THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 ^875 
 v3j
 
 ^ 
 
 THOUGHTS ^ 
 
 ON THE 
 
 MONEY AND EXCHANGES 
 
 OF 
 
 LOWER CANADA 
 
 BY HENRY S. CHAPMAN, 
 
 (aCTIIOR of a statistical sketch of tub corn trade of lover CANADA.) 
 
 MONTREAL: 
 PRINTED AT THE MONTREAL GAZETTE OFFICE, 
 
 2.'>f NOTRE DAME STREVT. 
 
 1832.
 
 
 TO 
 SAMUEL REVANS 
 
 AMD 
 
 JOHN W. DUNSCOMB, Esquires, 
 
 THE FOLLOWING PAGES, 
 
 THE RECORD OF OUR CONVERSATIONS ON 
 
 THE SUBJECT TREATED OF, 
 
 ARE DEDICATED, 
 
 BV THEIR SINCERE FRIEND 
 
 THE AUTHOR. 
 
 Qlf.bec, Scpfembcr, 1832. 
 
 35a'J6i
 
 ERRATA. 
 
 Owing to the circumstance of the Author residing at a distance from the Pub. 
 lislier, the following errors have crept in : — 
 
 Page 19, line 6, for " lead" read '< leads." 
 
 26, " 12, after the ward " conversion," the comma should be a semicolon, 
 
 and after " conveyance" the semicolon should be a comma. 
 23, " 19, for (G) rcarf (C). 
 
 30, ** 7 from bottom, for ''come" read "came." 
 
 31, " 24, for '' 106,061" read " 156,061." 
 34, ♦' 3 from bottom, for 1 3-6 read 1 3-8. 
 
 37, « 7 ditto, for '* these .sums" reai '* their sum," 
 
 42, " 13 ditto, for "substract" rcarf" subtract." 
 
 43, " 25, for " and the evidence" read " to the evidence." 
 
 44, in the note for " chapter 6" rend 4. 
 
 45, line 27, for " depreciate" read " depreciation." 
 
 46, «' 7, for '* emmigration" read "immigration." 
 
 8 from bottom, after the word " awkward" insert " for." 
 48, « 10 ditto, {or "its" read "their." 
 51, << 12 ditto, for <« depreciate," rearf "depreciation." 
 53, in the list of the Appendix, line 18 to be struck out ; E, No. 4, not hav. 
 ing been inserted. No. 5 is consequently marked 4, and the 
 Sumraar,y 5
 
 T H O U G II T S 
 
 MONEY AND EXCHANGES 
 
 LOWER CANADA. 
 
 INTRODUCTION. 
 
 It will be recollected, that in the early part of the year 
 1830, — ill consequence of a passage in the speech of Sir 
 James Kempt, having reference to the state of the Cur- 
 rency, — both houses of the Provincial Legislature appointed 
 Committees to hear evidence on, and inquire into the mone- 
 tary system of Lower Canada. 
 
 These Committees reported tlie results of their labours, 
 but, unfortunately, little has been practically edected 
 thereby. On examining the reports, this will not be deemed 
 surprising. The facts collected are few in number, and no 
 important conclusions are drawn from them. We learn, 
 that certain coins pass current in Lower Canada at rates 
 above their value; the evil is duly expatiated upon; but 
 accompanied only by a feeble recommendation " that they 
 " should be called in at the public expense, under safe- 
 " guards against their not having been introduced into the 
 " Province in order to profit by such deterioration."* A\ hat 
 safeguards arc sufficient is not pointed out, though it was 
 a question evidently within the province of both Commit- 
 tees ; in fact, generally, the Committees content themselves 
 with declaring, that it is advisable to do what they them- 
 selves were expressly appointed to do, and so putting oflT, 
 sine die^ the business of inquiry. ^Ve are further told that 
 the weight and purity of the Spanish dollar, having been 
 reduced, our par of exchange is no longer correct ; but, 
 
 • Council't. Report, p.igc 12, Svo. cd.
 
 although much evidence was collected, no attempt was 
 made to set the public right on the point. It is true 
 the evidence was contradictory ; one witness stating the 
 dollar to be worth 4s. Id. to 4s. 2d., another 4s. 3d., a 
 third 4s. 4d., and a fourth that it would require £115i-3 
 currency to make £100 sterling — thus making the dollar 
 worth 4s. 3|d .58. No attempt was made to establish, 
 by a reference to general principles, which, — if any, — of 
 the above rates is correct, though there is no principle 
 of the science, within whose province such questions come, 
 better, — more fairly and fully establislied than that which 
 would have led, — and by no very intricate road either, — to 
 the truth. 
 
 Hence it will appear that the "Lower Canadian Cur- 
 rency question" stands nearly as it did before the Com- 
 mittees sat. Its deranged state is still complained of, but the 
 extent and direction of that derangement is, as yet, wholly 
 undetermined and but vaguely conceived. These points it 
 will be the object of this paper to clear up ; the evidence 
 collected by the Committees, especially the documentary 
 pari, some of which appears valuable, will be submitted to 
 a careful examination ; and after adding such further evi- 
 dence as I can command, and which may tend to elucidate 
 the inquiry, I shall endeavour to point out a remedy for 
 the acknowledged evils, of easy practical application. 
 
 CHAPTER I. 
 
 On the state of the Coins in circulation. 
 
 As the actual state of the coins in circulation in the Pro- 
 vince forms no inconsiderable portion of the inquiries of 
 both Committees, let us, without preface, direct our atten- 
 tion thereto. 
 
 I need scarcely remind the reader, that the integer of ac- 
 count in Canada is the £ currency consisting of four Span- 
 ish dollars, its subdivisions being as those of British money, 
 into shillings and pence; the dollar, consequently, being 
 called five shillings. 
 
 The coins chietly met with in circulation are as follows : — 
 Spanish dollars, and a few American, 5s., — American half 
 dollars, and a few Spanish, 2s. 6d., — Spanish and American 
 quarter dollars. Is. 3d., — Spanish one eighth ditto, 7|d., — • 
 Spanish one-sixteenth ditto, S^d., — American 10 cents,
 
 one tenth ditto, 6cl., — French crown pieces, 5s. Gd., — 
 French half-crown ditto, 2s. 9d., — Pistareens, (formerly Is. 
 now) lOd., — Half Pistarcen, 5d., — together with some few 
 others, occasionally, though very rarely seen, such as five 
 franc pieces, 4s. 8d., — old Spanish quarter dollars without 
 pillars, Is, — English bank tokens of 1812, Ss., Is. Gd., — 
 and Irish lOd. and 5d., now, I believe, geneially refused. 
 
 Three questions appear to me to include all that is 
 meant by " the state of the coins in circulation.'*^ 
 
 First, Which of the coins in circulation are debased ? 
 
 Second, What is the extent of their depreciation ? 
 
 Third, Wliat proportion does the depreciated bear to 
 the sound part of our currency ? 
 
 The two first questions, it will be seen, form but one 
 subject for inquiry. 
 
 In estimating the value of the several coins in circula- 
 tion, the dollar of 60 pence is assumed as the standard into 
 which all the rest are resolved. Here the Conmiiitee of 
 the Legislative Council has the merit of having adopted the 
 right course, — actual experiment. 
 
 " The weights of the coins were ascertained by actually 
 weighing the quantities thereof so specified, respectively 
 taken at hazard. 
 
 The following are the results of the experiment above 
 alluded to : — 
 
 1000 Spaiiisli dollars were > oz. <f«'<. gfs. grs. value. 
 
 found to weigh . ... 5^ 8G5 1 8 avei'age 415, ea. 5s. 
 
 200O U. States half dollars, 865 18 2 " 207 16-20, ea. 2s. 6d. 
 
 4000 Spanish quarter do. 829 19 6 <' 99 1-2, ea. Is. 2 1-Sd. 
 
 5000 Pistareens 804 12" 779-50, ea. Os. 11 8-50d. 
 
 3000 French crowns 92S 4 << 445 4-10, ea. 5s. 4 l-2d. 
 
 2000 French half do 863 4 6 *« 207 1-6 ea. 2s. 5 1.4d. 
 
 Strictly the values of the several coins will be as follows : 
 that is, taking the data of the Committee, and supposing the 
 standard of the silver contained in the coins to be the same 
 as the Spanish standard. It will be seen that some trilling 
 errors have crept into their calculation: — 
 
 D 
 
 United States half dollar S0.04 
 
 Spanish quarter dollar 1-1. 3S 
 
 Spanish pistareen 11.1.57 
 
 Fiench crown 64.53 
 
 French half crown 29.92 
 
 French old standard, however, is rather better than 
 Spanish ; containing 1 Uwt. less of allov.
 
 8 
 
 Tlje French crown, when unworn, weighed 450 grs., ami 
 contained 403-1 grs. of pure silver. The coin in ciicuhition 
 in Canada, has lost 4-G grs. of its weight, allowing for which 
 it will he ibund to contain 398.9 grs. of pure silver, giving 
 5.42-1 for its true value. In like manner, the half crown 
 Jiaving lost 17-83 grs. will he found to contain only 185.5 
 grs. of pure silver, making its value 30-008. Hence the 
 
 French crown is depreciated 2 1- 1 per centum. 
 
 Spanisli quarter dollar " 4-1-7 '« " 
 
 Spanish pihtureeii " 7 1-S «' " 
 
 French half crown " 9 1-10" '< 
 
 The state of the copper coins current in Lower Canada 
 also demands notice. At the time the Committees sat, 
 complaints of the trash passing as copper coin, were very 
 general. It was also said they were in excess. If any 
 thing, their condition is now worse — they consist chiefly of 
 old and broken copper coin of all nations : tokens, and, 
 probably, bits of copper, which never were meant for coin. 
 But they are in decided scarcity, so much so, that the 
 Quebec Bank paid 2^ per cent, very recently, for some. 
 Indeed, it is difficult now to get a shilling's worth of 
 coppers. Of the recent importation of pence, halfpence, 
 and farthings, the latter will, most likely, find their way into 
 Lower Canada, where they pass for a halfpenny. A good 
 copper coinage to replace the above will be considered in 
 Chapter IV. 
 
 The proportion which the depreciated portion bears to 
 the sound portion of our currency may be ascertained with 
 accuracy from documents furnished by the report of the 
 Committee of the Assembly. 
 
 In the Appendix A, will be found a statement drawn from 
 the above report, showing the amount of each description 
 of coin in the Public Chest, on the 1st January, 1830, and 
 also the average amount of each in possession of the Banks 
 of Montreal and Quebec. 
 
 As the receiver of the Customs is strictly enjoined to 
 refuse all but Spanish and American dollars and half dollars 
 for the Crown duties, and as these form a very considerable 
 portion of the monies paid by the Collector into the hands 
 of the Receiver General, it must be obvious that the state 
 of the Public Chest cannot be admitted as evidence of the 
 proportion which erxh coin bears to the whole volume of 
 the currency. The two Banks, however, receive and pay 
 all coins in circulation indifferently, Tiiaking, doubtless, what'
 
 efFoits they are able to keep Spanisli and American money 
 in their hands as long as possible, because they are perpe- 
 tually being- called upon by their best customers, the West 
 India merchants, for supplies thereof lor Crown duties; 
 these very demands are continually preventing their pos- 
 sessing any great excess of such coins, and so neutralizing — 
 if we may be allowed the expression — all their ellbrts ; so 
 that, on the average, the coins held by the Banks will exhi- 
 bit a tolerably just view of the proportion which each coin 
 bears to the whole currency. Calling the whole currency 
 1000, no less than 671 parts are of the sound portion thereof, 
 the rest being composed of coins more or less depreciated. 
 
 If we include the contents of the Public Chest the pro- 
 portion of the sound portion will be still greater, namely, 
 680 parts in 1000. The additional proportion of dollars 
 and halves has been already accounted for by the circum- 
 stance that the Government receives those coins only for 
 the duties which hitherto it has claimed to appropriate. 
 
 Having now' traced out the state of the currency of 
 Lower Canada; having shown what coins pass above their 
 value, and how much ; it remains to inquire what cflbcts 
 must result from such a state of things. 
 
 The effects of eniploying a currency consisting of various 
 coins, some passing above and some at or below their 
 value, would be precisely analogous to the evils arising 
 from the employment of two metals, both as standard mo^ 
 ney, where the relative value of the said metals had depart- 
 ed from the fixed proportion. These evils are so forcibly 
 and accurately described by a popular writer, that I shall 
 adopt his words. 
 
 " Some nations have made use of two metals, gold and 
 " silver, both as standard money, or legal tender to any 
 " amount. 
 
 " For this purpose it was necessary to fix a certain rela- 
 " five value between them. A certain weight of the one 
 " was taken to be equal in value to a certain weight of the 
 " other. 
 
 " If the proportion thus fixed for the coins were accu- 
 " rately the i)roportion which it obtained in the market, 
 " and continued so invariably, there would be no inconve- 
 " nience in the two standards." 
 
 So far the case does not apply to coins passing above 
 Iheir value estimated in the basis of the currency. It is 
 only where the relative value of the two metals is destroy-
 
 10 
 
 ed that the supposed case apphes to the currency of Cana- 
 da. To resume, 
 
 " The relative value, however, of the two metals in the 
 *' market is fluctuating. Suppose that the value fixed for 
 " the coins is that of 15 to l,in other words, that 1 piece of 
 *' gold is equal to 15 pieces of silver of the same weight. A 
 *' change takes place in the market, and this value becomes 
 *' 16 to 1. What follows? A man who has a debt to pay 
 *' equal, let us say, to 100 of the gold pieces, or 1500 of the 
 " silver, finds it his interest to pay his debt not with gold. 
 " With his 100 gold pieces he can go into the market and 
 *' purchase as much silver as may be coined into 1600 
 " pieces ; with 1500 of which he may pay his debt, and re- 
 *' tain 100 to himself. In this manner silver would be mul- 
 *' tiplied ; and the quantity of the currency would be in- 
 *' creased ; its value would, therefore, be diminished ; the 
 " gold in coin would thus become of less value than in bul- 
 " lion ; hence, the gold coins would be melted, and would 
 " disappear."* 
 
 What follows only supposes the case of fluctuation the 
 other way. It is quite unnecessary to quote farther, the 
 reader will readily apply the reasoning contained in the 
 above passage to the case of the depreciated coins now 
 current in Canada. 
 
 If a sufficient number of crowns, half-crowns, quarter of 
 dollars, pistareens, &c. could have been procured from 
 places where they passed at or under their value, they 
 would long since have displaced all our more valuable 
 coins. In this case, the rate of exchange would have risen 
 against us to the amount of the depreciation : thus, if 8 per 
 centf be now the rate which is necessary to make up the 
 difference between the nominal par and the real par value 
 of our currency, and if, say, French half crowns wholly^ 
 filled up the channels of our circulation, then 9 per cent 
 ■would be to be added to the rate of exchange, whatever 
 it might be — say 8 per cent — and 17 per cent premium (or 
 8 + 9 per cent fluctuation being from 15 a 19, as now from 
 6 a 10) would be the ordinary average par value of our 
 currency. 
 
 The fact that we have still so large a portion of good 
 and faithful coins in circulation is proof either that America 
 
 * Mill's Elements of Political Economy, third edition^ page 14] -S. 
 f Vide supra, chap ii, sect. 1 . par. 8.
 
 11 
 
 does not contain a sufliciency of those coins to fill our 
 channels of circulation, or that they are current elsewhere 
 at higher, or, at all events, the same rates. The former is 
 the case with all the depreciated coins ; on some of them 
 the latter also operates as a cause of exclusion. 
 
