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Lorsque le document est trop grand pour Stre reproduit en un seul cliche, il est film6 i partir de Tangle sup^rieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'images n^cessaire. Les diagrammes suivants illustrent la mdthode. 1 2 3 1 2 3 4 5 6 fl^PK t ^ "-f THE EARLY HiSTORY OF CANADIAN BANKING Canadian Currency and Exchange Under French Rule BY ADAM SHORT!, M.A. IJlI-ES s 1.'m\i-.k mv, KlNC^TllN TORONTO JniKNAl. lit TIIK (^ANA|1!A^ BANhfliS A--'U1AII 'N t 65-| 248633 r: I ^nr-iri-i'^1^. CANADIAN CURRENCY AND EXCHANGE UNDER FRENCH RULE 1. BEFORE THK IN'TKODUCTION OF CARD MONEY* T^HE general expansion of life in Europe during the fifteenth * centur)', found special expression in the new commercial enterprise which began its rapid development in the latter part of that century and continued through the following one. The various countries of south-western Europe were eagerly over- running th(; maritime world in si'arch of new lands and that likely treasure with which the experience of Spain had encour- aged their imaginations to fill them. Tlie Norman seaports of France were those best prepared to respond to the expandmg trade of the country. The increas- ing demand for foreign goods, which followed the introduction of Italian luxury and art with the home-coming of Charles VIII, stimulated French shipping. There followed a rapid expansion of the trade and enterprise of such Norman towns as St. Male, Diep{)e, Rouen and HarHeur. Norman sailors roamed the ocean in many directions, but the fisheries of Newfoundland first attracted them to the northern coasts of America. There I * To avoid numerous references throughout the article it may be stated here that the chief sources for tliis study .ire the following: — " Documents relatiuf,' to the Colonial History of the State of New York," Vol. IX. " Collection de Manuscrits Contenant I.ettres, Mt'-moires, et Autres Documents Historiques Kelatils ii la Nouvelle-France," Vol. I. " Edits, Ordonnances Royaux. Declarations et Arrets du Conseil D'Etat du Roi, Concernant le Canada." "Jugements et Deliberations du Conseil Souverain de la Nouvelle- France," Vols. I. and II. '• I^eitres, Instructions et Mi'imoires de Colbert." Par I'icrre Clement. '■ Traite Historique des Monnoyes de France." Far M. Le Blanc. " Histoire Mont'taire des Colonies PVancaises d'apres les Documents Oificiels " Far E. Zay. Canadian .\rchives, Correspondancc (it)ur- r.w^/'A' Fh'/:\( // at/./;' 3 simply a system of barter. Those early merchant adventurers laid in a stock of floods before leaving France, consisting mainly of arrow tips, swords, hatchets, knives, kettles, cloaks, blankets, hats, caps, shirts, various cloths, biscuit, tobacco, and various other trinkets. At first little liquor seems to have been disposed of. With these they sailed across the Atlantic, e.xchanging them with the Indians at Tadousac, or at other points, for furs such as beaver, elk, lynx, fcx, otter, marten, badger and musk- rat. Returning to France they disposed of their furs and repeated the operation the next season. Trade growing, competition increasing and profits falling, efforts were made by some to obtain from the king a monopoly of the trade, usually on condition of establishing a colony and supporting missionaries. Lescarbot, the first Canadian his- torian, puts the case for the monopolists in its best form when he says, " Whether is it better to have the Christian religion and the glory of France extended, or to have certain individual merchants grow rich who do nothing for either. These individual merchants will neither plant colonies nor save the souls of the heathen. Further, through the competi- tion of the merchants, beaver is selling at 8J 1, whereas at the operation of the monopoly it was selling at 50 sols {2^ 1)." This gives the keynote of the general policy for the future, A monopoly of the Canadian trade was to be given to those who would undertake to colonize the country and support missionary enterprises. The earlier holders of this monopoly did little for colonization or the spread of the faith, but interested themselves only in the commercial privileges. Champlain was the first to take any real interest in the build- ing up of a permanent colony in Canada. In 1608 he began at Quebec, the first colonial settlement on the St. Lawrence. In 1609 Du Monts' patent of monopoly, upon which Champlain was working, expired and, as he failed to get it renewed, the following year the St. Lawrence swarmed with private traders eager for furs. So strong was the competition that they ran their vessels up to Montreal in the hope of intercepting fur- bearing Indians. This did not afford a very promising outlook for Champlain's colony, which hoped to live largely by trade with the Indians. However, this first year's experience some- I 4 c.ix.i /)/.!. \ a A'AV X( y I xokk hh'f-M ii kii.f. ^vhat checked the ardur of .he private tr.ulers, though they slill continue to come in considerable nunil)ers In i(ni there were 13 vessels at the head o( navigation at Montreal. As these traders had no other interest in the country than the season's profits, their free trade system naturally came in for severe criticism at the hands of Chan. plain, who pointed out the im- possibility of establishing a colory by their methods. Yet, when monopoly was once more established, he found that the various partners through whose hands it passed were actuated by precisely the same motives as the free traders, desir- ing tou.