canadian currency and exchange under french rule

8/7/2019 Canadian currency and exchange under French rule

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THEEARLY HISTORY OF CANADIAN BANKING

CANADIAN CURRENCY AND EXCHANGE UNDERFRENCH RULE

BYADAM SHORTT, M.A.

QUEEN'S UNIVERSITY,KINGSTON

TORONTOJOURNAL OF THE CANADIAN BANKERS' ASSOCIATION

18gt!.


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CANADIAN CURRENCY AND EXCHANGE UNDERFRENCH RULE

I . BEFORE TilE I ~ T R O D U C T I O N OF CARD MO!"E\'*TH E general expansion of life in Europe during the fifteenth

century, found special expression in the new commercialenterprise which hegan its rapid dcvelopment in the latter partof that century and continucd through the following one. Thevarious countries of sonth,westf!rn Europe werc eagerlyoverrunning the mantime world in search of new lands and thatlikely treasure with which the experience of Spain had encouraged their imaginations to fill them.

The Norman seaports of France were those best preparedto respond to the expanding trade of t!le country. The increasing demand for foreign g o o d ~ . which followed the introductionof Italian hlxury and art with the home-coming of CharlesVIII, stimulated French shipping. There followed a rapidexpansion of the trade and enterprise of such Norman towns asSt. t-Ialo, Diepl'c, ROllcn and Harfleur. Norman sailors roamedthe ocean in many directions, bllt the fisheries of i'\ewfollndlandfirst attracted them to the northern coasts of America_ There

To avoid numeron, references throughout the article it may be statedhere th:lt the chief sources for this study are Ihe foilowing;-.. Documents r e l a t i n ~ tu the Colonial History of the State of ~ e w York,"Vol. IX ... Collection rle :'Ilanuscrits Contenant Lettres. :'IIemoires, el Autres

Documents Hi'loriques Helatifs Ii la ;-';uuvelle.France," Vol. I... Edits, Ordonnances Royaux. Declarations P.t Arrets du ConseilD'Etat du [{oi, Concernant Ie Canada,".. Jugements et Deliberations du Conseil Som'crain de la :-


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2 CA.\'AIJIA.V (CRRENCY UNDER FRE,\'ClI Rf'I.Hwas little in the fishing industry to fire the imagination otromantic knights or excite the cllpidityof kings and courts.It was therefore left to be developed into a very profitahle tradeby pri\'ate enterprise, while more ambitious schemes wereattracting the attention of the cOllrt, and squandering Frenchlife and treasure in other parts of the world.

\VlIen, after a hasty ransacking of America, the search forthe still fahled riches of Cathay was once more resllmed, effortswere made to get round the American continent which barredthe way. EXJ:editions ullder royal patronage visited the north-ern waters 01 America, Verazzano leading the way in 1526, butvanishing somewhere in those stormy seas on a second attempt.Cartier followed him and discovered that the St. Lawrenceroute was not likely for some time to prove a successful highwayto the East. But the Indians in the neighborhood of l\Iontrealtold him, what even then they understood that all Europeanswished to know, that by the shores of great inland seas of freshwater there was abundance of the precions metals. Thus theclosing of one avenue of royal interest in Canada opcne


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( ' ..1.1".-11)/,'/, \ ' CI NNI:',\'C I ' I ',\ 'O"'A' I ,'Nli ,ye l l RI 1.1:' 3simply a s y ~ t e l l 1 of barter. Those early merchant ath-enturerslaid in a ~ t o c k of goods before leaving France, consisting mainlyof arrow tips, swords, hatchets, knives, kettles, cloaks, hlanl(ets,hats, caps, shirts, various cloths, biscuit, tobacco, and variollsother trinkets. At first little liquor seems to have heen disposedof. \Vith these they sailed across the Atlantic, exchangillg'them with the Indians at Tadousac, or at other points, for furssuch as beaver, elk, lynx, fox, otter, marten, badger and muskrat. Returning- to France they disposed of their furs andrepeated the operation the next season.

Trade growing, competition Increasing and profits falling,efforts were made by some to obtain from the king a monopolyof the trade, usually on condition of establishing a colony andsupporting missionaries. Lescarbot, the first Canadian his.torian, puts the case for the monopolists in its best formwhen he says, "\Vhether is it bctter to have the Christianreligion and the glory of France extended, or to have certainindividual merchants grow rich who do nothing for either.These individual merchants will neither plant colonies norsave the souls of the heathen. Further, through the competi.tion of the merchants, beaver is selling at 8t I, whereas at theoperation of the monopoly it was s e l l i n ~ at 50 sols (1, I)."This gives the keynote of the general policy for thefuture. A monopoly of the Canadian tradc was to be givento those who would undertake to colonize the country andsupport missionary enterprises. The earlier holders of thismonopoly did litt le for colonization or the spread of the faith,but interested themselves only in the commercial privileges,Champlain was the first to take any real interest in the building up of a permanent colony in Canada. In 1608 he began atQuebec, the first colonial settlement on the St. Lawrence, I I I1609 Du Monts' patent of monopoly, upon which Champlainwas working, expired and, as he failed to get it reneweci, tIlefollowing year the St. Lawrence swarmed with private traderseager for furs. So strong was the competition that they rantheir vessels up to Montreal in the hope of intercepting fllrbearing Indians. This did not afford a very promising outlookfor Champlain'S colony, which hoped to live largely by tradewith the Indians. However, this first year's experience some,


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4 C,I.v.1IJ'A.\' (. '( ' ' ' ' ' ' ' ' . \,CI ('.\'/)HA' FRH,YCII "'(I.Ewhat checked the ardor of .he private tr,l(Iers, though they stillcontinue to cOllle in considerable nlllllhers In 16[ [ there were[3 vessels at the head of navigation at :\Iontreal. As t h e ~ e traders h:ld no other interest in the Coulltry than the st'ason'sJ l r O r l t ~ , their free trade systelll lJ;ttllrally came in for severecriticislll at the h:llllls of Chal"I'Iain, who pointed Ollt the illl'possibility of estahlishing a colupy by their methods. Yet,when monopoly was once more established, he found th


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C.1.v.1IJIAS C(';' :NIi,\ 'Cr {,ll'IJ!!;': FRH,\ 'CI/ ; ':{",I! 5was that of the (:[1tire trade in skins and furs, and for fifteenyears a monopoly of all other Canadian commerce on land orsea, with the single exception of the cod and whale lishtry,The settlers of Canada were thus ClIt orr from all part in theexternal trade of the conntry, They were to be permitteu totrade with the Indians and with one another, but the bea\'crskins which they obtained nlllst be handed Ol'(!r to thc comp;,ny,or it s agents. :It the rate of 40 sols (;! I.) per pound. The peoplewcre also forhidd en to trade with any others than the Indians.

The capital of thp COllIpany, which was fixed at 30o,0t>o I.,onethird of it !,aid up and the remainder on call. was thesmallest feature in it.

\\ 'e lllay gather from these conditions the limits witl.inwhich exchange would be confIned in the colony, There beingbut one channel. the company, through which all imports am!eXp0rts wert: carried on, there could he no occasion for the u ~ e ofletters of exchange or other mediulll between Canada and themother country except for the bringing in of money or capital bythe colonists or the sending of contributions from France for religious or other special purposes, All cOllllllercial exchange wasmerged in the b u i n e s s of the company. In Canada itself, afterthe settlers had ceased to be dependent on the cOtllpany, therewould he occasion for considerable retail trade and a corres-ponding need for a mediullI of exchange, especially for sllIallcoins.

The dealings with the Indians took the shape of direct barterand the product of that trade p a s s ~ d to the cOlllpany in ex-change for other goods for slIstenance and harter, The nt edfor a medium of exchange was, therefore, confined within prntydefinite limits, To meet this need there was one article of uni.versal acceptance \\'hich answered all the purposes of a lIIediumof exchange, except for small currency, and that \'.as thebeaver skin. To a certain extent other furs shared th is posi-tion, Imt none so adequately as the beal'er, especially wilen theprice at which it was receivable by the company was fixed,

The ., Company of One Hundn.:d Associates," thollgh ;1Il-portant as expressing in its organization and purpose the gt:I'-eral French colonial policy for the next century, was destinedto failure from the outset. Its fIrst fleet of ships, cOllllng


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6with provisions. stores and set! lers, was intercepted by theEnglish under Kirke. and nineteen out of twenty vessels captured or destroyed. The following year Canada passed for atime into the hands of the English. The colol1), contained atthe time only five families of sl!ttlers and about twenty" -."s ofcleared land.

\Vhen Canada was re!.tored to France in I03:.!, the company resumed its powers, but IllOst of the original enthusiasmhad evaporated ill the meantime. Its pri\'ileges were trausferred to a small association within the other, which, followingthe lines of its predecessors, took little interest in anythingbeyond the immediate profit from the trading monopoly.

Champlain, who still retained his interest ill the colonization scheme. and who had gone out asa in as the first Governorof the country with ISO colonists, died in 1635, and no oneseemed ready to take up his work However. the Jesuits andother missionaries had now established themselves in the country, and were exciting a new interest in it through their famollsletters or relations which were eagerly read throughout France.

