The Colony of New Australia

IA Paradise in the Wrong Hemisphere

In the early 1890s, an Australian journalist and union organiser named William Lane became convinced that a fairer society could not be built at home. Instead, he believed it would need to be built in a new land. To achieve this vision, Lane founded the New Australia Co-operative Settlement Association and sought an overseas location where a socialist utopia could be established. The destination he chose was Paraguay.

At the time, Paraguay was still recovering from the devastation of the War of the Triple Alliance and was actively encouraging immigration and agricultural settlements. Large tracts of land were offered to colonists willing to establish communities. In July 1893, the ship Royal Tar departed Sydney carrying the first group of settlers bound for South America and the ambitious social experiment that would become New Australia.

The colony soon encountered difficulties. Lane's strict social beliefs, including total abstinence from alcohol and rigid communal rules, led to internal disagreements. Among the colony’s most notable settlers was Dame Mary Gilmore, whose portrait appears on the current Australian ten-dollar polymer banknote. By 1894, divisions within the settlement led Lane to leave and establish a second community, Cosme, while Frederick Kidd assumed leadership of New Australia. The settlement gradually declined and, by January 1897, its communal assets were sold and distributed among its members.

IIMoney for a Colony That Had Almost None

For much of its existence, New Australia operated on a communal credit system rather than conventional currency. Nevertheless, in 1895, the colony produced its own paper money. The most plausible explanation is that the notes facilitated the distribution of government subsidies and allowances provided to colonists during the settlement's final years.

The series comprises three denominations — One Peso, Ten Centavos, and Five Centavos — denominated in Paraguay's peso fuerte rather than any Australian currency standard. Each note carried the title Colonia Nueva Australia and was signed by Frederick Kidd as Presidente. Surviving examples indicate that the issue circulated only briefly, between May and November 1895.

The clasped hands depicted on the note symbolised cooperation, solidarity and the colony's ideal of collective endeavour.

IIIThe Note in Hand

The example here is among the finest survivors of that issue: the clasped-hands vignette with bare forearms — Symes Type 1 — a one-peso printed in red, dated 2 October 1895. It is also the plate example illustrated in Michael Vort-Ronald's standard reference on Australian colonial currency.

Peter Symes's study of the entire New Australia issue documented just fourteen notes across all four design types, of which only a handful were ever in private hands; he concluded that fewer than thirty — perhaps as few as twenty — survive in total. Of the bare-arms one-peso type specifically, only two examples are recorded by him, each carrying that same 2 October 1895 date. A third example, known to our cataloguer and bearing graffiti on the back, sold privately for nearly A$15,000.

IVThe New Zealand Thread

Although the New Australia experiment ultimately failed, William Lane's story leaves a surprising connection to New Zealand. Following his departure from Paraguay, Lane settled in Auckland and later became an editor of the New Zealand Herald. Writing under the pen-name “Tohunga”, he remained an influential figure in New Zealand journalism until his death in Auckland in 1917.