-e their monopoly privileges to enrich themselves, not to establish a colony. What few colonists were first settled at Quebec were not permitted to trade with the Indians or with one another ; they were not permitted to manufacture articles for sale which might compete with the wares of the company ; neither could they send anything to Fiance or receive anything in return, on their own account. They must dispose of their surplus produce to the company and receive goods in return, both selling and buy- ing buing at prices fixed by the company. This system involved a very simple form of exchange for both the Indians and colonists. Such regulations efTectively neutralized all Champlain's efforts. Only eighteen colonists were taken out during the lifteen years of the monopoly ; all others were simply servants of the company. The company itself hardly remained for two years in the same hands, though in one form or another it lasted for fifteen years, from 1612 to 1627. In 1627 we come upon the first truly national colonial policy of I'^ance. This was embodied in the colonial scheme of Cardinal Richelieu, the great minister of Louis XIII. Under his direction was formed the "Company of One Hundred Associates," posse'-sing extra- ordinary privileges and expected to achieve great things. Its purpose was part of a great national policy which had for its object the elevation of France as a nation to the first place in Europe. This ]iolicy was certainly successful, but in the con- centration of all the forces of the country upon its object it ultimately led to disaster through the disregard of the rights of the individual citizens. Among the numerous rights which the company obtained CAXADIAX I (KKF.XCy I'NDEK FRESCH Kl LP. 5 was that of the cntirt; trade in skins and furs, and for fifteen years a monopuly of all other Canadian commerce on land or sea, with the sinfjlc exception of the cod and whale fishery. The settlers of Canada were thus cut ofl' from all part in the external trad(.' of the country. They were to be permitted to trade with the Indians and with one another, but the beaver skins wliich they ol)taincd must be handed over to the compiiny, or its agents, at the rate of 40 sols (2 1.) per pound. The people were also forbidden to trade with any others than the Indians, The capital of tlip company, which was fixed at 300,0c") 1., one-third of it paid up and the remainder on call, was the smallest feature in it. We may gather from these conditions the limits within which exchange would be confined in the colony. There being but one channel, the company, through wliich all imports and exports were carried on, there could be no occasion for the use of letters of exchange or other medium between Canada and the mother country except for the bringing in of money or capital by the colonists or the sending of contributions from France for reli- gious or other special purposes. All commercial exchange was merged in the business of the company. In Canada itself, after the settlers had ceased to be dependent on the company, there would be occasion for considerable retail trade and a corres- ponding need for a medium of exchange, especially for small coins. The dealings with the Indians took the shape of direct barter and the product of that trade passed to the company in ex- change for other goods for sustenance and barter. The need for a medium of exchange was, therefore, confined within prt ity definite limits. To meet this need there was one article of uni- versal acceptance which answered all the purposes of a medium of exchange, except for small currency, and that v.as the beaver skin. To a certain extent other furs shared this posi- tion, l)ut none so adequately as the beaver, especially wiien the price at which it was receivable by the company was fixed. The "Company of One Ilundred Associates,'" though im- portant as expressing in its organization and purpose the gen- eral French colonial policy for the next century, was destined to failure from the outset. Its first fleet of ships, comnig .41^^41^. .:..ft;!.u. mM>. J TT 6 c.i.v.i/)/.t.\ (I RREX( y rxD/:A' /•A'A'.vr// aw,/: with provisions, stores and settlers, was intercepted by the Englisli under Kirke, and nineteen out oi twenty vessels cap- tured or destroyed. The followinf,' year Canada passed for a time into the hands of the Engh.