In I6H l\Iontreal was est"blished on a half religious, halfmilitary and wholly commercial basis, by a grant from the company to the Seminary of St. Sui pice.

In 16+5 the company gave up its trading monopoly to thepeople of Canada, on condition of being relieved frail! theburden of maintaining the religious, civil and military establishments of the colony, and of receiving 1 ,000 pounds of beaverannually. This freedom had for a time a stimulating effectupon trade, but it was soon found that a few Quebec merchants,owing to their central position and control over the foreigntrade, enjoyed a virtual monopoly of the -.... Ionial traffic. Thi!!was further favored by the fact that all furs had to be broughtto a central store to be received and taxed, in order to providefor the expenses of the colony and the subsidy to the company.

Notwithstanding these drawbacks, the change greatly enlarged the range uf Canadian business transactions and necesditated a corresponding enlargement of the machinery of exchange. Letters of exchange began to pass freely hetween thecolony and France, while the growing contributions from Francein support of the missions and other religious institutions, must


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CA .\' ..f/)/A.\' C( 'RRIiSCI ' ( . \ ' I) f' R n. : ! , se l l RII.I! 7have added considerably to the business of exchange. Anincreasing quantity of coinecl money II1lJ st havc been comin!;into circulation at this tilli e , for a lillie later we find thatthough still !'carce olJtside th e tradillg ce ntres of Qucbec,Three l{ivers and ~ n l r e a l , yet coined money was in regnlar usc,especially for fillin g' in the gaps betw ee n une"en barter.

Durin;; this tilllC the colony was slowly growing, hut afterthc Iroquois hegan to harass th e 01ltlying se ttlements, agricul.tural illlllligrat ion ahll os t ceas t d. ~ ) l l i t e a nllllll'er of merc hantscame to tr ade but few to set tl e. Frolll 1650 to [662 fo'renchinterest ill Can;tcb lIlay hc sUIllI1 !ed lip in two words- the canversion of the heathen hy the missionaries, ane! thc obtaining oftheir fur s hy the lI1erchants.Thc trollhles of the Fronde clistracted France its(;1fand natllral!y le ssened the illlcrest in l I J1'lC\:t. During thisperiod money becalllc scarce in Francc a .ld was considerablyincrea sed in value. Values in C a l a followed sllit, thoughprohab ly not r p o l l d i n ~ vc ry r a p i . ) ' or very rc \.. urat cly. In. ';3 1.11 edict was issued in Pran ce with tIl " ubjec t of restoringthe curre llcy to its former value, and ' tha t e llLl its nominalvalue was reduced by onesixth. III accurda ncewith this edict,the COllncil of Canada, the following year , July [Sth, 165-1,passed an ordinance declaring that the gold and sliver .-r insof France ha"ing heen reduced to their former values, the moneyin Canada shoukl be reduced to the same basis, there beingadded to it, however, "on account of the risks of the sea," oneeighth of its value in France. As small coins of copper or otheralloy were not affecteu by this ordinance, we may assume thatthey did not suffer a similar reduction.

Inasmllch as there was little foreign sale for Canadian pro ducts other than fllrs, and yet a considerable need for Frellchgoods, any money which was brought to the colony by Illerchants or others naturally tended to return to France in payment for goods.

I t was to prevent what little money there was in circulation,and especially the small change. frOlI". going out of the country,that the Guvernment of the time, following a plan often resortedto in France itself in earlier times, artifically raised the value ofall coined money.


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C.-I.Y.IDt.I.\ CI'RRE.YCY CX!JER FRE.YCII Rl"t.E 9country" was circulating at an increase of one fourth over the" money of France." They also quite dispose of the commonlyaccepted idea that in Canada money was first legally raised invalue after 1670. The copper coinage was deal t with on abasis of its own.

Two small coins, the sol and the liard. were doubled invallie, the sol being made to pass current for 2+ deniers byGovernor d' Ayal1gour in r662, and the liard being rated at 6deniers apparently at an earlier date. To some extent these

e l l l a t i o n s had the desired eff


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10 CANADIAN Cl'RRENCY (lNDER FRENCH RULEspecial commissioner to make enquiries along specific lines. Buteven before sending out his agent he was convinced that the transfer of the trading pri\'ileges of the company to the people hadbeen injurious to the colony, In their anxiety to get furs theinhabitants neglected the work of c l e a r i n ~ and cultivating thesoil. Colbert had e\'idently made up his mind to place thetrade of the country once more in the hands of a company.Bnt he desireJ the people to understand that in any Stich changethe colony would not stiffer, as thc revenue derivcd from thc furtrade wOllld be expended in the country for its improvelPent.

Colbert permitted no time to be lost in the execution of hisnew schemes for the colonial, commercial and naval expansionof French power. In November, 1663, the IIIarquis de Tracywas commissioned to \'isit the Amerir.an colonies, as lieutenantgeneral, with large powers and ample means in II I en and materialsfor the removal 0 : all obstacles, the settlement of all disputes. andthe placing of the colonies on a new footing of prosperity and pro-grc3s. He went to the \Vest Indies first, and did not reachCanada till 1665, In the meantime, however, Canada hegan tofeel the stimulus of the new interest which was heing raised inFrance. Just before this ncw period there were but 2,500 peoplein the colony, Soo of whom were in Quebec.All accounts agree that there was little money in thc country lip to thc year 1664, As already stated, French money ingeneral was considerahly o\'er-ratcd, The need for small changewas, of course, the most pnssing, for while large transactionsmight be carried on by barter, it would be a very inconvenicmtsystem fur small exchanges. Th e scarcity of money was felt in2i1 the colonies, bnt a general remedy was first definitely soughtand applied by Colbert. The suggestion for it seellls to havecome from the colonies themselves. The plan adopted followedthe practice already established in Canada. The most pressingcomplaints, however, came from the \Vest Indies.

In the year 1663, in which Colbert began to unfllld his ideasof colonial expansion, an arret of the Coullcil (in France) waspassed, providing for the coining of 100 ,000 livres worth ofmoney in silver and copper, for the use of the \Vest Indies. Butit did not take eflect at once, the organization of the new com-pany sllspending all other matters for a time.


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CAII 'AD/AS CI'RRF..\ 'Cr I '. \ 'DER FRESCII R{,I.F. IIMeanwhile in Canada, increasing trade seems to have

brought more money to the country. It naturally took the formof the cheapest coin-cheapest in France, dearest in Canadabeing' at the time sols,liards and doubles. In consequence of thisextra importation we find an arret of the Sovereign Council ofQuebec, passed April 17th, 166+, reducing the value of the liard tothree deniers, it heing previollsly current at six. III connectionwith this it is explained that both the liard and doul,le were greatlyover-rated on account of the previolls scarcity of money, butthat now certain people were making' a trad e of b r i n ~ i l l g inlarge quantities, anti fearing that it might increase to the ,uinof the colony Ihis reduction is made.

On ] lily 17th of the same year another arret is passedagain reducing t h , ~ liard from three to two deniers, in order, it issaid, to prevent the profit on it frol11 leading to its greater import. The normal value of the liard was three deniers and ofthe double t\\'o deniers, and as they seem to have circulatedin Can


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12 CAN.ID/AN :;rRRH.\"Cr {,,\'DHR FRF.\Cll Rf"LH'hdwecn the price in 'noney and the price in grain. For instance,a tub of lard was vah!ed at 80 1. if paid for in grain and 751. if paidfor in money. Further light is thrown upon this point by acomplaint presented to the Council to the effect that, there having been an arret established that wheat should be taken at therate of roo sols (51.) per minot in payment of old debts, as alsoto facilitate the carrying" or. of business in the country, this wasfound to be "ery prejudicial to business, inasmuch as t he priceof wheat was inconstant. After considering this complaint theCouncil ordained, :'IIay 29th, 1665, that for the future those whowere obliged to rcceive payment in wheat should be required toaccept it only at current prices. The arret here rderrcd to wasevidently all ordinance of the Intendant Talon, who wished toprovide an opportunity for the settlers to make us e of their sur-plus products for the purchase of supplics. The making ofwheat a legal tenJer at cnfl'cnt pric ts was ubviOlllsly a \"ery indefinite settlement of the difficulty and could hardly have workedsl11oothly, ,\ t any rate we find, on :\Iarch 19th, 1669, an ordin-ance passed , req uiring the mcrchants tv take the \\' he at of theirdebtors in ;Jayment at the rate o f +1. per minut. Talon broughtthe matter up on the grollnd that some creditors were refusingto t ;, ke wheat in paYlllent of debts, or, if so, at a very low price,The ordinance, hO\vever, was to hol tl good for only three monthsfrolll the da te of it s issue.

\V e ha\'e seen that Colbert helieved that the commerce ofthe colonies could best be prul110tcd by tbe es ta blishment oftrading cOlllpJ.nirs. BlIt instead of a number of small independent comp:tnies he propos. II to establish t\\'o strong companies, one for the East and th e otht-r f(lr the \Vest Indies. The\\ 'est India Company, which covered all the American coloniesand part of Africa, was formally established 011 l\Iay 23th, 1664,and was even more fa\'ored by the government than Richelieu'scompany. Yet, notlVithstandlllg" all its extraorJinary privilegesalld favors, it hecallle hankrupt in eight yea rs, and in 167+, theking resumed all the grants made to it. Though Canada wasgranted as a feudal possession to the company, yet the king cont ~ n u e d to nominate the Governor an:.1 Intendant and otherwisedirect th e development of the colony.

