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fl^PK

"-f

THE

EARLY HiSTORY OF CANADIAN BANKING

Canadian Currency and Exchange Under
French Rule

BY
ADAM SHORT!, M.A.

IJlI-ES s 1.'m\i-.k mv,
KlNC^TllN

TORONTO

JniKNAl. lit TIIK (^ANA|1!A^ BANhfliS A--'U1AII 'N

65-|

248633

^nr-iri-i'^1^.

CANADIAN CURRENCY AND EXCHANGE UNDER

FRENCH RULE

1. BEFORE THK IN'TKODUCTION OF CARD MONEY*

T^HE general expansion of life in Europe during the fifteenth
* centur)', found special expression in the new commercial
enterprise which began its rapid development in the latter part
of that century and continued through the following one. The
various countries of south-western Europe were eagerly over-
running th(; maritime world in si'arch of new lands and that
likely treasure with which the experience of Spain had encour-
aged their imaginations to fill them.

Tlie Norman seaports of France were those best prepared
to respond to the expandmg trade of the country. The increas-
ing demand for foreign goods, which followed the introduction
of Italian luxury and art with the home-coming of Charles
VIII, stimulated French shipping. There followed a rapid
expansion of the trade and enterprise of such Norman towns as
St. Male, Diep{)e, Rouen and HarHeur. Norman sailors roamed
the ocean in many directions, but the fisheries of Newfoundland
first attracted them to the northern coasts of America. There

* To avoid numerous references throughout the article it may be stated
here that the chief sources for tliis study .ire the following: —

" Documents relatiuf,' to the Colonial History of the State of New York,"
Vol. IX.

" Collection de Manuscrits Contenant I.ettres, Mt'-moires, et Autres
Documents Historiques Kelatils ii la Nouvelle-France," Vol. I.

" Edits, Ordonnances Royaux. Declarations et Arrets du Conseil
D'Etat du Roi, Concernant le Canada."

"Jugements et Deliberations du Conseil Souverain de la Nouvelle-
France," Vols. I. and II.

'• I^eitres, Instructions et Mi'imoires de Colbert." Par I'icrre Clement.

'■ Traite Historique des Monnoyes de France." Far M. Le Blanc.

" Histoire Mont'taire des Colonies PVancaises d'apres les Documents
Oificiels " Far E. Zay.

Canadian .\rchives, Correspondancc (it)ur<ih\ Vols III, VI, VII.

CANADIAN ( VRRFNCV UNDER FRENCH RVI.E

was little in the fishing industry to fire the imaf^'ination ot
romantic knights or excite the cupidity of kings and courts.
It was therefore left to be developed into a very profitable trade
by private enterprise, while more ambitious schemes were
attracting the attention of the court, and squandering French
life and treasure in other parts of the world.

W'uen, after a hasty ransacking of America, the search for
the still fabled riches of Cathay was once more resumed, efforts
were made to get round the American continent which barred
the way. Expeditions under royal patronage visited the north-
ern waters of America, Verazzano leading tlie way in 1526, but
vanishing somewhere in those stormy seas on a second attempt.
Cartier followed him and discovered that the St. Lawrence
route was not likely for some time to prove a successful highway
to the East. But the Indians in the neighborhood of Montreal
told him, what even then they understood that all Europeans
wished to know, that by the shores of great inland seas of fresh
water there was abundance of the precious metals. Thus the
closing of one avenue of royal interest in Canada opened the
door upon another. It also brouglU to a close the period of
prosperous unmolested development of Canadian resources by
private enterprise.

It is not necessary to record the list of dismal failures of
gold-laced and high-titled schemes which followed, and which
called forth the following observation from Montaigne, an
interest' d spectator : " I am afraid our eyes are l^igger than our
bellies, and that we have more curiosity than capacity : for we
grasp at all, but catch nothing but air."

However, in the intervals of these gorgeous failures, there
was going on, as best it might, during the sixteenth century, a
good deal of private trade with the Canadian shores. The
growing luxury- of Europe was making a market for furs. These
being obtainable at small prices from the Indians, afforded a
much more profitable return than the fishing industry, which
the fur trade at first supplemented, but afterwards almost sup-
planted.

Tadousac, at the mouth of the Saguenay, became the
centre of the fur trade for a time, and here we come upon the
first regular system of exchange carried on in Canada. It was

•IT

CAX.ini.tx (I A'A'/--.vr>- r.w^/'A' Fh'/:\( // at/./;' 3

simply a system of barter. Those early merchant adventurers
laid in a stock of floods before leaving France, consisting mainly
of arrow tips, swords, hatchets, knives, kettles, cloaks, blankets,
hats, caps, shirts, various cloths, biscuit, tobacco, and various
other trinkets. At first little liquor seems to have been disposed
of. With these they sailed across the Atlantic, e.xchanging
them with the Indians at Tadousac, or at other points, for furs
such as beaver, elk, lynx, fcx, otter, marten, badger and musk-
rat. Returning to France they disposed of their furs and
repeated the operation the next season.