-.h. The colony contained at the time only five families of settlers and about twenty " .cs of cleared land. When Canada was restored to France in ir>32, the com- pany resumed its powers, but most of the orif,Mnal enthusiasm had evaporated in the meantime. Its privileges were trans ferred to a small association within the other, which, following the lines of its predecessors, took little interest in anything beyond the immediate profit from the trading monopoly. Champlain, who still retained his interest in the coloniza- tion scheme, and who had gone out again as the first Governor of the country with 150 colonists, died in 1635, and no one seemed ready to take up his work. However, the Jesuits and other missionaries had now established themselves in the coun- try, and were exciting a new interest in it through their famous letters or relations which were eagerly read throughout France. In 1644 Montreal was established on a half religious, half military and wholly commercial basis, by a grant from the com- pany to the Seminary of St. Sulpice. In 1645 the company gave up its trading monopoly to the people of Canada, on condition of being relieved from the burden of maintaining the religious, civil and military establish- ments of the colony, and of receiving 1,000 pounds of beaver annually. This freedom had for a time a stimulating effect upon trade, but it was soon found that a few Quebec merchants, owing to their central position and control over the foreign trade, enjoyed a virtual monopoly of the ^-^lonial traffic. This was further favored by the fact that all furs had to be brought to a central store to be received and taxed, in order to provide for the expenses of the colony and the subsidy to the company. Notwithstanding these drawbacks, the change greatly en- larged the range of Canadian business transactions and neces- sitated a corresponding enlargement of the machinery of ex- change. Letters of exchange began to pass freely between the colony and France, while the growing contributions from France in support of the missions and other religious institutions, must w: S^^^ET c/.v. //;/./.%• c rA*A'/:.\(, r ixdhk i-nhsch nci.!-: 7 have added considerably to the business of exchange. An increasing,' (juanlity of coined money must liavc been coming into circulation at this time, for a Httle later we find that though still scarce outside ih-; tr.iduig centres of Quebec, Three Rivers and Montreal, yet coined money was in regular use, especially for filling in the gaps between uneven barter. During this time tht: colony was slowly growing, but after the Iroquois ixgan to harass tlie outlying settleinonts, agricul- tural immigration almost ceased. ()uite a number of merchants came to trade but few to settle. Imoih 1650 to 1662 French interest in Canada may be sumired up in two words— the con- version of the heathen by the missionaries, and the obtaining oi their fur;; by the mercliants. The troubles of the Fronde distracted France itself and naturally lessened the inieiest in C .:iada. During this period money became scarce in France a uJ was considerably increased in value. Values in Can- la followed suit, though probably not respondin.^ very rapu..} or very pc.arately. In .:.33 an edict was issued in France with th--- object of restoring the currency to its former value, and i u that end its nominal value was reduced by one-sixth. In accordance with this edict, the Council of Canada, the following yc^ar, July iSth, 1G54, passed an ordinance declaring that the gold and silver rr ins of France having been reduced to their former values, the money in Canada should be reduced to the same basis, there bein- added to it, however, " on account of the risks of the sea," onc- eighlh of its value in France. As small coins of copper or other alloy were not affected by this ordinance, we may assume that they did not suffer a similar reduction. Inasmuch as there was little foreign sale for Canadian pro- ducts other than furs, and yet a considerable need for French goods, any money which was brought to the colony by mer- chants or otliers naturally tended to return to France in pay- ment for goods. It was to prevent what little money there was in circulation, and especially the small change, from going out of the country, that the Government of the time, following a plan often resorted to in France itself in earlier times, artifically raised the value of all coined money. 8 c. ) .