 In the United States of America the French crowns and 
 half-crowns pass for a dollar and half a dollar only ; the 
 consequence is that those coins are rarely seen. The same 
 is the case in Upper Canada,* and, we believe, in New- 
 foundland. At what rate they pass in other parts of British 
 America we have no information; hence, we are driven to 
 the conclusion, that we have in circulation and hoarded 
 nearly all the French crowns and half crowns in America.} 
 
 With regard to the pistareens, they now come under the 
 second supposition, — they pass elsewhere higher than in 
 Canada ; before their reduction they came under the first. 
 The coin, it has been seen, is intrinsically worth llroVod. 
 or say ll^d. ; while it was current here at 12d., it was li- 
 mited in Nova Scotia to lid., hence, all that could be pro- 
 cured passed into this province. So many were current in 
 the cities of Quebec and Montreal, that they were felt to be 
 an inconvenience. An outcry was, accordingly, raised 
 
 • Demand for Lower Canada has raised French crowns in Upper Canada to 
 a prenuuni. 
 
 f A gentleman, to whom the MS. of this article was shown, and whose opinions 
 are entitled to attentive consideration, has suggested, that '• a more particular 
 ** assignment of the reasons which prevent the inferior coins from driving out of 
 " the market those whose intrinsic value equals or surpasses their nominal va- 
 " lue" would be desirable. 1 have, accordingly, looked over what I had written, 
 tiut can find nothing to add to what is stated above, in the shape of an addition, 
 al reason to account for the fact, that the base coins have not usurped the 
 place of the sound coins. The general law that inferior coins will, if allowed to 
 pass concurrently with the superior, entirely usurp their places, appears to me 
 true. Then comes the objection, that in the case of the inferior coins of Cana- 
 da that effect has not taken place, — followed by the question — and wliy ? The 
 only solution that can be offered appears to me to be that given in the teit ; 
 namely, 1st, That there are not enough to be found in America to fill the chan- 
 nel of the circulation ; 2d, That some of them pass elsewiiere at equal rates. 
 The trade of the country requires a certain volume of circulating medium ; that 
 volume canrot be supplied by the debased coins, — they being able to afford 
 about one-third only, — the rest, therefore, is made up of the only coins to be 
 had, namely, dollars and half-dollars. Another consideration is, that there was 
 an actual demand for a certain number of pistareens, as a subsidiary coin ; that 
 number, whatever it was, would be able to pass at a rate considerably above its 
 value, without the slightest inconvenience. The Hritish silver h debused 10 per 
 cent witliout being depreciated. To my mind these make up a satisfactory ex- 
 planation of the fact, I tcuiil they will do to to that of the reader and of the 
 iutclligeut objector.
 
 12 
 
 against them, — they were stigmatised as " the rotten part 
 " of our currency," and the 10th and 11 th of Geo. IV. cap. 5, 
 effectually drove them out of the market, by declaring them 
 to be current at lOd. only. In New Brunswick they bear 
 the same value, and even there they are a legal tender to 
 the extent of 5s. only. In the United States they pass for 
 17 cents, equal to lOj^od., Halifax Currency, whilst in Nova 
 Scotia they are valued at lid., hence, by that Colony they 
 are nearly all absorbed, — absorbed, not because they over 
 value them, as we formerly did, but because ail surround- 
 ing States undervalue them. 
 
 Like all bodies of men, ignorant of the matter before 
 them, and acting without any fixed principle, our law- 
 makers have deprived the country of what might have been 
 a most useful coin for no earthly reason, but that there was 
 a prejudice against it. In attempting to rectify an acknow- 
 ledged error, the Council and Assembly overstepped the 
 line of truth, and created an error exactly equal to that 
 which existed before. It is, doubtless, a bad thing to have 
 a coin passing as the pistareen did, unless as a subsidiary 
 coin, limited in quantity; but as depreciation was not a 
 property of the coin itself, it could not amount to a reason 
 lor abolishing it. 
 
 In the mode of effecting this there is much to condemn. 
 In the earlier times of European history, before civiliza- 
 tion, and its concomitants, education and a press tolerably 
 free, had put a stop to glaring acts of rapine and public 
 robbery, the nominal value of a currency was frequently 
 raised, and sometimes, though seldom, lowered to suit the 
 sinister purposes of despotic governments. Latterly, how- 
 ever, such acts of aggression have been extremely rare in 
 Europe, — in Great Britain wholly unknown. There are, 
 it is true, still to be met w ith, men sufficiently barefaced lo - 
 speak in favour of a depreciated currency ; but, fortunately, 
 the honest part of the community is too many for them. 
 Since 1819 every act of the Legislature relating to the cur- 
 rency has tended to promote its integrity ; and it is only by 
 a very complicated plan of operations that such frauds can 
 be effected. 
 
 In England, when the coinage, or any portion thereof, 
 becomes depreciated by wear to an extent to affect the ex- 
 changes and the price of bullion ; and it is decided to call it 
 in and issue another, it is invariably done at the expense of 
 the community. The measure is a public benefit, — the re-
 
 13 
 
 nioval of a public nuisance ; by Ibc public at large,* llicrc- 
 fore, and not by any small portion tliercof should the loss 
 be borne. The monstrous fraud of iullicting the loss on 
 holders could never have been carried into clfect in a 
 country where the bulk of the population was in a situa- 
 tion to profit by an independent press, and where that 
 press did its duty. Where the great mass of the people, 
 however, is destitute of the elements of knowledge, there 
 is but little demand for an ellicient press, — a people's only 
 safeguard ; they are constantly open to the most bare- 
 faced robbery of the most bungling plunderers. In Eng- 
 land, I do not hesitate to say, the press, in a body, would 
 have condemned the measure, denouncing its promoters 
 and supporters as open promoters of fraud. 
 
 Most of my readers will recollect the effects, even of tho 
 agitation of the measure, on trade. As it became certain 
 that it would be carried, in a way to exclude tlie possi- 
 bility of compensation for loss, every disposition was 
 evinced and every eifort made to get rid of the obnoxious 
 coins. Debtors paid their creditors with pistareens at Is., 
 knowing they would be worth only lOd. at the rising of the 
 morrow's sun. In this they were undoubtedly justified, 
 they had taken the coin at Is., the lawful rate, and while it 
 continued a legal tender, were committing no moral wrong 
 in discharging their debts therewith. One anecdote, in 
 illustration, deserves jircserving. A grocer of Quebec, 
 illustrious for the extent and success ef liis dealings, owed 
 a merchant a sum of money ; all the pistareens in his pos- 
 session he sent the said merchant in part payment of his 
 debt. The merchant, however, — who was from the same 
 side of the Tweed as his debtor, — hit upon an expedient to 
 return his countryman the compliment. Sagaciously gues- 
 sing his former debtor — having the fear of his old acquain- 
 tances, the doomed coins, before his eyes — would refuse 
 him credit pending the discussion of the measure, ho sent 
 his storekeeper or cooper, who purchased candles, soap, or 
 some such article to about the amount, paying for the same 
 in the dreaded pistareens. While the bill was waiting the 
 Governor's assent, some few shopkeepers shut up their 
 shops to avoid the evil above described.! 
 
 * This is the opinion of W. Finlay, E^q sec his evidence. Council RcporL 
 
 t On the question on whom should the loss rail ? I nm also at issue with 
 the objector ulicadv quoted at pugc 11 (note), he writes, — "in Iht catc of a
 
 14 
 
 In directing the measure of their wrath against the pista- 
 reens, the Legislature left unnoticed the gieatest offenders, 
 namely, the French hai-f crowns. In amount they ex- 
 liibit an excess over pistareens of 21 per cent., and in point 
 of depreciation they are 2 per cent, worse. It is, there- 
 fore, strange that in their zeal to amend, neither house 
 of the Provincial Legislature (except in the vague and 
 rcsultless recommendation of the Committee of the Coun- 
 cil,) thought of including French half crov^'ns in their bill, 
 which it was intended should work wonders in the way 
 of improvement. 
 
 Before I dismiss this portion of the subject, I take leave 
 
 <' metropolitan state calling in her worn coin for the purpose of making a new 
 *' issue, it is her oion coin siie calls in, upon which she has had the seignorage, 
 '* &c. In this case it is foreign coin, and no wisdom can prevent the colony 
 " from becoming the mart for all this debased foreign coin, and being paid for 
 •' at a price above its real value by the colony." 
 
 It is, indeed, most unwise in a state to pay for a coin, or other commodity, 
 more than it it is worth ; but in tlie case under consideration, tlie folly lias been 
 Committed — the colony has been the mart ; the debased coins iiave been bought 
 and piid for ; and by calling them in, no new inducement is offered to bring 
 them fioni a distant state te be changed, more than now exists in their free 
 exchangeability for dollars. 
 
 The question whether or not the local governments shall defray the expense 
 of calling in and re-issuing the coin, resolves itself to this. Shall the loss be 
 borne b^y the public in equal or unequal shares? If holders be saddled with 
 the loss, some are great sufferers while others wholly escape. If, on the 
 other hand, tlie government call them in, every tax-paying individual will 
 contribute his fair share of the loss. To those who hold that the pistareen would 
 purchase as great a quantity of commodities after, as before the passing of the 
 law, (and holders pro tanto be compensated,) I refer to page 15 of the text. I 
 would further remark, that on the basis (and the bulk) of her currency. Great 
 Britain levies no seignorage, consequently, the cost of calling in a worn coin is 
 an unrequited loss, — borne, however, fairly and equally, (in so far as taxes are 
 fairly and equally levied,) by every tax-payer. To me it appears, that the cir- 
 cumstance of a colony making use of a foreign coin, instead of being an argument 
 against her bearing the loss, is, in fact, the strongest argument in favor of such 
 a course. The colony is saved the cost of a mint establishment — she is, there- 
 fore, better able to bear the loss on worn coin ; in fact, wear of coin is as una- 
 voidable an expense to a people as the administration of justice. 
 
 Another observation too, from the same source, appears equally open to dis- 
 pute, namely, that it is a question between debtor and creditor. To make it so, 
 it appears to me the debtor should lose what the creditor gains, and the con- 
 verse. It is not so, however, with the case under discussion. A. borrows of B. 
 dS, say 100 shillings, which is received in pistareens. To make the case 
 strong let us sappose, before A, can make use of the said pistareens comes the 
 law, changing their current rate. A. tenders the pistareens back to B. who 
 refuses to take fewer than 120 in discharge of his debt, this is a clear loss to A. 
 but it is no gain to B. unless, indeed, what the autlior of a Review, &c. says, is 
 true, which it is not, hence it api»cars that A, loses not as a debtor but as a 
 holder.
 
 15 
 
 to say a few words on that part of a work entitled, a 
 " Review of tlie proceedings of the Legislature of Lower 
 " Canada in the session of 1831," which relates to the cur- 
 rency. 
 
 The author states two principles whereby to try the 
 effects of allowing pistareens to pass current at a nominal 
 value above their real value. 
 
 " We admit that money can under no circumstances (!-?) 
 " be made to circulate beyond its intrinsic value. When 
 " the nominal value is increased beyond the intrinsic value, 
 " a corresponding increase takes place in the prices of all 
 " commodities, and among these of bills of exchange. * 
 "****** If there be two or more coins form- 
 *' ing a part of the legal currency of a country, and the no- 
 " minal value of the one be higher than the nominal value 
 " of the other, the latter will be displaced by the former 
 " and entirely disappear, or be obtainable only by the pay- 
 " ment of a premium." — Review, &c. p. 125. 
 
 The first principle is not true, until the effects recited in 
 the second have taken place. Why they did not take place 
 has been already shown, page 11. Had they taken place — 
 had pistareens displaced, or permanently raised to a pre- 
 mium the sound portion of our currency, there is no doubt 
 that the prices of all commodities — including exchange, as 
 shewn page 10, would have risen in the precise ratio of the 
 depreciation. The case of the pistareens, in fact, does not 
 come under the author's general rule. They never dis- 
 placed dollars and half dollars, or raised them to a pre- 
 mium;* hence they never affected prices; all that is predi- 
 cated of the currency in the work in question is, conse- 
 quently, false, and in many cases absurd, manifestly so 
 indeed, as may be seen by the following extract. 
 
 " If eggs had been selling at 12d. previous to the passing 
 " of the law, they would, ceteris paribus, have sold for lOd. 
 " after its passing ; but they would, in both instances, have 
 " been paid (for) by the same identical quantity of silver, 
 " or other precious metal, and it might have been of the 
 " same identical form." — Review, eodem loco. 
 
 Now, making due allowance for the " ceteris paribus''^ of 
 the case, which we presume means any Jluctuation of price 
 
 * For tbe causes which have occasionally concurred to raise dollars to a pre- 
 mium, see chap. 2. sec 2, par. C.
 
 16 
 
 from a change in the ratio of supply and demand, we put 
 it to the experience of every man, wiiether as many eggs 
 could be bought for a pistareen the day after as the day be- 
 fore the passing of the law. 
 
 The sage Augustus, in Mr. Bulwer's " Paul Clifford," 
 says, — " the advantage of having a principle is, that if you 
 fail into error, it is your principle that is to blame and not 
 yourself." — Such is the case with the author of the " Re- 
 view." The same number of eggs would certainly have sold 
 for a pistareen after, as before the passing of the law, pro- 
 vided the effects predicated in the second principle had 
 taken place; that is, — if pistareens had filled the channels 
 of circulation. But this they never did. The rule has 
 been made too general, a common error with hasty writers. 
 
 In the observations (page 130,) on the absurdity of at- 
 tacking the pistareens and leaving the French half-crowns 
 untouched, I fully concur; but as I have gone through this 
 part of the question, (page 14,) I abstain from further com- 
 ment. Let us now look back and ascertain the steps we 
 have advanced in this inquiry. We have established which 
 of the several coins current in Canada are depreciated ; 
 their per centage depreciation has been pointed out ; and 
 a measure of the proportion which the said depreciated 
 coins bear to the whole in circulation has been exhibited. 
 From these three settled points — as I think we are authorised 
 in calling them — we may conclude : that the quantum of dis- 
 turbance under which our currency has been supposed to 
 labour, has been considerably over-rated. A currency can- 
 not be said to be in a very bad state, when the sound portion 
 consists of 670 to 680 parts out of 1000, especially when it 
 is considered that out of the remaining 320 to 330 parts a 
 considerable portion consists of small coins, useful, nay, in- 
 dispensible for the common purposes of interchange, and, 
 as such, may without any inconvenience be permitted to 
 pass at rates considerably above their metallic value. 
 
 That derangement exists, no one can doubt — it rests on 
 demonstration; and although not to an extent to warrant 
 the lamentations occasionally bestowed upon it, still quite 
 sufficient to demand a remedy. Of that remedy, however, 
 we must postpone the consideration, until we have pur- 
 sued our inquiries to a branch of the subject absolutely 
 necessary to the perfect understanding of the whole, — we 
 mean the exchange.
 
 17 
 
 CHAPTER II. 
 
 THE EXCHANGE. 
 
 Section I. — The Nominal Exchange. 
 
 Having, in the foregoing chapter, gone through the exa- 
 mination of the state of the coins in circulation, I now pro- 
 ceed to another but no less important question, which 
 occupied much of the attention of the Committees, namely, 
 
 THE EXCHANGE. 
 
 There are two circumstances on which the rate of ex- 
 change between different countries depends. First^ the 
 relative value of their respective currencies, weight and 
 fineness both considered ; and, second^ the supply of, com- 
 pared with the demand for, bills of exchange. By some 
 writers, the first has been called the nominal exchange — 
 the second, the real exchange — and both together the com- 
 puted exchange. In this section, I shall treat of the nomi- 
 nal exchange only. The nominal exchange may be affected 
 by the use of paper money ; the consideration of its mode 
 of operating, I shall put off till the next section ; confining 
 our investigations in this, to the nominal exchange between 
 two countries using metallic currencies. 
 
 Firsts The value of a currency is determined by the 
 quantity of pure metal contained in the coins forming its 
 basis, alloy being left wholly out of the account ; and the 
 number of times one coin is contained in another, is called 
 the PAR OF EXCHANGE. Thus, if one dollar contain as much 
 pure silver as five franks, then the par between the United 
 States and France will be 5f.=l$. or what amounts to the 
 same thing, 20 c.=l f. 
 
 This, however, only holds good between two countries 
 making use of the same metal as the standard of their res- 
 pective currencies. But, of some countries, gold is the 
 standard, of others, silver ; between such countries the par 
 is not invariable. 
 
 Let us take for illustration, the par between England and 
 France, or America ; gold being the standard in the former 
 country — silver in the two latter. 
 
 Having ascertained the quantity of pure silver contained 
 in the com forming the basis of the currency of the country 
 
 c
 
 18 
 
 of which silver is the standard, we must find what it is 
 worth at the market price of silver in the gold-using coun- 
 try, and not at any mint price, fixed by law for the purpose 
 of calculation. A short explanation will serve to render 
 this obvious. 
 
 The mint price of silver is a conventional price, insti- 
 tuted for the purpose of fixing, or rather attempting to fix, 
 the proportion between silver and gold. The silver coin 
 of Great Britain, being a subsidiary coin, passes at a rale 
 considerably above its real value, without the slightest 
 inconvenience, inasmuch as silver is not a legal tender 
 above a certain amount, namely, forty shillings.* Fo- 
 reign coins, how^ever, do not enjoy this advantage; they 
 are merely a commodity, worth whatever they will realize 
 in the market, at the market price. 
 