The company bei:lg fully' established, Colbert resumed


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CANADIA. \ ' CI'RRt::.\CI (',YIJER FRE.\'CIf RCLE 13consideration of the plan for a s .,p;nate colonial coinage,In 1665 we find an arret of the COllncil which ordained theissue, from the mint in P a r i ~ , of a special coinage to theextent of 100,0001., exclusi\ 'ely for circulati

This ;trret was not put in execution before 1670, when theking i S ~ \ l e d a declaration that he was abont to strike a speci['.1coinage for th l ' i ~ ) ; ' l J d s and mainland of Americ;t. It repro-duces Illllch of the explanations in the arrEt of 16 (; 5, but adds,aillong other thll1gs, that the Issne was to consist of t\\'o sih'ercoins, one of 15 sols and the other of 5 sols alld a double otcopper of the vallie of t\\'o deniers, These coins \\'cre not to betaken to France on pain of confiscation and special punishnwnt.

Though some of this lI ew coinage was apparently lIsed inCanada, yet it was specially intended for the \\'est Indies, asmay be gathered from the corresjJondellce with Talon. 1nColbert's letter of instruction to ~ r . de l3olltcrolle, when goingcut to Call:tda as Intendant, and dated April 5th, 1668,he says: "\\ ' i lh reference to the money it will not benecessary to make any considerable change in a cOllntr),~ , o undeveloped as tlmt. but it will be necessary to takeparticular care that any evil, should there be any such there,should not increase, while at the sanw time he must ~ e e k toreduce it gradually."

\Ve ha\e already seen how the thre


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J4 C.l.YADIA.Y CCRNL::.YCr C.VDER FRE.\'CH RCLEliards was p r e v e n t . ~ d , by reducing their yalue. After the arrivalof de Tracy and the troops that came with him, apparently withtheir pockets filled with cash, money became more plentiful inCanada. Accordin;:: to the l\ll:!c de l'Incarnation. writing atthe time, ":'Ifolley is common at pnen t , the gentlemen havebrought much with them. They pay in money for all they buy,as well for their food as other necessaries." In conseC]uence ofthis and the increasing tmde, the colony was next threatenedwith an oversupply of sols which, as already explained, werecirculating at double their normal value. On January 10th,1667, COlll plaint is made to the Council of Quebec. that the sols arebeing brought from France in lar;::e numbers while other coinsare taken away. ulltil there is now almost no other in circula-tion. The Council ordains that from the first of February next.suis shall be current for only 20 deniers each, hlIt for the rest ofthis month (january) they will be received by Sicur de laChesnaye. in payment of puhlic d l l e ~ , at the old rate of 24deniers. 011 the 31st of January it was found necessary tomake special arran;::emcnts to gi\'e w;.trning of the cbange andto extend the time for receiving til(; sols at the old value, for thebenefit of Three Rincrs and 1\lontreal.

Though the reduction on the sols was ~ l i g h t as comparedwith that on the deniers, yet it evidently affected the people toa much greater extent. A very general complaint seems to havebeen raiseu by the people on accollnt of the loss with which theywere threateneu by the reductj,m about to he made. A subscrip-tiOI-1 was opt!l1ed, headeu by de Tracy, the GovLfllor, the Intend-ant, the \\ 'est Indian Company and a number of others, to provide a fund to meet these losses on the part of the poor people.Incidently thiS indicates that money was now freely circulatingamong all classes in the colony. The same fact is furtherillustrateu by a Illatter whieh came before the Conncil on Oct.29th, 1663. The price at which the Company was to receivebea ver had been fixed at 101. per pounu for the best grade. Thecompany clnimed. however, that all they could get for it inFrance was 81. per poune:. Hence to prevent themselves fromsuffering loss they had raised the prices of their goods in likeproportion. But It was pointeu out before the Council. that,inasmllch as now-a-d


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C.4N.,/DIAN CCRRE,\'CI' { ',vlJER FRE /VCII Ri'I.E 15goods with beaver but often with money, this practice wasobviously unjust to the cash buyers. This being recognized, Talonproposed to reduce the price of beaver to 91., on condition thatthe company should reduce the price of its goods; which beingagreed to, the Council fixed it by an Act.

Returning to the matter of a special coinage fur the colonies,which had taken practical shape in the \Vest Indies in 1670, itwould appear that the king had originally intended to m:1l;e a special issue for Canada as well. In a memoir addressed to Colbert,dated Nov. roth, 1670, Talon says that when he was in Francethe king had declared his wish to have a coinage struck suitablefor the country, and which would remain in circulation in it.He considers that such a measure would be of the highestbenefit to the country, and promises to do his duty in thematter when the necessary orders are issued.

In another part of the same memoir he intimates that themerchants of Canada are very anxious that the sum annuallyset aside by the king for the assistance of the colony should hesent out in the shape of money, not in the form of goods. Thereason for this was that the merchants desired to have theentire supply of goods in their own hands. This, Talon says,would simply result in the people paying twice as much for theirsupplies as the rate at which they are now furnished from theking's stores. Besides the present arrangement permits him tuexchange the goods for grain with the settlers. He has undertaken to send goods to convenient places for exchange and tobring back wheat. 'Without doing this seme of the new settle- 'ments would be entirely ruined. This plainly indicates thatTalon was the author of the ordinance, already referred to,making wheat a legal tender r.t a certain price. I t will beobserved that there is no lack of harmony between Talon'sapproval of a special coinage for the colony and his disapprovalof having the king's contribution to the colony sent in the shapeof money, which, under the circumstances, would simply return toFrance for the purchase of fresh goods for the merchants.

Replying to Talon the following spring, II th Feb., 1671,Colbert says: "Before the king can adopt any resolution withreference to the striking of a coinage for Canada, it will benecessary to know the required denomination and weight, also


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16 C."/SADI.-IS C{"RRE.\"cr [!.\' lJER FREsel l RUI.Ethe circulation it ,\oldJ probah:y have in the colony. After thatHis :.'IIajesty will announce to yon his intentions on the subject."This would seem to illdicate that the coins already struck forthe \ \ 'cs t Indies were not intcnded for use in Callada.

In a letter to Talon the following year, dated June 4th, 1672,Colbert writes: "H is l\Iajesty has considered the proposal tostrike a special coinage for Canada, and as he considers it goodand ath"al, tageolls, Itt WIll issue the necessary orders to have itstruck and se llt out the following year." This purpose, however, was ne,'e r carried out. I t was apparently determined inthe meantime to have the ordinary coins of France circulate inthe colonies at an enhanced value . .Thus we find an arret passedby the Council of State, Paris, r8th November, 1672, statingthat the money issued for the Islands, f'tc., has been found to beof very great benefit, hence net only is it to he continued, butthe current money of France is to be permitted to circulatethere als" , but with increased values; the piece of r 5 sols topass for 20 sols, the 5 sol piece to pass for 6 sols 8 deniers, andthe sol of r 5 deniers to pass for 20 deniers, and other pieces inproportion. H enceforth all exchanges or contracts are to bereckoned in money, and not in sugar or any other goods. The solof 15 deniers here mentioned was alreJ.dy increased one-fourthof it s standard value.

Charlevoix says that this arret was made to apply to NewFrallce, and that in consequence the value of money increasedone-founl} in Canada and resulted in much confusion in al l theexchanges with France. Here, however, Charlevoix is partlymistaken, because for ten years at least the French money inCanada had heen circulating at an advance of one-fourth "or over.As \ve h;:J.\e ju st seen, the sol, the chief coin of the country, wasreduced from 2+ to 20 deniers, which is the value to which thearret raised it. In the introduction to a memoir on the card moneyprepared for the Council of l\Iarine and given in Zay, considerableconfusion is a lso found, the information obtained being eitherinexact or misunderstood. I t is supposed, for instance, thatthe distinction between money of France and money of thecountry came in with the arret of 1672, which was certainly notthe case, as there are numerous instances in which this distinction is mentioned from "1654 on.


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CAS,-W/AII' CL'RNEII'CV { '.VDEN FNE.YCll RI'I.E 17Money becoming a customary medium of cxchange, mer

chants were less willing to accept producc in lieu of it. \Veha\'e alrcady noticc(l that objection was made to taking payment in wheat. After 1672 contracts were bcing drawn rCf}lIir.ing payments to be wade in mOlley. The twe staplc skins ofthe fur trade were the beaver and moose, which were receiyableat fixed prices by the treasury of the colony, whethl.!r und, rcompany managcment or not, and afforded the chief basis fortaxation at the rate of one-fourth of the beaver and olle-tentllof the 11100sc. The beavcr seems to have: becn at-cepted inordinary trade without much question , hut after 1572 the merchants wcre beginning to refusc the moose skllls. Hence theCouncil found it necessary to pass an arret, Sept. 27th, 1674.ordaining that the moose skins should pa5S current as a legaltender at thdr market pnce, and prohibiting anyone trom refusing to accept them in paymcnt of debts.