\\ i/ju.y crR iExc i - ( xder f res en r r i.e An ordinance of the Council of Quebec of October 7th, 1661, states that the ireans hhh-rto adopted for attracting money to Canada and retaining it in the country had co;n- pletely failed. The value in Canada being so nearly the same; as that in France, there was no special inducement to bring money and little loss in carrying it away. Hence to remedy this condition, both for the public good and in the interests of trade, the Council ordains that from this time on the quarter ecu should pass in Canada at the rate of 24 sols, and the other gold and silver coins in like proportion. The quarter ecu was a silver coin, issued in 1602, and dis- continued in 1646, the value of which was 16 sols ; hence its value in Canada was raised fifty per cent, above its real value in France. But if it had already been in circulation at an in- crease of one-eighth, or at iS sols, being now raised to 24 sols, It would be current at an advance of one-third on its previous value in Canada. However, it must have been circubti ng at more than 18 sols, for we find that its new value was supposed to be approximately an increase of one-fourth on its previous value. This ordinance require i the same proportionate increase to be made in the values of all the other gold and silvor coins. But such a general statement could not be accurately applied, especially where the existing rates seem to have been but roughly adjusted. Hence it was found necessary the following vear. March 20th, i6b2, to publish a detailed tariff giving the value at which each gold and silver coin should circulate. These values, according to the ordinance, were calculated on the basis of an increase of one-fourth, " as has been the previous practice." In this tariff the quarter ecu is rated at 26 sols, 8 dcniers. From this and other values in the list we learn that they were at least one-third above the standard rate in France. However, from this time till the next chan ,e of the law in 1672, thase ratings held good, and were understood to be an advance of only-one fourth. In making his report on the finances of Canada in i66g. Talon calculates all the funds sent to Canada on the basis of an increase of one-fourth. These facts will serve to explain, in the few references to money matters which are met with in Canadian documents of the period, statements to the effect that the " money of the ia wl jm.' •• jtWfiff L t:-ajai»igwBa>v- CAXADl.lX CI RKEXCV I XPER FA'I-XC// A' ^ 7-/: 9 country " was circulating at an increase of one-fourth over the " money of France." They also quite dispose of the commonly accepted idea that in Canada money was first legally raised in value after 1670. The copper coinage was dealt with on a basis of its own. Two small coins, the sol and the Hard, were doubled in value, the sol being made to pass current for 24 deniers by Governor d'Avaugour in 1662, and the Hard being rated at 6 deniers apparently at an earlier date. To some extent these regulations had the desired efft-ct, for they virtually made the corns a kind ot French goods which the merchants found it profitable to dis;iose of for furs at their enhanced values. But as the people could not afford to keep on hand anything that would sell or exchange, a great influx of coin was not pos- sible r.ntil a largtr market was provided for the country's pro- duce. The special vah.es given to the sol and the Hard produced their natural effect a 1 ttle later, as we shall see. So completely at this tn«e had the national interest in the building up of the Canadian colony died out, that it was seriously proposed to make the country a dumping ground for criminals. To protest against this plan and to urge the claims of New France upon the Government. Pierre Boucher, of Three Rivers, was sent to France in i6b2, and there laid tlie situation before the court, Colbert had become chief minister the year before, and was revivmg and improving upon the policy of Richelieu, He resolved to have the king take over the colony from the decayed and indifferent " Company of One Hundred Asso- ciate's," now dwindled to fvnty-five. Canada was to be made, as in Richelieu's original plan, an important colony, capable, by the development of its trade and in lustry, of becoming a large factor in the national expansion of France, especially on the side of her naval power which, like Richelieu, Colbert con- sidered to be an all-important element in the development of a great state. In 1663 an edict was issued creating the Sovereign Council of Quebec, though a body of more Hmited powers had been in existence for so^ie time. In order to obtain exact information as to the actual condi- tion and future possibilities of the colony, Colbert sent out a V ■ r "MnfTTT 10 CANADIAN CrfiREXCV UNDER FRENCH RILE special commissioner to make enquiries along specific lines. But even before sending out ais agent he was convinced that the trans- fer of the trading privileges of the company to the people had been injurious to the colony. In their anxiety to get furs the inhabitants neglected the work of clearing and cultivating the soil, Colbert had evidently made up h.is mind to place the trade of the country once more in the hands of a company. But he desired the people to understand that in any such change the colony would not suffer, as the revenue derived from the fur trade would be expended in the country for its iniproven-'ent. Colbert permitted no time to