 The market price of silver, like that of all other com- 
 modities, is perpetually fluctuating, according to the exist- 
 ing ratio of supply and demand. A sudden change of 
 wind, for example, may thrust upon the market a large 
 supply of silver from Mexico ; a decline is as surely the 
 consequence, as a decline in the price of sugar would be 
 upon a sudden glut of that article. It will, at once, be 
 seen, that between two countries using different metals as 
 the basis of their currencies, there can exist no invariable 
 PAR of exchange. Besidcs the cause of variation above 
 mentioned, the par will be affected by any change in the 
 weight or purity of the coins in either of the interchanging 
 countries. 
 
 Many of the pars of exchange now in use, were fixed 
 when the respective coins contained a different quantity of 
 metal than at present ; hence, most of them are erroneous, 
 in other words, they are far no longer; and such, as I 
 shall presently show, is the case with the par of exchange 
 made use of in this country. 
 
 When the language of exchange is so much of the cur- 
 rency of one country for the unit of the other^ as 4s. l|d. 
 = $1, $4 80 ==£1, 12 guilders = £1, 25 francs = £1, 
 and so forth, no inconvenience can arise from a par being 
 assumed ; but when, as in Canada, the erroneously assumed 
 
 * Practically, however, payments are made in silver to any aniouilt, as the 
 IBank of England never refuses to take silver. " Change," as it is called, is, in, 
 fact, scarce, being kept so by moderate issues. Were the issues of silver to be- 
 come excessive, so as to reduce its value, those who had money to receive would 
 lefuse to take more than the lawful limit.
 
 19 
 
 par of exchange is never lost sight of, but enters into the 
 language of commerce daily and hourly, it does lead to con- 
 tradiction and misunderstanding. It asserts that exchange 
 is at a premium, when it may be cither at par or at a dis- 
 count. The practical knowledge of merchants, it is true, 
 lead them to call 5 or 6 per cent, premium low^ tlius tacitly 
 abandoning the par lixed by law ; for, were the par cor- 
 rect, no one could deny that 5 per cent, would bo enor- 
 mous as a premium, indeed utterly incapable of being main- 
 tained. 
 
 The par of exchange at present in use, namely, 4s. Gd. 
 sterling = 5s. currency, was fixed when the Spanish dol- 
 lar, or piece of eight, as it was then called, was both heavi- 
 er and finer than at present. The old dollar weighed 17 
 dwts. 12 grains, and the standard of Spain was only 1 dwt. 
 worse than that of Great Britain, the dollar being tiien ac- 
 tually worth 4s. 6d. at the mint price of standard silver.* 
 
 Since that period, however, the Spanish standard has 
 been lowered, — 7 dwts. more alloy having been added to 
 the lb., besides which the weight of the dollar has been re- 
 duced 4 grains, namely to 17 dwt. 8 grains, the pure silver 
 in the coin being 370.9 grains. f Now for whatever sum 
 three hundred and seventy grains and nine-tenths will sell 
 in the London market, — the money market of England, 
 indeed of Europe, — that sum is the par value of the dollar. 
 
 By referring to appendix B, No. 1, the reader will find a 
 table containing the price of silver in the London market, 
 monthly, from 1823 to 1828, both inclusive, and also for 
 1831; unfortunately I do not possess prices for 1829 and 
 1 830, nor do I know any source in this country whence to 
 derive them. Could they, however, be exhibited, they 
 would not much affect the average of the whole period. 
 No. 2 of the same appendix contains the annual av(!rage 
 prices of the Spanish dollar calculated from No. 1, together 
 with the average of the whole period, namely, 4s. IICl .3, 
 which would require, in our present mode of computation,' 
 a premium of 8^ per cent, over and above our assumed 
 par, to bring it into currency, £100 sterhng being worth 
 
 ♦ See Ordinance 17 Geo. III. c. iii. and Mr. Young's evidence, AssemhJy 
 Report, Svo. cd. p. ol. Tlie mint price of silver then coincided more nearly 
 with the market price timn at prcs(;nt. 
 
 f These facts were taken from h table in the second edition of Kelly's Cam- 
 biit. See uiso article «' Money" in the Supplement lo the l^neycl. Uiilt.
 
 '20 
 
 £120 4s. 2^d. In the state of the English currency last 
 year, silver commanded rather a higher price, seldom sink- 
 ing below 4s. 11 gd. the ounce, and sometimes commanding 
 5s., giving for the value of the dollar 4s. 2d., and requiring, 
 in our erroneous language, 8 per cent premium to bring 
 the real up to the nominal par, £100 sterling being worth 
 £120 currency, or, in fact, 20 per cent premium. This, 
 therefore, must be considered the approximate par* of ex- 
 change, — the ordinary average value of our currency esti- 
 mated in British sterling. 
 
 From the facts thus exhibited, it will be seen, that our 
 ordinary premium is only an expedient necessary to bring 
 the real par up to the nominal par. The analysis of the 
 process will make this evident : — 
 
 B. d. 
 
 Average value for the dollai-, 4 2 sterling, £ 100 
 
 8 per cent premium on 50d. is 4 8 
 
 Nominal value of the dollar, 4 6 sterling, 108 
 
 Add one-ninth, according to the ordinary rule, page ( ,) 6 12 
 
 Current denomination of dollar, 5 120 
 
 Hence, when exchange is nominally at 6 or 7 per centpre- 
 mium — as in June 1831 — it is, intact, at a discount; that 
 
 * The lowest price of silver occurred in March 1822 and in September 1826, 
 both, be it remembered, periods of low prices, consequent upon commercial dis- 
 tress and a contracted currency. The price was 4s. J0|d. This price will be 
 found to give 4s. lid. .6 for the value of the dollar, corresponding to which 
 will be found, as a par, the nominal premium of £10 9s. 2d. per £100, a par 
 which would allow exchange to get up to nearly 13 per cent before the pre- 
 cious metals would begin to be exported. 
 
 The highest price occurred from September to the close of 182.5, the very top 
 of the speculative period, with a currency redundant, and just before the cele- 
 brated panic. The price was 5s. Id., giving for the value of the dollar 
 4s, 2|d..6, or nearly ("within 4-10 of an i of) 4s. Sd., and a nominal premium 
 of £,6 Is. 4d. per dElOO, hence, the average par of 8 per cent would, at that 
 time, almost have fulfilled the condition of an exportation of silver. The mean 
 between the two extremes coincides very nearly with the ordinary average, as 
 may be seen by comparing the annexed table with B, No. 2, of Appendix. 
 
 Highest.... 
 Lowest. ... 
 
 Price of 
 silver. 
 
 Value of 
 dollar. 
 
 Nominal 
 premium. 
 
 Value of JlOOiu 
 Halifax currency. 
 
 s. d. 
 5 1 
 4 lOj 
 
 s. d. 
 4 21.6 
 4 1 .6 
 
 £ s. d. 
 
 6 14 
 
 10 9 2 
 
 £ g. d. 
 117 17 Of 
 122 14 7i 
 
 Mean 
 
 4 UJ 
 
 4 3 .1 
 
 8 5 3 
 
 120 5 10
 
 21 
 
 is, unless the par has been disturbed by an advance, above 
 the ordinary rate, of the price of silver ; and wlien tlie pre- 
 mium is nominally 9| per cent, as now, (August 1832,) it 
 is, in fact, only 1| per cent above the ordinary par. The 
 price of silver in London, according to the last (piotation, 
 was as low as at the lowest period, namely, 4s. lOfd. 
 This would give nearly 10| per cent as the par, and the 
 present real exchange actually at nearly 1 per cent dis- 
 count. 
 
 From these considerations it appears to me highly 
 inexpedient to fix a par of exchange. It leads to faulty 
 language, and to much inconvenience, and, as far as I can 
 discern, answers no good purpose. In changing its lan- 
 guage from " so much per cent premium'^ to " so muck 
 " sterling per Spanish dollar''^ the Government has acted 
 wisely ; and there appears no good reason why the im- 
 provement should not be extended to the language of ex- 
 change in general. If, however, it be determined to make 
 use of a par of exchange, from which all fluctuations shall 
 be made to start, it would be extremely desirable that 
 such par should be exact. But it has already been seen, 
 that the par of exchange between silver-using America and 
 gold-using England must be liable to perpetual variation ; 
 we are, consequently, constrained, as the best course open 
 to us, to fix upon the par of exchange, which the average 
 price of silver, taken over a period sufficiently long to in- 
 clude fluctuations from highest to lowest, is found to indi- 
 cate. In other words, if there exist no unvarying par of 
 exchange to fix upon the approximate par of exchange, 
 namely, 8 per cent premium, or adding what is afterwards 
 necessary to bring the whole into currency 20 per cent,* 
 the rules of conversion being, — to sterling add one-fifth to 
 give currency, — from currency deduct one-sixth to give 
 sterling. 
 
 It does not appear, that any, the slightest, inconvenience 
 could arise, were this change brought about at once, — were 
 the language of exchange, — for it is a case of naming only, 
 and has nothing to do with the state of the currency, — to 
 be altered. It would not interfere with existing contracts, 
 as all are here made in currency of four dollars to the £1, 
 and the £1 of four dollars would still be the currency of the 
 country. It would not augment taxation by affecting the 
 
 * Sec the Aiia'ysii in the last page.
 
 22 
 
 » 
 
 crown duties, inasmuch as the rule of conversion, by which 
 the sterhng crown duties are converted into currency, is 
 fixed by an order in Council, and in fact, at this moment, 
 departs equally from the customary par, and from truth, 
 being more than the first and less than the last by about 
 4 per cent.* 
 
 Occasionally, it may be urged, some few contracts made 
 in England in sterling, are paid here in currency, such for 
 instance as freight. In the majority of these cases, it is 
 stipulated, payable at the actual premium of exchange at the 
 time being. When, however, either through ignorance or 
 inadvertency, such stipulation is omitted, the creditor 
 receives less than his due, a species of injustice of which 
 law should, in no case, be made the sanction. Sometimes 
 the payment of freight in currency is conventional — is 
 nnderstood and allowed for by all parties concerned. In 
 this case, if competition had reduced freight to a certain 
 rate so payable, it would have reduced it 8 per cent more, 
 if payable at the ordinary premium. I need not expatiate 
 any further on the par value of our currency. If I have 
 failed to make myself understood, I must beg the reader 
 to go over, once more, the propositions I have endeavoured 
 to elucidate and which I now recapitulate. 
 
 First, That it is the quantity of pure silver contained in 
 the £1 currency, at the English market price, that deter- 
 mines the par for the time being, {ante page 18.) 
 
 Second, That as the market price of silver like that of 
 all other commodities, is perpetually fluctuating, there can 
 be no fixed par of exchange, {ante page 18.) 
 
 Third, That if it be deemed adviseable to establish a 
 par from which all fluctuations shall start, and if there be 
 no par to be found at all times correct ; then we are con- 
 strained to adopt the best course open to us, and fix upon 
 the approximate par, {ante page 21.) 
 
 Fourth, That the average price of silver taken over a 
 period sufficiently long to include fluctuations, from the 
 highest to the lowest will indicate with perfect accuracy 
 the said approximate par, {ante page 21,) and lastly. 
 
 Fifth, That 4 l|s. 3 is the average value of the dollar as 
 
 * The people of this country and the popular press ever jealous— and wisely 
 —of any attempt of the mother country at taxation, are not aware tlint whcii 
 the mode of computing, the Spanish dollars was changed from 4s. Od. to 4s. 4d. 
 at the Custom HousCj 4 per cent, was added to the crown duties.
 
 23 
 
 exhibited by the above process, giving in the erroneous lan- 
 guage now in use 8} per cent premium, as the average 
 value of our currency, or including the addition which is 
 necessary to bring tiie whole into currency 20 4 2| per 
 cent, £100 sterling being actuftlly worth £120 4s. 2?,d. 
 {ante page 20, and appendix B. 2,) but as, for the last few 
 years, owing to the steadier state of the English currency, 
 4s. 2d. is the average value of the dollar,it would be expedient 
 to adopts per cent as the approximate par, {ante jjage^O.) 
 
 Section II. 
 
 On the Effects of Paper Money, on the Nominal Exchange. 
 
 In the foregoing section, I have endeavoured to illustrate 
 the two circumstances liable to influence the nominal ex- 
 change, and so produce fluctuation in the par value of our 
 currency. These two circumstances we have seen are, 
 firsty fluctuations in the market price of bullion, second^ 
 changes — generally reductions in the weight and fineness of 
 the coins. It is but seldom the second occurs, one instance 
 only (page 19,) having been brought within our notice; 
 the first, on the other hand is never wholly inoperative 
 In this section the effects on the nominal exchange of the 
 use of paper money in either of the interchanging countries, 
 will be considered. 
 
 Paper money has several inconvenient properties inse- 
 parable from it. For our present purpose, however, it is 
 only necessary to mention one, namely, liability to excessive 
 issue, and consequent depreciation. 
 
 Under proper regulations and restrictions, this bad pro- 
 perty, and indeed all others, of paper money may be almost 
 nullified ; it is only where a vicious system of banking 
 exists that it amounts to an evil of any moment. A paper 
 currency is either irredeemable, — by some writers called 
 compulsory — or convertible. 
 
 An irredeemable paper currency is where the issuers are 
 exempt from paying coin for the same at the will of the 
 holder. A convertible paper currency speaks for itself; it 
 is the reverse of the other. 
 
 The issue of paper money is profitable. It is a means 
 of borrowing so much capital as it represents ; hence the 
 temptation to issue largely is very great.
 
 24. 
 
 So long, however, as coin can be demanded at the will of 
 the holder, a limit exists to the evil of excessive issues and 
 consequent depreciation.* When, on the other hand, the 
 obligation on the issuing banks to pay in bullion is removed, 
 there is no limit to depreciation. It must become ex- 
 cessive. 
 
 The limit to excessive issues where the currency is con- 
 vertible, may be readily explained. 
 
 The effect of depreciation is to raise prices of all commo- 
 dities and among the rest of gold and silver. Still, how- 
 ever, the sovereign will only lawfully purchase as much as 
 £1 in paper money, although the gold which it contains is 
 worth, let us suppose £1 Is. It, hence, becomes profitable 
 to convert sovereigns into bullion, and they are either car- 
 ried to the melting pot on account of the holders or are sur- 
 reptitiously sold to the melters at the supposed premium of 
 5 per cent, less the cost and profits of melting. This highly 
 profitable trade begets a disposition to carry paper to the 
 banks for coin, coin is accordingly demanded, until the 
 volume of the currency is again reduced ; and bullion de- 
 clines to a price at which melting is no longer profitable. 
 
 Besides the melting of the coin, when it is more valuable 
 in the shape of bullion, there is another check upon depre- 
 ciation in its profitable exportation. 
 
 An advance in the price of bullion, has the effect of turn- 
 ing the foreign exchanges against the paper- using country. 
 One hundred sovereigns in England will purchase only 
 £100 worth of commodities, though the gold they contain 
 is worth — as in the case already supposed — say £105 in 
 the depreciated paper currency. Sent abroad, however, and 
 exchanged for foreign metallic currency, the sum will pur- 
 chase a bill on London for £105, less the cost oj transmitting 
 the precious metals, f In this case the same motive exists to 
 demand coins at the banks and the same effects follow. By 
 
 * Many writers are in the habit of considering the circumstance of a paper 
 currency being convertible at the will of the holder, a perfect guarantee against 
 depreciation. So it would be if perfect cojivertibility could exist. The theory 
 is correct only as far as allowances are made, for the checks necessarily oppoied 
 to perfect convertibility ; when applied practically, they must be allowed for 
 like resistance and other countervailing forces in mechanics. It may be well in 
 elementary treatises to leave out their consideration at first, but their operation 
 should be subsequently fully treated of; as this essay is practical they are entered 
 into at once. 
 
 t For the real exchange and its limits, see next section.
 
 25 
 
 the operation of one or both of the above checks a favor- 
 able turn is given to the exchanges, — bullion declines in 
 price, — the currency is pro tanto raised to, or nearly to par, 
 and both melting and exportation cease to be profitable. 
 The natural limits, therefore, to the depreciation of a con- 
 vertible paper currency are the cost of transmitting coin to 
 adjacent countries or of melting it ; wliicliever of the two 
 happens to be least. 
 