Trade growing, competition increasing and profits falling,
efforts were made by some to obtain from the king a monopoly
of the trade, usually on condition of establishing a colony and
supporting missionaries. Lescarbot, the first Canadian his-
torian, puts the case for the monopolists in its best form
when he says, " Whether is it better to have the Christian
religion and the glory of France extended, or to have certain
individual merchants grow rich who do nothing for either.
These individual merchants will neither plant colonies nor
save the souls of the heathen. Further, through the competi-
tion of the merchants, beaver is selling at 8J 1, whereas at the
operation of the monopoly it was selling at 50 sols {2^ 1)."

This gives the keynote of the general policy for the
future, A monopoly of the Canadian trade was to be given
to those who would undertake to colonize the country and
support missionary enterprises. The earlier holders of this
monopoly did little 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 build-
ing up of a permanent colony in Canada. In 1608 he began at
Quebec, the first colonial settlement on the St. Lawrence. In
1609 Du Monts' patent of monopoly, upon which Champlain
was working, expired and, as he failed to get it renewed, the
following year the St. Lawrence swarmed with private traders
eager for furs. So strong was the competition that they ran
their vessels up to Montreal in the hope of intercepting fur-
bearing Indians. This did not afford a very promising outlook
for Champlain's colony, which hoped to live largely by trade
with the Indians. However, this first year's experience some-

4 c.ix.i /)/.!. \ a A'AV X( y I xokk hh'f-M ii kii.f.

^vhat checked the ardur of .he private tr.ulers, though they slill
continue to come in considerable nunil)ers In i(ni there were
13 vessels at the head o( navigation at Montreal. As these
traders had no other interest in the country than the season's
profits, their free trade system naturally came in for severe
criticism at the hands of Chan. plain, who pointed out the im-
possibility of establishing a colory by their methods. Yet,
when monopoly was once more established, he found that
the various partners through whose hands it passed were
actuated by precisely the same motives as the free traders, desir-
ing tou.-e their monopoly privileges to enrich themselves, not to
establish a colony.

What few colonists were first settled at Quebec were not
permitted to trade with the Indians or with one another ; they
were not permitted to manufacture articles for sale which might
compete with the wares of the company ; neither could they
send anything to Fiance or receive anything in return, on their
own account. They must dispose of their surplus produce to
the company and receive goods in return, both selling and buy-
ing buing at prices fixed by the company. This system involved
a very simple form of exchange for both the Indians and
colonists. Such regulations efTectively neutralized all Champlain's
efforts. Only eighteen colonists were taken out during the
lifteen years of the monopoly ; all others were simply servants
of the company. The company itself hardly remained for two
years in the same hands, though in one form or another it lasted
for fifteen years, from 1612 to 1627. In 1627 we come upon the
first truly national colonial policy of I'^ance. This was
embodied in the colonial scheme of Cardinal Richelieu, the
great minister of Louis XIII. Under his direction was formed
the "Company of One Hundred Associates," posse'-sing extra-
ordinary privileges and expected to achieve great things. Its
purpose was part of a great national policy which had for its
object the elevation of France as a nation to the first place in
Europe. This ]iolicy was certainly successful, but in the con-
centration of all the forces of the country upon its object it
ultimately led to disaster through the disregard of the rights of
the individual citizens.

Among the numerous rights which the company obtained

CAXADIAX I (KKF.XCy I'NDEK FRESCH Kl LP. 5

was that of the cntirt; trade in skins and furs, and for fifteen
years a monopuly of all other Canadian commerce on land or
sea, with the sinfjlc exception of the cod and whale fishery.
The settlers of Canada were thus cut ofl' from all part in the
external trad(.' of the country. They were to be permitted to
trade with the Indians and with one another, but the beaver
skins wliich they ol)taincd must be handed over to the compiiny,
or its agents, at the rate of 40 sols (2 1.) per pound. The people
were also forbidden to trade with any others than the Indians,

The capital of tlip company, which was fixed at 300,0c") 1.,
one-third of it paid up and the remainder on call, was the
smallest feature in it.

We may gather from these conditions the limits within
which exchange would be confined in the colony. There being
but one channel, the company, through wliich all imports and
exports were carried on, there could be no occasion for the use of
letters of exchange or other medium between Canada and the
mother country except for the bringing in of money or capital by
the colonists or the sending of contributions from France for reli-
gious or other special purposes. All commercial exchange was
merged in the business of the company. In Canada itself, after
the settlers had ceased to be dependent on the company, there
would be occasion for considerable retail trade and a corres-
ponding need for a medium of exchange, especially for small
coins.

