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Coinworks achieves record price with sale of Holey Dollar

Coinworks has just sold a Holey Dollar for a world record price of $495,000.

It’s the highest price paid for an example of Australia’s first coin, both nationally and internationally.

Ms. Belinda Downie, numismatics expert and Managing Director of Coinworks, said, “This Holey Dollar was created from a Spanish Silver Dollar that had been minted at the Lima Mint in Peru in 1808. Only twenty of the 200 specimens held by private collectors have ties to the Lima Mint. And this is the absolute finest of them all. A world class rarity, the coin was purchased by a private collector from Western Australia.”

The previous record price for a Holey Dollar was $485,000 achieved by Coinworks in 2011. The highest price paid for a similar style of Holey Dollar (The Hannibal Head) was achieved at Coinworks Auction in August 2012 for $410,000.

This is the ninth Holey Dollar sold by Coinworks (of the 200 examples privately held) over the last twenty months, total value of the nine coins exceeding $3.16 million.

The incrementing price of the Holey Dollar over the last few years reflects a strong interest in the Holey Dollar as Australia’s first coin, underpinned by a re-invigorated passion in the nation’s history.

Nostalgia also plays its part, 2013 being the 200th anniversary of its striking.

While pride has certainly played a role in the purchase of each of the nine coins, the ultimate drive has been the lure of investment, the extreme rarity of high quality Holey Dollars underpinning a solid record of financial growth. As a case in point the Hannibal Head Holey Dollar that sold for $410,000 at last year’s Eminent Colonials Auction exchanged hands in 1988 for $39,000.

Buy your Holey Dollars – like you buy your real estate

With the higher value of five shillings, and its imposing size, the Holey Dollar is indisputably the dominant partner in the Holey Dollar and Dump pairing.

Furthermore the Holey Dollar is the only coin in the partnership to clearly show that it began its life as a Spanish Silver Dollar. It is one coin created from another and its double history makes it doubly interesting.

The Spanish Silver Dollar was the world’s greatest trading coin in the late 18th and 19th centuries and was struck at the Spanish mints in Mexico, Peru, Bolivia, Spain, Guatemala, Santiago in Chile and Santa Fe de Bogota in Colombia.

The Mexico Mint was a prolific producer of silver coinage and approximately 80 per cent of Holey Dollars were converted from Mexico Mint Silver Dollars.

Of the remaining mints, 10 per cent pertain to Lima, 8 per cent to Potosi, with only a sprinkling tied to the mints in Spain and Guatemala. To this day no Holey Dollars have been found with ties to Chile and Columbia.

But the mint is only part of the Holey Dollar story, the first clue if you like in unravelling the mystery of Australia’s first coin.

The 40,000 Spanish Silver Dollars purchased by Macquarie were not minted in the one year. The shipment covered a range of dates depicting the Spanish monarchs of Ferdinand VI, Charles III, Charles IIII and Ferdinand VII. Approximately 75 per cent of Holey Dollars were converted from Silver Dollars produced during the reign of Charles IIII. Holey Dollars converted from Charles III and Ferdinand VII Silver Dollars are extremely rare, the Holey Dollar of Ferdinand VI unique.

The combinations of mint and monarch of the original Spanish Silver Dollar offer the Holey Dollar buyer different degrees of rarity. So while all Holey Dollars are rare, some are far rarer than others.

There are also, of course, very different degrees of quality. The extensive usage of the Spanish Silver Dollar as an international trading coin means that most Holey Dollars are found well worn.

The quality of the Holey Dollar also has to be considered in relation to the date of the Silver Dollar from it was converted. A Silver Dollar minted in 1780 (and holed by Macquarie in 1813) had many more years of circulation than one let’s say minted in 1805.

Acquiring a Holey Dollar is a little like real estate – you have to do some research before you buy.

For instance, if you were buying property, you would investigate the suburb first. That’s a little like investigating the significance of the year (and monarch) the original Spanish Silver Dollar was minted.

Finding the right street could be compared to knowing the importance of the mint the original Spanish Silver Dollar came from.

And of course the actual house you choose gets down to quality – something you definitely need to look for in a rare coin.

Australia’s first coins. An investment in history.

In 1812, the colony of New South Wales had a currency shortage so severe that Governor Lachlan Macquarie had to buy his own house with 200 gallons of rum. This was clearly unsustainable for a fast-growing society.

To alleviate the colony’s currency crisis Governor Macquarie purchased 40,000 Spanish Silver Dollars.

To stop the coins leaving the colony in payment for imports, he emulated his colleagues in the Americas and West Indies and re-minted each coin, declaring them a legal tender but only in the colony.

A hole was cut in the centre of each of the Spanish Dollars, creating an outer ring and a small circular inner disc.

The newly created ring was re-stamped with a value of five shillings, the year 1813, and the issuing authority of New South Wales to become Australia’s first domestic currency, the 1813 Holey Dollar.

The circular inner disc punched out of the centre was re-stamped with a crown, the year 1813, the issuing authority of New South Wales and the value of fifteen pence and became the 1813 Dump.

Between 1826 and 1829, the Holey Dollar and Dump were officially withdrawn from circulation. The recalled specie were shipped to London to be melted down and sold off as bullion silver. Of those that survived the smelter, there are now around 200 Holey Dollars and perhaps 800 Dumps in private hands.

The highest quality Holey Dollars and highest quality Dumps are extremely rare and very rarely offered.

That unique combination of quality and rarity means they are in very high demand, which is the key to their ongoing price growth

The recent sale of the famous Hannibal Head Holey Dollar is a reminder of the influence of rarity and quality in numismatic investment.

The Hannibal Head Holey Dollar was last offered at public auction in 1988 (and changed hands at $39,000). Competitive bidding at Coinworks Eminent Colonials Auction (August 2012) saw the coin sell for a new world record price of $410,000.

So not only are they coins anyone would be proud to own, quality Holey Dollars and Dumps can also be a significant contributor to an investment portfolio, offering a proven record of capital growth.

Coinweek is the top independent online media source for rare coin and currency news, with analysis and information contributed by leading experts across the numismatic spectrum.

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