 VVhen Governments permit the melting of coin, and 
 the free exportation of coin and bullion, as the Government 
 of Great Britain now wisely does, there is but a very trifling 
 expense incurred in distributing the precious mr.tals between 
 contiguous and circumjacent countries, in the exact quanti- 
 ties required by their respective trades ; very trifling, there- 
 fore, will be the depreciation to which the currency of 
 Great Britain or any such free country is liable. When, 
 however, difficulties are thrown in the way, when penalties 
 are instituted against the exporters of coin and bullion, and 
 against melters, the object has been entirely defeated. 
 Neither melting nor exportation have ever been stopped 
 thereby ; they have merely been thrown out of respectable, 
 into disreputable hands, and rendered more costly, inas-. 
 much as something has to be added to compensate risk of 
 infringing the law, in addition to cost of freight and insu- 
 rance. Even if the penalty for infraction be imprisonment 
 or death, and not fine or forfeiture, it is still estimatable in 
 money, because, there is no penalty men will not render 
 themselves liable to for money, especially taking into consi- 
 deration the chances against detection. 
 
 This increased cost of distributing the precious metals gives 
 an increased latitude to depreciation — to the profitable issue 
 of notes ; hence, we may easily understand, why paper 
 issuing banking establishments have always raised an out- 
 cry against the permission to deal with money as with a 
 commodity ; and called for sanguinary and cruel penal laws 
 against a useful class of men— the dealers in bullion. Any 
 natural or other circumstance apart from systems of banking, 
 which increases the cost of distributing the precious metals 
 also extends the limit of depreciation : — war by raising 
 freight and insurance ; seasons by doing the same. On 
 these it is not necessary to expatiate in this place ; we shall 
 treat of them more fully when we come to inquire into the 
 real exchange. The limit may also be extended and do- 
 
 D
 
 26 
 
 preciation promoted by any regulation, which throws diflTi- 
 cuity, or trouble in the way of taking notes to be changed. 
 The closing of banks at hours and on days, at and on which 
 only^ certain classes can attend to get their notes changed. 
 This, it may be objected, may be obviated by employing 
 others who can attend ; to which it may be replied, that the 
 employment of others is attended with risk, small it may 
 be, but at all events sufficient to stand in the way of the 
 perfect convertibility of paper money. 
 
 To give a bank an exclusive privilege to supply too large 
 a district, also throws an enormous difficulty — distance — in 
 the way of conversion, including risk of conveyance ; it may 
 amount quite to an assignable premium. 
 
 The last item I shall notice under the head of impedi- 
 ments in the way of convertibility, is a small note currency. 
 Spread over a considerable district and necessarily in many 
 hands, small notes have a great tendency to fill up the chan- 
 nels of circulation, to an extent to produce depreciation. 
 No one individual possesses enough to make it worth 
 his while to carry them to a distance to be changed 
 for coin,* unless the depreciation be sensibly great; 
 and, the circulation of a district of moderate extent, 
 does not offer any inducement to a money dealer to set up 
 in the neighbourhood. The whole business would not pay 
 him. With a sound system of banking, however, small 
 notes in the opinion of many eminent men, and among the 
 rest of the late Mr. Ricardo, may be allowed currency, with- 
 out producing inconvenient results. When combined with 
 monopoly of a large district,! with restrictions in the 
 way of exportation and melting — and with vexatious 
 delay begetting regulations at the banks and changing 
 houses, paper money may produce and has produced de- 
 
 * I leave out of the account the case of suspected stability, I assume that 
 perfect faith exists in the safety of banks, inducements to demand coin arising 
 out of the state of the currency are alone treated of, 
 
 \ Had Mr. Attwood and the currency mongers succeeded in introducing a 
 small note currency, it is most likely, that combined with the exclusive privi- 
 leges of the Bank of England, the British currency would have been per- 
 manently depreciated — prices would have been permanently raised — and the 
 exchanges permanently against her, oiir par would have been reduced nominally, 
 in the ratio of the depreciation — if they had succeeded to the extent of calling 
 *• half a crowa three shilliogs," currency and sterling would then coincide.
 
 27 
 
 preciation, although nominally convertible at the will of tlie 
 holder. 
 
 An instance of an expedient to create delay resorted to 
 by the Bank of England, merits a place here. When silver 
 was a legal tender to any amount, the Bank of England, 
 during the prevalence of an extraordinary demand for bul- 
 lion, actually paid in sixpences ; hence demanders gave 
 up the point in despair, and the currency continued depre- 
 ciated — the foreign exchanges continued against England. 
 This case is not without a parallel here. When large 
 demands have been made upon the Bank coffers, they have 
 made their payments in the small and depreciated coins. 
 These coins not being available for the purposes for which 
 they were demanded, have been returned to the banks, to 
 the manifest promotion of paper issues. But dollars or half 
 dollars were absolutely required, hence those who required 
 them, were constrained to pay a premium rather than go 
 w^ithout. Now will any one affirm that this premium was 
 created wholly by the existence of the depreciated coins, 
 unaided by any excess of paper ? Were not the depreciated 
 coins, rather a tool in the hands of the Banks, wherewith to 
 force their notes into circulation, and sell their stock of 
 sound coins at a profit, over the expense of bringing them 
 from the United States, where they are in the habit of re- 
 .•eetfting them in payment for exchange ? and would it not 
 be well to deprive the Banks of such an instrument of in- 
 jury ? I cannot anticipate any but an affimative answer to 
 these questions. If the debased coins were the sole cause, 
 dollars and half dollars would be at a permanent premium, 
 it is only when other causes concur — and what so obvious 
 as an excess of paper — that such premium exists. I have 
 extended my remarks on the possibility of a convertible 
 currency being depreciated, to a sufficient length, let us 
 now consider the more obvious case of an irredeemable or 
 compulsory paper currency. 
 
 It is well known to the reader, that the run upon the 
 Bank of England produced by a fear of invasion in I70G-7, 
 reached such an alarming extent in the early part of 1797, 
 that on Saturday, the 25th of February, only i:i,-272,OOU 
 remained in her coffers, and as the run was expected to 
 continue through the following week, an order in Council 
 was issued on the intervening Sunday, prohibiting the 
 Bank of Englnnd from paying its notes in cash, until the
 
 28 
 
 sense of the Commons could be taken on the subject. Par- 
 liament soon after continued the restriction, " till six 
 months after the signature of a definitive treaty of peace." 
 The return to cash payments did not take place till 1821. 
 In 1817, the Bank was fully able to resume paying cash ; 
 it was not however, till 1819, that 59 Geo. III. c. 78, called 
 Mr. Peel's Bill, v/as passed. This Act ordained, that cash 
 payments should be resumed in 1823, but as the Bank had 
 been some time preparing for the event, they commenced 
 specie payments on the 1 st May, 1 82 1. Hence the period of 
 restriction and depreciation — halcyon days to the Bank, 
 alas never to return ! — may be said to have endured twenty- 
 four years. 
 
 As soon as the Bank Directors began to feel the power 
 with which the Bank Restriction Act invested them, they 
 fully availed themselves of its advantages. Their issues 
 were pushed to a great extent indeed, and in Oct. 1813, 
 the currency had reached the enormous depreciation of 
 27 ro percent. In the appendix (G) will be found a table 
 shewing the annual average depreciation of the British Cur- 
 rency from 1800 to 1821, and it is to this table, the reader 
 must refer for an explanation of the state of the American 
 exchanges during the period. 
 
 During the American War, 1812 — 1815, exchange mr^^ 
 London was at a heavy discount. Some attributed it to an 
 extensive circulation of army bills, others to other causes. 
 It is, however, evidently in the state of the English cur- 
 rency at the time that the cause is to be found. 
 
 At the extreme height of the bank restriction, when the 
 currency was 27i-o per cent depreciated, £100 drawn -ia-.*^^ 
 London would only be paid in paper money, worth £72, 2s. 
 in bullion. Had the £100 bill been paid for in Canada, in 
 notes equally depreciated, no disturbance of the ordinary - 
 course of exchange would have taken place ; but hard dol- 
 lars had to be given, no more hard dollars, therefore, 
 w^ould be given than would discharge the debt, by send- 
 ing them home, expense of sending home included, of 
 which in next section. At the period to which we allude 
 silver was worth 6s. lid. per ounce, giving for the value of 
 the dollar 5s. 9|d. A debt of 5s. Old. sterling, therefore, 
 could be paid with 5s. currency, hence £100 sterling could 
 be paid with £86, 12s. lOd. currency. But £86, 12s. lOd. 
 currency, at the assumed par, (assumed then as well as
 
 29' 
 
 now,) is £77, 19s. 7d. sterling, hence a nominal discount 
 of 22 per cent was necessary to bring down our metallic 
 currency to the par of British paper. Thus, 
 
 £100 sterling. 
 Discount, 22 5 
 
 £77 19 7 
 Addone-ninth,.., 8 1,^ 3 
 
 £86 12 10 
 
 The proportionate value between gold and silver in the 
 Lopdon market was then nearly what it is now, namely, 
 about 1 to 15.52 per cent, hence, gold being considered the 
 standard of English money, the bullion value of the dollar 
 was the same as now. 
 
 Gold, £5 8 per ounce. 
 
 Silver, 6 11 ditto. 
 
 Hence, 
 
 As £5, 8s. : 6s. lid. : : £S, 17s. lO.Jd. : 4s. ll^d. 
 
 On that supposition let us try the value of £100 sterling in 
 our currency, less the amount of depreciation. 
 
 £100 sterling. 
 /^Tx-.- Less highest depreciation, 27 18 
 
 Metallic value of £100, £72 2 
 
 Add one-fifth, 14 8 5 by rule, page ( .) 
 
 £86 10 5 
 
 To produce this result would, in our language of ex- 
 change, require a discount of 22^ per cent, thus agreeing 
 very nearly (within n, per cent) with our first calculation 
 at the market price of the dollar. 
 
 Depreciation of the currency at home is, in its effects, 
 equivalent to our enhancement or appreciation of the cur- 
 rency here ; and, vice versa, depreciation of our currency is 
 equivalent to appreciation of the currency of Great Britain. 
 Tlie first determines the exchanges against England, the se- 
 cond in her favour. I believe I have now gone through all 
 that need be said on the effects, on the nominal exchange, of 
 a paper currency liable to depreciation. It affects the ex- 
 change mediately through the piece of silver, and is, in fact, 
 only a case under the general cause mentioned in the first 
 section of this chapter, namely, " Fluctuations in the Mar- 
 *' ket Price of Silver." My reasons for omitting its discus-
 
 so 
 
 sion in that place, are, first, the circumstance just mention- 
 ed, namely, it being a sub-cause only, coming under a more 
 general rule ; second, I wished, for the sake of perspicuity, 
 to confine our disquisitions to the metalhc value of our cur- 
 rency ; and third, its real importance demanded notice by it- 
 self. 
 
 We shall now be better able to understand the question 
 of the real exchange, wiiich will accordingly form the sub- 
 ject of the third section of this chapter. 
 
 Section III. — The real Exchange. y 
 
 The two sections just completed, are devoted to the con- 
 sideration of the circumstances by which the nominal Ex- 
 change is liable to be affected. We are now prepared to 
 understand the real exchange, or that premium or discount 
 which is generated by the circumstances of supply and 
 demand. 
 
 The exports of every country form its purchasing power 
 — the fund by means of which it supplies itself with those 
 commodities, w hich it is either wholly unable to produce, or 
 at least cannot produce, so advantageously as purchase. 
 The value of tliese exports has to be drawn for — this then 
 forms the supply of bills of exchange. The demand is 
 created by the necessity of paying for imports. When, 
 therefore, the imports and exports amount to the same sum 
 — when in other words the debts and credits are equal, the 
 real exchange will be at par. But it must evidently be of 
 rare occurrence that, in any country, the imports exactly 
 balance the exports. It is the difference which creates the 
 real exchange ; let us seek an illustration. The year 
 1830 was one of extraordinary production in America. Of 
 wheat and flour especially, the surplus was very great. 
 The advancing averages in England offered every induce- 
 ment to export as early as possible ; the spring export of 
 grain and flour in 1831 was accordingly greater than in 
 any previous year. The drafts for these shipments come 
 into the market early in the season, even before the open- 
 ing of the navigation, and as when the importation com- 
 menced, it was found to be by no means excessive, the real 
 exchange continued at a discount in New York up to the 
 middle of April, and in Canada up to the middle or latter 
 end of June. Indeed, in New York, it sunk to 7| per
 
 51 
 
 cent, {h per cent, discount) in June after having been above 
 par (8 per cent.) — see Appendix. 
 
 By looking at B 2 (Appendix) it will be found, that the 
 par value of our currency was 8 per cent, premium, during 
 1831. Indeed from August to December the par sunk, by 
 the advance in the price of silver and the consequent en- 
 hancement of our currency to 7| ; up to the middle of April 
 the average rate of exchange was 6^' — ranging from 6 per 
 cent, to 7§. Correcting these rates by 8 per cent, the par at 
 the time, we have real Exchange li discount, with a range 
 from 2 to | per cent. 
 
 Of the total exportation of the United States of America, 
 cotton alone forms nearly one half * say i-o"o • Of course, the 
 effects of fluctuations in the quantity exported of so impor- 
 tant an article as cotton are most marked ; accordingly we 
 find that a deficiency in the exports of cotton shows itself at 
 once on the exchanges in the shape of an advance; an in- 
 crease in the export on the other hand produces the opposite 
 effect, while there existed every inducement to export wheat 
 and flour, the state of the cotton market in England was far 
 from encouraging. This state of the market combined 
 with a low rate of exchange did away with all inducement 
 to ship, and by the 1st July, the exportation of cotton was 
 106,061 bales deficient compared with 1830. This carried 
 with it its own remedy. The supply of bills of exchange 
 fell short of the demand — their price — the rate of exchange 
 — accordingly rose above 10 per cent, or deducting the 
 nominal exchange, more than two per cent. 
 
 Over a certain point, however, the real exchange cannot 
 advance — it is subject to its own peculiar limit ; what that 
 limit is, is by no means difficult to discover. 
 
 " It is very easy to see, what is the limit to the price of 
 " bills, called in the language of merchants the exchange. 
 " The motive to the purchase of a bill is the payment of a 
 
 » Cotton, 2G,COO,000 
 
 Wheat, Flour, &c G,000,000 
 
 Tobacco, 5,000,000 
 
 Rice, 2,500,000 
 
 Pork 1,500,000 
 
 Timber, 1,700,000 
 
 Other small articles 12,400,000 
 
 55,700,000 
 -American Almanack, 1830,
 
 S2: 
 
 " debt. The merchant, however, on whom it is incum* 
 " bered to pay a debt in Holland, can pay it without a bill, 
 " by sending the metal. To send the metal is attended with 
 " a certain cost. If he can obtain the bill without paying 
 " beyond this cost, he will purchase the bill. This cost, 
 " therefore, is the utmost amount of the premium which he 
 " will pay for a bill, and tite limit to the rise of its price. 
 " As the cost of sending the metal which is a great value in 
 " a small bulk, is never considerable, the (real) exchange 
 " can never vary from par, to a considerable amount." 
 {MiWs Political Economy^ M Edition, p. 187.) The truth 
 of the above doctrine, wdiich Mr. Mill has so happily and logi- 
 cally expressed — will at once be acknowledged by every 
 practical merchant. There is scarcely one of us, who has, 
 not occasionally made it a matter of calculation whether it 
 would not be better — more profitable, all circumstances con- 
 sidered — freight and insurance incurred, less interest saved 
 — to pay for our imported goods with coin rather than with 
 bills of exchange at high rates. And when our determina- 
 tion has been in favor of an exportation of the precious me- 
 tals, it has invariably been because the expense of transmis- 
 sion has been something less than the rate of exchange. 
 
 Every exportation of coin or bullion, takes out of the 
 market a demander of exchange, accordingly we find that 
 when the transmission of the precious metals has gone on 
 for some time, an effect on the exchange is the consequence 
 — a decline takes place, until it reaches a point at which, 
 exportation ceases to be attended with profit, — is no longer 
 a saving ; and then it stops. 
 
 I have already stated, that above a certain point the real 
 exchange cannot long continue, being limited to the cost of 
 transmitting the precious metals. As that cost, however, is 
 subject to variation, it follows that the point above alluded* 
 to is by no means stationary. 
 
 It is chiefly by an increase of freight and insurance, that 
 the cost of transmitting the precious metals is enhanced. 
 It may be well therefore to state the leading circumstances 
 usually operating upon freight and insurance. They are 
 first, distance ; second, season ; third, war ; there is also a 
 fourth cause independent of freight and insurance, namely 
 legislative interference. 
 
 First, Between countries situated with respect to each 
 other, as are England, France, Holland, Germany, &c. the 
 expenses of freight and insurance are exceedingly small, be-
 
 3:5 
 
 twcen those countries accordingly the real exclian2;e is also 
 small ; and moreover, owing to the facility of distributing 
 the supply of bills between the chief connnerciai cities in 
 the exact proportion required, very steady. Between 
 countries situated at a greater distance, as England and 
 Anierica,the expenses are greater,exchange will accordingly 
 be found to lluctuate to the more extended limit. 
 