be lost in the execution of his new schemes for the colonial, commercial and naval expansion of P'^rcnch power. In November, 1663, the Marquis de Tracy was commissioned to visit the American colonies, as lieutenant- general, with large powers and ample means in men and materials for the removal of all obstacles, the settlement of all disputes, and the placing of the colonies on a new footing of prosjierity and pro- gress. ?Ie went to the West Indies first, and did not reach Canada till 1665. In the meantime, however, Canada began to feel the stimulus of the new interest which was b'jing raised in France. Just before this new period there were but 2,500 people in the colony, 800 of whom were in Quebec. All accounts agree that there was little money in the coun- try up to the 3ear 16G4. As already stated, French money in general was considerably over-rated. The need for small change was, of course, the most [dressing, lor while large transactions might be carried on by barter, it would be a very inconvenient system fur small exchanges. The scarcity of money was felt in z\\ the colonies, but a general remedy was first definitely sought and applied by Colbert. The suggestion for it seems to have come from the colonies themselves. The plan adopted followed the practice already established in Canada. The most pressing complaints, however, came from the West Indies. In the year 1663, in which Colbert began to unfold his ideas of colonial expansion, an arret of the Council (in France) was passed, providing for the coining of 100,000 livres worth of money in silver and copper, for the use of the West Indies. But it did not take eflect at once, the organization of the new com- pany suspending all other matters for a time. ii I i l^'i V ivL-,y) .i^iiizoff j-*«fa.jilQ;i^^up »rjwev,T«=i.^ CAA'ADIAN Crh'RF-.XCy IWDER FREXCN KILE II ii Meanwhile in Canada, increasinjj trade seems to have brought more monej' to the country. It naturally took the form of the cheapest coin — cheapest in France, dearest in Canada — being at the time sols, Hards and doubles. In consequence of this extra importation we find an arret of the Sovereign Council of Quebec, passed April 17th, 1664, reducing the value of the liard to three deniers, it being previously current at six. In connection with this it is explained that both the liard and double were greatly over-rated on account of the previous scarcity of money, but that now certain people were making a trade of bringing in large quantities, and fearing that it might increase to the ruin of thu colony this reduction is made. On July 17th of the same year another arret is passed again reducing the liard from three to two deniers, in order, it is said, to prevent the profit on it from leading to its greater im- port. The normal value of the liard was three deniers and of the double two deniers, and as they seem to have circulated in Canada on a common basis, the only one upon which there could be a profit at three deniers was the double whi'li appears to be aimed at in this arret. At the same time the merchants of Quebec were anxious for the introduction of more money in general, and in a petition to the Council, in France, June 14th, 1664, we find a charac- teristic French-Canadian request, to the effect that since tlie colony had now a little surplus grain his Majesty is asked to send out a regiment with money to buy and eat it in the country. They complain also that owing to the scarcity of money they can not get their debts collected. This was evidently true enough, because we find that on Nov. 17th a complaint is pre- sented to the Council on behalf of the farmers living at a dis- tance from Quebec, Owing to the want of mills in many districts the farmers were forced to come to Quebec to get their grain ground, and it was c -mplained that the grain was seized upon by the merchants in payment of paj^t debts. Tiie Council forbade the seizures until mills should be erected. Just here it may be noted that wheat was at one time a limited legal tender in Canada. By a determination of the Council of Quebec, July 30th, 1664, fixing the price to be charged for goods sent out by the king, a difference is made in some cases ) .1 ^j^ ..'.