Here's a short but nicely illustrated article about Canada's version of fractional currency.
Found via News & Notes from the Society of Paper Money Collectors (Volume IX, Number 4, July 11, 2023)
Canada used to have a 25-cent note that first appeared in 1870. The bill was meant to be a temporary solution to an ongoing problem, and many were even against it. However, it ended up being in circulation for 65 years.
According to Canadian Government Paper Money, 25-cent and 50-cent silver coins in the US depreciated by 5% compared to gold during the American Civil War. Since Canada received these coins
at full face value, the coins poured into the country.
Since banks and post offices refused to accept these American coins, retailers had no choice but to sell them at a discount to brokers. In turn, these brokers sold the silver to manufacturers and buyers of grain and cattle.
Thus the cycle repeated, and the ‘American silver nuisance' resulted in hardship to farmers, merchants, and factory workers who had no choice but to accept their losses, states the book.
The flood of American silver had other effects: $1 and $2 Province of Canada notes were being crowded out of circulation.
To combat this, in 1870, the minister of finance, Sir Francis Hincks, suggested that the government buy American silver at a discount, export it, and artificially lower its value (80 cents on the dollar)
to ensure against its return to the country. In its place, Canada would order its first silver coins from the Royal Mint in London.
Until then, 25-cent notes would be printed while the coins were prepared.
Hincks' efforts worked — American silver was sent back to the US, while the rest was sent to England as bullion. However, while his plan worked out, there was one thing he didn't anticipate.
Despite being a temporary solution, these
shinplasters would become so popular that they'd be in circulation for the next 65 years.
The note comes in three varieties.
To read the complete article, see:
Did you know that Canada once had a 25-cent note? (PHOTOS)
Wayne Homren, Editor
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