The dealings with the Indians took the shape of direct barter
and the product of that trade passed to the company in ex-
change for other goods for sustenance and barter. The need
for a medium of exchange was, therefore, confined within prt ity
definite limits. To meet this need there was one article of uni-
versal acceptance which answered all the purposes of a medium
of exchange, except for small currency, and that v.as the
beaver skin. To a certain extent other furs shared this posi-
tion, l)ut none so adequately as the beaver, especially wiien the
price at which it was receivable by the company was fixed.

The "Company of One Ilundred Associates,'" though im-
portant as expressing in its organization and purpose the gen-
eral French colonial policy for the next century, was destined
to failure from the outset. Its first fleet of ships, comnig

.41^^41^. .:..ft;!.u. mM>. J

6 c.i.v.i/)/.t.\ (I RREX( y rxD/:A' /•A'A'.vr// aw,/:

with provisions, stores and settlers, was intercepted by the
Englisli under Kirke, and nineteen out oi twenty vessels cap-
tured or destroyed. The followinf,' year Canada passed for a
time into the hands of the Engh.-.h. The colony contained at
the time only five families of settlers and about twenty " .cs of
cleared land.

When Canada was restored to France in ir>32, the com-
pany resumed its powers, but most of the orif,Mnal enthusiasm
had evaporated in the meantime. Its privileges were trans
ferred to a small association within the other, which, following
the lines of its predecessors, took little interest in anything
beyond the immediate profit from the trading monopoly.

Champlain, who still retained his interest in the coloniza-
tion scheme, and who had gone out again as the first Governor
of the country with 150 colonists, died in 1635, and no one
seemed ready to take up his work. However, the Jesuits and
other missionaries had now established themselves in the coun-
try, and were exciting a new interest in it through their famous
letters or relations which were eagerly read throughout France.

In 1644 Montreal was established on a half religious, half
military and wholly commercial basis, by a grant from the com-
pany to the Seminary of St. Sulpice.

In 1645 the company gave up its trading monopoly to the
people of Canada, on condition of being relieved from the
burden of maintaining the religious, civil and military establish-
ments of the colony, and of receiving 1,000 pounds of beaver
annually. This freedom had for a time a stimulating effect
upon trade, but it was soon found that a few Quebec merchants,
owing to their central position and control over the foreign
trade, enjoyed a virtual monopoly of the ^-^lonial traffic. This
was further favored by the fact that all furs had to be brought
to a central store to be received and taxed, in order to provide
for the expenses of the colony and the subsidy to the company.

Notwithstanding these drawbacks, the change greatly en-
larged the range of Canadian business transactions and neces-
sitated a corresponding enlargement of the machinery of ex-
change. Letters of exchange began to pass freely between the
colony and France, while the growing contributions from France
in support of the missions and other religious institutions, must

S^^^ET

c/.v. //;/./.%• c rA*A'/:.\(, r ixdhk i-nhsch nci.!-: 7

have added considerably to the business of exchange. An
increasing,' (juanlity of coined money must liavc been coming
into circulation at this time, for a Httle later we find that
though still scarce outside ih-; tr.iduig centres of Quebec,
Three Rivers and Montreal, yet coined money was in regular use,
especially for filling in the gaps between uneven barter.

During this time tht: colony was slowly growing, but after
the Iroquois ixgan to harass tlie outlying settleinonts, agricul-
tural immigration almost ceased. ()uite a number of merchants
came to trade but few to settle. Imoih 1650 to 1662 French
interest in Canada may be sumired up in two words— the con-
version of the heathen by the missionaries, and the obtaining oi
their fur;; by the mercliants.

The troubles of the Fronde distracted France itself
and naturally lessened the inieiest in C .:iada. During this
period money became scarce in France a uJ was considerably
increased in value. Values in Can- la followed suit, though
probably not respondin.^ very rapu..} or very pc.arately. In
.:.33 an edict was issued in France with th--- object of restoring
the currency to its former value, and i u that end its nominal
value was reduced by one-sixth. In accordance with this edict,
the Council of Canada, the following yc^ar, July iSth, 1G54,
passed an ordinance declaring that the gold and silver rr ins
of France having been reduced to their former values, the money
in Canada should be reduced to the same basis, there bein-
added to it, however, " on account of the risks of the sea," onc-
eighlh of its value in France. As small coins of copper or other
alloy were not affected by this ordinance, we may assume that
they did not suffer a similar reduction.

Inasmuch as there was little foreign sale for Canadian pro-
ducts other than furs, and yet a considerable need for French
goods, any money which was brought to the colony by mer-
chants or otliers naturally tended to return to France in pay-
ment for goods.

