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Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Un des symboles suivants apparaitra sur la iernlAre image de cheque microfiche, selon le cas: le symbols -^ signifie "A SUIVRE ", le symbols V signifie "FIN". Les cartes, planches, tableaux, etc., peuvent dtre film6s A des taux de rMuction diffirents. Lorsque le document est trop grand pour 6tre reproduit en un seul cliche, il est film6 A partir de I'angle supArieur gauche, de gauche A droite, et de haut en bas, en prenant le nombre d'images nAcessaire. Les diagrammes suivants illustrent la mAthode. 1 2 3 1 2 3 4 , 5 6 tV,,,.iU)!!W". I Jl.ilM^P!«^^BBa|9«BH|ip|p|p^p ^: y^*./.,:*'.: ::*■*■• THE WAR OF 1812 IN CONNKCriUN Willi THE A R M \' BILL A C T !iV JAMES STKV'KXSOX GENEKAL MANAGER OK THE (JUEHEC HANK montrp:al W. FOSTER BROWN ^: CO., PUBLISHERS 1892. I I I / PREFACE. Some years ago I delivered a Lecture before 77u' Literary and Historical Society of Quebec, on The Currency of Canada after the Capitulation, which was published, and copies were sent to my friends. I closed my lecture with a promise to pro- ceed with the subject. " We have now reached," I said, " the most interesting part of our financial History, that which is related to the War of 1812, when our Militia and our monetary resources were taxed to the utmost. I shall leave it to others to deal with the incidents of war : it will be my endeavour to show how the exigencies of the Army were provided for, under circumstances particularly trying, by the establishment of a Government Bank of Issue, which all our writers upon the History of Canada have alluded to; but which few, if any, have described in its operations, from its inception to its close, on the return of peace." Having been frequently reminded of my promise by brother Bankers, and by several friends, I have considered it my duty to redeem my pledge — hence the following pages. JAMES STEVENSON. Quebec, i^th March, i8g2. COXTKNTS. CHAPTER I. Declaration of War — Embargo — Meeting of Provincial Parliament- Introduction of the Act — Lcj^al tender coins — Price of gold- Capture of Detroit — Death of General Brock. CHAPTER n. Meeting of Provincial Parliament — Speech of the Governor General — Enlargement of the Act — Steamboat service between Quebec and Montreal —Capture of York — Further enlargement of the Act. CHAPTER HI. Americans prepare to continue the war — Treaty of peace — Report on Army Bills in circulation — Bills lost or destroyed, ^'9000 — Final close of the Army Bill Office. 4 M THE CIRCULATION OF THE ARMY HILLS WITH SOME REMARKS UPON THE WAR OF 1812. CHAPTER I. Declaration of War— Embargo on Goods— Meeting uf Provincial Parliament— Introduction of the Act— Legal lender coins -Capture of Detroit— Death of General Brock. The American declaration of war was received in Quebec on Monday, the 29th June, 18 12. On the 30th, a proclamation was issued by His Excellency Sir George Prevost, requiring all American citizens to depart from the Province within fourteen days ; and, by order of police, within seven days from the city and district of Quebec. Great activity prevailed in the city in putting into operation the means of defence at the immediate disposal of the government, which consisted of the ordinary peace establishment of the British troops in the Province and the colonial forces. 8 Declaration of War. A militia c^cncral order was issued by the Adjutant- General, V. Vassal do Monviel, from the headcjuartcrs in Montreal on the 6th July, ordcrini^ the battalions of militia throu'Miout the I^-ovincc to hold themselves in readiness to be embodied, and to marc', on the shortest notice to such points as the safety of the Province mi^dU require. In Quebec the militia of the city mounted c^uard in company with the regular troops, and each battalion continued to furnisli a pro- portion of its number daily for garrison duty. The flank companies belonging to the militia battalions of Montreal, were formed into a battalion under Lieut.- Col. Auldjo and Lieut.-Col. Guy. A proclamation was issued by General Isaac Hrock, Governor of Upper Canada, from his headquarters, Voxl George, on the 22nd July, announcing the invasion of the Province by the Americans, with the intention, he said, of con- quering Canada and restoring it to the Empire of h^'ance. ''Are you prepared," he said, "inhabitants of Canada, to become willing subjects, or rather slaves to the despot who rules the nations of Europe with a rod of iron, — if not, arise," etc. On the 1 6th July, a temporary embargo was laid upon all goods, wares, moneys, merchandise and com- mcKlities in and within the Province of Lower Canada; upon all arms and ammunition; upon scalping knives, daggers and Indian lances, bullion and specie of every description, none of which were allowed to be exported from any port within the Province of Lower Canada. All vessels were prohibited from sailing, J\firti//i^ of J^roviiicinl l^arliaiuent. !) save such as were actually Uiadcd or loatliiiij^, aiul whicli were bound for any port in the United King- dom, or any of the colonies in America or the West Indies. The Provincial I'arliament met on the same day, anti His ICxcellenc)- Sir (jeor^e I'revost alluded in his speech to the fruitless endeavours of His Majesty for the preservation of peace ; to his implicit confidence in the loyalty of liis subjects ; to their attacliment to his person ; and to their ardent love for the true interests of tiieir countrv. He observed with concern that the necessarv establishments of the militiu forces and the operations of the approaching campaii^n, would be attended with considerable expense; but he relied implicitly upon their wisdor. and public spirit for miu!, sui)plies as tiic circumstances and exiL,rencie.s )f the affairs of the Province would be found to recjuirc. Loyal responses were made by the Lci^islativc Council and House c^f Assembly on the i8th, the latter expressing itself prepared to grant such supplies as the exigencies of affairs might re(|uire. The peoi)le and authorities of Canada had for a long time been alive to the imminence of war ; but at the time of the declaration of war, Canada was in