 Second, In the summer season when freight and insu- 
 rance, especially the latter, are low, in the absence of other 
 impediments, the cost of transmission from America will be 
 small, perhaps not over H to I2 per cent, that is, making 
 allow ance for the saving of interest on the thne a bill would 
 have to run. In the winter season, however, freight and in- 
 surance may both advance to an extent to enhance the 
 cost of transmission to fully 3 or 4 per cent. If a simulta- 
 neous decline take place in the price of silver, so as to 
 advance the par. above the ordinary level, it may happen 
 that 13 or 14 per cent premium, will scarcely fullil the con- 
 ditions of an exportation of the precious metals. This was 
 the case in the winter of 1823, the price of silver was low in 
 Kngland, making our par 9^ per cent, so that allowing 3| per 
 cent for winter cost of transmission, it would require ex- 
 change to have advanced to 13| or 14 per cent before an 
 inducement would exist to prefer an exportation of dollars 
 to the purchase of a good bill. Throughout 1823, however, 
 the state of export and import favored a low exchange, so 
 that the operation of the check was never required. As 
 a further illustration, but in an opposite direction, I take 
 the state of things last year, (1831,) By the higher price 
 of silver our currency was raised in value, requiring only 8 
 percent (instead of 9^') to raise it to the nominal par. The 
 rate of exchange in July, August, and September, ranged 
 from 9| to 10| per cent premium, shewing a mean real ex- 
 change of 2| per cent. An exportation of coin accordingly 
 -took place to the extent of $5,000,000, without having any 
 material immediate elfect on the exchange ; lor in the (b!- 
 lowing month exchange rose to II per cent. Freight and 
 insurance, however, was rising to their winter rates, hence 
 the limit was extended. The two remaining circumstances 
 allecting the cost of transmitting the precious metals do not 
 require to be treated at great length. 
 
 Third, War, "It appears from the evidence annexed to 
 " the Report of the Bullion Committee, that the expense 
 " of carrying gold from London to Hamburg, w hich pre- 
 
 E
 
 34. 
 
 " viously to the war only amounted to 2 or 2| per cent, had, 
 *' in the latter part of 1809, amounted to 7 per cent, shovv- 
 " ing that the limits, within which fluctuations in the real 
 " exchange were confined in 1809,were about three times as 
 " great as those within which they were confined in 
 " 1773." — Supp. Encyc. Brit. art. Exchange. 
 
 It is easy to see that the chances of suffering from the 
 " acts of the King's enemies," as the policies have it, 
 are greatly augmented by distance ; here war would pro- 
 duce much more marked effects on the exchanges of Ame- 
 rica, than of European countries. 
 
 Fourth., The effects of legislative restrictions in the 
 way of a free exportation of the precious metals have al- 
 ready been treated of in the previous section ; as they in- 
 crease the cost of transmission, so they extend the limit of 
 the real exchange. 
 
 When exchange has advanced sufficiently to fulfil the 
 conditions of an exportation of the precious metals, then 
 comes into operation another result productive of a decline 
 in the exchanges. I mean an increased activity in the ex- 
 port trade generally. 
 
 I would here remark that exportations of coin, bullion, 
 produce or manufactures produce their effects in the same 
 way. First J by diminishing the demand for exchange, as 
 when an importing merchant remits the precious metals or 
 produce, instead of buying a bill of exchange ; Second, by 
 increasing the supply, as when produce and coin or bul- 
 lion are shipped in the ordinary way and drawn against. 
 Still, however, it is the same phenomena, though brought 
 about by the agency of different classes of men. 
 
 In the spring of 1831, as we have seen, exchange was 
 low. Exportation, accordingly, was checked in all those 
 commodities upon which the state of the consuming markets 
 did not operate as an inducement. The falling off of cot- 
 ton alone was very great — at one time exceeding in value 
 six millions of dollars. Demand for exchange continued 
 the same ; but as the supply was diminished, exchange ad- 
 vanced. It advanced, as we have seen, to a height suffi- 
 cient to furnish the motive to transmit the precious metals ; 
 it did more, — it supplied another motive, — it made the ex- 
 portation of commodities profitable. An article which, 
 when exchange is at If below par, would be shipped to a 
 moderate extent only ; would be extensively shipped when 
 exchange was at 2 per cent premium. Such was the case
 
 35 
 
 with cotton. The tlcficiency which at the end of June was 
 156,000 bales, compared with the previous year, was gra- 
 dually reduced, till at the end of September, — the close of 
 the cotton year, — the deficiency came under 70,000 bales.* 
 
 We have seen that the increased cost of transmitting the 
 precious metals towards the winter, stopped the export of 
 coin before it had brought down the exchange. What the 
 exportation of bullion, however, was unable alone to ac- 
 complish, it succeeded in doing aided by the continued 
 shipments of cotton. In November, exchange at New 
 York on London began to decline, and during the winter it 
 continued at about 9| per cent. In June of the present 
 year, the exportation of cotton had recovered itself, so that 
 it exhibited an increase compared with June 1831, exactly 
 equal to the deficiency of that period compared with June 
 1830, — hence, exchange would have decHned, had it not 
 been for an increased importation, with a diminished ex- 
 portation of flour and other articles, f 
 
 The exchange between Canada and New York is pure- 
 ly a real exchange. The currencies of Canada and of the 
 United States are the same, under different denominations ; 
 the premium or discount thereon, therefore, is regulated by 
 the principle of supply and demand, limited by the circum- 
 stances already fully described. 
 
 The demand for drafts on New York arises from the fol- 
 lowing circumstances : — 
 
 First, A considerable portion of the exports from Cana- 
 da consist of ashes, lumber, 'and other productions of the 
 United States. The value of these exports has, for the 
 most part to be remitted to New York, and thus creates a 
 demand for exchange. 
 
 Second, Produce is shipped from New York, Norfolk, 
 &c. to the West Indies on Quebec account. 
 
 Third, West India produce is sold in the Canadian mar- 
 kets to a considerable extent for merchants resident in 
 Newfoundland, Nova Scotia, and New Jkunswick, part of 
 the proceeds of the same being remitted to Nev/ York on 
 their account. 
 
 Fourth, Remittance has also to be made for the pre- 
 
 * See Appendix D. 
 
 f Since tliis was written, the stagnation of trnde resulting fioni cholcia lias 
 produced a I'^iipurury decline in exchange at New York.
 
 3G 
 
 iniums of insurance on policies, under-written at New 
 York for Quebec account. 
 
 TIic supply of bills on New York arises, — 
 
 First, and chielly out of the circumstances of a large 
 quantity of government and private exchange, on London, 
 being sent to New York to be disposed of, for Quebec and 
 Montreal account ; Second, The losses at sea on the risks 
 taken at New York have to be drawn for. 
 
 If the drafts on London for the American produce sold 
 at and shipped from Quebec were at once transmitted to 
 New York, instead of being sold in the Canadian markets, 
 of course the first named source of demand would balance 
 a considerable portion of the fi,rst named source of supply. 
 
 The second and third sources of demand might also be 
 considered to be about sufficient to absorb and neutralize 
 the remaining portion of the first source of supply ; thus, — 
 A cargo of rum or sugar is to be disposed of here, the pro- 
 ceeds of which are to be invested in produce at New York 
 or Norfolk. The merchant sells the cargo, sends his order 
 to his New York or Norfolk agent, buys a bill of exchange 
 on London, sends it to his agent, and so closes the account 
 without the intervention of a draft on New York in any 
 shape. 
 
 When the losses at sea are placed against the premiums 
 paid, it is probable the balance is not very great. From all 
 these considerations, it appears that, on the whole transac- 
 tions, the drafts and credits between New York and Cana- 
 da will about balance, and the money rate of exchange on 
 the average will be at par. I say money rate of exchange, 
 because when exchange, taking the circumstances of sup- 
 ply and demand alone into consideration, should be !\tj)ar, 
 and would be so if paid in cash, a premium of 1 to IJ per 
 cent is given, in consideration of the seller granting a long 
 credit to the buyer ; this premium, therefore, must be con- 
 sidered rather as a guarantee commission than as a pre- 
 njium of exchange. 
 
 Supposing, then, that the debts and credits between Ca- 
 nada and the United States nearly balance, and that the 
 rate of exchange on the average is at par, — that is, fluctu- 
 ates as much one way as the other, — allowing for the 
 " guarantee commission" already described, — it follows, 
 that the rate of exchange at any particular time will be re- 
 gulated by the rate of exchange at New York on London. 
 At this moment the transmission of bills to New York
 
 would lie allondetl with loss; few or none arc, (horefore, 
 sent, and the supply ol" bills on New York in conse(iuenco 
 is sn)all. The rate has accordin<:;ly risen to 3 a 4 per cent 
 premium. In July and August 1831 the exact converse 
 existed. Bills on London were higher at New York than 
 at Quebec. A large amount was sent tlown, enough, in- 
 deed, to bring the money rate of exchange on New Yoi k 
 to a discount. New Yoik is, in fact, the money market of 
 America, the great arbitrator of" the rate ofexciiange. To 
 her the drafts for the cotton shipments of the South, as 
 well as the bread stuffs of the North, find tlieir way for 
 sale. The leading circumstances aftecting the real exchange 
 have now been enumerated ; it remains only to add a short 
 section on the combined effects of the various, and some- 
 times conflicting, circumstances described in the three past 
 sections. 
 
 Section IV. — The Computed Exchange. 
 
 The combined effects of the nominal and real exchange 
 have been sometimes called the " computed exchange ;" 
 with a few remarks on which I shall dismiss this alieady 
 (I fear) too tedious chapter. 
 
 The nominal and real exchange act sometimes in the 
 same direction, and sometimes in different directions. In 
 1823, the computed exchange (actual rate) was, as exhi- 
 bited in E, 4 of the Appendix, £6 7s. 3d. per cent. In this 
 case the nominal and real exchange operated in opposite 
 directions ; the former, owing to the exceedingly low price 
 of silver, was £9 12s. ll|d. per cent premium; and the 
 latter, owing to a very moderate importation, and a great 
 encouragement to exportation, by reason of the advances 
 in the prices of almost all articles of American produce, 
 was £3 5s. 8d. discount. In this case the computed ex- 
 change expresses the diflference between the real and no- 
 minal exchange. 
 
 In the following year the nominal and real exchange 
 acted in the same direction, the computed exchange ex- 
 pressing these s?»72.9, namely, £9 4s. 4d. per cent, being 
 made up of nominal exchange 8 per cent, and real exchange 
 £l 4s. 4d. per cent premium. On the average of the six 
 years ending 1828, the nominal and real exchange was the 
 same, their sum was the average late ofexciiange for the 
 period, namely, £8 12s. 3(\. the value of the cmren<y, —
 
 38 
 
 the nominal exchange for the same period was £8 5s. 4cl. ; 
 hence, the real cxcliangc, — that which was generated by 
 the state of supply and demand, — w^as only 6s. lid. per 
 cent, or rather over one-third per cent premium. On this 
 head no more need be said tlian to refer to Appendix F. 
 
 In the course of the above remarks we have adopted the 
 language forced upon us, — as we have already fully ex- 
 plained, — by the assumption of the par of 4s. 6d. sterling to 
 the dollar ; were that assumption abandoned, and the ap- 
 proximate par of 4s. 2d. the dollar adopted, £100 sterling 
 would be worth £120 currency, on which a premium of 1 
 per cent would be £1 4s. — of 2 per cent £2 8s. — and so 
 forth. A computed exchange of £22 8s. per cent would 
 t-iien be, — supposing the value of the dollar undisturbed, — 
 composed of nominal exchange 20 per cent and real 2 per 
 cent. I have already endeavoured to show, that it would 
 obviate much misconception w ere all assumption of a par 
 avoided, — were the dollar quoted at so many pence and 
 eighths ; or, what amounts to the same thing, the £1 ster- 
 ling at so many shillings and pence currency, as sovereigns 
 are now actually bought and sold. It would be interesting 
 could we exhibit the computed exchange during the period 
 of the Bank restriction : but I have not been able to meet 
 with a record of the actual rate of exchange in the years 
 1813 and 1814, only knowing that it was at a heavy dis- 
 count. It has already been explained that rather over 22 
 per cent discount was warranted by the depreciated state 
 of the English currency. If at that time exchange was at 
 a still heavier discount, — say at 25 per cent, — it would 
 show that the real exchange was actually depressed 3 per 
 cent by the then circumstances of supply and demand. 
 
 If, on the other hand, 20 per cent were the rate of dis- 
 count, it would be equal to a real exchange of 2 per cent 
 premium. As war was at that time being carried on in the 
 European Seas on a most stupendous scale, the rates of in- 
 surances between the Continental States were very high. 
 America seized the golden opportunity of annoying Eng- 
 land, while her hands were full, hence American insurances 
 were still further enhanced and the cost of transmission, 
 pj'o tantOj increased ; the limit of the real exchange was ex- 
 tended probably beyond what is usually supposed. A con- 
 stant supply of army bills concurred with a nominal ex- 
 change against England, to keep the computed exchange 
 at a heavy discount. Still wc are inclined to believe
 
 59 
 
 that the real exchange was at a considerable premium. 
 This, however, is mere surmise, introduced merely to 
 show how such things might be. I liave been unable, — as 
 I have already stated, — to meet with any documents from 
 which I could learn any thing of the then rates. 
 
 CHAPTER III. 
 
 On the Introduction of British Silver as the Money of Cir- 
 culation, and the Pound Sterling as the Integer of Account. 
 
 To assimilate the currency of the colony to that of the 
 mother country seems to have been a i'avourite project 
 with both Committees, and also with most of the witnesses 
 examined. In the sight of many merchants, too, connected 
 with the home trade, it hath also found favour ; chiefly, it 
 should seem, because calculation would thereby become fa- 
 cilitated. I cannot, however, discover that it was ever 
 contemplated to make British silver the only current mo- 
 ney ; it was merely to form the basis ; all the coins now cur- 
 rent to be freely exchangeable at rates to be determined by 
 the wisdom of the Legislature. Supposing the value of all 
 other coins compared with the Spanish dollar to be known 
 and fixed, it would, of course, only remain to declare at 
 what rate the dollar should be exchangeable for British sil- 
 ver. 
 
 Before T go into this question, connected with that of 
 the possibility of keeping British silver in the Province, I 
 beg to offer to the most serious consideration of the reader 
 a few observations on the general question of the expedien- 
 cy of such a change in our currency. 
 
 Of the money of account, the denomination would be 
 unchanged. We should still contract debts in pounds, shil- 
 lings, and pence ; but we should contract them in pounds, 
 shillings, and pence of greater intrinsic value ; hence, to ac- 
 quire the sanje nominal sum, we should have to give more 
 value — more of the produce of labour for it. 
 
 In parting with commodities sellers ought to content 
 themselves with a nominally lower price — lower by the 
 greater value of the money received, say 20 per cent ; and 
 buyers, in the case supposed, ought to use the greatest cau- 
 tion in their purchases, paying say 20 per cent less than be- 
 fore. Thus, suppose rum to be selling for 2s. Gd. a gallon 
 in the present currency, it would be worth only 2s. Id. in
 
 40 
 
 the new and more valuable currency. Now all this is both 
 tlicoroticaliy and practically true ; and if every individual 
 in the country could be made acquainted with it at once, 
 not the slightest inconvenience could, by any possibility, 
 follow the proposed change. Prices would, as it were, 
 nominally jump down at once, and so remain really and in- 
 trinsically the same ; and, if the measure were to be ac- 
 companied by a retrospective law, declaring that antece- 
 dent contracts not completed should be at the proportion 
 of £100 oX the new currency for every £120 of the old, all 
 would be done that the nature of the case would require. 
 
 In the answers of the several gentlemen examined by the 
 Committee of the Council, as to the question of expediency, 
 no very steady conception of the nature of the inconveni- 
 ence to be apprehended appears to have been entertained. 
 Their fears seem to have had reference rather to existing 
 contracts, than to mischief in bringing the measure about ; 
 though it must be evident, that as far as unfulfilled contracts 
 are concerned, inconvenience might be fully obviated, by 
 declaring so much of the new currency to be worth so 
 much of the old. The real source of disturbance shall be 
 presently explained ; in the meantime I beg to submit to 
 tiie reader the substance of the answers made by the seve- 
 ral witnesses to the following very important question : — 
 
 -' Are you of opinion that it would be advisable and be- 
 " neficial to assimilate the money of account and circulation 
 " with the money of account and circulation of the United 
 " Kingdom, and if so, for what reasons ?" 
 
