Ancient Hawaiians did not use money. They provided for themselves or simply traded for the things they needed.
As commerce came to Hawai‘i, initial transactions included trading – sandalwood became the primary medium of exchange for Ali‘i, who traded it for western goods.
The adoption of a Western style economy created a demand for money. At first, this money consisted of coins carried in from the variety of countries having interest in the islands.
This source proved unreliable and coins were in chronically-short supply.
King Kamehameha III set out to rectify the shortage of coinage and currency by including a provision for a Hawaiian monetary system in his new legal code of 1846.
This system provided for a unit known as the dala, which was based on the American dollar. The dala was divided into 100 keneta (cents.)
Several denominations of fractional silver coins were included in this system, as well as a copper piece to be valued at one keneta.
As prescribed by law, these copper pieces bore on their obverse a facing portrait of Kamehameha III with his name and title Ka Moi (the King).
Hawaii’s first coins were issued in 1847. They were copper cents bearing the portrait of King Kamehameha III. The coins proved to be unpopular due to the poor quality image of the king.
Although it is claimed the denomination was misspelled (hapa haneri instead of hapa haneli), the spelling “Hapa Haneri” was included until the end the 19th century.
The spelling “Haneri” (Hawaiian for “Hundred”) appears on all $100 and $500 Hawaiian bank notes in circulation between 1879 and 1900.
In 1883, silver coins were issued in denominations of one dime (umi keneta), quarter dollar (hapaha), half dollar (hapalua) and one dollar (akahi dala).
The vast majority of these coins were struck to the same specifications as current US coins by the San Francisco Mint.
Hawaiian coins continued to circulate for several years after the 1898 annexation to the United States.
In 1903, an act of Congress demonetized Hawaiian coins, and most were withdrawn and melted, with a sizable percentage of surviving examples made into jewelry.
As early as 1836, with coins in shortage, private Hawaiian firms began to issue paper scrip of their own redeemable by the issuing company in coins or goods.
At Kōloa Sugar Plantation, script was issued in payment for services and redeemable at the plantation store; it started with simply a notation of denomination and signature of the owner on cardboard.
However, due to counterfeiting, in 1839, script was printed from engraved plates, with intricate waved and networked lines.
This more formal Kōloa Plantation script became the first paper money from Hawai‘i. Not only was this script accepted at the Plantation store, it became widely accepted by other merchants on the island.
In early 1843, apparently, the Lahainaluna Mission Seminary first issued its own paper money.
The Hawaiian government occasionally issued its own banknotes between 1847 and 1898 in denominations of $10, $20, $50 and $100 Hawaiian Dollars.
However, these notes were only issued in small numbers and US notes made up the bulk of circulating paper money.
In 1895, the newly formed Republic of Hawai‘i issued both gold and silver coin deposit certificates for $5, $10, $20, $50 and $100. These were the last Hawaiian notes issued.