a comparatively defenceless state. To man tlie fort- resses of Quebec and Kingston, and to cover a frontier of 1,700 miles in length, the whole available force consisted of 4,450 regulars of all arms. In the Upper Province, which presents a war frontier of 1,300 miles, there were about 1,450 soldiers. The militia consisted 10 Militia MiisUr. of about 2,000 men in the Lowe,; and 1,800 in the Upper Province. The total population of Upper Canada at this time was under 100,000, while that of the Lower Province did not exceed 300,000. On Sunday, the 19th July, orders for the whole of the militia of the Province to hold themselves in readiness to be embodied, was read on the Esplanade of the city of Quebec to the militiamen under arms. His Excellency was present on the occasion, and expressed his approbation of the zeal shown by the men in voluntarily doing duty with His Majesty's regular forces. To meet the pecuniary exigencies of the war the Provincial Parliament of Lower Canada, which assem- bled on the i6th July, i8i2,and remained in session till the 1st of August, being the third session of the seventh Parliament holden in Quebec, passed the Act to facilitate the circulation of army bills, which pro- vided as follows : P^irst. That His Excellency the Governor, as Com- mander of His Majesty's forces, from time to time should cause to be prepared and made any number of bills, to be denominated army bills, containing one common sum, or different sums, in the principal moneys, not to exceed two hundred and fifty thousand pounds currency. Second. That such bills should be issued from an office to be called the "army bill office!" Third. That the said army bills of twenty- five dollars each and upwards should bear interest at the rate of fourpence per centum per diem, upon or Army BUI Act. 11 in respect of the several amounts of each. Fourth. That the principal sums of the said army bills of twenty-five dollars each and upwards should, at the option of the Commander of the forces, be payable on demand to the holders of such army bills, in cash or in Government bills of exchange on London, at thirty days' sight at the current rate of exchange. Fifth. That the interest of all such army bills of twenty-five dollars each and upwards, upon the pay- ment thereof in cash or in bills of exchanc^e as afore- said, should be paid in army bills or in cash at the army bill office, at the option of the holders of such army bills. Sixth. That the principal sums of all such army bills of twenty-five dollars each and upwards, if paid in cash, should be paid at the army bill office; but if paid in government bills of exchange, should be paid at the office of the Commissary- General, upon a deposit in army bills of the amount of the bills of exchange to be so paid, and a certificate of such deposit under the hand and seal of the super- intendent of the army bill office to the Commissary- General. Seventh. That it will be advisable for His Excellency the Commander of the forces, from time to time to cause to be prepared and made, such num- ber of army bills of the value of four dollars each as he shall see fit, provided the said army bills of four dollars each and the said army bills of twenty-five dollars each and upwards do not together exceed the aforesaid sum of two hundred and fifty thousand pounds currency. Eighth. That the said army bills 12 Army Bill Act. of four dollars each should be payable at the Army bill office in cash, to the bearer on demand. Ninth. That all army bills whatever should be issued as cash, upon the warrants of Mis Excc'Iency as Commander of the Forces, to such person or persons, as he by such warrants shall sec fit to direct such payments to be made. Tenth. That the current rate of ex- chani^e should be established on oath once in every fortniij^ht by five persons, to be named by His Ex- cellency, and publicly notified before any army bills whatever shall be issued. Eleventh. Makes provision for the cancellation of defaced army bills, and the re- issue of new army bills of same number, tenor and date as those cancelled. Twelfth. That no army bills should be re-issued, those of four dollars each excepted, and that all army bills whatever should at all times be redeemable by being called in and paid, both principal and interest in cash. And whereas His Excellency hath been pleased to prepare and cause to be prepared such army bills to the value of two hundred and fifty thousand pounds currency, which from time to time, as required, will be issued. And whereas it is the bounden duty of the Legis- lature to furnish every possible aid and assistance towards the defence of the Province, and to this end it is necessary to facilitate and support the circula- tion of all such army bills, be it enacted that the Governor, Lieut-Governor or person administering, the Government be authorized and empowered to pay and allow or cause to be paid out of all moneys, Army Bill Act. 13 customs, taxes and revenues of the Province, and in preference to all other claims and demands whatso- ever, all such interest at the rate of four pence per hundred pounds per diem as shall have arisen and grown due upon all every and any such army bill which shall be so issued as aforesaid, not exceeding in the whole, the sum of fifteen thousand pounds currency per annum, which said interest shall run from the day of the date of such bill or bills, and such other charges as shall be necessarily incurred in, to or for the issuing, circulating or cancelling of the said army bills, not exceeding in the whole, two thousand five hundred pounds currency per annum. Section II. Provides that whatever moneys shall be issued out of the aforesaid moneys, customs, &c., shall be replaced out of the first supplies granted in the Provincial Parliament. III. Provides that the army bills shall be current in the revenue, and taken by all collectors, and receivers in the province, and that the same in the hands of such collectors and receivers, and in the hands of the Receiver-General shall be deemed as cash. IV. Provides that in payments to the revenue, interest shall be allowed to the day of payment, i.e., that the interest which from time to time