 The gentlemen examined were the Cashiers of the two 
 Banks, Mr. Simpson and Mr. Freer ; Mr. Finlay, Mr. Le- 
 mesurier, and the late Mr. Leather, merchants ; and the 
 late Mr. Keys, a dealer in exchange. 
 
 Mr. Simpson doubted the expediency of the measure, and 
 spoke very decidedly of the inconvenience that would attend 
 the change, at least for a time* 
 
 Mr. Freer was not certain that it would be beneficial, he 
 apprehended that so great a change would be productive of 
 inconvenience. 
 
 Mr. Finlay spoke in its favor, but thought it should be 
 applied to all the Colonies ; he further expressed his opin- 
 
 * Mr, Simpson's answers throughout, are marked by superior knowledge o£ 
 the subject.
 
 41 
 
 ion, that as to the money of chculation, it matters little of 
 what it consists, &c. provided its intrinsic value in British 
 sterling were correctly fixed. 
 
 Mr. Lemesurier is decidedly of opinion, that the measure 
 in question would be beneficial and expresses no fear of 
 inconvenience. 
 
 The late Mr. Leather's evidence appears to be against 
 the measure, among other reasons, because it would injuie 
 vested interests. " I may instance it by myself," he said, 
 " I have a long lease of property at a rate of rent payable 
 " in tlie current money of the Province, to which the pro- 
 " posed bill would add largely." 
 
 Mr. Keys expressed his doubts of the expediency of the 
 measure, on the ground of the inconvenience and confusion 
 which must ensue. 
 
 It will be observed that Mr. Finlay's opinion is in favour 
 — Mr. Lemesurier's strongly in favour of the measure, and 
 the other gentlemen are more or less against it, though some 
 clothe their dissent in the language of doubt. It is worthy 
 of remark also, that all mention " inconvenience" as a 
 ground of objection, though not one endeavours to describe 
 that inconvenience, an omission which I shall now attempt 
 to fill up. In the first section of the preceding chapter, we 
 have seen, that in point of relative value sterling is to cur- 
 rency as £100 to £120. Hence in a change from the latter 
 to the former, prices should, and indeed would, fall one sixth. 
 But would they do so at once? — I answer — No. 
 
 The price of an article, as we all know, is regulated by 
 the free competition of buyers and sellers. Sellers will, 
 generally, take the current rate of the market, but they will 
 at the same time be on the alert, to avail themselves of 
 every advantage which the circumstances of the times afford 
 to obtain an advance thereon. A buyer. A, from a distance 
 comes into town either totally ignorant of the change, or 
 but ill informed of its extent. He finds that the rum for 
 which a week before his neighbour B, had paid 2s. 6d. his 
 merchant offers to him at 2s. 3d. or 2s. 4d. the change having 
 tak^rt place in the meantime, he buys it as a bargain, not 
 having been informed that he should only have paid 2s. Id. 
 for it. At length the day of payment arrives, B, satisfies 
 his creditor with 2s. Id. in the new currency, because he 
 contracted his debt before flic change took place. A, on 
 the other hand, finds himself obliged to pay the price he 
 had engaged to pay, because forsooth he contracted his 
 
 r
 
 42 
 
 debt it is assumed with his eyes open. Of course A, is only 
 deceived once, and as a knowledge of the matter spreads 
 around, the inconvenience subsides ; the difference of the 
 two currencies would soon become understood, and seller 
 after seller would reduce his price, till at last the theory 
 would be verified. 
 
 I have not as yet shown all the evil which would accom- 
 pany such a change. A low price promotes consumption — 
 an apparently low price will do the same thing. Rum at 
 2s. 3d. say, following 2s. 6d. would induce the country 
 buyers on credit to enlarge their stoclrs. Stocks in first 
 hands would accordingly diminish. This would be accor. - 
 panied by a real advance in the price of the article. Impor- 
 tation would l)e encouraged to an extent to reduce the price 
 of the article below the natural level, and most probably 
 involve merchants in losses, greater than their first gains as 
 above described. Coincident upon such losses, are mercan- 
 tile failures ; if numerous, aflfecting public confidence and 
 credit and reacting still further upon prices to an extent to 
 produce what is usually called revulsion, a state of things 
 to be avoided by all possible means. 
 
 There can I think be no doubt, that all sellers would for 
 a time be benefitted, by the delay which would take place 
 before prices assumed the new level, and among the rest the 
 Sellers of Labour. Wages would not at once subside. 
 Those who employed labourers w ould have in fact more 
 to pay than before ; but as the price of the produce would 
 be in continual process of reduction, profits would be less. 
 The change of money would, therefore, act as a most unfair 
 tax on profits. Wages are now quite sufficient to support 
 the labourer in comfort, any further advance would not be 
 desirable, as it would tend to substract from the induce- 
 ments — already too few — to the introduction of capital into 
 the colony. 
 
 From a very careful consideration of the question, I am 
 fully of opinion that it would require more than two years to 
 adjust prices and quantities to the new standard ; so long a 
 period of disturbance and fluctuation, appears to me a very 
 strong argument against any change in the money of ac- 
 count. I do not affirm that it should decide the question, 
 but if more can be urged against the measure, and nothing 
 but facility of calculation in its favor, I do contend the 
 project should be wholly abandoned. On the question, 
 whether British silver would be more likely to remain in-
 
 ,43 
 
 Canada than Spanish and American doHars, four \vitncsses 
 out of seven, were of opinion tliat it would, provided the 
 Spanish dollar were made exchangeable for it at 4s. 2d. 
 These were the Commissary General, he said 4s. Id. to 4s. 
 2d. Mr. Finlay, Mr. Lemesurier, and Mr. Freer. One, 
 namely, Mr. Keys, was equally decided that British silver 
 would not remain in the country. The late Mr. Leather 
 was doubtful, and lastly, Mr. Simpson, whose opinion de- 
 serves recording, for the clear, though necessarily abridged 
 views it contains, gave it against the measure, he said, (1) 
 " Our calculating neighbours of the United States * always 
 *' take their returns for produce sold in Canada,in such money 
 " as will pass to best account in the United States. So that 
 " (2) British silver at its intrinsic worth would just be as like- 
 " ly to disappear from the Province, as any other description 
 " of coin at a proportionate rate ; but if (3) British silver is 
 " declared by law to be a legal tender, at a rate much above 
 " its intrinsic value, then there is little doubt but it will 
 '' remain until all other descriptions of coin disappear.'- f 
 
 It appears to me to be capable of proof, that British silver 
 would not permanently remain in the province if fixed at 
 4s. 2d. the dollar, as recommended by the four first wit- 
 nesses. In giving this opinion so diametrically opposite to 
 such authority, I feel — I cannot say diffidence, because the 
 labour I have given and the evidence, precludes the exis- 
 tence of doubt on my mind — but, a considerable degree of 
 anxiety to exhibit clearly to the reader the reasons for that 
 opinion. 
 
 We have seen that 4s. 2d. the dollar, is what we call 8 
 per cent premium. We have also seen that when exchange 
 advances to about 10 per cent, specie begins to leave the 
 country, and further, that in 1831, this state of things took 
 place to a considerable extent. In the present state of the 
 American currency specie is exported chiefly in the form 
 of Spanish- American and Mexican coin, and of such small 
 parcels of English money, as can be from time to time laid 
 hold of. 
 
 It may be easily shown, that on an advance in the rate of 
 exchange to 10 per cent and upwards, British silver 
 
 • The same would be done by any other people. 
 
 t As Mr. Simpson's evidence coutaius ihicc dibtiuct propositions, I have 
 marited them J, 2 and 3.
 
 44 
 
 would be more desirable as an exportable commodity 
 than Spanish dollars. The value of Spanish and other 
 Foreign coin, is ever fluctuating with the varying state of the 
 bullion market, consequently, the exporter of dollars must 
 take into consideration this liability to decline ; in calcula- 
 ting, a small per centage, let us suppose | per cent, must be 
 allowed for that contingency. But British silver is liable 
 to no such fluctuation in the home market, it will be worth 
 to the exporter rather more than dollars ; it will conse- 
 quently bear a premium. If the estimated liability to dechne 
 be supposed | per cent, then it is likely the premium of 
 British silver would be J per cent. Buyers and sellers 
 would, as in other cases, divide the profit between them, 
 subject of course to the usual modifications of supply and 
 demand. 
 
 It has not unfrequently happened, that in the course of two 
 or three months, five or six millions of dollars have been ex- 
 ported from New York alone. The whole volume of the Ca- 
 nadian currency is probably not 3,000,000 * including Upper 
 Canada, certainly not 4,000,000 : hence, in times of gieat 
 demand similar to that of 1831, all, or nearly all the money 
 of Canada would disappear, and we should again return to 
 our present currency, which fortunately would be the full 
 extent of the evil. 
 
 It is quite true that the converse state of things might hap- 
 pen, that a low exchange, say 5 or 6 per cent, as we have 
 seen occur, would induce an importation of British silver, 
 always saleable, be it remembered, at 8 per cent but when 
 we consider that on the state of the exchanges warning us 
 to export, — exportation takes place immediately, but that 
 on the other hand a warning to import cannot be obeyed in 
 less than three months, no man, I think, could desire to see 
 British silver the money of circulation. America — the ■ 
 possessor of the mines — is in fact our natural source of sup- 
 ply. From the mines all America first supplies itself, the 
 surplus being constantly exported. 
 
 If bills of exchange were usually drawn, bought, and sold 
 in London, on the American cities, as well as in the Ame- 
 rican cities on London, the argument would not be so strong. 
 There would be a rate of exchange in London to regulate 
 exportation of British silver to America, and a rate of ex- 
 
 * See Chaptei vi. lor a calculation of the amount of current money iu Lower 
 Canada.
 
 45 
 
 change in America — as now — to regulate the cxj)oi tation of 
 British silver and other specie to London. Such a stale of 
 things exists between the several European states. But we 
 should still have distance to favour a (luctuation between 
 the extremes of abundance and scarcity. On this head I 
 need say no more. Of course if the dollar were rated 
 higher, say at 4s. 4d. it would not require an advance in the 
 exchanges above the ordinary level to drive every shilling 
 of British money out of America ; I owe £100 in England, 
 dollars sell there at 4s. 2d. hence I must send home 480 to 
 pay my debt; but I can buy British silver enough to pay 
 my debt for 402^ dollars — hence the 17-3 4 dollars would 
 he the inducement to export British silver, instead of dollars. 
 I say nothing of expense of transmission, because it would 
 be the same in both cases ; nor do I make any allowance 
 for the certainty of the value of the British silver — the un- 
 certainty of the value of the dollar in the home market, these 
 considered as inducements, having been lully treated of. 
 
 I must now beg the reader to turn back to page 43, and 
 read once more Mr. Simpson's evidence. Proposition 
 3 would be fulfilled, were the value of the Spanish dollar to 
 be rated as low as 4s. Id. or 4s. in other words were British 
 silver rated as high as 10^ or 12| per cent premium. 
 This would be in effect making British silver a depreciated 
 currency. Prices would advance ; the nominal exchange 
 would be against us, that is our par would be a nominal 
 premium expressive of the depreciate, say 2| a 4^ per 
 cent, and we should not be relieved of our surplus coin — a 
 
 {)erfect nuisance when in excess — until the real exchange 
 lad advanced to 2 per cent and upwards above the nomi- 
 nal exchange, in other words to 12$ and over, in the case of 
 4s. Id. being fixed ; to 141 and over, if 4s. were fixed. Dol- 
 lars of course we should never see, unless some unfortunate 
 ignorant were to introduce a few. 
 
 Importers, during the period of the introduction of British 
 silver at the above rates, would have to fight against an ad- 
 vancing nominal exchange, prices would be some time in 
 adjusting themselves, as shewn at page 41, only in the op- 
 posite direction, and in the meantime the whole class would 
 be suffering enormous loss — a portion thereof ruined. 
 
 In the I3ritish Parliament and elsewhere, we often hear 
 men talk of the danger of " tampering" with the cur- 
 rency. The term is often used by men whose conceptions 
 are extremely vague, and whose knowledge of the subject is
 
 46 
 
 scanty. Here let it stand for the disturbance which this 
 Chapter is attended to avert. 
 
 1 would not, however, exclude the free introduction of 
 British money ; and if the change proposed in proposition 
 No. iv. of the next Chapter were carried into etfect, there 
 can be no doubt that both gold and silver would circulate 
 inconsiderable quantities, especially with the present emnii- 
 gration. All I wish to show is, that no forcible means should 
 be resorted to to introduce British silver ; and still less should 
 any change take place, which would, even for a time, dis- 
 turb prices. 
 
 CHAPTER IV. 
 
 REMEDIES. 
 
 The intelligent reader will have already perceived, that 
 the currency of this Colony requires but little * to put it into 
 as sound a state as any currency is susceptible of. That 
 httle it is the object of the present Chapter to point out. I 
 shall put the remedies in the form of propositions, explain- 
 ing such as do not appear to have come within the province 
 of the foregoing Chapter. 
 
 I. That it is expedient to call in the French crown pieces 
 and half crown pieces, at the public expense. 
 
 n. That the above coins be called in simultaneously, at 
 Quebec, Montreal, and Gaspe, and that the time of paying 
 such coins, at their present current rates, be limited to four- 
 teen days from the first notice. 
 
 HI. That the French half crowns be re-issued at 2s. 6d. 
 but that the French crowns be exported as bullion, be- 
 cause of their intrinsic value (5s. 4|d.) being extremely 
 awkw ard calculation. 
 
 IV. That from and after six calendar months from the date 
 of the Act, the par of exchange be assumed, for the pur- 
 pose of calculation, at what is now called 8 per cent pre- 
 mium, that is, at 20 per cent difference between sterling 
 and currency, in other words that £100 sterling be consi- 
 dered equal to £120 currency ; the rules of conversion 
 being 
 
 * 1 mean as far as relates to the coins in circulation ; before we can plume 
 (jurselves on our sjeady currency, we rc<iuire a reform in our banking system.
 
 47 
 
 To CONVERT Sterling into Currency, add one fifth. 
 To convert Currency into Sterling, deduct one- 
 sixth.* 
 
 V. That the following coin be deemed a legal tender to 
 any amount, at the rates below specified : 
 
 Spanish and American dollai-s ."Js, 
 
 Do. do. do. half-dollars and Freiicii half- > ^ , 
 
 Clowns V ^"^ ^'^• 
 
 F.nglish crown pieces (see IV.) (is. 
 
 Do. half-crowns do 3s. 
 
 Sovereio;ns do £.[ 4s. 
 
 Half-sovereigns do I2s, 
 
 VI. That the following coins be deemed a legal tender to 
 the extent of ten dollars only, at the rates below specified : 
 
 Spanisli and American quarter dollars Is. Sd. 
 
 Spanish ei-^hth do 7^d. 
 
 Do. sixteenth do 3.|d. 
 
 American ten cent pieces 6d. 
 
 English shillings, coined since 1817 Is. 2d. 
 
 Do. sixpences, do. do. do 7d. 
 
 Spanish one-fourth dollar without pillars Is. 
 
 Pistareens Is. 
 
 VII. That in all payments exceeding ten dollars, the re- 
 ceiver shall not be compelled to take any of the above small 
 coin,regulation Vi. being intended to provide fora subsidiary 
 coinage, and so facilitate small purchases and payments. 
 
 VIII. That an importation of copper coin be provided for 
 — coined expressly for the use of the Colony to the following 
 extent. 
 
 Of penny pieces, three tons 
 Of half penny pieces, five tons. 
 That the penny pieces be made to weigh 8 dwts. each, 
 and the half-penny pieces 4 dwts. which will produce 
 201,600 pieces of 1 penny, 
 
 672,000 pieces of a half-penny, being about 5d. for every 
 family, or merely Id. for every individual in the Province. 
 
 * As the Crown duties are ca'culated according to a different rule, it would be 
 well, were the Legislature to introduce a clause to protect the i)cople against 
 anyattempUat illegal taxation by the Grown authorities, l>y a sudden adoption 
 of this rule.
 
 48 
 
 IX. That Ihc al)Ove be a legal tender to the extent of 
 FiVE Shillings only. 
 
 The above nine propositions, appear to me to include all 
 that is necessary, in order to remove the evils which have 
 been described. I shall conclude the Chapter, with some 
 few observations on each. 
 