It was to prevent what little money there was in circulation,
and especially the small change, from going out of the country,
that the Government of the time, following a plan often resorted
to in France itself in earlier times, artifically raised the value of
all coined money.

8 c. ) .\\ i/ju.y crR iExc i - ( xder f res en r r i.e

An ordinance of the Council of Quebec of October 7th,
1661, states that the ireans hhh-rto adopted for attracting
money to Canada and retaining it in the country had co;n-
pletely failed. The value in Canada being so nearly the same;
as that in France, there was no special inducement to bring
money and little loss in carrying it away. Hence to remedy
this condition, both for the public good and in the interests of
trade, the Council ordains that from this time on the quarter
ecu should pass in Canada at the rate of 24 sols, and the other
gold and silver coins in like proportion.

The quarter ecu was a silver coin, issued in 1602, and dis-
continued in 1646, the value of which was 16 sols ; hence its
value in Canada was raised fifty per cent, above its real value
in France. But if it had already been in circulation at an in-
crease of one-eighth, or at iS sols, being now raised to 24 sols,
It would be current at an advance of one-third on its previous
value in Canada. However, it must have been circubti ng at
more than 18 sols, for we find that its new value was supposed
to be approximately an increase of one-fourth on its previous
value. This ordinance require i the same proportionate increase
to be made in the values of all the other gold and silvor coins.
But such a general statement could not be accurately applied,
especially where the existing rates seem to have been but
roughly adjusted. Hence it was found necessary the following
vear. March 20th, i6b2, to publish a detailed tariff giving the
value at which each gold and silver coin should circulate.
These values, according to the ordinance, were calculated on the
basis of an increase of one-fourth, " as has been the previous
practice." In this tariff the quarter ecu is rated at 26 sols, 8
dcniers. From this and other values in the list we learn that
they were at least one-third above the standard rate in France.
However, from this time till the next chan ,e of the law in 1672,
thase ratings held good, and were understood to be an advance
of only-one fourth. In making his report on the finances of
Canada in i66g. Talon calculates all the funds sent to Canada
on the basis of an increase of one-fourth.

These facts will serve to explain, in the few references to
money matters which are met with in Canadian documents of
the period, statements to the effect that the " money of the

jm.' •• jtWfiff L t:-ajai»igwBa>v-

CAXADl.lX CI RKEXCV I XPER FA'I-XC// A' ^ 7-/: 9

country " was circulating at an increase of one-fourth over the
" money of France." They also quite dispose of the commonly
accepted idea that in Canada money was first legally raised in
value after 1670. The copper coinage was dealt with on a
basis of its own.

Two small coins, the sol and the Hard, were doubled in
value, the sol being made to pass current for 24 deniers by
Governor d'Avaugour in 1662, and the Hard being rated at 6
deniers apparently at an earlier date. To some extent these
regulations had the desired efft-ct, for they virtually made the
corns a kind ot French goods which the merchants found it
profitable to dis;iose of for furs at their enhanced values.
But as the people could not afford to keep on hand anything
that would sell or exchange, a great influx of coin was not pos-
sible r.ntil a largtr market was provided for the country's pro-
duce. The special vah.es given to the sol and the Hard produced
their natural effect a 1 ttle later, as we shall see.

So completely at this tn«e had the national interest in the
building up of the Canadian colony died out, that it was seriously
proposed to make the country a dumping ground for criminals.
To protest against this plan and to urge the claims of New
France upon the Government. Pierre Boucher, of Three Rivers,
was sent to France in i6b2, and there laid tlie situation before
the court, Colbert had become chief minister the year before,
and was revivmg and improving upon the policy of Richelieu,
He resolved to have the king take over the colony from the
decayed and indifferent " Company of One Hundred Asso-
ciate's," now dwindled to fvnty-five. Canada was to be made,
as in Richelieu's original plan, an important colony, capable,
by the development of its trade and in lustry, of becoming a
large factor in the national expansion of France, especially on
the side of her naval power which, like Richelieu, Colbert con-
sidered to be an all-important element in the development of a

great state.

In 1663 an edict was issued creating the Sovereign Council
of Quebec, though a body of more Hmited powers had been in
existence for so^ie time.

In order to obtain exact information as to the actual condi-
tion and future possibilities of the colony, Colbert sent out a

■ r "MnfTTT

CANADIAN CrfiREXCV UNDER FRENCH RILE

special commissioner to make enquiries along specific lines. But
even before sending out ais agent he was convinced that the trans-
fer of the trading privileges of the company to the people had
been injurious to the colony. In their anxiety to get furs the
inhabitants neglected the work of clearing and cultivating the
soil, Colbert had evidently made up h.is mind to place the
trade of the country once more in the hands of a company.
But he desired the people to understand that in any such change
the colony would not suffer, as the revenue derived from the fur
trade would be expended in the country for its iniproven-'ent.

