Effect of lack of coins

In past some courtiers decided to issue special coins for their possessions, such as Denmark for its Norway province of the Great Britain realm for its many many islands. 

From one side it looks practical and gives political value to the territory's national perception: this step rises the position of the territory higher in eyes of peoples in the territory and in the whole world.

From the other side it gives responsibility to organize healthy circulation. 

In fact for a long time territories of both examples given above experienced lack of coins. The government knew about it and did nothing for years.  The mintages were so small, that population used and used the same coins again and again. It brought to phenomenon, that most of coins became very well worn, but still circulated! As the result a common condition of coins in a collection from such territories of tough times is much more worn, than from independent countries.

(Source: https://www.delcampe.net/en_GB/collectables/coins-banknotes/coins/cyprus/o-uncommon-cyprus-1-4-piastre-1881h-low-start-no-reserve-479358527.html )
 

Here is an example of Cyprus coinage under British rule. It was organized immediately when the island was gifted by Turkey to the Crown for its help in war with Russian Empire. It proudly bears name of possession CYPRUS  on the Rev. For more than 20 years the possession did not see a silver coin in circulation! Three denominations ¼ (above), ½ and 1 piastre had to satisfy needs of the island. And the total mintage less than 1000000 each during whole period of the emission was too small to keep circulation in normal watercourse. 

With regard to the British Empire, based on my observations the general rule is that there was a strong push for the colonies to adopt Sterling. When this actually happened, the colony would just get British coins as its circulating medium. Yet, in the West Indies and elsewhere, there often were more Hispano-American “dollars” in circulation, and many economic problems caused by the over- or undervaluation of one currency against the other.

As for base metal, it was almost always a problem because the seigniorage fee (the fee taken by the Mint for each coin struck) was proportionally much higher for base metals than for a silver or gold coin. In addition, bronze farthings, halfpennies and pennies or (worse) the pre-1860 copper coins of the same denominations were heavy for a low value, and this meant that the authorities and the banks or even private individuals (merchants) were unwilling to import them since they would suffer a loss.

A useful comparison can be made using the halfpenny and shilling. The weights of the bronze halfpenny (5.67 g) and silver shilling (5.655 g) were almost identical (see the first annual report of the Royal Mint, p. 62), and assuming that the ship-loading fee, therefore, would have been similar, in terms of monetary value halfpennies were twenty-four times more expensive to ship than shillings.

Now for some reason the 4-penny silver piece was in strong demand in British Guyana, Trinidad, and maybe in some other British West-Indian colonies as well in the last third of the 19th century. I.e. this was after 1862, when the 4d was no longer struck for general circulation in Great Britain. So there were colonial silver 4d issues such as this one from 1888 and those several later issues with the names “British Guiana and West Indies” added to the legend (unlike the 1888 issue which looks British).

Incidentally, the British colonies of Essequibo and Demerara, which were precursors to British Guiana, were granted a coinage in stivers and guilders which they had inherited form their Dutch past. 

In Canada, there was no special regal coinage until we got the right to decide of our own currency needs in 1853, followed by the adoption of the dollar of 100 cents and the 1858 coinage. It took a lot longer for Australia and New Zealand to adopt their own coinage, but their geo-politico-economic situation was much different.

Very interesting topic.

My family emigrated from Ireland to Canada in 1795.  I have read some of their letters which were microfiched at the central Toronto Public Library.  In those letters, they often discuss the "lack of specie" (or currency) but typically resort to various barter systems (exchange of goods with either no or minor amounts of money involved). I also had access to the James Macklem (1759-1838) papers & letters which described a lot of the commerce (mostly in Pounds in 1820's).  When it comes to dealings between neighbours there's a lot of passages that describe how they exchanged 4 pounds of butter for X bales of hay, X bushels of rhubarb, beets, this, that or the other.  Macklem ran a store & often customers were marked up in terms of their debts which they later paid in other commodities. The amount of currency available at any given time varied (of course) but it was particularly bad after the War of 1812 (due to a severe recession, poor weather, etc).

This is very interesting, Serial_Number_8. I may DM you at some point in the near future just to get more details about those letters in the Toronto Public Library since I'm interested in these currency problems. 

When I mentioned currency issues above, I could have been more specific about the fact that even when a colony adopted sterling, there usually was a shortage of “good” money. Much of it went back to Great Britain to pay for goods, and some was hoarded while “bad” money kept on circulating. In Trinidad, the French silver half franc was seen as a problem by some because of this, while others believed the opposite, that it was actually a temporary solution to the shortage of specie... It's kind of a chicken and egg situation.

British currency was not ideal in dealing with terra firma (as they used to say, i.e. the mainland, especially the USA, Mexico, and Venezuela). Until about the 1860s or 1870s, the most easily accepted international currency was the Hispano-American “dollar”, and then (to a lesser extent) the Mexican “dollar”. 

Yet the Crown was successful in imposing sterling on all West Indies colonies, but the two southernmost, Trinidad and Guiana, were quite reluctant and late in adopting it. What greatly facilitated its introduction in the 1850s and 1860s was that the rate was exactly 1 penny = 2 cents. A shilling was therefore 24 cents, a florin 48 cents, etc.

As for small change, there's an interesting reader's letter sent to the Port of Spain Gazette in 1846 which mentions “paper goods” and “leaden tokens” worth a half-stampee handed as change by shopkeepers because there was no such small coins. None of these “paper goods” and “leaden tokens” have survived, so far as I can tell.

Camerinus touches one more aspects of the Crown realm. It had practice to introduce Russian decimal system in colonies at the beginning and only when population accepted it, they switched to it in 1971 at terra firma finally. 

From this point of view Cyprus currency was  an uncommon phenomenon. The piastre was not in good ratio with pound, that is why a crown (¼ of pound) consisted of 45 piastres. Later with the reign of Elizabeth II the decimal counting came and again with strange set of coins: 3, 5, 25, 50 and 100 mils. It makes not so practical to pay 1 mil back, and had a non-understandable gap between 5 and 25 mils.

Great article, thank you so much for sharing your knowledge. Very interesting read!