 The first proposition has been already explained in the 
 1st Chapter. The number of days named in the second pro- 
 position, appear to me quite sufficient to enable all the 
 French coin, to find their way to either of the places 
 named, within the time specified. The provision for the 
 exportation of the French crowns as bullion, was inserted 
 .it the suggestion of Mr Simpson. The reason for the sug- 
 gestion requires no explanation ; its force will be apparent 
 to any practical man. It may be remarked, that by ship- 
 ping the coin in the summer, when insurance is low, and 
 drawing when exchange has advanced to the winter rates, 
 an actual saving may be effected of probably half and per- 
 haps even all the loss of calling in the French crowns. 
 
 No. IV. is proposed only as a second best course, be- 
 cause there exists a strong prejudice against the better plan 
 of adopting the American subdivision of the dollar into 
 cents. Except as greatly facilitating calculation, however, 
 it is, as we have already seen, not very important. The 
 change recommended, is absolutely necessary as shown in 
 section I. of the second Chapter. 
 
 The propositions V. VI. and VII. will act as a perfect 
 guarantee against depreciation. In the present state of the 
 currency, VI. would be wholly inoperative, inasmuch as 
 small coins are very scarce ; hardly a sufficient quantity 
 exists for the small exchanges of the cities ; and so far from 
 being forced to take even ten dollars worth, it is quite a 
 matter of favor to obtain them. To remedy this deficiency 
 it is proposed to restore the pistareens to circulation by en- 
 hancing its value. We should then have an influx of about 
 £25,000 of a most useful coin, which with the other small 
 coins in circulation would probably be sufficient as subsi- 
 diary coins, at least for a few years. By limiting it to ten 
 dollars as a legal tender it would never produce inconve- 
 nience. It would pass just as British silver now does in 
 England, namely, rated above its value, but limited both in 
 its whole quantity, and as a tender. The only difference in 
 the cases would be, that British silver is rated 10 per cent, 
 above its value, whereas the pistareens would only be 7|
 
 49 
 
 per cent above. Even granting that tlicsc depreciated pis- 
 tareens produce their worst possible effects on the currency, 
 what will it amount to ? — Calling the whole currency half 
 a million and the pistareens £25,000 depreciated 7^ per 
 cent spread over the whole, it would just amount to ^ per 
 cent. 
 
 The necessity of an importation of copper coin must be 
 obvious to every one, not a more wretched copper coinage 
 — if coinage it can be called — exists any where ; and yet, de- 
 based as it is, its value is enhanced by scarcity about 2}^ per 
 cent, such being the price the banks have been glad to procure 
 it at. From Birmingham,a neat and tasty Colonial coin might 
 be obtained at the expense named in the next Chapter, 
 namely, £1116, and by making it weigh one third less than 
 the English coin, a profit might be made of it to help to 
 pay the loss on the French coin. By keeping its quantity 
 down, it would never be requisite to call proposition IX. into 
 operation. If eight tons were found insufficient, more might 
 be struck during the following year. 
 
 CHAPTER V. 
 
 EXPENSE OF CALLING IN THE DEBASED COINS. 
 
 Throughout these papers, the principle — that the loss in- 
 curred by calling in the worn coins should be borne in equal 
 shares by every individual in the community — has never 
 been lost sight of. This only can be attained by calling them 
 in at the expense of the local government ; to ascertain 
 what that expense will be is the object of this chapter. 
 
 As a necessary preliminary we must enquire what quan- 
 tity of coin exists in Lower Canada. The only estimate I 
 can find of the whole sum of coined money in Canada, is 
 contained in the evidence of Mr. Commissary General Routh, 
 before the Committee of the House of Assembly. In reply 
 to the question, " Have you formed any conjecture as to 
 " the whole amount of Foreign coins in Lower Canada," he 
 said, *' Calculating that there are about 100,000 fomilies in 
 " Lower Canada, and that each may have four or five dollars 
 " in specie, and that the Military chest would require as 
 " much more, and the Receiver General and the Banks 
 "about half that amount {Qy. each,) I should infer that 
 " the circulating medium for this country should be about 
 
 II
 
 50. 
 
 " £250,000 to £300,000 sterling :" putting (he above into 
 " figures, we have 
 
 100,000 families at 4| dollars each £113,500 
 
 Banks 56,250 
 
 Receiver General , 56,250 
 
 Military Chest 112,500 • 
 
 4337,500 
 
 On the above estimate we have to remark, that the only 
 item subject to doubt is the first, it evidently depends on the 
 average quantity of silver the head of each family is in the 
 habit of keeping in his possession. 
 
 We require no vague opinion as to the quantity of money 
 in the hands of the Receiver General, or in the vaults of the 
 Banks, documents furnish us with those important facts. 
 
 For the contents of the Military Chest, we could have no 
 better authority than its keeper. 
 
 With regard to the money possessed by the Canadian 
 population, I am inchned to think the Commissary General's 
 estimate far too low ; instead of five dollars I should be in- 
 clined to say it w-as nearer ten dollars on the average.* 
 
 The money in the Receiver General's Chest, I take from 
 Appendix A ; that table, however, does not furnish a fair 
 criterion of the average cash in the hands of the Banks. 
 The periods were chosen by Mr. Holmes, f as stated in his 
 letter, because they enabled him to give the proportion of 
 each coin, accounts being taken at those periods by order of 
 the Directors. The average amount of cash in their vaults 
 I take from Appendix N, Journals of Assembly, 1830, and 
 M. 1831. :j: 
 
 * If I were confined to the French population, I should say twelve or fourteeu 
 dollars rather. 
 
 t See Report, p. 12. 
 
 1 Statement of cash in the vault 
 of the Montreal Bank, average 
 of each year and of five years. 
 
 Cash in the vaults of the Quebec 
 Bank, average of each year and 
 of four years. 
 
 1821 
 
 1822 
 1823 
 1824 
 1825 
 
 71624 
 96823 
 76453 
 90232 
 
 82988 
 
 1826 
 1827 
 1823 
 1829 
 ISSO 
 
 86540 
 68660 
 62104 
 63537 
 *70543 
 
 1823 
 1824 
 
 1825 
 1826 
 
 9100 
 12947 
 16200 
 14258 
 
 la27 
 1823 
 1829 
 ISSO 
 
 15111 
 
 16444 
 1.5040 
 19683 
 
 Average 
 ,)f 5 yrs. 
 
 8S62t 
 
 
 70277 
 
 Average 
 
 of 4 yrs. 
 
 13126 
 
 
 16568 
 
 * Average of thie? months only.
 
 Tlic second peiiod of both Banks is chosen, as indicating 
 hiorc I'airly than the first the present state of the currency. 
 
 Calculating on the several data above specified, we obtain 
 the Ibllowing result : — 
 
 In the Military Chest, ... .; 112,500 
 
 In the Public Chest,« 83,000 
 
 In the Montreal Bank, 70,277 
 
 In the Quebec Bank, 10,568 
 
 100,000 families having ^10 each 250,000 
 
 JK532,235 
 
 In page 4 of the Report, Mr. Commissary General Routh 
 states, " that no coins are received into the Military Chest 
 " except dollars and half dollars and English money," hcnco 
 in taking the proportions as exhibited in Appendix A, we 
 must reject the contents of the Military Chest, which will 
 leave us £420,000 as a total, of which French crowns and 
 half crowns bear their proportion, as exhibited by the above 
 table. 
 
 The pistareens have been already unwisely dismissed the 
 Province, it remains therefore to estimate the cost of call- 
 ing in the French coin only, and re- issuing them at their 
 intrinsic value. 
 
 We have seen that French crowns form -r^^a of the 
 whole circulation of Canada, this will be found to give 
 £55,862, their actual depreciationis 2\ per cent, making the 
 amount of loss £1260. 
 
 Of half crowns the proportion is i^f o amounting to 
 £31,500,the percentage depreciate Oj-o per cent, and the loss 
 £2866. 
 
 Something remains to be added for expense of manage- 
 ment. I have no doubt but that the Banks would gladly 
 undertake it for A per cent. The trouble of exchanging 
 about £85,000 to £90,000 would be extremely trilling, for 
 which £450 would amply remunerate, or should su( h a 
 course be preferred or the Banks refuse the business, it 
 might be done by a Commissioner of k»f>wn integrity in 
 Quebec and Montreal, with proper checks in Iho shape ol 
 an obligation to account daily to an Auditor, and deposit his 
 balances in the Banks. 
 
 * The average is perhaps itithcr below this.
 
 5^ 
 
 To recapitulate : — 
 
 Loss on French crowns ^I2G0 
 
 Do. do. half crowns 2866 
 
 Expenses of management 450 
 
 The act of calling in the copper coin and re-issuing a 
 new Colonial coin, would be by no means an expense, it 
 would probably leave a profit. 
 
 8 tons of copper a d£88 f 704 
 
 Dies 30 
 
 Striking 60 
 
 Freight and Insurance 36 
 
 Commission and Management 100 
 
 Sterling ^930 
 
 Currency 1116 
 
 The above would issue as follows : — 
 
 201,600 pieces of one penny jE840 
 
 672,000 pieces of one-half penny 1400 
 
 ^2240 
 
 I do not think there is more than £1000 of copper coin 
 in Lower Canada, worth perhaps, if sold, about £250 to 
 £300. The account will stand thus 
 
 First cost of the new copper coin ^1116 
 
 Old coin called in 1000 
 
 ^2116 
 
 New issue £2240 
 
 Sale of old coin 250 
 
 2490 
 
 Net profit £274, 
 
 Every new issue would be attended with a profit of 100 
 per cent on the outlay. 
 
 As truth is the only object in this publication, it may be 
 well to point out to the reader the sources whence error 
 may have sprung in the above estimate. 
 
 Firsts The whole amount of coin in the country, exclu- 
 sive of the Military Chest, may have been under estimated. 
 
 Second, The proportion which the crowns and half 
 crowns bear to the whole circulation, may not be exactly 
 indicated by Appendix A, the habitans having a greater 
 proportion. It is within my knowledge, however, that the 
 habitans prefer dollars and half dollars to crowns, and half 
 crowns, repeatedly asking at the banks for Vargent Ang- 
 lais, as they designate all not French. It may be, that there
 
 is scattered among them more than £250,000, but I am 
 most decidedly of opinion, that the ad(Hti()n will be in dol- 
 lars and half dollars, and so tend to diminish the propor- 
 tion of the debased coins. 
 
 Another consideration too on the favorahle side of ex- 
 pense, is that there are perhaps not more than 70,000 or 
 80,000 families of French extraction in Canada, and it is 
 . among them only, that hoarding to any extent exists. Judg- 
 ing from myself and the friends around me, I should say, the 
 English inhabitants of towns seldom keep more than one or 
 two dollars in specie in their possession. From all which it is 
 concluded, that if there be errors in my estimate, one will 
 correct another ; — that the French money in circulation and 
 hoarded, does not exceed £90,000 currency, and that the ex- 
 pense of calling it in,and of re-issuing the half crowns at their 
 intrinsic value, and of exporting the crowns as bullion, as 
 recommended page 46, on account of their inconvenient 
 value, would be considerably under £5000. The advan- 
 tages, however, of having a steady circulating medium, are 
 so inconceivably great, that even were the expense much 
 more formidable, I cannot conceive it would for a moment 
 be allowed to weigh with a Legislature having the welfare 
 of the country at heart ; and it is to be hoped, that the Re- 
 presentative of the Crown will, at the opening of the com- 
 ing Session, call the attention of the Commons once more to 
 the subject ; — that the Commons will institute a new en- 
 quiry into the facts ; — and thereon ground a Bill calculated 
 to effect the end desired. Let us hope also, that no paltry 
 jealousies of party will be allowed to stand in the way of 
 the final adjustment of this most important matter. That 
 the French and English Canadians can have interests really 
 opposed to each other, I doubt, nay I think it would not be 
 difficult to show that it is impossible. If, however, there 
 be any real or supposed difference of interests between men 
 livhig in the same country — warmed by the same sun and 
 chilled by the same blast — merely because their fathers 
 spoke a diflferent language, such difference of interest 
 clearly does not lie in the settlement of the Canadian Cur- 
 B^NCY Question.
 
 Appendix. 
 
 A. Statement of the average amount of each denomination of coin in posses- 
 sion of the Montreal and Quebec Banks, in IS28 and 1S29 ; and in the Publis 
 Ciiest on the 1st of January, 1829* 
 
 B. 1, Price of standard silver in bars, in London, from 1823 to 1831, (omit- 
 ting 1829 and 1S30,) monthly. 
 
 2. Annual averaj^e value of the Spanish dollar, (deduced from B. 1.) Ave- 
 rage for the whole period, wiili corresponding par value of the currency. 
 
 C. Table of the annual average depreciation of the English currency during 
 the period of the Bank restriction. 
 
 D. Rlonthly exports of Cotton from the United States, from May 18S0 td 
 1st September i8i32, with current rate of exchange at New York annexed to 
 each month. 
 
 E. Exchange transactions of the Montreal Bank, 1821 to 1829, from the 
 Assembly Journals, 18S0, Appendix N. 
 
 1. Sales of their drafts on London. 
 
 2. Purchases of private exchange. 
 
 S. Purchases of Government exchange. 
 
 4. Monthly rate of exchange at Quebec, 1821 to 1883. 
 
 5. Abstract of Nos. 1,5, and S, showing tlie aggregate average premiums 
 
 on each class of transactions — for each year and for the whole 
 period. 
 
 6. Summary. 
 
 E. Table shovping 
 
 1. Par value of the currency from B, 1. 1 
 
 2. Actual rate of exchange from C. 4. 
 S. Real exchange, being the difference between 1 and 2. f"^ ^ 
 
 4. Par value of £100 sterling in currency, from column 1. I o ^ 
 
 5. "Value of JElOO sterling at the actual rate, from column 2. J jij ■" 
 "With averages and real exchange for the period. 
 
 G. Rate of exchange at New York, 1820 to 1832, weekly. 

 
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 59 
 
 APPENDIX E. 
 
 EXCHANC;E transactions OV THK MONTKliAL BANK. 
 
 Jfo. 7. — Amount of Exchange sold by the Montreal Bank in each year, 
 from 1821 to 1829 inclusive, with the Aggregate L'remiums received, and 
 the several rates. 
 
 1821. 1 
 
 1822. 
 
 1823. 
 
 4j 
 Amount. « 
 
 Aggregate 
 premiums. 
 
 Amount. 
 
 
 Aggregate' 
 premiums.! 
 
 Amount, m 
 
 Aggregate 
 premiums. 
 
 &. 
 
 £. s. d 
 
 £. 
 
 
 £.. s. d\ 
 
 £. 
 
 £. s. d. 
 
 16650 a 6 
 
 999 
 
 5000 a 
 
 10 
 
 500 
 
 2000 a 4i 
 
 90 
 
 19450 a 6.i 
 
 1264 5 
 
 63611 a 
 
 11 
 
 6997 4 2 
 
 20383 a 5" 
 
 1019 3 
 
 4142 a 7" 
 
 289 19 9 
 
 1529 a 
 
 Hi 
 
 195 16 S! 
 
 4000 a 5,i 
 
 220 Q 
 
 50000 a 7f 
 
 3750 
 
 43968 a 
 
 12 
 
 5276 3 2 
 
 9833 a 6' 
 
 589 19 7 
 
 31132 a 8 
 
 2492 19 2 
 
 43621 a 
 
 121 
 
 5452 12 6 5000 a 6^ 
 
 337 10 
 
 23019 a 8| 
 
 195S 12 4 
 
 30723 o 
 
 13' 
 
 3993 19 10 39193 a 7 
 
 2743 10 2 
 
 6000 a Sl 
 
 525 
 
 15855 a 
 
 13i 
 
 2140 8 6! 240UO a 7.f 
 
 1740 
 
 18456 a 9 
 
 1661 10 
 
 4500 a 
 
 14" 
 
 630 875S a 7,i 
 
 656 17 
 
 8000 a 9i 
 
 760 
 
 230 a 
 
 15 
 
 34 10 3949 a 8 
 
 315 18 5 
 
 13397 a 10 
 
 1339 14 
 
 
 
 
 1917 a 10 
 
 191 14 
 
 2335 a 11 
 
 262 7 
 
 
 
 
 204 a 12 
 
 2353 a 12.i 
 
 9o8 a 13' 
 
 24 19 7 
 294 2 6 
 125 16 10 
 
 192681 
 
 15300 18 1209037 
 
 
 25220 15 10 
 
 122558 
 
 8349 1 1 
 
 1824. 
 
 1825. 
 
 1825. 
 
 Amount, n 
 
 Aggregate 
 premiums. 
 
 Amount. 
 
 
 Aggregate 
 premiums. 
 
 <u 
 Amount. % 
 
 Aggregate 
 premiums. 
 