shall be due upon any such army bill, shall be allowed to all persons, &c., paying the same to the Receiver- General or any collector or receiver up to the respec- tive days whereupon such bill or bills shall be so paid ; Provided always that every such Receiver- 14 Army Bill Act. General, collectors and receivers as aforesaid, shall be accountable for the interest on every such bill, so by them or either of theni received for and during which such bill shall remain in their hands. V. Provides that all interest upon such army bills shall cease from and after the fourteenth day next after the day on which the same by any proclama- tion shall be called in to be redeemed in cash, and that money shall be reserved in hand for discharging the same. VI. Sets forth the penalty on forging army bills. VII. Enacts that all contracts shall be void in which any distinction shall be made between army bills and cash. VIII. No arrest if a tender in army bills be made. IX. No attachment shall issue if a deposit in Army Bills be made within the time limited by order of court. X. On capias ad satisfaciendum a deposit of the debt and costs in Army Bills shall stay proceedings. XI. On fieri facias, &c., a deposit of the debt and costs in army bills shall stay proceedings. XII. Provides relief for bills destroyed or lost in case of satisfactory proof of such destruction or loss being given, together with security for payment if the bill or bills certified to be lost, burnt or destroyed, shall be thereafter produced. XIII. Provides Provincial security for ultimate payment of army bills and loans in the following terms : And whereas there may be many persons y: ir7fij' Bill Act. 15 desirous of coming forward in aid of His Majesty's Government, with the loan of monies, who, having no commercial concern whereby to dispose of bills of exchange, and who, on that account may be deterred therefrom, for remedy thereof; be it enacted that from and after the expiration of five years after the passing of this Act, each and every the holder of any and every such army bill as may remain unpaid and unsatisfied shall be entitled to receive out of and from the monies that then may be in the hands of the Receiver-General of the Province, or from the first monies that may thereafter come into his hands arising out of any taxes or duties heretofore imposed or that may hereafter be imposed, levied or raised by virtue of any Act or Acts of the Provincial legisla- ture, or from the rents and revenues of His Majesty's territorial domains in this Province, the full amount of all such army bills in money, with the interest remaining due thereon. XIV. Refers to the duty of the Receiver-General on the receipt and payment of army bills, viz., that he shall pay over the same to the Commissary-General for the time being and get from him the amount thereof in Government bills of exchange, at the current rate of exchange, or in cash at the option of the said Commissary-General, and the Receiver-General shall immediately thereafter render a true and exact account of all such payments and receipts to the Governor, in order that the same may be laid before the House of Assembly at the next session thereafter. 16 Army Bill Act. ,1 XV. And be it further enacted by the authority aforesaid, that for and during the period of five years from the passing of this Act, no person whatever shall export or otherwise carry out of this province, any gold, silver, or copper coin of any description whatsoever, or any molten gold or silver in any shape or shapes whatever, and if any person whatever shall export or otherwise carry out of this province, or procure to be exported or otherwise carry out of this province, or shall in any manner or way whatsoever, attempt or endeavour to export or otherwise carry out of this province, or attempt or endeavour to pro- cure to be exported or otherwise carried out of this province, any gold, silver or copper coin of any de- scription whatever, or any molten gold or silver in any shape or shapes whatever, then, in each and every such case, such gold, silver and copper coin, and such molten gold and silver shall be forfeited, one half to His Majesty, his heirs and successors, and one half to the person who shall sue for the same, and the same shall and may be seized, sued for, i)rosecuted, condemned and recovered in such courts, and by such and the like ways, means and methods, and the produce thereof disposed of and applied in such and the like manner, and to such and the like uses and purposes as any forfeiture incurred by any law respecting the revenue of the Customs may now be seized, sued for, prosecuted, condemned or recovered, disposed ot or a[)i)lied. XVI. Refers to action against the ex[)orter of I Army Bill Act. 17 thority c years latever ovince, :ription / shape sr shall nee, or of this :soever, e carry to pro- of this iny de- ilvcr in ch and er coin, )rfeited, cessors, for the d, sued in such ins and of and Lich and ncurred "ustoms demned :)rtcr of 4 specie or bullion as follows : And be it further enacted that every person whatever, who, durini,^ the period of five years from the passing of this Act shall export or otherwise carry out of this province, or procure to be exported or otherwise carried out of this province, or shall put on board of any ship, or vessel, or boat, or into any land carriage to be exported or otherwise caried out of this province, or shall in any manner or way whatsoever attempt or endeavour to export or otherwise carry out of this province, or attempt or endeavour to procure to be exported any gold, silver, or copper coin of any description whatever, or any molten gold or silver, in any shape or shapes whatever, for every such offence over and above the forfeiture of such gold, sihcr and copper coin, and if such molten gold or silver, if the same shall be seized, shall forfeit the sum of two hundred pounds, and double the value of such gold, silver and copper coin, and of such molten gold and silver, one half to His Majesty, and one half to the person who shall sue for the same by bill, suit, action or information, in any of His Majesty's courts in this Province. XVII. Provides that nothing in