An agitation was made in 1679-80 to have a reductionmade in others of the current coins, especially the four-solpiece, which it was sought (0 bring to its valuc in France. T h , however, was refused, and 011 Decelllber 2nd, 1680, an arret waspassed requiring that all coins should circulate ill Canada a tthe same rate, namely, at an increase of one-third of their valuein France. As we gather from subsequcnt ordinances, this wasapparently intended to apply to foreign COillS as well.

After Duchesneau became Intendant he proposed to theGovernment to send out to Canada 30,000 crowns, in order toincrease the money in circulation; to which Colbert replied, onApril 28th, 1677: "That which you propose with reference tothe money, namely, the sending of a sum of 30,000 eClls toCanada, is not thought expedient. It is necessary that thetrade, labor and industry of the people should Olttract money intothe country. YOII yourself admit tbat Canada is as fruitful asFrance, and in addition to being able to produce all that Francecan, it has the fisheries." The truth was that Colbert, compelledto find money to support the operations of Turenne and Condein Europe, had none to spare for the colonies.At this time Canada was anticipating Colbert's advice toattract money to it by trade, although it was in a direction notat all relished by France and one that was to cause no end of


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18 C'A.\..lI'I.I.V C!'RA'I iSrT f',\'OF:R FA'/ i .vel l R11.1itrouble for the future, Canadian traders had discovt!red that theEnglish and Dutch merchants of Albany, Boston and New Yorl(were anxious to buy furs, and at much higher prices than couldbe obtained in Canada. They were willing also to pay forthem either in dollars (piastres) or in goods, the goods beingcheaper than in Canada. Further, by selling to the English thetax of one-fourth on the beaver would be escaped. Under thesecircumstances a very lively trade was developed with the Eng-lish colonies. Against this traffic the Government, both iDFrance and Canada, directed all its verbal engines, but withoutmuch success. The highest officials in the colony, Governorand Intendant included, mutually accused one another of takingpart in this illicit trade for personal gain. As one result of thistraffic a steady stream of Spanish coins began to pour intoCanada, consisting chiefly of the piastre or Spanish dollar andits fractions, one-half, one-fourth and one-eighth.

The farmers of the revenue were naturally much disturbedover the loss of revenue through the loss of beaver. The merchants of Quebec interested in the trade with France were alsoaggrieved, as it meant a loss of profit to them on both exports andimports. It was found, too, that though the English were p a y i n ~ high prices for beaver, yet they were unloading on the Frenchtraders all their worn and light coins. Numerous complaints werepresented to the procureur general, and through him to the Council, on account of the merchants refusing to receive the coins.Hence an arret was passed September 17th, 1681, supplement-ing that of December 2nd, 1680, ordaining that all {oreigDmoney, gold or silver, should pass by weight, but increased byone-third of its value, according to the usage of the country.The full piastre was to be accepted at 31. 19 sols 1 denier, whilethe light coins were to be reduced in value at the rate of 1I solsfor every grain which they lacked in weight. It was forhiddento anyone to refuse to accept these coins at this valuation.

In a country like Canada where it was simply impossible toascertain the weight of coin in every transaction, this ordinancecould not be worked. But, though this was soon discovered, yetowing to the quarrels between the Governor and Intendant, thebusiness of the Council Was so obstructed that it was not tillJanuary 13th, 1683, when de Meulleshad succeeded Duchesneau


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CANADIAN CURRRNC}' U,YDER FRENCH ReLl'; 19as Intendant, that the matter could be remedied. The agent ofthe farmers of the revenue desired the Council to treat allforeign coins as France did, by entirely prohibiting their circula.tion. This, however, the Council refused to do unless thefarmers of the revenue would undertake to buy up all the foreignmoney then in the colony, which of course they were not prepared to do. Hence the Council ordained that the piastre shouldpass current for four Iivres, if of full weight, and at decreasingrates according to the degree of their lightness. To get overthe difficulty of constant weighing, they were to be stampedwith aflclIr de lis, and those of light weight were arranged illfonr classes, to be distinguished by Roman numerals stampedon them, while a scale of value was arranged for them. Similarprovisions were made for the fractions of the piastre. Nonewere to circulate without being stalllped, and nOlle to be refusedthat bore the stamp.

This arrangement seems to ha \ 'c settled the difficulty forthe time. Governor De la Barre, writing to M. de Seignelay,in November, 1683, thus refers to the matter: "\Ve experiencedserious embarrassment in the month of January last in regardto dollars. They were here in some number, and a quantity ofthem being light caused considerable disorder among the lowerclasses. I t not being cnstomary in this country to weigh them,induced the Intendant and lIle to assemble an extraordinarysession of the Council, at which it was resolved, subject to hisMajesty's pleasure, to have the dollars of weight marked with a/leur de lis, and those which were light with some cypher fixingtheir value. This was done and is now in operation without anynoise or difficnlty."

This brings us tf) the eye of the introduction of card Illoneyin 1685, the nature and effects of which will be considered inthe next paper.

ADAM SHORTTQUEKN'S UNIVERSITY, Kingston, March. 1898


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CANADIAN CURRENCY AND EXCHANGE UNDERFRENCH RULEII. FIRST PERIOD OF THE CARD MONEV*THE introduction and continued employment of card moneyin Canada, though having very important monetary consequences, had no intentional connection with questions ofcurrency. The card money was entirely a financial expedient.Only to a very slight degree and after much entreaty on thepart of the Canadian merchants and officials, was it adapted tocurrency needs, and then only through a financial channel. I tis very necessary to keep this in mind, as it will serve to explainmany of the anomalous monetary situations which resulted from

the use of the card money. To regard its issue from the pointof view of a currency expedient would indicate a degree ofstupidity on the part of the French officials, with referenceto the nature and functions of money, with which they are byno means to be charged.

In order to account for the introduction of the first cardmoney in Canada, and to indicate its function, it is necessary tooutline the condition of the colony just before 1685.The greater part of that portion of the Canadian revenue*Chief sources :-Canadian Archives, Correspondance G e o ~ e , Vols. VII.-XLIII.II Documents relating to the Colooia1 History of the State of NewYork," Vol. IX... Collection de Manuscrits Contenant Lettres, M ~ o i r e s , et AutresDocuments Historiques Relatifs t\ la Nouvelle-France," Vols. I.-III... Edits, Ordonnances Royaux, Declarations et Arrets du Conseil D'Etatdu Roi, Concernant Ie Canada.".. Jugements et D4liberations du Conseil Souverain de 1a Nouvelle-France," Vols. III.-VI. ... Histolre M o n ~ t a l r e des Colonies Francaises, d'apres les DocumentsOfliciels." Par. E. Zay.

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2 CANADIAN CURRENCY UNDER FRENCH RULEwhich was obtained from the colony itself, was derived from theexport tax of one-fourth on the beaver and one-tenth on themoose skins, and an import duty of ten per cent. on certaingoods, chiefly wine and brandy. But for some time previous to1685 the beaver trade had been diminishing. This was due toseveral causes. The largf.st quantity and best quality of beavercame from the North-West, and the Ottawa tribe of Indiansfurnished the middlemen who gathered the furs from the westernIndians and sold them to the French. The coureurs des bois,however, carried on a large illicit trade in the same direction.As more stringent efforts were made to suppress their trade, theynaturally abandoned Canadian markets and carried their furs tothe English, whereby they not only avoided the danger of arrestbut received better prices for their furs and escaped the tax ofone-fourth on the beaver.

The development of the English trade in Hudson's Bay atthis time, also drew off an increasing quantity of North-Westbeaver which usually went to the French. Finally, the growinghostility of the Iroquois, encouraged by the English colonies,manifested itself most actively at first in attacks upon theIndian allies of the French, among them the Ottawas. Allthese conditions combined, tended to cut in upon the two mainsources of revenue from the colony, the export tax on the beaverand the import tax on the goods brought in to exchange for it.The beaver from Canada fell from 95,489 Ibs. in 1783 to 23,568ibs. in 1785.

The Iroquois becoming more threatening, Governor De laBarre requested more troops from France and called out thelocal forces. With the latter, in 1684, he undertook an expedition to Lake Ontario, which, however, resulted very unfavorablyfor the colony. The Iroquois were convinced of the weaknessof the French power in Canada, the expenses of the colony weregreatly increased, and a rupture resulted with the farmers of therevenue who refused. the following year, to contribute the usualamount of funds for the government. In consequence of thiscomblDation of circumstances, the Intendant Demeulles foundhimself running short of funds to meet the increasing expenses,especially for the pay of the troops.

The supplies for Canada, at this time, were provided in

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CANADIAN CURRENCY UNDER FRENCH RULE 3France in the early part of each year for that year only, but didnot usually reach Canada till late in the summer. The conse-quence was that when the stores ran out there was nothing atthe command of the Intendant with which to meet the expensesof the first six months of the following year. This did not pre-sent special difficulties where t ~ e chief payments were to be madeto merchants or others who could wait a few months for theirmoney. But, with a considerable military force, the pay of thesoldiers had to be provided regularly.Such were the circumstances in which Demeulles foundhimself in 1685. His ~ u p p l i e s were exhausted, he had neithercash on hand nor stores to sell, yet the soldiers were clamoringfor their pay and complaining of the conditions under which theywere called out.

