First published in the Australasian Coin and Banknote Magazine, February 2008.
During the 1820s New South Wales went through prosperous times but only one bank was reaping the benefits of the boom. While some companies had been issuing private notes for a number of years, such as the Waterloo Company, banking business was limited to the Bank of New South Wales. In January 1826 the Bank declared an impressive half-yearly dividend of £9/5/- on shares worth £30/10/-, an announcement that led a group of the colony's pastoralists and government officials to establish a second bank. The result of their endeavours was the Bank of Australia, which opened for business on 3 July 1826.
The public had become aware of the proposal to form the second bank as early as January 1826, just days after the Bank of New South Wales declared its attractive dividend. However, as the weeks went by it soon became apparent that the new institution was being launched through private subscription and shares in the new bank would not be made available to the citizens of the colony.
Angered at the inability of the public to buy shares in the new institution, a meeting was called on 27 February 1826 to propose a third bank for Sydney. At the meeting it was agreed to establish the third bank with a capital of £100,000, of which only £20,000 would need to be subscribed. By the end of the week six hundred £50 shares were reserved.
The men behind the third bank were predominantly merchants, of whom the leaders were Thomas Horton James, Gregory Blaxland, E. S. Hall , Dr. Redfern and John Black. All were shareholders in the Bank of New South Wales, but their desire to reap a greater reward from the economic boom led them to launch their project in opposition to the pastoralists who were founding the Bank of Australia. On 1 March 1826 the Sydney Gazette announced the planned third bank to be the 'Sydney Banking Company', but within a week the name of the proposed bank was changed to the 'Sydney Commercial Bank'.
Within days of the first meeting to found the third bank, reports circulated that the Bank of New South Wales was making overtures to the promoters of the new bank. Specifically, they were prepared to accommodate an expansion of shares within the old bank, on condition that the proposal for the third bank was abandoned.
A meeting of the proprietors of the Bank of New South Wales on 18 March proposed a scheme, which was met with disdain by the promoters of the new bank. However, the Bank of New South Wales subsequently agreed to raise the number of their shares from 300 to 1000 and offer the new shares to the public. The promoters of the third bank were appeased and the plans for the Sydney Bank were abandoned.
One of the surprising outcomes of this short episode is that a series of banknotes was prepared for the 'third bank'. Considering that the first meeting of the promoters of the Sydney Bank was held on 27 February and the meeting of the proprietors of the Bank of New South Wales, which ended thoughts of the new proposal, took place on 18 March, it can only be wondered when the order for the banknotes was placed.
The notes of the Sydney Bank are known in denominations of 1-, 5-, 10- (see Figure 1) and 20-Spanish dollars but other denominations may have been prepared. The notes are produced by a peculiar method, known as compound plate engraving, which was a new technology at the time the bank notes were printed. Patented by Sir William Congreve in 1821, this technology was first used to print revenue stamps on the back of British banknotes. The first printer to commercially use this technology was Charles Whiting, using plates designed by his partner Robert Branston. The method entails two engraved plates that were inked separately and brought together for printing, allowing for two-colour designs. Using bronze plates engraved by a 'rose engine' geometric lathe, the printing technique was specifically designed for security printing, as it was believed impossible to faithfully reproduce the complex designs by hand.
The notes prepared for the Sydney Bank have the distinctive features of bank notes produced by the compound plate process, including the two colours and the white text – formed by the absence of ink. The notes are similar to those prepared for Robert Owen's National Equitable Labour Exchange. Not only is the style similar, but the chain links at the left on the notes of the Sydney Bank are very similar to the chain links in a similar panel on the notes of the National Equitable Labour Exchange. One of the advantages of compound plate engraving was claimed to be the ability to produce designs displaying depth and the use of chain links on both designs is an attempt to produce three-dimensional images.
Vizetelly, Branston & Co., of Fleet Street, London, printed Robert Owen's notes in the 1830s, with Robert Branston junior being a partner in the firm. The son evidently inherited his father's equipment, which allowed the design of the chain engraving on the banknotes. Robert Branston senior died in 1827, but it is almost certain he prepared the plates for the banknotes of the Sydney Bank and that Whiting and Branston printed the notes.
There are two interesting features to the notes of the Sydney Bank, the vignette and the coat of arms to the left. The vignette (see Figure 2) is of Sydney Cove and it is adapted from an aquatint drawing by Joseph Lycett. The illustration appeared in Lycett's Views in Australia or New South Wales, & Van Dieman's Land delineated. For a number of years Lycett produced illustrations of Sydney Cove from the same position on the north side of the Harbour. The vignette on the banknote has been drawn from one of Lycett's illustrations with slight changes to the original artwork. Fort Macquarie on Bennelong point can be seen at the far left, with Government House immediately to the right of the fort. The spire of St. James's Church can be seen next to a windmill, which must have been close to Macquarie Street, as it largely obscures the hospital and Hyde Park Barracks. Toward the right, near the shore, are the Commissariat Stores and behind it are buildings, which are probably the barracks at Barrack Square (immediately above) and St. Phillips Church (above and to the right). At the far right is the fourteen-gun battery on Dawes Point. The buildings in Lycett's illustration, from St. Phillips Church to Dawes Point, have been omitted from the vignette. The ships on the harbour are positioned in a similar manner to Lycett's illustration and the tops of the trees from the foreground of the illustration can be seen in the foreground of the vignette.