the Act shall prevent persons taking out of the Province the sum of £\o, or such further sum with license from the Governor. XVIII. Penalty on persons convicted of perjury. XIX. Refers to fines, &c., to be paid into the hands 18 Army Bill Act. :') III of the Rcccivcr-Gciicral and to be accounted for to the Crown. XX. Refers to Hmitations of action. At the close of the session, on the ist of August, 1812, the Provincial Parliament of Lower Canada presented to His Excellency Sir George Prevost, Baronet, the foregoing "Act to facilitate the circulation of army bills " for the royal assent, which was duly given. The Honorable Speaker of the Assembly said : " They, the representatives of the Province of Lower Canada, are under the greatest obligation to your Excellency for having communicated to them the means to ameliorate and insure for several years the punctual payment of the army, by the circulation of bills, the reimbursement of which is guaranteed in England. To give theiii greater credit, this bill limits the sum necessary, and moreover provides for the interest, the advantages accruing therefrom, and for the entire payment of the principal in specie in this Province, which has become expressly bound for the same at a fixed period." In connection with the establishment of the army bill office, a notification was made to the public by His Excellency, that James Green, Esquire, had been appointed Director, and Louis Montizambert, Esquire, Cashier, and that they had given the required security for the faithful performance of the trust reposed in them. The office was opened at the Court House, and from thence by order of His Excellency, an issue of army bills was made, consisting of the denomina- 4 I 1 TJlc Coins Current in Canada. 19 itcd for to the close 1 812, the presented ronet, the 1 of army Lily given. bly said : of Lower 1 to your them the years the ulation of an teed in bill limits 2s for the n, and for cie in this nd for the the army public by , had been t, Esquire, ;d security eposed in rt House, y, an issue ienomina- tions, twenty-five dollars, fifty dollars, one hundred dollars and four hundred dollars ; sifrncd by His Excellency the Commander of the Forces, by the Director, by the Military Secretary and made payable to the bearer, on demand, at the army bill office, in Government bills of exchange at the current rate of exchange or in cash, at the option of the Commander of the Forces, with interest. Prior to the passing of the "Act to facilitate the circulation of army bills," the currency of Canada con- sisted of a variety of coins. In the absence of a colonial coinage, the gold and silver coins of several nations were in circulation. Spanish, Portuguese, I'rench and German, circulated simultaneously with the gold and silver coins of Great Britain. During the session of 1795, the following statute was passed, viz : " An Act to prevent the diminution of specie circulating in this Province, that the same may be regulated according to a standard that shall not present an advantage by carrying it to neighbouring countries ; and whereas, by an ordinance now in force for regulating the currency of this Province, an advantage does arise by carrying gold coin out of the same, be it therefore enacted that the gold and silver coins hereafter mentioned, shall pass current and be deemed a legal tender in payment of al debts, and demands whatsoever in this Province, at the weights and rates following, that is to say : 20 Tlie Coins Current in Canada. Cnnndn Na.MKS (JI- Coins. WeiKhiii),'. Currency. Dwts. Grains. £, s. il. The British guinea 5 6 i 34 The Johannes of Portugal 18 400 The Moidore of Portugal 6 18 i 10 o The P'our Pistole piece of Spain 17 3 ^4 o The French Louis d'or coined before 1793 5 4 0180 The American Eagle 1 1 6 2100 With regard to silver, the American dollar shall pass current at five shillings currency, and every other coin current in the Province as already provided for, viz : Can.'uln Currency. The Spanish dollar at £0 5 o The British Crown .. 056 The French Crown or piece of 6 iivres Tournois . .'. 056 The French piece of 4 Iivres, 10 sols 042 Canada Currency. The British shilling ^o i i The French piece of 24 sols Tournois 01 i Pistareen o t o The French piece of 36 sols Tournois o I 8 A similar Act was passed by the Parliament of Upper Canada on the 3rd of June, 1796. Great inconvenience was experienced in conse- quence of the scarcity of specie, which gave rise to a kind of barter, or store pay, prejudicial to the interests of the farmers and labouring classes. Farm produce, furs, and labour were paid for in goods which had to be taken at unreasonably high prices at the shops or stores, because specie was hardly to be had. Under the Army Bill Act, however, a paper cur- rency was introduced, which proved of essential Circulation of Army Bills. 21 Cnnnclii Currency. IS. £ s. il. ' 3 4 400 1 10 o 3 14 o o 18 o 2 10 O ir shall y other led for, Canada Currency. ^^i^o 5 o 056 056 042 Canada Currency. £0 I I O I I O I o o I 8 lent of coiise- se to a terests oduce, lad to ops or r cur- sen tial service, not only in meeting the exigencies of the public service, but in facilitating commercial trans- actions. The measure proved, in practice, a complete success. Bills of the denominations $25, $50, $100 and $400 were not re-issued. They bore interest, as provided for in the Act, $400, fourpence per diem, $100, one penny per diem, $50, one halfpenny per diem, and $25, one farthing per diem, being substan- tially interest at the rate of six per cent, per annum. Four dollar bills bore no interest, and they were re-issued. They were payable at the army bill office in cash on demand. Many years ago I ascertained from merchants who were engaged in the retail business in Quebec in 1 81 2, and during the war, that the army bills circu- lated freely, the larger denominations with interest from the date of issue added. The calculation of interest which had accrued was an easy one: $400 for 30 days was just 120 pence, equal to 10 shillings currency ; $100, 30 pence ; $50, 15 pence, and so on ; consequently the increased value of each bill was easily ascertained ; and it passed, with its