In the following letter, dated 24th September, 1685, he des-cribes his situation and the device by which he managed to tideover the difficulty." I have found myself this year in very great straits withreference to the supplies for the soldiers. You did not, my

Lord, provide funds beyond the first of January last. I madeevery effort to support them for the whole eight months tillSeptember. I drew from my own purse and from those of myfriends all that was possible. But at last, seeing i t impossiblefor them to render me any further service, and not knowing towhich saint to make my vows, money being very scarce, havingdistributed very considerable sums on all sides for the pay ofthe troops, it occurred to me to put in circulation in place ofcoin certain notes made of cards cut in four. I send you, myLord, samples of the three kinds, one being for four franks,another for forty sols, and the third for fifteen sols, becausewith these three kinds I was able to make the soldiers monthlypay. I issued an ordinance requiring all the inhabitants toaccept this money in payments and to give it currency. Havingpledged my word to redeem the notes no one refused them, andthe issue had so good an effect that by this means the troopshave lived as usual. There were some merchants who offeredme cash, in money of the country, on condition that I shouldpay them back in money of France, to which however I wouldnot consent, because, in so doing, the king would have lost one

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... CANADIAN CURRENCY UNDER FRENCH RULEthird. That is to say, for 10,000 ecus he would have paid40,0001. Thus, by means of my credit and management Ihave saved His Majesty 13,0001."There are one or two features in this letter worth noting.First, as already observed, the introduction of the card moneywas obviously not a currency expedient, but entirely a financialone. Secondly, it was not on account of the general expensesof the colony that it was found necessary to introduce the cardmoney. It was due to the necessity of providing for themonthly payments to the soldiers, which could not be postponed.Again, the proposition of the merchants to lend money to theIntendant, on the terms stated, did not indicate a particularlyexorbitant demand improvised for the occasion. It was thecustom of the time, brought to Canada from France itself, tomake large profits at the expense of the government. I t wasalso a settled custom of the merchants of Canada to makeadvances to the Indian traders and others on the basis of themoney of the country, to be repaid on the basis of themoney of France. The proposal made to the Intendant difteredfrom that custom only in being an accommodation in moneyinstead of goods, and for a shorter period of time. Moreover,the device of borrowing money from the merchants and othersin the colony, if not already practiced by the authorities; was tobecome a very common expedient with the colonial government,being adopted immediately after this, as we shall see.

The card money, thus issued, was evidently of a verytemporary, and indeed of a personal character. The Intendantstates that he pledged, not the home nor the colonial government, but his own word for the redemption of the cards, and hislast word is that he had saved the king money, not on the basisof the king's credit, but on the basis of his own.In accordance with the promise made, the cards wereevidently redeemed on the arrival ofthe funds for the year. As

the king was sending out extra troops and supplies for an expedition against the Iroquois, there was no occasion for Demeullesto repeat his experiment the following year.

In October, 1686, Champigny arrived to succeed Demeullesas Intendant. He, too, had no occasion, the first year, to resortto any such devices to meet the necessary outlay of the govern-

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CANADIAN CURRENCY UNDER FRENCH RULE 5ment. In his first report on the financial condition of thecolony, in 1687, Champigny, while showing that he still hassome of last year's appropriation on hand, points out that theextraordinary expenses of the war are sure to require, before thearrival of the vessels the following year, more funds than he hason hand. Evidently wishing to avoid the difficulties of Demeulles, he concludes thus: " In consequence of these considerations, the Marquis de Denonville and myself have found ourselvesobliged to order the agent of M. de Lubert (treasurer of thedepartment of Marine) to borrow here the sum of 105,000 1. andto draw letters of exchange on the said Sr. de Lubert, not payable however till the month of May, in order that it may notembarrass him."

By .. borrowing" the -money before the departure of thevessels, he was able to obtain ready advances in return for billsef exchange payable six months after, because the bills enabledthe merchants to purchase, in France, their goods for the comingseason. His method was perfectly sound, and had the war notseriously interfered with the trade of the country, it might havebeen continued indefinitely, the letters of exchange being promptly paid.

But the trade of the colony depended almost entirely uponthe western furs, and the fur trade was nearly annihilated by thewar with the Iroquois and their other allies of the Five Nations.Thus the country was largely reduced to living on what the kingexpended in it to carryon the war. Everything depended uponthe prompt and adequate supply of funds from the Frenchtreasury.

In 1690 part of the supplies sent to Canada were lost intransit, and Champigny, finding himself in the same position asDemeulles, availed himself of the same expedient. But, sincethe colouy was now so completely dependent on France, nothingthat would not command supplies from France was of any avail.To pay the soldiers in card money was simply to increase thedemand for goods without giving the merchants the means ofpurchasing them. The natural result was a rise in prices, anda special price for card money.In 1691 the same difficulty occurred, and a new issue ofcard money was made, the issue of 1690 being paid off. In his

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6 CANADIAN CURRENCY UNDER FRENCH RULEreport to the minister, dated loth May 16g1, Champigny thusdescribes the situation: " Though Count de Frontenac and Ihave drawn, through M. de Lubert's clerk, last November, billsof exchange on France (or 87,3771, in order to have funds inthis country, we could not meanwhile avoid making this year anew issue of the card money in order to meet all the expenses,as a portion of our funds, which consisted of ammunition, did notarrive last year, and we have redeemed the paper money issuedin 16g0. It is highly necessary, my Lord, to adopt some otherexpedient, in order to have funds every year in this country tomeet the expenses of the first five or six months of the onesucceeding. I f you will authorize the payment in France ofbills of exchange to be drawn here when the last vessels sail, attwo or three months sight, by M. de Lubert's clerk, means willbe found to borrow to the amount of 50,000 ecus in readymoney. We pray you to consider it, my Lord, and to think ofthe wrong done the troops who purchase (or much higher ratesfor paper money than (or specie, and who experience, in addition,considerable difficulty in procuring necessaries."

Here we observe that the depreciation o( the card moneywas plainly not due to any lack of faith in i ts redemption,(or the only two issues yet made had been promptly and fullyredeemed. The depreciation was due simply to the card moneyincreasing, (or the time, the amount of currency without corre-sponding increase in the goods to be purchased. Hence, as hestates, the soldiers not only have to. pay more (or their neces-saries, but even find a difficulty in obtaining them. By sellingexchanges, however, the currency of the colony was notincreased, while means were at once given for the purchase off u r t h ~ r supplies.About midsummer a large addition was made to the mIli-tary (orces in the country by the arrival o( further troops fromFrance, giving much joy to the colonists, but adding correspond-ingly to the expenditure. Writing in October o( the same year,Champigny, after g i v i n ~ an account of the increased outlayrequired, and the inadequacy of the funds sent out, says thatFrontenac and he are very anxious not to be obliged to issuecard money (or the payment o( the troops and for the otherexpenses o( the country from the b e ~ n n i n g of each year till the

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CANADIAN CURRENCY UNDER FRENCH RULE 7arrival of the vessels. To avoid this for the coming year, theyhad commanded the clerk of M. de Lubert to obtain from themerchants and traders of Canada, to the extflnt of 200,000 1. incash, in return for letters of exchange on M. de Lubert, payable,in the month of May following, out of the funds set aside that yearfor the colony. He then explains that this will be a great con-venience to the Canadian merchants who have now some diffi-culty in making their payments in France, as there has beenbut little beaver received this year, and the merchants are loathto trust their money on the sea, a risk which threatens also theKing's funds in coming out to Canada. He therefore asks theminister to authorize the payment of these letters of exchangein order that they may be able to adopt similar methods for thefuture.

From this we gather that the payment of so many troopsand other outlay requiring ready money, had necessitated theKing sending much specie to Canada every year. On the otherhand the falling off in the beaver, which used to be the staple ofexport against which letters of exchange were drawn, had madeit necessary for the merchants to send much specie back toFrance in default of other means of paying for imports. Henceit naturally occurred to Champigny that it would be much moresafe and convenient, both for the merchants and the King tohave them turn their money over to him instead of sending itback to France, receiving in return letters of exchange whichwould be paid in France with the money which would other-wise have been sent to Canada.

His proposal was thoroughly correct as a system of exchange,and as the great naval powers of Europe were at war withFrance at this time, the risk of sending treasure across theAtlantic was very great. Subject to the influences of a stereo-typed bureaucracy, the French ministry was at first slow tograsp the situation, s e e i n ~ , too, only one side of the exchangeprocess. In the end, however, Champigny's clear presentationof the facts and the increasing risks convinced them, and hewas authorized to draw bills as requested.

