Holey sound decisions

Although the connection is not immediately obvious, the Macquarie Group's logo is based on the holey dollar, Australia's first coin. These silver coins were introduced 200 years ago, in 1813, appropriately by Governor Lachlan Macquarie.

Faced with a severe shortage of local currency, Macquarie had the bright idea of buying 40,000 Spanish silver dollars from the East India Company in Madras. He transformed them into local currency by punching a hole in each coin, creating an outer circular ring and an inner disc. The outer ring was re-stamped "New South Wales" to become the 1813 holey dollar with a value of five shillings. The inner disc was also re-stamped to become the 1813 dump, with a value of 15 pence.

The conversion was done by a convicted forger, William Henshall.

When the Macquarie Group decided to stage an exhibition of these coins to mark the anniversary, it recruited Belinda Downie, managing director of Coinworks in Melbourne.

About 300 of these coins survive, with 200 in private hands, including most of the finest known examples. Downie knows where they are because chances are she has bought and sold them in the past 10 years.

She assembled 13 of the most significant holey dollars, with a total estimated value of $7.3 million. These coins have taken off as solid-gold investments in the past 10 years, especially since the global financial crisis.

In March, a West Australian collector paid a record price of $495,000 for one, bought through Coinworks.

Downie also sold the holey dollar that set the previous record of $485,000 in 2011. Three other examples have sold for more than $400,000 since 2010. Downie estimates she has sold 10 holey dollars in the past three years, for a total value of $3.46 million.

What makes the coins so special is that each is unique. Governor Macquarie's urgent request for 40,000 silver dollars did not specify dates, and the coins supplied had been struck at various mints, including Mexico, Peru, Bolivia, Spain, Guatemala, Chile and Colombia.

The condition was of no concern given what would happen to them. Some, of course, are more significant than others.

One of the most notable on display at the exhibition is known as the Hannibal Head, a reference to the unflattering portrait of Joseph Bonaparte on the original Spanish coin. It is the only one known bearing this design and its exceptional condition makes it one of the most valuable. It sold at the Eminent Colonials Auction in August last year for about $450,000. The coin's previous public appearance was at a 1988 Spinks auction where it was listed with a $45,000 estimate, which bidders thought a little excessive. It's thought it sold privately after the auction for $40,500. Downie picked up this coin in 2007 for a cool $260,000, then on-sold it to a client who, five years later, sold it again for a profit of about $200,000.

She says this tenfold increase in value from 1988 to 2013 is typical of Holey Dollars in good condition.

The location of the mint is also significant. Holey dollars from the Mexico Mint are relatively common. Examples from Lima and Potosi are scarce.

The exhibited holey dollar struck at the Madrid Mint is unique in private hands.

The date can also be a factor.

The 1788 holey dollar on display marks the year that NSW was settled and, as if William Henshall were aware of this, the countermarks New South Wales, the holey dollar date 1813 and the Spanish dollar date 1788 are vertically aligned.

This raises an interesting question. Was Henshall under instructions to make this holey dollar the textbook coin in the series?

The exhibition also includes four examples of the 1813 dumps. Originally worth a mere 15 pence, these are also in demand. Those in exceptional condition are valued at up to $250,000.

The Macquarie Group Exhibition of Holey Dollars starts on October 2 at 1 Martin Place, Sydney. The exhibition is open to the public and admission is free.

For a gallery of highlights from the coin exhibition, see

theage.com.au/money