Anchor Money

[Deeman]

The Great Recoinage of 1816 was fundamentally concerned with the re-introduction of a silver coinage and a change in the gold coinage from the guinea to the slightly lighter sovereign worth 20/-. The value of the shilling remained unchanged at 12d. The minting of copper coins resumed in 1821 when farthings were produced for George IV with these followed by pennies and halfpennies from 1825 onwards.

Until 1825 Britain had never supplied any of its own currency to its colonies. They had been left to fend for themselves and to pick up and use what other money they could find.

From 1817 the British government turned its attention to the need for a colonial coinage based on the Spanish dollar. The colonial coinage, generally known as Anchor money from the anchor featured on the reverse, was developed. The coins were struck on the Spanish dollar silver of 0.892 fine.

The first issue, dated 1820, was sent to Mauritius in the denominations of quarter, eighth and sixteenth dollar. A second issue, dated 1822 was sent both to Mauritius and the British West Indies. An additional half-dollar denomination was only sent to Mauritius.

The system was not a success with both areas eventually moving to the sterling system. In 1826, when Mauritius went over to sterling, remaining anchor money dated 1822, including the half-dollar pieces, were transferred to the British West Indies.

Dies were prepared at the Royal Mint bearing the date 1821 but the dates on the dies were modified to read 1822, with some coins showing an overdate, 1822 over 1821.

The obverse design is an ornate shield bearing the arms of George IV with the crowned shield of Hannover at centre containing the two lions passant guardant of Hannover, the lion rampant within a semy of hearts of Luneburg and the horse running to the left of Westphalia. Quartered around are the three lions passant guardant of England in the 1st and 4th quadrants, the lion rampant within a tressure of Scotland in the 2nd quadrant and the harp of Ireland in the 3rd quadrant. All circumscribed by the inscription GEORGIUS IV D:G: BRITANNIARUM REX F:D:.

The reverse design has a crowned central anchor with the dollar fraction in Roman numerals either side, all surrounded by the inscription COLONIAR: BRITAN: MONET: from southwest to southeast with the date in the gap.

Typical weights and diameters: -

Half dollar 13.2g, 32mm.
Quarter dollar 6.6g, 26mm.
Eighth dollar 3.3g, 21mm.
Sixteenth dollar 1.65g, 16mm.

[Deeman]

Half dollar



Only struck dated 1822.

[Deeman]

Quarter dollar

[Deeman]

Quarter dollar 1822 over 1821

[Deeman]

Eighth dollar

[Deeman]

Sixteenth dollar

[Figleaf]

You are quite right to state that technically, the anchor coins are tied to the great recoinage of 1816 in the sense that the new presses could produce them at good speed, in the necessary quantity and at high precision. They were said to be of (Spanish) dollar fineness and weight, raising the question of why the issue failed.

However, the coins were also a political element. After the wars of Napoléon, Spain's colonial empire in South America was lost. Even at that time, the silver mines were getting less productive, so it was clear that the supply of Spanish colonial coins would stop and equivalent coin supply would be trending down. The void was crying out to be filled, as the country that could supply the missing coins would earn interesting seigniorage, while the coins in circulation would amount to a huge, interest-free loan (the same mechanism whereby today, the US is supported by US banknotes circulating outside the country). The same train of thought explains the Hong Kong mint: the territory was too small for a mint, but the aim was to get minting rights of Chinese coins.

London marketed its coins by making them slightly underweight and claiming that the underweight was made up by quality. This explains e.g. why it was necessary to send counterstamped Madras coins to Ceylon: the Ceylonese rejected the machine-struck coins foisted on them. I suspect strongly that the claim that the anchor coins were of Spanish colonial dollar fineness and weight was bogus. For one thing, that was not standard policy, for another, as Newton showed, the Spanish colonial dollar was not of one standard weight of fineness. These values varied over time and from mint to mint. My suspicion is fed further by the tariffs published in Chalmers, in which the anchor coins are consistently overrated against the Spanish dollar.

Another factor that contributed to the failure of the issue was that the subordinate values were badly chosen. The Spanish peso was indeed divided in 8 reales, making the binary small change seem logical. However, in fact, Spanish dollars were largely a unit of account for sea traders, rather than a currency in circulation. The population at large used French 5 franc pieces and the sicca rupee at a rate of 2 sicca rupees to 5 francs. This rate had created a decimal, rather than a binary system for domestic transactions. While the half and quarter anchor dollar could be expressed decimally, the 1/8 and 1/16 dollar did not fit the decimal system and none of the anchor coins fit in with UK money. Since the need for coins was greatest for denominations between the sou marqué (1 cent) and the sicca rupee (50 cent), the anchor coins were of very limited use to the population.

For once, the colonial authorities got it right. In 1825 the UK shilling was rated at 25 cents, the UK penny at 2 cents. This connected the sicca rupee with the local dollar at the desired rate of 2 sicca rupee to 5 French francs, (by now replaced by 4 shillings) and persuaded Mauritians to accept UK coins, spelling the end of the anchor coins.

Side note:the replacement of the sicca rupee in 1836 made UK coins undervalued. They disappeared quickly and were eventually replaced by coins denominated in decimal rupees. Mauritius had decimal rupees long before India.

Peter

[Mister T]

Interesting - it always seemed strange that Britain's first colonial coins were for the Americas out of all of its colonies.

