Passing the buck

By Mary Ducharme  (June 2014)

Bartering balanced many accounts at stores in Hemmingford or across the border in the early years of settlement. Most farmers were struggling, and aside from poverty, coins were in short supply.

Potash, a form of potassium carbonate, highly valued in fertilizer, was one of the first “cash crops” available in the wilderness lands. It was heavy work to produce, requiring the cutting of trees, burning them to ash, leaching the ashes in large iron pots over hot fires and transporting barrels of potash through nearly impossible trails. At a time when Canada had no legal tender as we know it, and no banks, what was the “cash” that paid for the potash?

There were several early forms of legal tender. By 1678 the trade of beaver pelts had proved lucrative and those involved often were among the rich elite in Montreal. Hudson’s Bay Company struck a coin that was equal to the value of one male beaver pelt – known as a “buck.” However, the beaver population was grateful when beaver hats and beaver bucks fell out of fashion. Wampum was legal tender in some areas: these were belts make from shell beads. Eight white beads or four purple beads bought one penny. In 1685 playing cards became legal money, guaranteed by the colonial government. The cards had no value in themselves, except for their printed denominations. They were discontinued because of widespread counterfeiting.

Through the 18th to the mid-19th centuries, there was a hodge-podge of coins in circulation. Their value was expressed in the British system of pounds, shillings, and pence for bookkeeping purposes. But the coins in circulation were not only British; they were American, French, Spanish, and Portuguese. Their value was rated on the amount of gold or silver in the coins. These ratings were not consistent and many coins in circulation were of poor quality because the good quality coins were in private hoards. The result was crippled and inefficient trade.

The War of 1812 cut off Canadian access to coins from the American markets, and to pay the bills of the war, the Quebec Executive Council issued and guaranteed 250,000 in paper army bills based on the value of Spanish dollars. Confidence in paper money was lacking, but the British government did redeem the bills at full value at the end of the war.

In November of 1817, Canada’s first bank opened in Montreal in a rented house on St. Paul Street, and its first bank notes were is- sued as “dollars” – a term based on the German word “thaler” for a silver coin.

Depending on coinage only had drawbacks. In 1818 when The Bank of Montreal sent a convoy to Boston with 130,00 Spanish coins for the China trade, the coinage weighed three tons, was packed in 65 kegs and hauled by horse and sleigh. Thievery was also a problem: chests full of war-time gold and silver, for example, had a tendency to disappear.

In 1837, the Bank of Montreal not only was issuing paper money, but also tokens, among them tokens with the image of a habitant on one side and the coat of Arms of Montreal on the other. These tokens were called “Papineaus.”

In the 1850’s there was wrangling over whether to adopt a sterling money system, advocated by Britain, or a decimal money system like the US dollar. For reasons of trade between Canada and the US, the decimal system was adopted. In 1858, the first Canadian coins were minted in London, with the image of Queen Victoria. In 1867, the Dominion of Canada now had a Canadian dollar and issued a new series of coins. In 1908 the first domestically pro- duced coin was minted in Ottawa with the image of King Edward VII of England.

Now with our new hi-tech plastic currency, new coins not containing silver or gold, our credit cards, debit cards, internet bank- ing, ATMs and banks everywhere, we take easy access to cash for granted. It is still difficult to pin down the relative value of our beloved beaver nickel, and it takes a leap of faith to trust the international stock exchange. But we have come a long way from beaver bucks.