Money and Banking
Sansom (1991) coins the phrase 'a grammar of exchange' to describe pre-whitesettlement modes of payment prevailing in Indigenous Australian communities. This grammar of exchange is a voluntaristic philosophy counterposing a white European one based on the creation of an artificial commodity labelled money. In tribal cultures, aborigines holding surplus work capacity or material possessions are called on to help those in deficit in the expectation that such favours are returned in due course. No prices or values are placed on these exchanges, rendering many of the normal paradigms of an exchange economy redundant. The European settlement of the Australian continent did not have any initial impact on Indigenous Australians and through time Aboriginal culture was able to absorb European money in a bimodal culture of exchange: the Australian dollar applying in relation to transactions in the outside economy and the traditional grammar inside the Aboriginal community. European settlement has not apparently led to the monetisation of the Aboriginal mind.
An explanation of this outcome may be found in Dowd's (1991) analysis of Australia's early monetary history, which indicates that the blueprint for the establishment of the colony of New South Wales did not include a provision for money and banking. The absence of a monetary constitution in 1788 meant that Indigenous Australians were not immediately confronted by a set of institutions, instruments and rules that might have challenged the indigenous philosophy of exchange and trade. The absence of a monetary constitution and the makeshift financial arrangements that replaced it were to have a profound impact on the evolution of Australia's capital market, according to scholars such as Dowd (1988, 1991).
This lacuna in the first settlers' kitbag was filled by a series of free banking ventures beginning with the Macquarie Bank of New South Wales, established in 1817, and a series of single-branch, colonial ventures without all the nineteenth-century trappings of a regulated financial system. The 1830s pastoral boom, the 1850s gold rush and the resulting financial-capital inflow led to the rapid growth of Australia's unregulated banking system.