Sovereign Hill Museum’s Association’s outdoor museum is located on Sovereign Hill, where quartz mining began in 1860 by what became known as the Sovereign Quartz Mining Company. The ‘sovereign’ name was associated both with the British Crown and with gold.
A sovereign is a one-pound (value, not weight) gold coin. Much of the gold from the goldfields was sent to the mint to be made into these gold coins, initially in London and then to the mints of Sydney and Melbourne.
The museum cares for many collections including the Paul and Jessica Simon coin collection. This important collection includes a variety of sovereigns like these two examples.
Gold sovereign coin (Edge Knock) featuring the bust of Queen Victoria on the obverse and the British coat of arms on the reverse. [GM 76.0107] 1851
Gold Sovereign Type 1 with bust of Queen Victoria on obverse and crown and wreath on the reverse. Made at Sydney Mint, one of the first Sovereign coins made in Australia. It was legal currency only in the colonies, you could not use an Australian Sovereign in Great Britain. [GM 76.0031] 1853
What is a pound?
As an immersive museum one of the things, you may notice as you explore Sovereign Hill are the changes in currency and units of measurement. Currency is the system of money, like paper bills and coins, used in a particular country. What we call our money and the look of our money have changed over time. Our miners were not using the same system of measuring or currency as we do today; there was no national standard of measurement as there is today. States within Australia determined their measurement systems independently, based on the imperial systems of weights and measures used in England. The need for a nationally standardised system of weights and measures was recognised as part of the Commonwealth Constitution in 1901. With Federation Australia became responsible for its currency – until 1901 Australian colonies used the British Pound but minted in Australia. The Australian pound was introduced in 1910 and in 1966 the Australian dollar.
Around Sovereign Hill, you may hear the term “pound” used both as a unit of weight and as a unit of currency. One pound weight (lb) is the equivalent of 450g (0.45 kg) in the metric units we use in Australia today. One pound currency (£) in today’s Australian dollars ($) is a little more difficult to compare. The relative value of one pound today can vary from hundreds of dollars to tens of thousands of dollars depending on what we are comparing. To understand the value of £1 today, we need to think about it relative to the cost of goods (what can you buy with £1 in 1852 and how much money would you need to buy the same things today) and relative to the average wage (how much would a person be paid in their job).
We currently use the approximate figure that £1 would have the buying and social power of $1000. But, where did we get this figure? Below are two examples of calculating the value of a pound that give us very different figures.
Compared to the Value of Gold
In the nineteenth century, the British Government adopted the Gold Standard. An economic system that matched the amount of money circulating (being used) in Britain to the amount of gold stored in the country. Gold has been highly valued for millennia so was considered a safe, stable resource on which to base the value of a country’s money. The value of 1 ounce of gold was set at £4.25 throughout the nineteenth century. As a British colony using British money at the time, we will use this value as our starting point.
1 oz gold = £4.25 in 1850
Currently (2022), gold is selling for approximately $2500 Australian per ounce.
2022 1 oz gold = $2500 AUD
We need to convert dollars to pounds to compare these values. Currently, 1 British Pound is worth $1.76 AUD.
$2500 / oz) / ( $1.76/£) = £1420 / oz in 2022
This gives us a value of 1 oz, but we want the value of £1, so we are going to bring back our 1850 value.
(£1420/oz) / (£4.25/oz) = 334
Therefore, £1 in 1850 would be £334 in 2022. To understand this in Australian dollars:
£334 x ($1.76 / £) = $588
Using the changing value of gold £1 in 1850 is worth $588 in 2022. The price of gold changes daily, so this figure will not stay the same.
Compared to the Average Wages of the Miners
We have to consider that the average person in the 1850s had far less buying power than the average person today, even after having accounted for inflation (the changing cost of goods and services, CPI). The gold value above does not account for the changing cost of living (for example paying for food, rent, and clothing) or changing wages (how much you are paid for work). In 1851, at the start of the gold rush period, a married couple with a family likely has an annual income of between £29-35.
So, what does it mean to make a one-pound purchase if this is your household income – for example, a £1 / month Gold Licence? When you consider that, apart from Carpenters and Blacksmiths, most other jobs earned between £25-35 pounds a year, then one pound a month could be as much as a third if not almost half of a yearly wage (£12 / year).
You can see more specific examples of wages from 1851 in an excerpt from The Argus, 23 June 1851 (http://trove.nla.gov.au/newspaper/article/4778688/505668?zoomLevel=3) and at the State Library of Victoria (https://guides.slv.vic.gov.au/whatitcost/earnings)
In 2021 the average Australian weekly earning was $1328.90 or an annual salary of about $69 000 (https://www.abs.gov.au/statistics/labour/earnings-and-work-hours/average-weekly-earnings-australia/latest-release). As a very loose approximation, we can draw a comparison that if a third of $69 000 is $23 000 (this is our £12 / year figure), and one-twelfth of $23 000 is $1 919, then a £1 / month fee in 1850 in Ballarat would cost the wage-equivalent of $1919 Australian Dollars today.
Was a Gold Licence really expensive?
On the 1 September 1851 a fee of 30 shillings/month was introduced for a miner’s licence (there were 20 shillings in a pound) – all adult males on the goldfields were required to have one, whether searching for gold, finding gold, or not. By 1853 all persons (women, if they were prospecting, included) on the goldfields were required to have a licence and the fee had dropped to £ 1 / month or £8 / year. Reflecting on the relative value of a pound above ($588 or $1 919 current AUD) this was a significant expense. Following the events of the Eureka Rebellion in 1854, in mid-1855 the Miner’s Right replaced the Gold Licence and was purchased annually rather than monthly or quarterly.
A miner’s right is still required for fossicking or prospecting today, and it must be on you at all times when prospecting (even in your own backyard!). It currently costs about $25 and is valid for 10 years.
Links and References:
A great resource to explore changing values of money over time is Measuring Worth, https://www.measuringworth.com/calculators/australiacompare/index.php
Learn more about Sovereign Hill and the story it tells here: https://sovereignhilledblog.com/2015/03/24/oh-sovereign-hill-is-a-museum/
For more information on current prospecting visit Victoria State Government Earth Resources site https://earthresources.vic.gov.au/licensing-approvals/fossicking
ABC Education “digibook” called The Colonisation of the Central Victorian Goldfields: https://education.abc.net.au/home#!/digibook/2873696/colonisation-of-the-central-victorian-goldfields A “digitour” of the Aboriginal side of the goldrush story: https://sovereignhillhiddenhistories.com.au/