In considering the financial, exchange and monetary con-dition of Canada from this time on, constant reference must bemade to the situation of France itself in these respects. The

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8 CANADIAN CURRENCY UNDER FRENCH RULECanadian experience in these lines, though very instructive, wasnot the result of gratuitous experiment, but mostly the inevitable outcome of the condition of affairs in the mother country.Weare now at the period when France began to feel the terribledrain on her resources from the long wars in which she wasengaged in Europe and her colonies, broken only by theshort peace between the Treaty of Ryswick in 16g7 and theopening of the war of the Spanish Succession in 1701. Theincreasing embarrassment, distress and partial bankruptcy ofthe Canadian colony, due to its financial and exchange difficulties, simply express the necessary colonial parallel of that evenmore terrible distress and misery amidst which the greatnessand glory of the reign 'of Louis XIV. expired, and which laidthe foundations of the financial disorder and social derangement which culminated in the French Revolution.During this peried many changes were made in the Frenchnational currency, which were necessarily reflected in Canada,though, for various reasons, the results were not always thesame as in France. Thus in 1686 the French government raisedthe value of the louis d'or from 10 1. to II 1. lOS, and other goldcoins in proportion. The funds which were sent to Canada in1687 were therefore a11 valued at this increased rate. On July28th, 1867, the Procureur General drew attention to this fact inthe Council at Quebec. He pointed out that the louis d'or andpistolle were now rated at II 1. lOS, the ecu d'or at IIg s, or 5 1.Igs, and the demy louis, de my pistolle and demyecu at the halfof these sums. The Council therefore ordains that these coinsshall be raised to the same value as in France, which will makethem, in money of Canada, louis d'or and pistolles 15 l. 6s. Bd.,the ecus 71. 17s. 8d., and their halves in proportion. Againin 1689 the value of both gold and silver coins was raised,the louis d'or being now placed at I I 1. 12S, and the louisd'argent at 3 1. 2S, which valuation was also adopted inCanada. But a re-coinage was undertaken in the sameyear, when, though the weight and standard were not altered,the value was raised. The louis d'or was issued at 12 1. lOS.and the louis d'argent at 3 1. 6s. The value being raised,the old money was easily recalled in France, but not so fromCanada. In his dispatch of October 12th, 16g1, Champigny

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CANADIAN CURRENCY UNDER FRENCH RULE 9asks the minister to inform him on what basis the old moneymay be permitted to circulate in the colony. The new money,he says, is currect on the same basis as in France, with, of course,the usual addition of one-third its value. The minister notes onthe margin of the letter that an ordinance is necessary to decrythe old money in order to force it to return to the mint in France.Such an ordinance was evidently sent but it was not enforced,for, as the Governor and Intendant explained, they thought itunwise to enforce the law when to do so would be to compel thepeople to send almost all their money out of the country in thetwo vessels which were about to sail and which might be lost, aswere others at that time. Besides, if they once sent their moneyaway it was more than doubtful whether they should ever see itagain. The only money which comes to the country is whatthe king sends, and the colony, deprived of its currency, wouldcollapse altogether, as its present trade is in a very precariousposition. .

Canada thus continued to retain in circulation a large proportion of a coinage which had been recalled in the mothercountry. This situation and the natural tendency, under thecircumstances, for money to leave the country, revived the proposal, which had never quite died out, for the striking of a specialcoinage for Canada. In 16g5, Frontenac proposed the scheme,suggesting the issue of 100,000 fro or 40 ,000 ecus to be currentin Canada alone. I f this is not done he fears that aU the moneywill be drained out of the country in a short time. But whenpeople have little to sell and pressing needs to meet, if they haveany money that is sure to go, for it at least is salable. Obviouslyno special coinage would afford relief under such circumstances.

In 16g3 a large quantity of beaver arrived in Canada fromthe west. giving much joy to the merchants and temporarilyrelieving the commercial distress. The following year, however,but little came and trade languished.While the liberty to draw bills of exchange in autumn, to bepaid out of the appropriation for the following year, relieved theCanadian authorities from the necessity of issuing card money tomeet the expenses of the first half of that year, yet it did notenable them to enlarge the appropriation itself. Hence when,for one reason or another, the outlay of the year exceeded its

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10 CANADIAN CURRENCY UNDER FRENCH RULBrevenue, the authorities were once more in perplexity to meetthe deficit. This situation occurred in 1690-91, and again in16g2 and 16g7, involving the further issue of card money on eachoccasion. In 16g6, Champigny asked for a special appropriation to payoff the cards which represented this floating debt upto that time.Much of the Canadian funds continued to be invested ingoods in France and sent out to be disposed of on the king'saccount. In 16g5, Frontenac, who had always a very lofty senseof the dignity of the Canadian administration, attempted to havethis system abolished, and specie sent instead. He urges thatthe goods are troublesome to dispose of; besides such truckingis beneath the king's dignity, and it is greatly to the disadvantageof the local merchants that the king should have a store six timesas large as any of theirs. Neither does he believe that the profitmade on the goods is so great that it would materially increasethe king's outlay if money were sent instead of goods. Champigny also points out, in partial explanation of his deficits, thatthe funds sent in the shape of goods to be sold were not immediately available but only as they were disposed of or otherwiseused. However, no change seems to ha ve been made at that time.After several annual requests for funds to payoff the floating debt represented by card money, certain funds were appropriated for this purpose in 1700. Champigny gratefullyacknowledges the concession which, he says, will enable him topayoff the deficit due to losses incurred in 1690-91-92. I twould appear that the deficit of 1697 still remained unprovidedfor, and though he declares that the issue of card money hasceased. in accordance with the orders of the minister, yet, whenhe was succeeded by Beauharnois in 1702 it was found that hehad left a considerable amount of card money outstanding.Whether all of this was due to the is,ue of 1702, or includedthe remainder of former issues, is uncertain.Meanwhile the financial condition of France itself wasgoing from bad to worse, and in 1700 the King warns theCanadian authorities that they cannot expect much moreassistance from him, as his affairs have fallen into a disastrouscondition, and he foresees additional troubles in Europe; norwas his foresight defective.

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CANADIAN CURRENCY UNDER FRENCH RULE I IVarious schemes were considered for imposing additional

taxes in Canada. In 1702 Beauharnois gives us a glimpse ofhow the finances were being manipulated in order to make bothends meet. The revenue obtained from Canada between thefirst of January and the middle of October in 1705 amountedto 29,444 1. An ordinance of the Intendant was issued Sept.17th of that year, requiring that the import duties on wine andbrandy should be paid henceforth in money of France. Cardmoney became a regular means of meeting all deficiencies.

Though the Canadian beaver trade had now resumed itsregular course, yet the European market for furs-a kind ofluxury-was greatly reduced by the devactating wars which hadbeen going on there. Vaudreuil and Raudot, writing inNovember, 1708. tell of the sad condition of the colony, owingto the low value of furs, and the recent losses by sea. Theyhave tried every possible remedy, but nothing will answer savea rise in the price of beaver, which they think might be forcedon the new company farming the revenue. The merchants ofCanada had undertaken to manage the whole beaver tradefrom 1700. But their attempt fell upon evil days, and theywere glad to be rid of it again to a company in 1707. TheGovernor and Intendant had to acknowledge that while thecolony was suffering from the declining value of the cardmoney, owing to inadequate redemption, the letters of exchangedrawn on the farmers of the revenue for the beaver sent toFrance were promptly paid in cash.. Matters becoming rapidly worse with the French treasury,there was an almost complete suspension of appropriations forCanada from 1708 till after the treaty of Utrecht in 1713. Thoughthe expenses of the colony had been considerably reduced, yetthe Intendant, having very little local revenue to depend on, hadno other resource than the continued issue of card money. Thequantity of card money outstanding at the close of 1713 amountedto about 1,600,000 1. The trade of the country was completelydemoralized, the merchants claiming that they were ruined.

I t being impossible to carryon the government upon cardmoney alone, Begon, the Intendant at that time, having per-suaded the people to accept balf the face value of their cards,proposed this to the French Court in 1713. The proposal was

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12 CAN:.fDIAN CURRENCY UNDER FRENCH RULEdiscussed and adopted by arret in 1714. The amount of cardmoney outstanding being taken at 1,600,000 1.,800,000 1. wereto be paid in five yearly instalments of I60,ooo 1. each, beginingin March, 1715,

In accOl'dance with this arrangement, bills to the amount of160,000 1. arrived in France in January, 1715. They were presented to the treasurer and promptly accepted, but when theyfell due could not be paid. The importunity of the French merchants holding the bills, being great, the treasurer put them offtill June and July with what were practically exchequer bills.But when these were due they could be cashed only at a discountof 60 per cent. They then went to the minister, who referredthem to the King's secretary, but there, too, there was nothingto be had. Finally they obtained orders on the treasurer of theextraordinary war funds, and from him they managed to extract33,000 1. out of I60,ooo 1.Bills for 1716 had also been drawn at the same time. Butwhen the fate of those presented in 1715 became known in Canada the people preferred to keep ~ h e i r cards, which were evenyet of some value at home, consequently very few were offeredfor the instalment of 1717.

The letters of exchange drawn on the Company for thebeaver exported, having been faithfully paid up to this time, thecolony was saved from complete ruin, although a panic wascaused by the reported financial embarrassment and disolutionof the Company.Finally the whole subject of the card money was referred tothe Council of Marine for examination and recommendation.The Council reported April 12th, 1717, recommending the callingin and abolishing of the card money. The redemption shouldtake place on the basis of one-half its face value, as already proposed, that being also the valuation at which it was circulatingin the colony. As their plan could not be put in operation thatyear, it was agreed to allow the cards to be issued as usual, butfor the last time. The details of their plan of redemption weretoo elaborate and theoretical to be worked, and a simpler onewas adopted. I t was also pointed out by the council that, inasmuch as the card money was required by law to be taken at itsface value, instead of actually passing for one half its face

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CANADIAN CURRENCY UNDER FRENCH RULE 13value, the price of everything was doubled. But all debts,salaries and fixed charges were paid in cards at their face value,which was manifestly unjust; hence it was recommended thatthe cards be reduced by law to one half their face value. Theyalso advised the complete abolition of the distinction between" money of France" and" money of the country," all moneyto have the same value in Canada as in France.

