Notes of promise

Notes of promise
Uncover stories of financial ruin and failed business ventures in our collection of promissory notes
1 June 2016

This post was originally written for the regular feature ‘Mining Manuscripts’ in the National Library of Australia Magazine.

Promissory Note for Eight Hundred and Forty Pounds Sterling

Promissory Note for Eight Hundred and Forty Pounds Sterling, Issued 21 July 1869, to Mr Daniel Melhado in Papers of Sir Edmond Barton, 1827–1940
MS 51,

Picture the scene:

Bookplate cafe, mid-morning.

‘Hello. A flat white, please.’

‘Certainly, that’ll be half a pound of flour.’

‘Can you change a bushel of wheat?’

‘Indeed. Do you prefer a pint of rum or a pound of pork?’

Thank goodness someone realised life would be easier if we swapped bits of paper representing value instead of actual goods. Today we take money as a medium of exchange for granted—I buy a coffee from you, you exchange that money for more coffee beans. But in early colonial days, there was very little ‘money’ to go around, so barter, store receipts and promissory notes evolved to fill the vacuum. A promissory note is a private bill in some such form as ‘I promise to pay’, drawn on the issuer, his agent or bank without a fixed printed value. Bills with a definitive denomination are called ‘currency’ notes, precursors of today’s plastic banknotes. Lower denomination notes were also known as shinplasters, calabashes, merchant notes, money tokens, queer money or blankets.

Every detail on these flimsy chits of paper offers a clue to an Australian story. Who issued the note, to whom, why, what was their relationship, where and when were they used? The Library’s donor-funded project to identify and describe currency-related items in the Manuscripts Collection tries to answer these intriguing questions.

A note’s signature is often crucial in discerning its story. Sometimes a name is legible, sometimes not. In the Edmund Barton papers (MS 51), I found 66 promissory notes, mostly issued to someone whose name I couldn’t quite decipher. Some Googling and a search of Trove identified the probable recipient: Daniel Melhado. Who was he? Why was he being promised such large sums of money: £847 in 1869? Pulling on that dangling thread a little more, I discovered that Melhado was a typical self-made colonial who, from humble beginnings (and a possible dodgy interest in horseflesh), became Sydney’s first stockbroker and a business partner of William Barton, Edmund’s father. Sadly, Melhado’s meteoric rise in Sydney society preceded an even more swift fall, when he ‘auto-defenestrated’ from the tenth floor of the Reform Club, aged 60 and in severe financial trouble.

Then there are the many promissory notes for significant sums tucked away in the papers of Sydney merchant and politician Samuel Deane Gordon (MS 9865), all made out to merchant-cum-moneylender Daniel Cowper in 1857. A bit of sleuthing elicited that Gordon was a trustee of the Empire newspaper, owned by Henry Parkes (later Sir), which collapsed in 1858. Revered ‘father of Federation’ he may be, but it seems Parkes was a failed businessman, bankrupted not once but three times and owing over £53,000 in 1857. Presumably Cowper never saw the colour of his money again.

A promissory note may look unimpressive with only minimal pieces of information—the issuer, the amount, the drawee and sometimes the date—but behind every scruffy paper scrap lies a tale that illuminates our past.

‘Err … I’ll take my change in rum.’