdom, Nigeria, Cape Verde, Chile, The Gambia, Nicaragua, Trinidad, Tobago, Mexico, Maldives, Mauritania, Botswana, São Tomé and Príncipe, Macedonia, Russian Federation, Armenia, Solomon Islands, Egypt and the Organisation of Eastern Caribbean States – Quite a list really