Colbert permitted no time to be lost in the execution of his
new schemes for the colonial, commercial and naval expansion
of P'^rcnch power. In November, 1663, the Marquis de Tracy
was commissioned to visit the American colonies, as lieutenant-
general, with large powers and ample means in men and materials
for the removal of all obstacles, the settlement of all disputes, and
the placing of the colonies on a new footing of prosjierity and pro-
gress. ?Ie went to the West Indies first, and did not reach
Canada till 1665. In the meantime, however, Canada began to
feel the stimulus of the new interest which was b'jing raised in
France. Just before this new period there were but 2,500 people
in the colony, 800 of whom were in Quebec.

All accounts agree that there was little money in the coun-
try up to the 3ear 16G4. As already stated, French money in
general was considerably over-rated. The need for small change
was, of course, the most [dressing, lor while large transactions
might be carried on by barter, it would be a very inconvenient
system fur small exchanges. The scarcity of money was felt in
z\\ the colonies, but a general remedy was first definitely sought
and applied by Colbert. The suggestion for it seems to have
come from the colonies themselves. The plan adopted followed
the practice already established in Canada. The most pressing
complaints, however, came from the West Indies.

In the year 1663, in which Colbert began to unfold his ideas
of colonial expansion, an arret of the Council (in France) was
passed, providing for the coining of 100,000 livres worth of
money in silver and copper, for the use of the West Indies. But
it did not take eflect at once, the organization of the new com-
pany suspending all other matters for a time.

I i

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Meanwhile in Canada, increasinjj trade seems to have
brought more monej' to the country. It naturally took the form
of the cheapest coin — cheapest in France, dearest in Canada —
being at the time sols, Hards and doubles. In consequence of this
extra importation we find an arret of the Sovereign Council of
Quebec, passed April 17th, 1664, reducing the value of the liard to
three deniers, it being previously current at six. In connection
with this it is explained that both the liard and double were greatly
over-rated on account of the previous scarcity of money, but
that now certain people were making a trade of bringing in
large quantities, and fearing that it might increase to the ruin
of thu colony this reduction is made.

On July 17th of the same year another arret is passed
again reducing the liard from three to two deniers, in order, it is
said, to prevent the profit on it from leading to its greater im-
port. The normal value of the liard was three deniers and of
the double two deniers, and as they seem to have circulated
in Canada on a common basis, the only one upon which there
could be a profit at three deniers was the double whi'li appears
to be aimed at in this arret.

At the same time the merchants of Quebec were anxious
for the introduction of more money in general, and in a petition
to the Council, in France, June 14th, 1664, we find a charac-
teristic French-Canadian request, to the effect that since tlie
colony had now a little surplus grain his Majesty is asked to
send out a regiment with money to buy and eat it in the country.
They complain also that owing to the scarcity of money they
can not get their debts collected. This was evidently true
enough, because we find that on Nov. 17th a complaint is pre-
sented to the Council on behalf of the farmers living at a dis-
tance from Quebec, Owing to the want of mills in many districts
the farmers were forced to come to Quebec to get their grain
ground, and it was c -mplained that the grain was seized upon by
the merchants in payment of paj^t debts. Tiie Council forbade
the seizures until mills should be erected.

Just here it may be noted that wheat was at one time a
limited legal tender in Canada. By a determination of the Council
of Quebec, July 30th, 1664, fixing the price to be charged for
goods sent out by the king, a difference is made in some cases

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between the price in 'noney and the price in grain. For instance,
a tub of lard was vakied at 8ol. if paid for in grain and 75I. if paid
for in money. Further Hglit is thrown upon this point by a
complaint presented to the Council to the effect that, there hav-
ing been an arret estabUshed that wheat should be taken at the
rate of 100 sols (5I.) per minot in payment of old debts, as also
to facilitate the carrying on of l)usiness in the country, this was
found to be very prejudicial to business, inasmuch as the price
of wheat was inconstant. After considering this complaint the
Council ordained, May 29th, 1665, that for the future those who
were obliged to receive payment in wheat should be recjuired to
accept it only at current prices. The arret here referred to was
evidently an ordinance of the Intendant Talon, who wished to
provide an opportunity for the settlers to make use of their sur-
plus products for the purchase of supplies. The making of
wheat a legal tender at current prices was obviiusly a very inde-
finite settlement of the difficulty and could hardly have worked
smoothly. At any rate we find, on March igth, i66g, an ordin-
ance passed, requiring the merchants i^^ take the wheat of their
debtors in payment at the rate of 4I. per min -t. Talon brought
the matter up on the ground that some creditors were refusing
to take wheat in payment of debts, or, if so, at a very low price.
The ordinance, however, was to hold good for only three months
from the date of its issue.

