Grand River Branch
United Empire Loyalists' Association of Canada
Selected Reprints from the
Grand River Branch Newsletter, Branches
"The Distrust of Paper Currency By Colonists and Loyalists In Early Times"
Angela E.M. Files, November 1999, Vol.11 No.2, Pages 4-5
A few years ago, some old Spanish coins were found along our Grand River area. This was not an unusual finding because North American colonists used coins of many European countries in the early times. there was a scarcity of coins so the colonists used various mediums of exchange, such as lead bullets, tobacco, liquor and furs, etc. Some colonists issued paper money that circulated at varying rates of discount.
The first unified currency consisted of the notes issued by the Continental
Congress to finance the American Revolution. Although these notes were originally declared redeemable in gold or silver coins, such redemption was found impossible after the Revolutionary War because of the excess of printed notes over metal reserves. Consequently the notes depreciated rapidly and became nearly worthless. The expression "it was worth a continental dollar" was used frequently by both Loyalists and revolutionaries during those times.
By the end of the American Revolution, currency issued by the American continental and state governments totaled four hundred million in paper notes. Is it any wonder that colonists and Loyalists distrusted paper currency?
In 1776 Franklin journeyed with four associates including a printer and his wife to Montréal to induce the co-operation and support of Canada in the Revolution.
The journey was made by way of Lake Champlain and it took six weeks to reach Montréal from Philadelphia. They attempted to meet their obligations in Montréal with paper money that had been issued by the Continental Congress a few months earlier.
Canadians were so wary of paper money that it was refused and the Franklin party was unable to continue their propaganda. Four of the party left in haste but were obliged to leave the poor printer and his wife in Montréal.
Canada benefited two-fold from this mission. The work of Franklin was spoiled and the country acquired another much-needed citizen who was trained in the art of printing!
The Act of Union of Upper and Lower Canada gave each jurisdiction over their own currency. In 1792, two Montréal firms in conjunction with a house in London formed a bank in Montréal that was known as the Canada Banking Company. A few notes were issued but the distrust of paper money was so deeply rooted that it soon closed its door. During the next few years a large number of merchants issued copper coins in an effort to supply the country with commercial change.
King George IV (1762 - 1830), the eldest son of George III, realized that his dominions were depending on the Spanish dollar as a standard and decided to make an issue of divisions of that coin. Four silver coins were struck which represented one-half, one-quarter, one-eighth and one-sixteenth of a Spanish dollar. These coins were circulated in British West Indies and Canada.
When Upper Canada was created in 1791 and John Graves Simcoe was appointed to be the first governor of the district, he decided very early in his administration to avoid the financial difficulties that had overtaken Lower Canada (Québec).
A company was formed under the title of The Copper Company of Upper Canada and a number of half pennies were struck. They were dated 1794 and 1796 but did not have wide circulation. Later more metallic and paper currency were issued.
In the 1840's, the bank of Brantford issued dollar bills for the use of local citizens. It was an effort to introduce paper money along the Grand River area.
A Loyalists settled in Upper and Lower Canada, the Currency Act of 1841 introduced uniform currency standards. By the middle of 1858, the first shipment of Canadian coins were received from the British Mint. By 1868 provincial paper currency was changed to Dominion notes, backed by the gold standard. With the development of the country of Canada, both metallic and paper currency evolved for the use of its citizens.
The distrust of the value of currency was only a factor in the early development of North America. We wonder: What medium of exchange for goods and services will be used in the next millennium?