The King accepted the advice of the council in principle.The final plan for the winding up of the card money system isgiven in the" Declaration of the King" dated July 5th, 1717, theleading items of which are as follows. To meet the requirements of the last six months of 1716, and the first six monthsof 1717 the last issue of card money will be made. All thecard money, old and new, is to pass for one-half its facevalue; thus a card for 41. will pass for 21. money of thecountry, or II. lOS. money of France. All the cardmoney must be presented to the agent of Sr. Gaudion,treasurer-general of the Marine. That presented before thedeparture of the vessels this year will be redeemed inletters of exchange, payable one-third on the first of March,1718, one-third on the first of March, 1719, and the other thirdon the first of March, 1720. Letters of exchange will not begiven for less than 100 1. The smaller sums were apparentlyto be paid off in cash. The remainder of the cards were to bepresented in 1718 to be redeemed in 1719 and 1720. After thedeparture of the vessels in 1718 all money not presented willhave neither value nor currency. From the publication of this'edict the distinction between money of the country and moneyof France shall cease, all further contracts and transactions tobe undertaken on the basis of the money of France, which shallalso be the money of Canada. All debts and contracts madepreviously to this time shall be payable in French money, witha deduction of one fourth, which is the difference between theCanadian and French money. This latter clause may beillustrated by the statement that 15 1. money of France, beingincreased by one third, became 20 1. money of Canada, which,being reduced by one fourth, became once more 151. money ofFrance.

In accordance with this edict, the greater part of the card

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14 CANADIAN CURRENCY UNDER FRENCH RULEmoney was brought in and letters of exchange issued. A complete statement was sent to France giving the name of eachperson to whom the exchanges were payable-586 in all-withthe amounts due to each in 1718-19-20. The total sum drawnin letters of exchange was 359,6g6 1. 28., redeeming cards to theface value of 959,IBg 1. 12 s. in money of the country.On the 21st of March the King ordained that those whohad contracted debts since 1714, when the value of the cardmoney fell to one half in consequence of being redeemed at onehalf its face value, sbould be permitted to pay their debts, onthe basis of one half their value, in letters of exchange on thetreasurer, M. Gaudion.The vessels from France were anxiously awaited in Canadain 1718, as those interested in the card money were eager toknow whether the exchanges due that year had been paid, orwhether the promises of the court were broken again. OnOctober 4th the Governor and Intendant write to say that theyhave not yet received word of the payment, and the merchantsare in great suspense. They have assured them, however, thatthe bills were paid when due. By the 24th of October they arebeginning to despair of the arrival of the ships, which were tobring them the money and stores for the next year, and takeback the exchanges for the last card money. They say thatmost of the specie which came out the year before has returnedto France, and the colony is so nearly without money that tradeis at a standstill. I f the" vessels do not appear before the endof the month they will have to suspend the law with referenceto the card money and resort to it again. The vessels notarriving, the Governor and Intendant passed an ordinancesuspending the law. In the meantime the King had issued anordinance, on July 12th, extending the time for receiving thecard money until the departure of the vessels in 1719.

This seems to have been the last hitch in the operations.All local circulation of the cards ceased in 1719, and in thedispatches of 1721 we hear the last of the Canadian cardmoney of the first period.From the facts which have been related with reference tothis first experience with the card money, it is quite obvious

that it was precisely of the same nature as the army bills issued

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CANADIAN CURRENCY UNDER FRENCH RULE 15in Canada by the British Government during the war of I8n 15.Had the exchanges drawn for the cards been promptly paid, asin the case of the army blils, they could not have affected disas-trously the currency of the country, for only a temporary over-issue would have been possible. An increase in the amountissued would have meant an increase in the expenditure of thegovernment, which in turn would have meant an increased de-mand for goods and labor, and this would have involved a cor-responding increase in the import of French goods, which woulddraw off, in return for letters of exchange, the greater part of theextra issue of card money. As the trade of the colony might beenlarged in this way, an increasing quantity of the cards wouldhave remained in circulation to act as a medium of exchange.

It was not the quantity of cards issued in proportion to thepopulation and trade of the colony that led to their depreciation,but simply the inability of the government to redeem the surplusnot required as a circulating medium. Had the amount of cardmoney issued not exceeded the needs of the country for a cur-rency, they would not have fallen in value, whether the homegovernment could have redeemed them or not. The need forthem as currency would have prevented a call for their redemption.

Thus the card money, like the army bills, though issuedsimply as a means of enabling the authorities to carry on theaffairs of the country, yet, once issued, discharged two totallydifferent functions: first, as a currency or local medium ofexchange; secondly, as orders on France for supplies. Thefirst, however, was simply incidental. Further, as the cardswere issued only when the government was in straits, owing tothe failure of the recognized methods of supply, the real currencyfunction of the cards never had an opportunity to be recognizedduring this first period. In the beginning of the second period,however, this feature was strongly brought out, as will appearfrom the facts to be related in the next paper.Other aspects of the card money as they appeared to the philo-sophic observer of that time, are admirably stated in a memoiron the subject, bearing date 17 I I . It contains a shrewd apologyfor the card money, written from the imperial point of view.I t is stated that nothing but card money is to be found inCanada. This the writer regards as very fortunate for France,

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which would otherwise have to supply the colony with about100,000 ecus yearly, which would be a very serious matter forthe French treasury at the time. Of course much of it wouldreturn to France in payment for goods, but a great part wouldalso go to the New England colonies, whereas card moneycould not be sent there. This was very trne, and it was equallytrue that little Spanish coin WAS now coming to Canada fromthe New England colonies, as they too were deep in the mysteriesof paper money at the same time. Among the other virtues ofthe card money, according to the memoir, was that it avoidedthe risk of loss by transport, and the loss of money, as thewriter feelingly remarks, is the worst of losses.Again, it is good policy on the part of the King to renderhis subjects submissive, and to attach them to his person. Thisthe card money does by making all its value depend on thepleasure of the King as to its redemption. This idea, in a verysimilar form, was recognized in the case of the Bank of Englandthen recently established.

Further, the card money enables the mother country to com-pletely monopolize all benefit to be derived from the Canadiancolony, and this is the height of good policy.As to its drawbacks : The first is the danger of counter-feiting, both in Canada and from France. The remedy proposedis to call in the money each year to be redeemed in letters ofexchange, and then issue new cards with different stamps afterthe departure of the last vessels. These suggestions were after-wards partially adopted, though the stamps were not changedevery year. The writer admits that at present and for sometime past, the letters of exchange drawn for the cards have notbeen very well redeemed; but it is only proper that the colonyshould suffer something for the mother country from which itderives all its benefits.Tbroughout, the memoir is thoroughly characteristic of themercantile and colonial policy of the time.

The next paper will deal with the conditions leading up tothe second issue of the card money, and the course which it ran.

ADAM SHORTTQUEEN'S UNIVERSITY, Kingston

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III. SECOND PERIOD OF THE CARD MONEYIT was unfortunate for Canada that the close of the first periodof the card money, and the return to a metallic currency,should have coincided with the inflating of Law's Mississippibubble. The Company of the Occident, as was the name ofthis airy structure, obtained, among other rights and privileges,a monopoly of the Canadian beaver trade, and a lease of theFrench mint for nine years from 1719.

French currency and finance were found to be in a verydisordered condition when the ratification of the Treaty ofUtrecht permitted attention to be drawn to them. Theirreconstruction had been entrusted to the famous John Law, aman of genius in many respects, whose chief misfortune wasthe phenomenal success which attended his efforts. Like acloudburst after a drought, his projects swept everythingbefore them, completing the ruin which they were intended tomitigate, and themselves being carried to destruction in theflood which they had precipitated.

J71st when Canada was being purged of its paper currencyFrance itself was being deluged with it through Law's nationalbank. By 1719 evcrything in France was afloat on paper.Values, prices, rates of exchange, monetary standards, all weredancing gaily without anchor on a very tidal wa\'c of pros-

Chlef sources:Canadian Archives, Corre!pondance Gcnolrale, Vols. X L l V I ~ X X V ... Documents relaling 10 Ihe Colonial History of the Stl-Ie of Ne,.York," Vol. IX ... Collecllon de Manuscrlls Contenanl LeltrOll, Pt'h1molrl>', et AutresDocuml!nts Historlqucs Rt'i:uifslla NouvelleFranct'," Vol. III." Edits. OrdonnancCl Royaux, Declarations ct ArrelS du Conlcil D'Etatdu Roi. Concernant Ie Canada.""Hisloire Mont\taire del Colonies F r a n ~ a i l C l , d'apres Ie.. DocumentsOfficiols." I'ar E. Zay.