increment, from one to another in the purchase of goods or settle- ment of account. The Act provided for the redemption of bills of $25 and upwards, in cash or exchange on London, at 30 days sight, at the option of the Commander of the forces, at the current rate of exchange ; but the interest which had accrued on all such bills was paid in cash or exchange at the option of the holder. •)•) Rate of lixchnnge. The current rate of exchaiif^^c for bills on London at 30 days sii^ht was establislied (jncc in every fort- night, by a committee of five persons named by Mis Kxcellency. The rate of exchanj^^e for bills on London, in con- sequence of the suspension of specie payments by the Bank of Kn<^land, which took place in 1797, and which lasted till 1823, was very low. This subject, however, lias to be considered in connection with the price of ;4old in Kni^dand. The mint i)rice of an ounce of Standard gold is £7^ 17s. lo'^d., being one-twelfth part of £^6 14s. 6d. the value set upon a pound weight of gold. During the Napoleonic wars, the price of gold in Kngland per ounce rose, in 1800 to £4t. 5s. currency ; in 1809 to ^^"4. IIS. ; in 1810 to ;64. 19s.; and in 181 2, when Napoleon was in the zenith of his power, to £$. los. British currency. In order therefore to effect a settlement in Canada on a specie basis, bills drawn at 30 days sight on the Treasury in London, were subject to a large discount, frequently as much as 22^, as determined by the committee appointed by His Excellency to regulate the rate of exchange. Con- sequently, a bill at 30 days sight for i^ioo, at that rate, yielded only £'j'i sterling, equal to $356.46 in specie. In 1812 ^100 sterling in gold in England was worth ;^I20 4s. 9d. ; in 1813, ;{^ioo sterling in gold was worth ;{^I22. i8s. currency of Great Britain. It has to be borne in mind that the dollar in gold of 181 2, was of greater value than the dollar in gold The War. 'IW of the present day, oti account of its »;rcater wcij^ht and fineness. It retiuired only $4.57 to constitute the par of the pound sterlin^j in 18 12 ; whereas it requires $4.86^ to constitute the par now, bein^ 9j/°/ over the nuith or old i)ar of Queen Anne. In other words, the American ea<;le of 1792 contained 24.2 }4 i^rains of fine c;'old — the American eac;le o( 1837 contains only 232.2 i^rains of fine <;old. ThciC has been no change since that year in the quality or weight of the American eagle. In the early part of August 18 12, the war, both by land and sea, began to assume ii.i proper character. The American General, Hull, with a strong force, crossed from Detroit to the Canadian shore on the 1 2th of July. Hull, however, had calculated upon a friendly reception in Canada, but found the people hostile ; and, being warned of the advance of General Brock with a force of over 300 regulars, 400 militia, and several hundred Indians, led by Tecumseh, made a hasty retreat, recrossed the river and occupied his old quarters in Detroit. General Brock, however, with characteristic daring, crossed in pursuit, attacked and captured the town with 33 pieces of cannon, and the military chest ; and took General Hull and 2,500 troops prisoners of war. During the autumn, several raids were made along the frontier of the Upper St. Lawrence, and at other points ; but none of them of any importance, and none of them very creditable to either party. The Americans were repulsed at Presqu'ile on September 24 Oucenstoii Heitrhts. the 1 6th ; Gananoque was raided by Americans on the 2 1st; the British were repulsed at Ogdensburg on October the 4th ; and several British craft were captured off Black Rock, Lake Erie, on October the 9th. In the early part of October, however, viz., on the 1 2th, General Van Renselaer, in command of a con siderable force of American regulars and militia on the Niagara frontier, prepared to attack the British at Queenston, opposite Lewiston. He considered his forces ample to secure success. They numbered more than six thousand. The British force on the Western bank of the Niagara river, regular, militia, and Indians, numbered fifteen hundred. The Indian allies, under John Brant, numbered about two hundred and fifty strong. In addition, there was a detachment of the 41st regiment, 380 strong, under Captain Bullock, and the flank companies of the 49th regiment. The Americans effected a landing, notwithstanding a desperate resistance made by the British, and occupied the heights after a hot engagement, in which the gallant Brock lost his life ; but they were finally defeated and driven over the precipitous banks of the Niagara river at the point of the bayonet. About 1,1 or Americans, officers and privates, surrendered unv;onditionally as prisoners of war. CHAPTER II. Meeting of Parliament— Speech of the Governor— Enlargement of the Act— Steamboat service between (Quebec and Montreal— Capture of York -Further enlargement of the Act. The Provincial Parliament of Lower Canada was summoned for the despatch of business on the 29th December, 181 2. In the Speech from the Throne, His Excellency Sir George Prevost said :— " The complete discomfiture of the plans of the enemy for the conquest of Upper Canada, by the capture of Detroit, and by the surrender of the whole invading army with its general ; the brilliant achieve- ment at Queenston, tho' clouded by death in the hour of vfctory, of the gallant and much lamented Major-General Brock, together with other recent advantages gained over the enemy, both in Lower and Upper Canada, are subjects of sincere congratu- lations, and demand our fervent acknowledgments to the Great Ruler of the Universe for these unde- served mercies. " I take also pleasure in acquainting you that the measure of the issue of army bills, for the circulation of which you so promptly and liberally provided during the last session, has been attended with the 20 Meeting of Parliajnent. happiest effects, both by powerfully aiding His Majesty's Government to meet the extraordinary demands of the present crisis, and by materially facilitating commercial transactions. The experience of four months having fully shown the utility of the measure, I recommend to your consideration the adoption of