Dollars From Hawaii

Last week’s Hawaii quarter may have been the first time the island state has appeared on U.S. currency, but there were far more coins minted in Hawaii’s honor than most people know.  The Hawaiian dollar existed for only a short time, but reflects a unique time in the U.S.’ influence in the South Pacific.

Hawaii’s first modern government was established in the early 19th century, but it wasn’t until 1847 that they established a modern treasury and issued currency.   Prior to this time, the native currency of traders and visiting ships was used, and the local economy was so small it was not difficult to trade in foreign money.   As the economy and population grew, it became more difficult to exchange disparate monies, so a new, local money was established. The 1847 Kamehameha penny was the first coin issued by the Hawaiian government.  The penny was just the smallest denomination, with one “dala” (or dollar) was the largest, and several coins in between paralelling the structure and value of the U.S. dollar of the time, and all were minted in copper.   These coins were produced in small numbers, just enough for the small population on the island, by a private U.S. mint known for producing Hard Times tokens. The public didn’t completely take to the money, so the local banks had plenty to use, and no more coins were produced until the reign of King Kalakaua.

King Kalakaua was much more a product of Victorian times than his predecessors, and wished to make Hawaii a power in the South Pacific.  He increased trade with the United States, bringing more income to his small nation, and as such needed new money to improve his country’s economy.  The old coins were eliminated from circulation, and a new set of money was commissioned.

The U.S. Mint (as it still does today for other countries) produced this new coinage for Hawaii, and in 1883 they came up with Hawaii’s four requested coins: 1 dollar, 1/2 dollar, 1/4 dollar, and 1/8 dollar.  The first three matched U.S. coins of the same size and value, but the 1/8 dollar was a sticking point.   Coming up with a custom coin size would require a significant amount of mint re-working and new planchettes just for Hawaii, so a compromise was made:  Hawaii would have a dime instead.   While the 1/8 Dollar never reached regular circulation, in 1884 20 ‘proof’ sets of Hawaiian currency were produced by the Mint in Philadelphia…and the 1/8 dollar was included.    These 1/8th dollar coins are the most rare coin from Hawaii’s kingdom age, nearly impossible to find aside from private collections.    Pre-1880s coins are also extremely rare, due to their destruction and unlikeliness of leaving the islands at the time.   The Kamehameha pennies were slightly more common, because the lack of a penny denomination in the Kalakua era meant some people still circulated the old pennies for making change between the dime and the quarter-dollar coins.  Larger denominations were also produced as paper currency, up to a $500 bill, in the allegorical style of most Western Hemisphere money of the time.

In 1898, Hawaii officially became a territory of the  United States, and eventually the U.S. dollar supplanted their local currency.   Because the Hawaiian dollar was already based on U.S. dollar parity, it required no significant effort.   This wasn’t the end of special Hawaiian money, though.    In anticipation of World War II spreading throughout the South Pacific, the U.S. Treasury came up with a plan to avoid inadvertently financing Japan’s war.   Money distributed to Hawaiian banks was stamped with the word “HAWAII” on the front and back.    As long as Hawaii remained under U.S. control, those dollars would be the equivalent of a regular U.S. dollar, but if Japan were to invade and take over Hawaii, raiding their banks for funds, the Hawaii-stamped dollars would become as valuable as Monopoly dollars.  Thankfully, that day never came, but money stamped “Hawaii” remained in circulation for a short amount of time, a few returning in the pockets of sailors and soldiers stationed in the South Pacific.  These do not appear to have been minted specifically for Hawaii, but were stamps added to regular-circulation dollars in preparation for shipment to Hawaii, and most are of the 1934 and 1935 varieties.    As these eventually went back to the treasury and were destroyed, few still exist today.   While they can be relatively easy to find, they do demand a significant premium, $10-$50 depending on denomination and condition, and appeal to both numismatists and WWII collectors.