We have seen that Colbert believed that the commerce of
the colonies could bust be promoted by the establishment of
trading companies. But instead of a number of small inde-
pcndtnt companies he propos( d to establish two strong com-
panies, one for the East and the other for the West Indies. The
West India Company, which covered all the American colonies
and part of Africa, was formally established on i\Iay 28th, 1664,
and was even more favored by the government than Richelieu's
company. Yet, notv/ithstandmg all its extraordinary privileges
and favors, it became bankrupt in eight years, and in 1674, the
king resumed all the grants made to it. Though Canada was
granted as a feudal possession to the company, yet the king con-
tinued to nominate the Governor and Intendant and otherwise
direct the development of the colony.

The company being fully established, Colbert resumed

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consideration of the plan for a s parate colonial coinage.
In 1665 we find an arret of the Council which ordained the
issue, from the mint in Paris, of a special coinage to the
extent of ioo,oool., exclusively for circul.ition in the countries
granted to the West India Company. In the explanation which
accompanies the arret it is stated that, from what the company
represents, it is necessary to send to tha islands and mainland
of America a quantity of small coins, especially tor the con-
venience of the working people. In the West Indies they were
accustomed to receive their wages in sugar and tobacco, which
were saleable only in France, whence the returns came tlie fol-
lowing year. As the other colonies paid their laborers in m-.tiey,
there was a tendency to leave the French Islai:ds. It is also
pointed nut that money current in France woidd n t remain in
the colonies, those who trade to them being more anxious to bring
back money than goods. Hence the king hi'S been requested to
issue a special coinage for the colonies which should have ? dis-
tinct stamp and be artifically raised in value in order that there
might be no inducement to take it out of the country.

This arret was not put in execution before 1670, when the
king isbueel a declaration that he was about to strike a special
coinage for the isbtnds and mainland of America. It repro-
duces much of the explanations in the arret of 1665, but adds,
among other things, that the issue was to consist of two silver
coins, one of 15 sols and the other of 5 sols and a double of
copper of the value of two deniers. These coins were not to be
taken to France on pain of confiscation and special punishment.
Though some of this new coinage was apparently used in
Canada, yet it was specially intended for the West Indies, as
may be gathered from the correspondence with Taion. In
Colbert's letter of instruction to M. de Bouteroue, when going
cut to Canada as Intendant, and dated April 5th, 1668,
he says : " With reference to the money it will not be
necessary to make any considerable change in a country
so undeveloped as that, but it will be necessary to take
particular care that any evil, should there be any such there,
should not increase, while at the same time he must seek to
reduce it gradually."

We have already seen how the threatened over-supi)ly of

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CAXADIAX ClRRl-XCy IWDER FKEXCH KILE

Hards was prevented, by reducing their value. After the arrival
of de Tracy and tlie troops that came with him, apparently with
their pockets filled with cash, money became more plentiful in
Canada. According to the Mere de I'lncarnation, writing at
the time, " Aloney is common at pre ent, the gentlemen have
brought much with them. They pay in money for all they buy,
as well for their food as other necessaries." In consequence of
this and the increasing trade, the colony was next threatened
with an over-suppl}' of so!s which, as already explained, were
circulating at double their normal value. On January loth,
1667, complaint is made to thcCouncilof Quebec, that the sols are
being brought from France in large numbers while other coins
are taken away, until iiiere is now almost no other in circula-
tion. The Council ordains that from the first of February next,
suls shall be current for only 20 denicrs each, b\it for the rest of
this mouth (January) they will be received by Sicur de la
Chesnaye, in payment of public dues, at the old rate of 24
deniers. On the 31st of January it was found necessary to
make special arrangements to give warning of the change and
to extend the time for receiving the sols at the old value, for the
benefit of Three Rivers and Montreal.

Though the reduction on the sols was slight as compared
with that on the deniers, yet it evidently affe;:tcd the people to
a much greater extent. A very general complaint seems to have
been raised by the people on account of the loss with which they
were threatened by the reductiim about to be made. A subscrip-
tion was opened, headed by de Tracy, the Governor, the Intend-
ant, the West Indian Company and a number of others, to pro-
vide a fund to meet these losses on the part of the poor people.
Incidently this indicates that money was now freely circulating
among all classes in the colony. The same fact is further
illustrated b}- a matter which came before the Council on Oct,
29th, 1668. The price at which the Company was to receive
beaver had been fixed at lol. per pound for the best grade. The
company claimed, however, that all they could get for it in
France was Hi. per pound. Hence to prevent themselves from
suffering loss they had raised the prices of their goods in like
proportion. But it was pointed out before the Council, that,
inasmuch as now-a-dsys people no longer always purchased their

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CAXADIAN ClKREXCy I XUEK Fh'EXCH Rll.H

goods with beaver but often with money, this practice was
obviously unjust to the cash buyers. Tliis being recognized, Talon
proposed to reduce the price of beaver to 9I., on condition that
the company should reduce the price of its goods ; which being
agreed to, the Council fixed it by an Act.