such further regulations and provisions respecting it, as, upon a review of the Act passed upon this head, and of the present circumstances of the country, may appear to be necessary." It is manifest, I have said, that the Act to facilitate the circulation of army bills, proved a complete success ; but a much larger amount of notes than that authorized by the Act had been issued during the recess ; and the exigencies of the public service rendered it necessary to resort to a furtlier increase of issue. At the fourth session of the seventh Parliament holden in Quebec the 29th December, 181 2, "An Act to extend the provisions of an Act passed in the fifty-second year of His Majesty's reign, intituled, " An Act to facilitate the circulation of army bills," and to make further regulations respecting the same," was passed, and received the royal assent on the 15th February, 1S13. The Act reads as follows : I. Whereas an Act was made and passed in the fifty-second year of His Majesty's reign, intituled "An Act to facilitate the circulation of army bills ;" And whereas it appears by a message of the Governor- in-Chief to the House of Assembly of the 8th Enlargement of the Army Bill Act. 27 January, 1813, that the exigencies of the public service have rendered it indispensably necessary for him as Commander-in-Chief to direct an issue of the army bills to be made to a greater amount than two hundred and fifty thousand pounds provided for by the said Act, and that the further exigencies of the public service may render a further issue indispensably necessary ; and whereas it is expedient to subject such army bills as have been so issued, as well as such as may be hereafter issued, to the provisions, recfulations, and enactments of the afore-recited Act, and to make further provisions and regulations respecting the same ; Be it therefore enacted by the king's most Excellent Majesty, by and with the advice and consent of the Legislative Council and Assembly of the Province of Lower Canada, consti- tuted and assembled, by virtue of and under the authority of an Act of the Parliament of Great Britain, passed in the 31st year of His Majesty's reign, intituled " An Act to repeal certain parts of an Act passed in the 14th year of His Majesty's reign, intituled, "An Act for making more effectual provision for the government of the Province of Quebec ; in North America ; " " and to make further provision for the government of the said Province, and it is hereby enacted by the authority of the same, that all army bills which have been so issued after the time at which the army bills then issued, amounted to the sum of two hundred and fifty thousand pounds, and each and every of them and all such army bills as 28 Enlargement of the Army Bill Act. shall be issued during the next twelve months, from and after the passing of this Act, shall be deemed and taken to be within the purview of the Act made and passed in the 52nd year of His Majesty's reign, intituled, " An Act to facilitate the circulation of army bills ; " and that all the provisions, regulations and enactments in the said last-mentioned Act con- tain(?d, and each and every of them, shall be applied and put in force in respect to all and every such army bills so issued, or that may hereafter be issued, as fully and effectually to all intents and purposes as if the same were severally and separately repeated, and herein recited, and made part of this Act under the restrictions hereinafter mentioned. II. Provides for the payment out of all and every and any the monies, customs, taxes and revenues of , this province, and in preference to all other claims and demands whatsoever, all such interest at the rate of fourpence per one hundred pounds per diem, as shall arise and grow due upon all and every and any army bill or bills, which have been issued, or shall hereafter be issued. III. Provided always that the sum so to be paid out of and from the customs &c. aforesaid, with inter- est as aforesaid, shall not on the whole and together exceed the sum of fifteen thousand pounds currency per annum. IV. Provided also, and be it further enacted by the authority aforesaid, that the amount of army bills in circulation as well as those already issued or such as Enlargement of the Army Bill Act. 29 may be hereafter issued, shall not at any one period exceed the sum of five hundred thousand pounds currency. V. And be it further enacted by the authority aforesaid, that interest upon such army bills as have been, or shall hereafter be issued, shall run from the day of the date of such bill or bills, until the same shall be paid, and that the holder or holders of every such bill or bills shall be entitled to demand and receive payment of all such interest at stated periods, once in every six months, at the army bill office in the city of Quebec, and further, that public notifica- tion shall be given in the Quebec Gazette immedi- ately after the passing of this Act, by order of the Governor, Lieutenant-Governor, or the person ad- ministering the government for the time being, of the periods at which such payments shall be made. VI. And whereas it is expedient in order that the public confidence in such army bills may remain undiminished, that the holders thereof may be assured of the punctual payment of all interest that may become due and payable on army bills ; and whereas the sum of fifteen thousand pounds per annum herein before provided, may not suffice for the full payment thereof on the whole amount of bills so issued or to be issued, Be it therefore enacted, by the authority aforesaid, that the provisions, regulations and enact-, ments of the Act herein before cited, intituled, "An Act to facilitate the circulation of army bills," shall not extend or be coni:trucd to extend to a greater 30 Enlargement of the Army Bill Act. amount of army bills in circulation at any one time, during the next twelve months after the passing of this Act, than two hundred and fifty thousand pounds currency, unless public notification shall be given in the Quebec Gazette within one month after the passing of this Act, by the Commander ot His Majesty's forces in this province for the time