 1863a 8 
 
 148 12 10 32300 a 
 
 5 
 
 1615 oj 7500 a 7 
 
 525 
 
 26786 a 8$ 
 
 2276 16 2 3000 a 
 
 5^ 
 
 157 10 -0 3170 a 8 
 
 253 12 
 
 2000 o 8| 
 
 175 7000 a 
 
 6 
 
 480 0] 1050 a 9 
 
 94 10 
 
 54037 a 9 
 
 4867 16 7| 13578 a 
 
 7 
 
 950 9 2 
 
 15807 a 10 
 
 1580 14 
 
 64359 a 10 
 
 6433 18 4000 a 
 
 7,i 
 
 300 
 
 38 a lO.i 
 
 3 19 10 
 
 5505 a 12 
 
 6S0 12 o! 17000 a 
 
 7f 
 
 1317 10 
 
 
 
 23188 a 12.t 
 
 2398 10 14624 o 
 
 S^ 
 
 1169 18 5 
 
 
 
 
 
 25000 a 
 7891 a 
 32573 a 
 35503 a 
 29326 a 
 7822 a 
 
 Si 
 8i 
 9 
 
 H 
 
 10 
 
 12.1 
 
 2062 10 
 670 4 8 
 
 2931 11 5 
 3373 1 5 
 
 2932 12 
 977 15 
 
 
 
 178293 
 
 17514 5 7230520 
 
 
 18933 2 1 
 
 27565 
 
 2457 15 10 
 
 1827. 
 
 1828. 
 
 1829. 
 
 Amount, 'rt 
 
 Aggregate 
 premiums 
 
 Amount. 
 
 rt 
 
 Aggregate 
 premiums. 
 
 at 
 'Amount. » 
 
 Aggregate 
 premiums. 
 
 103 a 8 
 
 8 12 10 
 
 7500 a 
 
 9 
 
 675 o' 5000 a 8 
 
 400 
 
 2947 a 8:1 
 
 250 9 11 
 
 7500 a 
 
 9| 
 
 693 15 6000 rt 9 
 
 510 
 
 6034 a 9 
 
 547 11 2 
 
 6325 a 
 
 lo;. 
 
 664 2 G 2850 a Vi 
 2660 12 6 4SOS3 a 9| 
 
 26.1 12 6 
 
 4911 a 9? 
 
 466 10 11 
 
 24750 o 
 
 ;^^ 
 
 4367 17 8 
 
 5300 a lu" 
 
 5.30 t 
 
 3000 a 
 
 330 (» .9000 a 9i 
 
 877 10 
 
 1 1250 a UU 
 
 1181 5 (j 
 
 329 a 
 
 12 
 
 .39 9 7 11352 o 10 
 
 1135 4 U 
 
 10361 a 12^ 
 
 1295 2 S 
 
 1860 a 
 
 13 
 
 241 16 0. 13733 a lO.J 
 
 1441 19 4 
 
 
 
 
 
 
 578 a 1 1 
 
 63 II 7 
 
 
 
 
 
 
 795 o 11,{ 
 
 91 8 6 
 
 40961 
 
 4279 12 3 
 
 51'264 
 
 
 5304 15 1 
 
 97391 
 
 9381 3 7 
 
 Xole — The materials for Appendix R. Nn, 1 to j, are to b*" founH in a paper laid 
 before the House of Absenibly, and ordered lo be jiriutedy ITtli .Marcli, 18S0. See 
 Appendix lo the Juiknals of llial year, letter iN.
 
 60 
 
 APPENDIX E. 
 
 EXCHANGE TRANSACTIONS OF THE MONTREAL BANK, 
 
 No. 2. — Amount of Merchants' Exchange bought by the Montreal Bankf 
 with the Aggregate Premiums received and the several rates. 
 
 1821. 
 
 1822. 
 
 1823. 
 
 Amount. 
 
 15 
 
 Aggregate 
 premiums. 
 
 Amount. « 
 
 Aggregate 
 premiums. 
 
 Amount. 
 
 
 Aggregate 
 premiums. 
 
 £. 
 
 
 £. s. d. 
 
 *. 
 
 £. s. d 
 
 £. 
 
 
 M. s. d. 
 
 4370 a 
 
 3* 
 
 159 19 
 
 284 a 5 
 
 14 4 
 
 6106 a 
 
 4 
 
 244 4 10 
 
 23G3 a 
 
 5f 
 
 129 19 4 
 
 200 a 8 
 
 16 Qj 29165 
 
 
 
 1312 8 6 
 
 20380 a 
 
 6^ 
 
 1222 16 
 
 8945 9 
 
 105 1 
 
 690 a 
 
 34 10 
 
 3940 a 
 
 6f 
 
 400 19 
 
 4000 a 9.i 
 
 380 
 
 7630 a 
 
 ^i 
 
 420 15 
 
 24739 a 
 
 7 
 
 1731 14 7 
 
 23573 a 10 
 
 2357 6 
 
 352 a 
 
 6^ 
 
 21 14 5 
 
 29990 a 
 
 n 
 
 2174 5 6 
 
 149.93 a Hi 
 
 1724 15 5 
 
 5291 fl 
 
 6f 
 
 330 13 9 
 
 4600 a 
 
 9l 
 
 437 
 
 12073 12 
 
 1448 15 2 
 
 2399 a 
 
 6f 
 
 161 18 8 
 
 
 
 
 
 
 5970 fl 
 
 6000 a 
 
 10000 a 
 
 2363 a 
 
 7 
 10 
 
 417 18 
 
 600 
 
 1175 
 
 283 11 « 
 
 94332 
 
 
 6249 13 5 
 
 64073 
 
 6046 1 7 
 
 75976 
 
 
 5022 14 4 
 
 1824. 
 
 1825. 
 
 1826. 
 
 Amount. 
 
 
 Aggregate 
 premiums. 
 
 aj 
 
 Amount, n 
 
 Aggregate 
 premiums. 
 
 Amount. 
 
 
 
 Aggregate 
 premiums. 
 
 763 a 
 
 6,4 
 
 49 18 5 
 
 18064 a 4.i 
 
 812 17 7 
 
 6640 a 
 
 7 
 
 464 16 
 
 9790 a 
 
 7 
 
 685 6 
 
 24838 a 5 
 
 1241 18 
 
 35157 a 
 
 74 
 
 2636 6 
 
 9507 a 
 
 7f 
 
 689 5 2 
 
 5460 61 
 
 354 18 
 
 2226 a 
 
 "^f 
 
 172 10 4 
 
 11716 a 
 
 7I 
 
 878 14 
 
 34625 a 7 
 
 2424 15 
 
 2330 a 
 
 8 
 
 186 8 
 
 11892 a 
 
 8" 
 
 951 7 2 
 
 29136 a 7i 
 
 2075 18 10 
 
 21480 a 
 
 8^ 
 
 1825 16 
 
 326 a 
 
 H 
 
 26 17 6 
 
 12778 74 
 
 958 7 
 
 2380 a 
 
 H 
 
 273 12 
 
 7251 a 
 
 4 
 
 616 6 8 
 
 54098 a 8" 
 
 4327 16 10 
 
 
 
 8425 a 
 
 9^ 
 
 753 5 
 
 535 a 8| 
 
 45 9 6 
 
 
 
 
 9342 a 
 
 Hf 
 
 1050 19 6 
 
 15735 a 11 
 
 1730 17 
 
 
 
 
 3907 a 
 
 III 
 
 449 6 1 
 
 12547 12 
 
 1505 12 10 
 
 
 
 
 10320 a 
 
 12' 
 
 1338 8 
 
 
 
 
 
 
 83144 
 
 
 7449 11 11 
 
 207816 
 
 15478 10 7 
 
 70703 
 
 
 5559 2 10 
 
 1827. 
 
 1828. 
 
 1829. 
 
 Amount. 
 
 <u 
 
 1 
 
 Aggregate 
 premiums. 
 
 <u 
 
 Amount. « 
 
 CS 
 
 Aggregate 
 premiums. 
 
 Amount. 
 
 
 Aggregate 
 premiums. 
 
 5963 fl 
 
 "^i 
 
 430 18 4 
 
 19094 a 9f 
 
 1766 3 11 
 
 5675 a 
 
 6;f 
 
 383 1 3 
 
 3911 a 
 
 74 
 
 293 6 6 
 
 5794 a 9*. 
 
 S.'.O 8 7 
 
 9714 rt 
 
 ''i 
 
 692 2 5 
 
 1976 a 
 
 S" 
 
 158 
 
 4100 a 9J 
 
 3.Q9 15 
 
 11724 a 
 
 ^ 
 
 849 19 10 
 
 1100 o 
 
 8i 
 
 93 10 
 
 10252 a 10 
 
 1025 4 
 
 7185 fl 
 
 556 16 9 
 
 2200 a 
 
 8t* 
 
 ,192 10 
 
 12064 a lOl 
 
 1236 11 2 
 
 1.3831 fl 
 
 H 
 
 1110 9 7 
 
 980 o 
 
 y' 
 
 88 4 
 
 
 
 2800 a 
 
 84 
 
 238 
 
 100 a 
 
 10 
 
 10 
 
 
 
 6600 « 
 
 8^ 
 
 577 10 
 
 
 
 
 
 
 2381 a 
 
 4 
 
 2S2 2 11 
 
 16229 
 
 
 1266 8 10 
 
 51304 
 
 4978 2 8 
 
 59950 
 
 
 4640 2 9
 
 fJl 
 
 APPENDIX E. 
 
 EXCHANGE TKANSACTIONS OF THE MdNTKEAL HANK. 
 
 yo. !i.--A7nount nf Treasury Bilh purchased bi/ the Monti eal Hank, from 
 lb'2\ to lb2;J inclusive, with the Aggregate Fre/niunis received and the 
 several rates. 
 
 1821. 
 
 1822. 
 
 18-23. 
 
 Amount. 
 
 V Apprefjate 
 ^ premiums. 
 
 Amount. 
 
 S Aggregate 
 (2 premiums. 
 
 Amount. 
 
 2 Aeeregate 
 j3 premiums- 
 
 M. 
 13000 rt 
 57000 a 
 32000 a 
 
 £. s. d M. 
 6 900 0, 55000 a 
 71 4-275 Oj '2:3000 a 
 8' 2560 21000 a 
 
 *. s rf 
 10 5300 
 Hi 2530 
 12,i 2625 
 
 £. 
 
 18000 a 
 8000 a 
 11000 a 
 
 £. s. d. 
 
 5 500 
 
 6 480 
 
 7 770 
 
 104000 
 
 7735 98000 
 
 10655 
 
 29000 
 
 1750 
 
 18-24. 
 
 18-25. 
 
 1826. 
 
 Amount. 
 
 i Aggrepate Amount. 
 ^ premiums. 
 
 *; Aggregate 
 j2 premiums. 
 
 AmouDt. 
 
 iJ Aerpregate 
 (3 premiums. 
 
 65412 a 
 49034 a 
 
 8 5-234 19 2| 1300 a 
 
 9 4413 1 2 25000 a 
 
 7^ 97 10 
 9' 2-250 
 
 13-200 a 
 
 ■ 3900 a 
 
 28733 a 
 
 8 1056 
 
 91 370 10 
 
 10 2873 6 
 
 114446 
 
 9648 4j 26300 
 
 2347 10 
 
 45833 
 
 4-299 16 
 
 1827. 
 
 1823. 
 
 1829. 
 
 AmouDt. 
 
 -2 Acjjrepate 
 (3 premiums. 
 
 Amount. 
 
 i Aggregate 
 ^ premiums 
 
 Amount. 
 
 ^ Agcregate 
 ^ premiums. 
 
 34500 a 
 
 900 a 
 
 11600 a 
 
 4300 a 
 
 8 2760 
 8| 76 10 
 
 9 1044 
 10 430 
 
 5000 a 
 27061 a 
 
 10 500 
 lOJ 2909 1 2 
 
 157500 a 
 
 8 12590 
 
 51800 
 
 4310 10 
 
 3-2061 
 
 3409 1 2 
 
 157500 
 
 12590
 
 63 
 
 APPENDIX E. 
 
 EXCHANGE TIUNSACTIONS OF THE MONTREAL lUNK. 
 
 No. 4. — Abstract of the three foregoing tables, showing — 
 
 First. ~'Vhe amount of Exchange sold by the Montreal Bank in each year, 1821 to 
 
 1829. 
 Second. — The amount of Government Hills purchased during same period. 
 Third. —The amount of Merchants' liills do. do. 
 
 Fourth. — Total of the above transactions each year. 
 
 With aggregate average Premiums on each class of transactions and on total. 
 
 1821 
 
 1822 
 
 1823 
 
 Description of 
 transactions. 
 
 Annu- 
 al 
 Amt. 
 
 Aggregate 
 premium. 
 
 Exchange sold... 192681 15300 18 
 Governt. bought 104M00 7735 
 Private ditto. ... 94382 6249 13 
 
 Exchange sold . . .'209037|25220 1 6 
 Governt. bought 9800U 10655 
 Private do 64073 6046 1 
 
 Rate. 
 
 Total transactions of the 
 ^y ea r. 
 
 7 18 9 
 7 8 9 
 6 12 5 
 
 Amt. 
 
 Prems. 
 
 29106329485 11 5 
 
 Exchange sold ...132558 
 Governt. bought! 29000 
 Private do 75976 
 
 1824 Exchange sold . . .178293 
 Governt. bought|ll4446 
 Private do 83244 
 
 1S25 
 
 1825 
 
 1827 
 
 Exchange sold... '230620 
 Governt. bought | 26300 
 Private do 207816 
 
 Exchange sold ... 
 Governt. bought 
 Private do 
 
 Exchange sold ... 
 Governt. bought 
 Private do 
 
 1828 Exchange sold 
 
 Governt. bought 
 Private do. ... 
 
 1829 
 
 Exchange sold .. 
 Governt. bought 
 Private do 
 
 27565 
 45833 
 70703 
 
 12 1 9 
 10 17 5 
 9 8 8.137111041921 17 7 
 
 237534 
 
 Rate. 
 
 7 9 9 
 
 11 5 10 
 
 15121 15 4 6 7 3 
 
 37598834656 IS 3 9 4 4 
 
 464736,36764 2 7 
 
 7 18 3 
 
 144101 12316 14 10 8 H 
 
 40961 4279 12 
 51.300 4310 10 
 16229 1266 8 10 
 
 51264 
 32061 
 51303 
 
 97391 
 157500 
 59960 
 
 108490 9856 10 10 
 
 134628 
 
 314851 
 
 9 18 
 
 14191 19 1010 10 10 
 
 26611 6 9, 8 9 O 
 
 No. 5. — Suinmarij, 
 
 Total Exchange sold, 1821 to 1829 inclusive 
 Ditto Government Exchange purchased, ^ 
 
 same period \ 
 
 Ditto Private Exchange purchased, same/^ 
 
 period r 
 
 1150375 
 688539 
 
 703587 
 
 106746 11 
 57444 5 
 
 56735 9 
 
 9 5 7 
 8 6 lOJ 
 
 8 13 
 
 2542501 
 
 220926 17 5 
 
 8 13 9
 
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 (14 
 
 APPENDIX O. 
 
 Tdhtt' of the Rale of Exchange at Netv York on Loudon, 1S21 to 1833. 
 
 
 1 1 
 13-21 1822,1823 
 
 182^ 
 
 182 J 
 
 1286 
 
 132- 
 
 1828 
 I 10, 
 
 1829 1830 
 
 8J 9i 
 
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 93 
 
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 7 
 
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 11 
 
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 S 
 
 10 
 
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 11 
 
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 8 
 
 n 
 
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 7 
 
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 7.i 
 
 9 
 
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 7j 
 
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 M 
 
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 16 
 
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 8 
 
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 21 
 
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 8.^ 
 
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 9 
 
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 8 
 
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 24 
 
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 9 
 
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 71 
 
 10| 
 
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 8i 
 
 8 
 
 7' 
 
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 8 
 
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 16 
 
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 10 
 
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 81 
 
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 24 
 
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 10 
 
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 8| 
 
 8| 
 
 9J 
 
 10 
 
 lO.j 
 
 91 
 
 7 
 
 91 
 
 IO3 
 
 
 8 
 
 7^ 
 
 
 
 9 
 
 7 
 
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 7 
 
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 7 
 
 9 
 
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 16 
 
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 9 
 
 5| 
 
 101 
 
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 91 
 
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 21 
 
 9 
 
 
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 8.1 
 
 51 
 
 91 
 
 10 
 
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 6| 
 
 9| 
 
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 9 
 
 
 6 
 
 9 
 
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 9t 
 
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 S 
 
 9 
 
 
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 51 
 
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 12 
 
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 8 
 
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 12 
 
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