^^j^dnivtmr^^tttr 12 C.l\.t/)/.l.y CIRRF\CV rXDER FRF.XC/f AT/./? between the price in 'noney and the price in grain. For instance, a tub of lard was vakied at 8ol. if paid for in grain and 75I. if paid for in money. Further Hglit is thrown upon this point by a complaint presented to the Council to the effect that, there hav- ing been an arret estabUshed that wheat should be taken at the rate of 100 sols (5I.) per minot in payment of old debts, as also to facilitate the carrying on of l)usiness in the country, this was found to be very prejudicial to business, inasmuch as the price of wheat was inconstant. After considering this complaint the Council ordained, May 29th, 1665, that for the future those who were obliged to receive payment in wheat should be recjuired to accept it only at current prices. The arret here referred to was evidently an ordinance of the Intendant Talon, who wished to provide an opportunity for the settlers to make use of their sur- plus products for the purchase of supplies. The making of wheat a legal tender at current prices was obviiusly a very inde- finite settlement of the difficulty and could hardly have worked smoothly. At any rate we find, on March igth, i66g, an ordin- ance passed, requiring the merchants i^^ take the wheat of their debtors in payment at the rate of 4I. per min -t. Talon brought the matter up on the ground that some creditors were refusing to take wheat in payment of debts, or, if so, at a very low price. The ordinance, however, was to hold good for only three months from the date of its issue. We have seen that Colbert believed that the commerce of the colonies could bust be promoted by the establishment of trading companies. But instead of a number of small inde- pcndtnt companies he propos( d to establish two strong com- panies, one for the East and the other for the West Indies. The West India Company, which covered all the American colonies and part of Africa, was formally established on i\Iay 28th, 1664, and was even more favored by the government than Richelieu's company. Yet, notv/ithstandmg all its extraordinary privileges and favors, it became bankrupt in eight years, and in 1674, the king resumed all the grants made to it. Though Canada was granted as a feudal possession to the company, yet the king con- tinued to nominate the Governor and Intendant and otherwise direct the development of the colony. The company being fully established, Colbert resumed r x«5«flti 1 1. %U^eti—i-ili'njm'mii3S'*SUlSm: « -;i**9«^!*■-■*^•»«3*'«Wte-■■ CAyADiAX crRREXcy r\Di:R Fh'/-:\cH ri/.e 13 consideration of the plan for a s parate colonial coinage. In 1665 we find an arret of the Council which ordained the issue, from the mint in Paris, of a special coinage to the extent of ioo,oool., exclusively for circul.ition in the countries granted to the West India Company. In the explanation which accompanies the arret it is stated that, from what the company represents, it is necessary to send to tha islands and mainland of America a quantity of small coins, especially tor the con- venience of the working people. In the West Indies they were accustomed to receive their wages in sugar and tobacco, which were saleable only in France, whence the returns came tlie fol- lowing year. As the other colonies paid their laborers in m-.tiey, there was a tendency to leave the French Islai:ds. It is also pointed nut that money current in France woidd n t remain in the colonies, those who trade to them being more anxious to bring back money than goods. Hence the king hi'S been requested to issue a special coinage for the colonies which should have ? dis- tinct stamp and be artifically raised in value in order that there might be no inducement to take it out of the country. This arret was not put in execution before 1670, when the king isbueel a declaration that he was about to strike a special coinage for the isbtnds and mainland of America. It repro- duces much of the explanations in the arret of 1665, but adds, among other things, that the issue was to consist of two silver coins, one of 15 sols and the other of 5 sols and a double of copper of the value of two deniers. These coins were not to be taken to France on pain of confiscation and special punishment. Though some of this new coinage was apparently used in Canada, yet it was specially intended for the West Indies, as may be gathered from the correspondence with Taion. In Colbert's letter of instruction to M. de Bouteroue, when going cut to Canada as Intendant, and dated April 5th, 1668, he says : " With reference to the money it will not be necessary to make any considerable change in a country so undeveloped as that, but it will be necessary to take particular care that any evil, should there be any such there, should not increase, while at the same time he must seek to reduce it gradually." We have already seen how the threatened over-supi)ly of -^^•m' > .J4s^j.?; .' 14 CAXADIAX ClRRl-XCy IWDER FKEXCH KILE Hards was prevented, by reducing their value. After the arrival of de Tracy and tlie troops that came with him, apparently with their pockets filled with cash, money became more plentiful in Canada. According to the Mere de I'lncarnation, writing at the time, " Aloney is common at pre ent, the gentlemen have brought much with them. They pay in money for all they buy, as well for their food as other necessaries." In consequence of this and the increasing trade, the colony was next threatened with an over-suppl}' of so!s which, as already explained, were circulating at double their normal value. On January loth, 1667, complaint is made to thcCouncilof Quebec, that the sols are being brought from France in large