Returning to the matter of a special coinage for the colonies,
which had taken practical shape in the West Indies in 1670, it
would appear that the king had originally intended to m^ke a spe-
cial issue for Canada as well. In a memoir addressed to Colbert,
dated Nov. loth, 1670, Talon says that when he was in France
the king had declared his wish to have a coinage struck suitable
for the country, and which would remain in circulation in it.
He considers that such a measure would be of the highest
benefit to the country, and promises to do his duty in the
matter when the necessary orders are issued.

In another part of the same memoir he intimates that the
merchants of Canada are very anxious that the sum annually
set aside by the king for the assistance of the colony should be
sent out in the shape of money, not in the form of goods. The
reason for this was that the merchants desired to have the
entire supply of goods in their own hands. This, Talon says,
would simply result in the people paying twice as much for their
supplies as the rate at which they are now furnished from the
king's stores. Besides the present arrangement permits him to
exchange the goods for grain with the settlers. He has under-
taken to send goods to convenient places for exchange and to
bring back wheat. Without doing this seme of the new settle-
ments would be entirely ruined. This plainly indicates that
Talon was the author of the ordinance, already referred to,
making wheat a legal tender at a certain price. It will be
observed that there is no lack of harmony between Talon's
approval of a special coinage for the colony and his disapproval
of having the king's contribution to the colony sent in the shape
of money, which, under the circumstances, would simply return to
France for the purchase of fresh goods for the merchants.

Replying to Talon the following spring, nth Feb., 1671,
Colbert says : " Before the king can adopt any resolution with
reference to the striking of a coinage for Canada, it will be
necessary ta know the required denomination and weight, also

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CASADIAX CrUREXCV iWDER FREXCH RULE

the circulation it vould probably have in the colony. After that
His Majesty will announce to you his intentions on the subject."
This would seem to indicate that the coins already struck for
the West Indies were not intended for use in Canada.

In a letter to Talon the following year, dated June 4th, 1672,
Colbert writes : " His Majesty has considered the proposal to
strike a special coinage for Canada, and as he considers it good
and advar-tageoiis, he will issue the necessary orders to have it
struck and sent out the following year." This purpose, how-
ever, was never carried out. It was apparently determined in
the meantime to have the ordinary coins of France circulate in
the colonies at an enhanced value. Thus we find an arret passed
by the Council of State, Paris, iSth November, 1672, stating
that the money issued for the Islands, etc., has been found to be
of very great benefit, hence not only is it to be continued, but
the curreni money of France is to be permitted to circulate
there als-, but with increased values ; the piece of 15 sols to
pass for 20 sols, the 5 sol piece to pass for 6 sols 8 deniers, and
the sol fi 15 dcniers to pass for 20 deniers, and other pieces in
proportion. Henceforth all exchanges or contracts are to be
reckoned in money, and not in sugar or any other goods. The sol
of 15 deniers nere mentioned was already increased one-fourth
of its standard value.

Charlevoix sa\ s that this arret was made to apply to New
France, and that in consequence the value of money increased
one-fourth in Canada and resulted in much confusion in all the
exchanges w'th France. Here, however, Charlevoix is partly
mistaken, because for ten years at least the French money in
Canada had been circulating at an advance of one-fourth or over.
As we have just seen, the sol, the chief coin of the country, was
reduced from 24 to 20 deniers, which is the value to which the
arret raised it. In the introduction to a memoir on the card money
prepared for the Council of Marine and given in Zay, considerable
confusion is also found, the information obtained being either
inexact or misunderstood. It is supposed, for instance, that
the distinction between money of France and money of the
country came in with the arret of 1672, which was certainly not
the case, as there are numerous instances in which this dis-
tinction is mentioned from 1654 o"-

CAXADIAN CrRHEXCV IXDEK IKEXCH RCl.E

Money becoming' a customary me(]ium of exchange, mer-
chants were less willing to accept produce in lieu of it. We
have already noticed that objection was made to taking pay-
ment in wheat. After 1672 contracts were being drawn requir-
ing pa} ments to be made in money. The two staple skins of
the fur trade were the beaver and moose, which were receivable
at hxed prices by the treasury of the colony, whether und r
company management or not, and afforded the chief basis for
taxation at the rate of one-fourth of the beaver and one-tenih
of the moose. The beaver seems to have been accepted in
ordinary trade without much question, but after 1572 the mer-
chants were beginning to refuse the mo.jse skms. Hence the
Council found it necessary to pass an arret, Sept. 27th, 1674,
ordaining that the moose skins should pass current as a le^^al
tender ar their market price, and prohibiting anyone from refus-
ing to accept them in payment of debts.