being, that all such interest as aforesaid shall be paid at the army bill office at the like stated periods. VII. And be it further enacted, that the five Com- missioners heretofore appointed for the purpose of certifying the current rate of exchange, at which bills of exchange on London were and are to be given in payment of army bills, and their successors, or any three of them, shall continue to meet and certify under Oath the rate of exchange in like manner, and that in due execution of their office, as aforesaid, they shall be guided by the fair current rate of bills of exchange at thirty days' sight, and by all such other information as they may be able to procure, so as to enable them to do substantial justice to the holders of such bills, and to the government. VIII. And be it further enacted, that it shall be the duty of the officer or officers to whom it may appertain as having the direction of the army bill office, to lay before the Commissioners immediately after the passing of this Act, a correct account of the amount of all su h army bills as shall then be in circulation, ?»' ; r.. ukc\\ second subsequent meeting of the said Cou\ni;;.s;..ncrs, a true and correct account Enlargcincut of the Army Bill Act. 31 of all such bills as shall have been issued and put into circulation from the date of the last account rendered, in order that the same may be laid before the Legislature, at its next ensuing meeting. IX. And be it further enacted, that all sheriffs and bailiffs who shall or may receive army bills upon execution, shall be accountable for the interest on all such bills which by them or any of them shall be so received for, and during the time that such bills remain in their hands, to the persons interested therein, and to this end the said sheriffs and bailiffs shall mention in their respective returns, whether t' cy received the amount or any part of the amount of such executions in money or in such bills, and also the day on which they received it. X. And be it further enacted, that no public officer whatsoever shall profit by the interest on the army bills which may be placed in his hands as such public officer, to be given in payment, and shall render an account of the said interest, annually, on the first day of November, to the Receiver-General to be employed according to the dispositions of the fourth section of the aforesaid Act, passed in the fifty- second year of His Majesty's reign. XI. xAnd be it further enacted, that the interest for which the Receiver-General and collector and all public officers are accountable to the province, shall be employed and applied in the payment of the interest wherewith the Province is by this Act charged. 32 Enlargement of the Army BUI Act. XII, Provided always, and be it further enacted, that nothing in this Act contained shall extend or be construed to extend or entitle any holder or holders of any such army bills as aforesaid, as may at any time hereafter, remain unpaid or unsatisfied (save and except the holder or holders of such army bills as were heretofore issued, subsequent to the passing of the Act, to facilitate the circulation of army bills and until the same exceeded in the whole the sum of two hundred and fifty thousand pounds, and which now remain unpaid and unsatisfied) to receive out of or from any monies that may then be in the hands of the Receiver «jeneral of this Province, or from any moniei: that may hereafter come into his hands arising out of any taxes or duties heretofore imposed or that may hereafter be imposed, levied, or raised by virtue of any Act of the Provincial Legislature, or from the rents and rev^enues of His Majesty's terri- torial domains in this province, or from any other monies in the hands of the Receiver-General, pay- ment of any such army bill or bills, as aforesaid. XIII. And be it further enacted, that should the Governor-in-Chief deem it expedient, to cause the whole or any part of the army bills to be hereafter issued to be signed by any other person or persons, by and under his authority ; public notice shall be given during one month in the Quebec Gazette, of the name or names of such person or persons so authorised, and that all army bills signed by such person or persons, shall be considered as forming Enlargcinoit of the Army liiii Act. ;33 part of the sum of five hundred thousand pounds, at which the whole amount of army bills to be circu- lated at the same period is hereinbefore limited. XIV. And be it further enacted, that the sum of five hundred thousand pounds, at wliich the amount of army bills to be in circulation at one period is limited, such amount may be issued in army bills of one, two, eight, ten, twelve, sixteen and twenty dollars each, as the Commander of the forces may deem expedient and necessary, such bills bearing' no interest and payable in cash on demand at the army bill office. Provided always that the amount of such bills, and of bills of four dollars each, shall not in the whole and together exceed the sum of fifty thousand pounds. XV. And be it further enacted, that it shall and and may be lawful for the Governor, as Commander of the forces, to establish such other office or offices at Montreal or elsewhere in the Province as to him may seem expedient and necessary for the payment of all such bills as have, or may hereafter be issued, payable in cash on demand. Provided that the whole expense thereby incurred, together with the expense of the office already established, do not in the whole exceed the sum of two thousand five hundred pounds per annum, appropriated by the Act herein before mentioned. The following is a copy of advertisement respecting the adjustment of the rate of exchange : c 34 Rate of lixc/iaugc. !il f'i "Quebec, 151I1 March, 1S13. "The Commissioners appointeil by I lis Excellency Sir (ieorge Prevost, Governor-in-cliief and Conunimler of llie Forces, in virtue of the I'rovincial Act of the 52n(l year of His Majesty's reign, inlituleil, "An Act to facilitate the circulation of army l)ills,' (the provisions thereof being extended, and further regulated by an Act of the 53rd year of His Majesty';, reign) have fixed on the rate of exchange for government