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Canada's First Notes

By Library and Archives Canada | Monday, March 29, 2004

Dominion of Canada, three 25-cent shinplasters, 1870, 1900, 1923
Dominion of Canada, three 25-cent shinplasters, 1870, 1900, 1923

Between 1868 and 1869 the Dominion government withdrew from circulation and exported several million U.S. silver coins, which were actually worth only 80 per cent of their face value. This ensured that Canadian coins were the only coinage in use in Canada. Waiting for the 1870 series of coins to arrive from England, the central government resorted to issuing 25-cent notes. The public dubbed these small notes "shinplasters" after similar U.S. notes that were reputedly used, during the American revolution, to line soldiers' boots. The initial issue was followed by two others, the last occurring in 1923.

Dominion of Canada, $2, 1870
Dominion of Canada, $2, 1870

The Dominion government wanted to extend its monopoly to paper money, which was still issued only by banks. Under the Bank Act of 1871, Ottawa issued $1, $2, $50, $500 and $1,000 notes. The banks retained the right to issue any note of $4 and over.

La Banque Nationale, $6, 1870
La Banque Nationale, $6, 1870

Some banks circumvented the agreement by issuing $6 and $7 notes (such as this $6 note from La Banque Nationale). In this way, they could carry out more transactions without having to use the $1 and $2 notes issued by the Dominion government. Only one New Brunswick bank was covered by the Bank Act of 1871. The others were free to issue notes in any denominations they wished, such as $3 notes (like this $3 note from St. Stephen's Bank). The Bank Act of 1881 restricted the banks to issuing $5 notes and multiples thereof.

St. Stephens Bank, $3, 1873
St. Stephens Bank, $3, 1873

This article represents a portion of the the article titled Currency Museum of the Bank of Canada

Source : Library and Archives Canada

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