An agitation was made in 1679-80 to have a reduction
made in others of the current coins, especially the four-sol
piece, which it was sought to bring to its value in France. This,
however, was refused, and ou December 2nd, 1680, an arret was
passed requiring that all coins should circulate in Canada at
the same rate, namely, at an increase of one-third of their value
in France. As we gather from subsequent ordinances, tliis was
apparently intended to apply to foreign coins as well.

After Duchesneau became Intendant he proposed to the
Government to send out to Canada 30,000 crowns, in order to
increase the money in circulation ; to which Colbert replied, on
April 28th, 1677: "That which you propose with reference to
the money, namely, the sending of a sum of 30,000 ecus to
Canada, is not thought expedient. It is necessary that the
trade, labor and industry of the people should attract money into
the country. You yourself admit that Canada is as fruitful as
France, and in addition to being able to produce all that France
can, it has the fisheries." The truth was that Colbert, compelled
to find money to support the operations of Turenne and Conde
in Europe, had none to spare for the colonies.

At this time Canada was anticipating Colbert's advice to
attract money to it by trade, although it was in a direction not
at all relished by France and one that was to cause no end of

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trouble for the future. Canadian traders had discovered that the
Enghsh and Dutch merchants of Albany, Boston and New York
were anxious to buy furs, and at much higher prices than could
be obtained in Canada. They were wilhng also to pay for
them either in dollars (piastres) or in goods, the goods being
cheaper than in Canada. Further, by selling to the Engiish the
tax of one-fourth on the beaver would be escaped. Under these
circumstances a very lively trade was developed with the Eng-
lish colonies. Against this traffic the Government, both in
France and Canada, directed all its verbal engines, but without
much success. The highest officials in the colony, Governor
an<i Inteiidant included, mutually accused one another of taking
part in this illicit trade for personal gain. As one result of this
traffic a steady stream of Spanish coins began to pour into
Canada, consisting chiefly of the piastre or Spanish dollar and
its fractions, one-half, one-fourth and one-eighth.

The farmers of the revenue were naturally much disturbed
over the loss of revenue through the loss of beaver. The mer-
chants of Quebec interested in the trade with France were also
aggrieved, as it meant a loss of profit to them on both exports and
imports. It was found, too, that though the English were paying
high prices for beaver, yet they were unloading on the French
traders all their worn and light coins. Numerous complaints were
presented to the procureur general, and through him to the Coun-
cil, 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 foreign
money, gold or silver, should pass by weight, but increased by
one-third of its value, according to the usage of the country.
The full piastre was to be accepted at 3I. 19 sols r denier, while
the light coins were to be reduced in value at the rate of 1 1 sols
for every grain which they lacked in weight. It was forbidden
to any one to refuse to accept these coins at this valuation.

In a country like Canada where it was simply impossible to
ascertain the weight of coin in every transaction, this ordinance
could not be worked. But, though this was soon discovered, yet
owing to the quarrels between the Governor and Intendant, the
business of the Council Was so obstructed that it was not till
January 13th, 1683, when de Meulleshad succeeded Duchesneau

CANADIAN CURRENCY CNDER FRENCH RILE

as Intendant, that the matter could be remedied. The agent of
the farmers of the revenue desired the Council to treat all
foreign coins as France did, by entirely prohibiting their circula-
tion. This, iiowever, the Council refused to do unless the
farmers of the revenue would undertake to buy up all the foreign
money then in the colony, which of course they were not pre-
pared to do. Hence the Council ordained that the piastre should
pass current for four livres, if of full weight, and at decreasing
rates according to the degree of their lightness. To get over
the difficulty of constant weighing, they were to be stamped
with a.fleur de lis, and those of light weight were arranged in
four classes, to be distinguished by Roman numerals stamped
on them, while a scale of value was arranged for them. Similar
provisions were made for the fractions of the piastre. None
were to circulate without being stamped, and none to be refused
that bore the stamp.

This arrangement seems to have settled the difficulty for
the time. Governor De la Barre, writing to M. de Seignelay,
in November, 1683, thus refers to the matter : " We experienced
serious embarrassment in the month of January last in regard
to dollars. They were here in some number, and a quantity of
them being light caused considerable disorder among the lower
classes. It not being customary in this country to weigh them,
induced the Intendant and me to assemble an extraordinary
session of the Council, at which it was resolved, subject to his
Majesty's pleasure, to have the dollars of weight marked with a
fleur de lis, and those which were light with some cypher fixing
their value. This was done and is now in operation without any
noise or difficulty."

This brings us t > the eve of the introduction of card money
in 1685, iiie nature and effects of which will be considered in
the next paper.

Adam Shortt
Queen's UNivERsiiy, Kingston, March, 1898