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The earliest mention of these I have found was a description of a groom’s clothing in 1890. These nuts were favoured as a durable, readily accessible, and free material by country folk, but were also regarded as very attractive.
Some readers answered below:
The Sydney Morning Herald, 5th May 1954, page 13. It appears quandong seeds were used for DYI buttons reaching back into the 19th century, but faded out in the 1930s. According to a story in the Chronicle in 1940, there had been (?when) a horse breaker in New South Wales known as Quandong Ned as all his buttons were made from Quandong seeds. The seeds were cut in half and holes were bored with a hot wire or a boring tool. He also used the seeds instead of cork suspended from the brim of his hat.