A History of Nova Scotia Page

Book #3: TOC
The Road To Being Canada
Chapter 16, Money

Money, has been around a long time; but if in short supply, as it often was in the early days of the 19th century, an older system yet came into play: barter. Barter is, however, notoriously inefficient and the authorities understood the importance of keeping a sufficient supply of money in circulation. Simple paper-money was not something that a person could be made to accept when it came to a trade, to most it was simply an IOU which would be difficult to pass on. What was wanted was "white money" mostly silver; gold where there was a large transaction going down. "Black money," mainly copper coin, circulated but was used only for very small transaction. It was always difficult for one to lay their hands on money and the best deals were always to be made by a person who had real money. Only in 1821, in England, was the mint able to to provide an adequate supply of small change. Prior to that date it was problematic enough in England to keep enough in circulation, in the colonies it was often a severe problem. In the early part of the 19th century, in certain places, such as Shelburne, no money circulated, at all. This was Lord Dalhousie's observation as made in 1817 "-- for butter, eggs or whatever they had to sell, they got barter of Sugar, Tea or Rum, & all these of the worst quality, smuggled by the American fishermen who infest the coast."1

As for "white money," the country of origin mattered little, as long as it was stamped pieces of silver or gold, in portable form.

"The circulating medium at this time [c.1817] in the town and throughout the country was Spanish doubloons, old Spanish dollars, pistareens and other small Spanish coins, with a mixed collection of copper coinage, English and Spanish, with all kinds of half-penny tokens issued by private individuals in the town. No British coinage ever reached Halifax except the old English Guinea. The troops were paid in old Spanish money, which was brought from South America and the West Indies by the merchants in exchange for their cargoes of fish with occasional importations of Spanish silver by the British Government for the troops, etc."2
Merchants in Halifax would have their own coin or token struck. They were generally halfpenny tokens.3 These coins worked until the counterfeiters started producing their own coins.
"The problem became so acute that in 1817, the colonial government decreed all halfpenny tokens were to be removed from circulation within three years. Permission was then sought to have the British government strike copper coins in the form of penny and halfpenny tokens. Some 400,000 halfpennies were issued in 1823 and more halfpennies and pennies released in 1824, followed in 1823 by an issue of 800,000 halfpennies and 200,000 pennies.4
Captain W. Moorsom who came to Halifax in 1827, made these contemporary observations as to the reason why there was always a shortage of money in early Nova Scotia and described what was then circulating:
"The state of trade between the province and other countries is such, that every hard dollar which may have been realized in the fisheries or mines, eventually finds its way to the States or England, in payment of flour or manufactured goods. The coins current in various parts of the province are doubloons and their fractions, chiefly of the South American republics; and in Halifax, occasionally, a British sovereign: Spanish, and American dollars and their fractions, and British silver; and, in the eastern parts, every description of English and Irish tokens, and French silver, passes a higher nominal rate than that at which it is received elsewhere. Paper from the provincial Bank is in circulation ... and is limited by statute. Old British and Colonial copper coins complete this medley ... The effect of this scarcity of cash are not apparent in the capital, or in those parts of the country frequented by persons of property; but, go into the country towns, which serve as so many nuclei for the settlers in the wilderness around, and you will there find the most extraordinary systems of barter and exchange ..."5
People who carried money around, usually went around in the company of a man or men with staffs and guns walking just behind their master. Each coin that was offered up on a potential trade was carefully examined by the person who was considering its acceptance. The coin might have been filed or clipped which would lessen its value. Any evidence of this would lead to the scales coming out.6 Incidentally, filers, clippers and forgers were considered to be criminals to be harshly dealt with. For example, in 1825, "John Puttum, for forging province notes, was sentenced to one year's imprisonment, one hour in the pillory, and to have one of his ears cut off."7

In 1816, in Great Britain, it was declared that gold was to be the sole standard and full legal tender. It was at that time, too, that a new coin, known as the sovereign was put into circulation."8 In 1818, an act passed "to prohibit corporate bodies issuing paper money." Reputable merchants up to this time would issue paper money (IOUs). Now government thought that they should get in on the business, on a monopoly basis, and printed up provincial notes to the extent £15,000, in denominations of £5, £2, and £1.9 During February of 1820, England issued gold ingots ("Ricardos"), freely exchangeable with its paper money. By the following year (1821) England was fully on the gold exchange: "The effect of this move was to increase immensely worldwide confidence in the British economy and the expansion of international trade."10

Akins wrote of the government issue of 1820:

"A large issue of paper money by the province took place in 1820. Silver change was almost driven out of circulation by the issue of small notes, many at one dollar, at 2s. 6d., and even at 1s. 3d. These notes were issued by private individuals upon their own credit and responsibility. Those of William Lawson and Adam Esson were the most numerous. The doubloon was at this time established at £4 currency, and the Spanish dollar at five shillings. The price of flour had fallen to twenty-seven shillings and six pence per barrel."11
As of 1848:
"The currency of Nova Scotia, composed chiefly of province and bank paper is strictly guarded by Law, which provides for its prompt conversion into the precious metals -- The government reserves to itself the circulation of notes under £5 and has £47,974 of paper afloat, chiefly £1 notes, receivable for duties at all the Revenue offices, and convertible into Specie on presentation at the Treasury. There are three Banks, whose combined issue is about £140,000 Sterling'"12
Up to 1860, Nova Scotia used the naming system as existed in England. On January 1st of that year, the province went to the decimal system of accounting. The law was passed in order to provide uniform currency for Canada. The denominations were to be the dollar/cent. Pounds, shillings, and pence were no longer accepted as an alternative method of accounting.13

NEXT: [Chapter 17, Banks]


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Peter Landry