[Figleaf]

That is debatable. There were earlier coppers for the BEIC: copperoons, minted from around 1672. The problem is that India wasn't a colony, but Bombay was. See this thread. More detail here. Still, if you consider the hog coins as coins, the statement becomes correct (but in that case it's in the wrong thread).

More important, long range trade in earlier centuries was to a considerable extent based on "return freight". Sailing to or from Farawaystan with an empty ship just didn't make sense. One of the first profitable routes was taking textiles and copper from England to West Africa, trading that for slaves, bringing those to the Caribbean and trading them for coffee, tea, sugar and cotton and sailing those to England. Those fly specks in the Caribbean were as many sources of wealth for the traders. Thus the colonists, the plantations and the coins.

Another old trade "triangle" was to sail out with silver, buy spices in Surat, copper in Japan and gold in China and sail back home. Hence the interest in Bombay and Calcutta as an alternative for Surat.

Peter

[Mister T]

Ah good point - I was thinking along the lines of the first colony to get decent-looking, well-produced coinage. I don't know who was lobbying when but I would have thought Australia, or New Zealand or Canada would have been interested in their own money early on, but I guess locals filled the void with tokens rather than Britain filling the void with real money.

[Figleaf]

Good looks were never the point of colonial coins. Even in the home country, coins could look pretty sloppy. Coins were a means of payment, utilitarian. Anything else that got into that direction could function like money also: sugar and tobacco in the Caribbean, animal skins in Canada, rum in Australia, textile in West Africa. Metallic money was almost a luxury good, as unreliable as the alternatives, but at least it didn't spoil.

In India, the British colonisers thought they could replace the crummily struck traditional coins with nicely made, but slightly lighter coins. The shroffs ("bankers") disagreed. It took quite a bit of display of power before the machine-struck coins were accepted.

Point being that how the pieces looked like was without any importance. The all-important question was rather if someone else would accept it as payment.

Also, colonial coins were supposed to be struck in the home country. This is because coining was and is a profitable enterprise, yielding seigniorage. For that reason, striking coins were considered a royal prerogative, though in less centralised countries, the ruler could share it, e.g. with the clergy or certain cities. The companies that exploited colonies did not have the right to strike coins for their own account - the EIC was an important exception, not the rule.

These two principles clashed when there was insufficient supply of metallic coin. This was the rule (except in EIC ruled territories), because the companies would continually take money out of the colonies: they would have a balance of payment surplus (i.e. the colonists would produce more value than the cost of supplying them), but much of the net surplus would be stored with London bankers in accounts in the name of the companies. Paying cash to the colonists was a cost item, to be kept as low as possible.

Peter

[lakdiva]

The first issue, dated 1820, was sent to Mauritius in the denominations of quarter, eighth and sixteenth dollar. A second issue, dated 1822 was sent both to Mauritius and the British West Indies. An additional half-dollar denomination was only sent to Mauritius.

The system was not a success with both areas eventually moving to the sterling system. In 1826, when Mauritius went over to sterling, the remaining anchor money dated 1822, including the half-dollar pieces were transferred to the British West Indies.

There is the reference that 1822 Anchor money was also sent to Ceylon
See http://coins.lakdiva.org/anchor/1822_anchor_ag.html
They were never sent again, and in the next year, 1823 Britain sent Countermarked Indian Rupees.
See http://coins.lakdiva.org/ceylon_government/1823_cm_1rm_ag.html

I wonder if that is because the Anchor Money was not accepted in Ceylon.
I know that sometime after the change over to Sterling in 1825, the British stopped sending British Silver coins to Ceylon as most were melted to make jewelry. Ceylon used the Indian Rupee unofficially since 1835, and officially after the 1870 adoption of Decimal Currency.

[FosseWay]

Arguably the first colony was Ireland, for which specific coinage was minted in the name of English/British rulers long before any of the above

[Figleaf]

There is the reference that 1822 Anchor money was also sent to Ceylon
See http://coins.lakdiva.org/anchor/1822_anchor_ag.html

There is another reference in A history of currency in the British Colonies by Robert Chalmers: In 1820 and 1822 "Anchor money" (see page 21), was coined in England for use of the colonies generally, and a consignment was made to Ceylon of these silver fractions of a Spanish dollar (page 355)

I can only speculate, but it looks likely that the reason the anchor money coins did not circulate is that in 1825, the currency of the island was reformed by Order in Council of 23rd March 1825, page 23, juncto Regulation No. 8 of 1825. Only British coins were allowed to circulate and all older coins and banknotes were withdrawn.

There was to be a transition period for some of the old coins, valued at a fixed rate. The rate of the Spanish colonial peso was 4/4 (52 pence). At around 15 to the pound, the coin called "England" in your link should be worth 8 pence, which would be 2/13th of a peso. The closest would be a real (2/16th peso, 1/8 anchor dollar) coin. For the reference to apply to the real, the exchange rate would have to be 5/4 (64 pence), which is a totally unrealistic rate of exchange. If we presume that the anchor money coins were valued the same as the peso in 1825, the exchange rate of 8 pence for the "England" does not seem to be an anchor money coin.

Peter

[Offa]

Arguably the first colony was Ireland, for which specific coinage was minted in the name of English/British rulers long before any of the above

Absolutely spot on, coins specifically for ireland date back to king John and Edward I.