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perity. ' ' 'lith everyone lending a helping hand, the breakerswere soon in sight. Then the Government ran wildly aboutissuing edicts and ordinances, repealing them and issuing others,in the vain hope of casting some anchor that would hold in themidst of drifting chaos.

The people of Canada, away on the outskirts of this commotion, were almost reduced to barter by the wiping out oftheir paper money before a sufficient substitute had been provided. Nevertheless they found themselves bewildered with aseries of regulations about money and prices, sent over fromFrance with the yearly supplies, the latter none too liberal.

Thus a royal edict of May 7th, 17I9, declares that the kinghas issued a new gold coinage, the louis d'or being fixed at 351.,and all persons are forbidden to receive or pay it out at anyother rate. This, however, was of no avail. Forces muchstronger than royal edicts, the necessities of trade namely,were regulating values, and, in consequence, sending specie toa high premium.

Under Law's management of the mint several changes inthe rating of the coins took place during 1719-20. In September, 1720, a special effort was made to fix money values andcheapen provisions. A new issue was made, of which the louisd'or was to pass for 541., and the louis d'argent or ecu for 91.,and the other gold and silver coins in proportion. From Dec.1st these rates were to be reduced to 451. and 71. lOS., respectively, and after Jan. 1St, 1721, they were to be still furtherreduced to 331. and 61. respectively. Special rates were prescribed for the old coins till they could be returned to the mint.But before the end of 1720 it was found that this anchor toowas dragging, and the effort to stem the tide was given up.

By this time the flood was in full sweep, and Law's vastedifice was rapidly going down before it. In Jan., 1721, hislease of the mint was annulled. but nothing could be donetowards a permanent reform till the waters had subsided. Abeginning was made in 1723, and, after various attempts, something stable was secured in 1726, when an extensive recoinagewas undertaken on the basis of 201. for the louis d'or and 51. forthe ecu.To what extent, it may be asked, did these rapid and


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CANADIAN CURRENCY UNDER FRENCH RULE 3extensive changes in the currency of France affect Canada?The colony had two points of contact with the movement ofvalues in the mother country, namely, the commercial dealingsof the country with French merchants, and the management ofthe Canadian finances.As we have seen, the French commercial system did notrespond to every attempt to fix the legal rating of the currency.hence the commercial exchanges between Canada and Francefollowed the range of market values and not the edicts of theCourt. In Canada, again, business was not done on a veryclose margin, and, though trade with France might be somewhathampered. yet the fluctuations in values would not be rapidlyor strongly felt in the internal trade of the country.

In the case of the Canadian finances, the matter wasdifferent. The funds sent out on the king's account wereestimated on the basis of whatever happened to be the legalstandard of values at the time, which was usually some-thing else before the payments were actually made in Canada,the result being to greatly complicate the bookkeeping in con-nection with the colonial finances. Thus, for instance, a certainsum of money was sent out in 1720, consisting chiefly ofcrowns (louis d'argents or tkus) rated at 21. ISS., but in Jan.,172:>, they had been reduced to 21., which caused a shrinkagein the colonial appropriation to the extent of 17,9521. 15s. Butagain, on July 30th, the same coin was increased to 41., ofwhich, however, prompt notice did not reach Canada, and thecoins being paid out on the basis of 21., great loss resulted,which the colony asked the king to bear.

It will be readily understood that specie being scarce inFrance itself, and in consequence running to a high premium,as little coin as possible would be sent to Canada. As thebalance of trade was against Canada. the Canadian merchantsin making their remittances would find the premium on speciea strong inducement to send it as long as they could get it.Hence what funds were sent out by the king, or brought by thecompany to purchase furs, as required by their charter, wouldimmediately return to France. The colony was thus deprivedoC the necessary medium of exchange.The Cunction oC a medium of exchange is, of course, quite


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4 CANADIAN CURRENCY UlIlDER FREi"CH RULEdifferent from that of a means of settling international tradebalances. I f the colony had a medium which could not beIIsed for the settlement of trade balances it would be left to doits work regardless of the unfavorable balance of trade. It wasa vague appreciation of this idea that led to the periodical revival of the proposal to issue a special coinage for Canada or theother colonies. I t had also led to the extra rating of one-fourthon the French currency in Canada, which, though it had prevailed so long, had availed nothing when once Canadian valueshad made corresponding adjustment. None of the advocatesof a sp.par:ate coinage for Canada really understood the natureof the interdependence of the currency, the foreign exchanges,and the finances of the colony. The fact was that this threecornered connection presented an economic problem more difficult of solution than any hitherto met with in French experience.

Naturally enough the condition of Canada after the withdrawal of the card money, which had acted as a special cur-rency for the country, led to the revival of the idea of a separatecoinage. The proposal first took shape, however, in a projectfor supplying the colonies with copper coin through the agencyof the Company of the Occident, a project which was more par-ticularly connected with the West Indies, though includingCanada in its application.

The edict giving expression to the purpose provided for theissue of copper coins of 12 and 6 deniers. I t was published inDec., 1716, and the following year an order was apparently sentto Quebec and the other American colonies to have the edictregistered and currency given to the coins. The copper, however, which was provided for their manufacture, turned out tobe of so poor a quality that the process of minting them wassuspended, and in the subsequent rush of events the matterwas forgotten. In 1721 the Company of the Indies, which hadabsorbed the Company of the Occident, revived the project.Having obtained suitable copper from Sweden, they prevailedon the king to mint it for them, and give it the necessary legalstatus. Accordingly, an edict was issued in June, 1721 , providing for the minting at Bordeaux, Rochelle and N antes of 150 ,000marcs of copper in pieces of 20 , 40 and 80 to the marc. They


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CAI\ADIA.Y CURRENCr UNDER FRENCH RULE 5were to be current in the Americas and in the other Frenchpossessions outside of Europe. Their values were fixed at 18,9, and 4! deniers. In the end only the 9 denier piece was struck,and that only at Rochelle.

In 1722 the Company of the Indies sent 20,0001. worth ofthis copper money to their agent in Canada to put into circulation in connection with the purchase of furs. But the Canadians objected to receiving it, alleging as an excuse that theedict of the king had not been registered in the SuperiorCouncil. The company made appeal to the Minister of Marineto have instructions sent to Canada to register the edict. Thiswas done, but with the proviso that no one should be requiredto take more than onesixth of any cash payment in copper, aswas the rule in France. The governor and intendant informedthe minister that they did not expect the money to circulate, asit was not customary in Canada to make payments in copper.The people, they say, find it clumsy on account of its weight, andobject to these coins in particular, because they are highly overrated, and because they will not circulate beyond the colony.\Vhen the company tried to force the circulation, the merchants steadily refused to take more than one-sixth in copper, andas the company had not the necessary silver to complete thepayments, it had to give up the attempt, and pay in bills ofexchange. Only 3061. I5S. had been got into circulation.

It was afterwards proposed to get the government to takeover the rest of the copper, and pay it out along with its cashpayments. Apparently the minister h:td received such a proposal, and had referred the matter to the Canadian authorities.The following year, 1724, the governor and intendant reportthat after discu'ising the matter with the chier inhabitants ofthe colony, they are sure that there is no use to attempt itsissue. There is no need in the colony, they say, for any coinbelow the sol marquez. There is. therefore, nothing to dowith it but send it back to France, for so long as it remains hereit makes the people uneasy. I t was finally returned to Rochellein 1726.Since these copper coins circulated freely in Louisiana andthe \est Indies, as they would certainly have circulated inCanada also in the period before the card money, it is quite


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6 CA il'ADIA.Y CURRENCY UNDER FRENCH RULEevident that their failure to pass now was entirely due to thenew monetary habits of the people, owing to the prevailing useof card money for a generation. The abundance and depreciated value of the cards necessarily raised prices, and led to analmost total disuse of fractional denominations either as currencyor as a value counter. Hence even when specie paymentwas restored, the people in their valuations had no place foranything less than the sol.

When the distinction between money of Canada andmoney of France was abolished by the declaration of the kingof July 5th, 1717, some difficulty resulted in fulfilling contractsmade on the basis of the money of Canada. As, however,from the economic condition of the country at the time, therecould not have been many contracts in force, heyond the narrowrange of the commercial element of Quebec, Three Rivers andMontreal, who could readily understand and apply the law, thedifficulty in this respect could not have been very great. In onedirection, however, contracts were very general and of longduration, in the direction, namely, of the terms on which thecommon people held their lands. As time passed a number ofdisputes arose as to whether the land holders were entitled tothe reduction of one-fourth on the contracts made on the basisof the money of Canada. Several decisions were given by theCanadian courts, but without complete satisfaction. Hence itbecame necessary for the authorities in France to attempt tosettle the matter, which they undertook to do in the " Declaration in interpretation of that of 5th July, 1717, on the subjectof the card money of Canada," dated 25th March, 1730. Thisreverses several of the Canadian decisions, and declares that inthe case of all feudal dues and other contracts made beforethe registering of the declaration of 1717, and where there is nostipulation for payment in money of France, or money tournoisor parisis, the contract shall be paid in the money of France,with a reduction of orie-fourth from the amount stipulated inmoney of Canada.I have already referred to the difficulties of the Canadian