The coat of arms (see Figure 3), in the centre of the left-hand panel of the banknotes, appears to belong to Thomas Horton James. The arms depict a black shield emblazoned with a dolphin between three 'crosses crosslets', above which is a crest of a 'demi-bull rampant'. Several English 'James' families from Somerset and Pembroke used similar shields and crests in their coats of arms. It is not certain the arms on the banknotes are those of Horton James, or whether he took licence in using the arms. Why Horton James included a coat of arms, presumed to be his own, on a banknote that was to be issued by a bank owned by shareholders is a mystery.
Horton James was a merchant and landowner who was sometimes known as a 'Tobacco Merchant' during his time in Sydney. He operated 'T.H. James and Company' from George Street in Sydney and he appears to have either owned a shipping business or been a partner in a shipping business. Born around 1792, Horton James first comes to notice in Sydney with his involvement with the Sydney Bank and at this time he was about 34 years of age with substantial means. Although it is not known when Horton James arrived in Sydney, he was active in the mercantile community of Sydney for a number of years. He bought land from W C. Wentworth and Joseph Grose in the North Rocks district, he bought and sold land in the area of Surry Hills during the late 1820s, and in 1832 he bought blocks of land south of Devonshire Street and subdivided it as the Strawberry Hills Estate.
In 1832 the first of Horton James's literary pursuits came to fruition in London, with the publication of a pamphlet on the Sandwich and Bonin Islands. He followed this with a pamphlet, published in Sydney, of his address to the passengers of the Barque Ann. The pamphlet identifies him as the owner of the Ann and it later becomes apparent that the pamphlet was an early effort to promote immigration to the Australian colonies, a trade from which he hoped to profit. In 1837 Horton James quit Sydney. Travelling overland to Port Phillip, he went to Adelaide for just under four months before returning to England via Launceston. On his return to London he wrote a book on his view of South Australia, one that was not altogether complimentary.
From February 1839 Horton James was behind a scheme to create the British and Colonial Export Company based in London. Promoting the company in The Times in February, March and April, the company commenced business on 1 May 1839. Apparently progressing satisfactorily for some time, the company soon declared a half-yearly dividend of 5 percent. In April 1840 efforts to increase the shareholding led to a scathing attack on the company's prospectus by the Sydney Gazette. The attack was reported in The Times which led to a defence of the company by 'A. Shareholder', published on the following day.
The attack by the Sydney Gazette was perhaps not unexpected. In June 1827 Horton James had brought an action for libel in the Supreme Court of New South Wales against Robert Howe, the editor of the Sydney newspaper. The action concerned an anonymous piece written in the Australian which was claimed to be written by Horton James. Represented by Robert Wardell, a lawyer who was also editor and co-proprietor of the Australian, Horton James won damages of fifty pounds.
How well Horton James's British and Colonial Export Company ultimately fared is not known, but in 1845 he was travelling in the United States and Canada after which he published an account of his travels in North America. From 1846 until his death in 1867, nothing is known of his activities.
Horton James had an interesting life, travelling to many parts of the world. While his activities in Australia are largely unrecognised, he left behind several valuable accounts that record aspects of the world in which he lived. Some of the more interesting items he left to posterity are the banknotes prepared for the 'third' Sydney bank.
It is interesting to observe that while the bold text on the banknotes says 'Sydney Bank', the text at the lower right says 'Sydney Banking Company'. This is the title suggested at the first meeting of the promoters of the third bank, but quickly changed to the 'Sydney Commercial Bank'. The request for the banknotes might have been made before the second name was proposed, but the short window during which this name was proposed questions this possibility. Alternatively, Horton James might have entertained thoughts of establishing the bank as a private concern, once the initial scheme foundered and the notes of the Sydney Bank might have been prepared for a subsequent scheme.
What happened to the notes that were printed is unknown. However, in March 1830, July 1834, and May 1835 individual notes were reported by the Sydney press to have fraudulently passed into circulation. Today only a few of the notes of the Sydney Bank survive to record the abortive scheme for Sydney's third bank in 1826. The 10-dollar note illustrated here is in the possession of the Mitchell Library. The unissued 20-dollar note (valued at $105,000) and another 10-dollar printer's proof (valued at $85,000) are believed unique in private hands. Their value indicates their singular place in Australian numismatic and Australian social history.
This article was completed in February 2008
© Peter Symes