numbers while other coins are taken away, until iiiere is now almost no other in circula- tion. The Council ordains that from the first of February next, suls shall be current for only 20 denicrs each, b\it for the rest of this mouth (January) they will be received by Sicur de la Chesnaye, in payment of public dues, at the old rate of 24 deniers. On the 31st of January it was found necessary to make special arrangements to give warning of the change and to extend the time for receiving the sols at the old value, for the benefit of Three Rivers and Montreal. Though the reduction on the sols was slight as compared with that on the deniers, yet it evidently affe;:tcd the people to a much greater extent. A very general complaint seems to have been raised by the people on account of the loss with which they were threatened by the reductiim about to be made. A subscrip- tion was opened, headed by de Tracy, the Governor, the Intend- ant, the West Indian Company and a number of others, to pro- vide a fund to meet these losses on the part of the poor people. Incidently this indicates that money was now freely circulating among all classes in the colony. The same fact is further illustrated b}- a matter which came before the Council on Oct, 29th, 1668. The price at which the Company was to receive beaver had been fixed at lol. per pound for the best grade. The company claimed, however, that all they could get for it in France was Hi. per pound. Hence to prevent themselves from suffering loss they had raised the prices of their goods in like proportion. But it was pointed out before the Council, that, inasmuch as now-a-dsys people no longer always purchased their r -=«4i|[g^^aisi^f■:*te.^^S¥^'*l^^4»i CAXADIAN ClKREXCy I XUEK Fh'EXCH Rll.H 15 goods with beaver but often with money, this practice was obviously unjust to the cash buyers. Tliis being recognized, Talon proposed to reduce the price of beaver to 9I., on condition that the company should reduce the price of its goods ; which being agreed to, the Council fixed it by an Act. Returning to the matter of a special coinage for the colonies, which had taken practical shape in the West Indies in 1670, it would appear that the king had originally intended to m^ke a spe- cial issue for Canada as well. In a memoir addressed to Colbert, dated Nov. loth, 1670, Talon says that when he was in France the king had declared his wish to have a coinage struck suitable for the country, and which would remain in circulation in it. He considers that such a measure would be of the highest benefit to the country, and promises to do his duty in the matter when the necessary orders are issued. In another part of the same memoir he intimates that the merchants of Canada are very anxious that the sum annually set aside by the king for the assistance of the colony should be sent out in the shape of money, not in the form of goods. The reason for this was that the merchants desired to have the entire supply of goods in their own hands. This, Talon says, would simply result in the people paying twice as much for their supplies as the rate at which they are now furnished from the king's stores. Besides the present arrangement permits him to exchange the goods for grain with the settlers. He has under- taken to send goods to convenient places for exchange and to bring back wheat. Without doing this seme of the new settle- ments would be entirely ruined. This plainly indicates that Talon was the author of the ordinance, already referred to, making wheat a legal tender at a certain price. It will be observed that there is no lack of harmony between Talon's approval of a special coinage for the colony and his disapproval of having the king's contribution to the colony sent in the shape of money, which, under the circumstances, would simply return to France for the purchase of fresh goods for the merchants. Replying to Talon the following spring, nth Feb., 1671, Colbert says : " Before the king can adopt any resolution with reference to the striking of a coinage for Canada, it will be necessary ta know the required denomination and weight, also "»*"«3«te3^ 1 . 1 ; ;i I Mf i m rmmmmmmim i6 CASADIAX CrUREXCV iWDER FREXCH RULE the circulation it vould probably have in the colony. After that His Majesty will announce to you his intentions on the subject." This would seem to indicate that the coins already struck for the West Indies were not intended for use in Canada. In a letter to Talon the following year, dated June 4th, 1672, Colbert writes : " His Majesty has considered the proposal to strike a special coinage for Canada, and as he considers it good and advar-tageoiis, he will issue the necessary orders to have it struck and sent out the following year." This purpose, how- ever, was never carried out. It was apparently determined in the meantime to have the ordinary coins of France circulate in the colonies at an enhanced value. Thus we find an arret passed by the Council of State, Paris, iSth November, 1672, stating that the money issued for the Islands, etc., has been found to be of very great benefit, hence not only is it to be continued, but the curreni money of France is to be permitted to circulate there als-, but with increased values ; the piece of 15 sols to pass for 20 sols, the 5 sol piece to pass for 6 sols 8 deniers, and the sol fi 15 dcniers to pass for 20 deniers, and other pieces in proportion. Henceforth all exchanges or contracts are to be reckoned in money, and not in sugar or any other goods. The sol of 15 deniers nere mentioned was already increased one-fourth of its standard value. Charlevoix sa\ s that this arret was made to apply to New France, and that in consequence the value of money increased one-fourth in Canada and resulted in much confusion in all the exchanges w'th France. Here, however, Charlevoix is partly mistaken, because for ten years at least the French money in Canada had been circulating at an advance of one-fourth or over. As we have just seen, the sol, the chief coin of the country, was reduced from 24 to 20 deniers, which is the value to which the arret raised it. In the introduction to a memoir on the card money prepared for the Council of Marine and given in Zay, considerable confusion is also found, the information obtained being either inexact or misunderstood. It is supposed, for instance, that the distinction between money of France and money of the country came in with the arret of 1672, which was certainly not the case, as there are numerous instances in which this dis- tinction is mentioned from 1654 o"- CAXADIAN CrRHEXCV IXDEK IKEXCH RCl.E 17 Money becoming' a customary me(]ium of exchange, mer- chants were less willing to accept produce in lieu of it. We have already noticed that objection was made to taking pay- ment in wheat. After 1672 contracts were being drawn requir- ing pa} ments to be made in money. The two staple skins of the fur trade were the beaver and moose, which were receivable at hxed prices by the treasury of the colony, whether und r company management or not, and afforded the chief basis for taxation at the rate of one-fourth of the beaver and one-tenih of the moose. The beaver seems to have been accepted in ordinary trade without much question, but after 1572 the mer- chants were beginning to refuse the mo.jse skms. Hence the Council found it necessary to pass an arret, Sept. 27th, 1674, ordaining that the moose skins should pass current as a le^^al tender ar their market price, and prohibiting anyone from refus- ing to accept them in payment of debts. An agitation was made in 1679-80 to have a reduction made in others of the current coins, especially the four-sol piece, which it was sought to bring to its value in France. This, however, was refused, and ou December 2nd, 1680, an arret was passed requiring that all coins should circulate in Canada at the same rate, namely, at an increase of one-third of their value in France. As we gather from subsequent ordinances, tliis was apparently intended to apply to foreign coins as well. After Duchesneau became Intendant he proposed to the Government to send out to Canada 30,000 crowns, in order to increase the money in circulation ; to which Colbert replied, on April 28th, 1677: "That which you propose with reference to the money, namely, the sending of a sum of 30,000 ecus to Canada, is not thought expedient. It is necessary that the trade, labor and industry of the people should attract money into the country. You yourself admit that Canada is as fruitful as France, and in addition to being able to produce all that France can, it has the fisheries." The truth was that Colbert, compelled to find money to support the operations of Turenne and Conde in Europe, had none to spare for the colonies. At this time Canada was anticipating Colbert's advice to attract money to it by trade, although it was in a direction not at all relished by France and one that was to cause no end of "^f tM« | 8II.V«,V.'.l'J!.V- ' t ' ., i8 CA.\Ai>iA.\ cruh'K.My lyni:/^ Jh'i-.WH a'i / /■: trouble for the future. Canadian traders had discovered that the Enghsh and Dutch merchants of Albany, Boston and New York were anxious to buy furs, and at much higher prices than could be obtained in Canada. They were wilhng also to pay for them either in dollars (piastres) or in goods, the goods being cheaper than in Canada. Further, by selling to the Engiish the tax of one-fourth on the beaver would be escaped. Under these circumstances a very lively trade was developed with the Eng- lish colonies. Against this traffic the Government, both in France and Canada, directed all its verbal engines, but without much success. The highest officials in the colony, Governor an the eve of the introduction of card money in 1685, iiie nature and effects of which will be considered in the next paper. Adam Shortt Queen's UNivERsiiy, Kingston, March, 1898