bills, at 30 days sight, at twenty per cent for the next fortnight from this date." N.IJ. — "The said Commissioners meet every Monday fortnight at 10 o'clock, at the hf)use of Mr. Blackwood, St. I,ouis Stre, $50 and $25, were signed, as I have already stated, by Mis Excellency as Commander of the forces, by the Director, and b}'' the Military Secretary, and made payable as provided for in the Act. The four dollar bills were signed by the director of the Army bill office, the Cashier and the military secretary only. The whole of the bills were deposited in the mili- tary chest, from whence they were issued in payment of whatever demands were required to be made on the Commissary-General or Paymaster-General, on account of the public service. The signing of these bills by His Excellency was apparently found inconvenient, for, under date of 23rd March, 18 13, I find the f<^'lowing notice: " His Excellency has directed that public notice be given, and the same is hereby given, that all such army bills, will, from and after the 24th day of April, instead of bearing the signature of His Excellency the Commander of the forces, be signed under the authority of His Excellency, by James (ireen, Esquire, director of the said army bill ^. Armj' Bill Office. 35 ofllce, or l)y the direclnr of the said office for the lime l)einj;, by tiie command of His Excellency, and ])y Louis Moiilizambert, Esquire, cashier of the said office for the time beinj;, and by those persons only." And on the 22nd of April, further notice is given as follows : "And whereas certain army bills now bearing my signature still remain to be issued, and will be issueil, nothwithstanding the said notification, after the said 24th in — statuary to Paris. Hut time at last makes all thini^s even. "The Transfi-^^uratioii atul the Last Communion of St. Jerome resumed their place in the Vatican; the Apollo and the Laoc(^on aj^ain adorned the precincts of St. Peter's ; the Venus was enshrined anew amid hcauty in the tribune of I'lorencc ; and the Descent h-om the Cross, b\' Rubens, was restored to the devout worshij) of the I'^lcminc,^s in the Catliedral at Antwerp." The Americans were nothing daunted by the reverse at Ouccnston. The authorities, as well as the writers, spoke of the death of l^rock as etpiivalent to a victorv. At the cw^ of April, iSi 3, a joint land and naval expedition was organized to capture York (now Toronto) the capital of Upper Canada. The American fleet api)eared before the town on the 2()th, conveying a land force of 2,500 men. Toronto had for defence, under Major-General Slicaffe, less than 600 men, consisting of regulars and militia. General Pike, of the American army, at the head of a division of at least 1,000 strong, landed, in spite of a spirited resist- ance. The Americans swarmed into the old French fort and harbour defences, fiery with fighting, and flushed with success, when suddenly, — with the crash and concussion of an earthquake, — the powder maga- zine exploded at their feet, spreading havoc through their ranks. Of the assailants, 250 were instantly killed or wounded, — General Pike amongst the killed; of the defenders many perished. The contest itself was stayed by the catastrophe ; it had endured eight A Jiiericans Victorious. '^ ^:'} u hours. The survivitif^ l^ritish troops had witlidrawn ; all that could be done had been done, and York capitulated throui^h the local officers of militia. Shcaffc left behind him, of regulars sixty-two killed and seventy-two wounded. The Americans kept possession, but evacuated York on the 2nd of May, i8i * The complete victory of the Americans over the British at York atoned in some measure for the reverse they had suffered at Oucetiston Heights. .1 might now allude to the succe: - of the Americans at sea, to t leir victory over the l^ritish frigate Gucrriere; to the naval duel between the British ship Shannon and the American Chesapeake, to the defeat and capture of the latter after a sanguinary engagement ; but it is not my intention to refer to the stirring events of the war, further than mav seem to me desir- able to show the necessity which existed for the Army l^ill Act, and for the subsequent enlargement of its provisions to meet the exigencies of the public service. Several raids or attacks were made from both sides of the lines with alternate successes and defeats. Among the most memorable were the attack on Sackets harbour by the 15ritish, without any satis- factory result ; the capture of Fort George by the Americans ; the subsequent night attack by the British upon the American army encamped at Stoney-creek, Colonel Coffin, " l8i2, Chronicle of the War." Chatcauguay, Defeat of Americans. 3!) where deadly work was done with the bayonet, in the lurid light of the watch-fires, as the sleepers aroused, rose stumbling and dazed. Two American Generals, caught napping, and one hundred soldiers were made prisoners of war. The rest of the American Army made a hast>' retreat, never halting till safe within the works of Fort George. Ikit the most memorable of all the engagements was the battle of Chateauguay in October 1813, when a powerful invading force of Americans, bent upon the subjugation of Lower Canada, was beaten back and signally defeated by a small force, consisting chiefly of French Canadian militia, led by Colonel de Sala- berry. There was also a minor engagement at Cryslers farm, in which the Americans were defeated. The expenses connected with the war were so great that it is difficult to conceive how it could have been carried on without the operation of the Army Bill Act. We are, I believe, as much indebted to the authors of that measure for the preservation of our connection with the British lunpire, as we are to the valour of our soldiers and sailors in repelling a cruel and unwarrantable invasion. The Provincial Parliament again assembled on the 13th of January, 18 14. His I^:xccllency Sir George Prevost, after alluding in his Speech from the throne to His Majesty's victorious arms in ICurope, said : "In turning our eves to our own shores, we have abundant cause for gratitude to thj S^'iremc Giver of all good, for the termination of the late campaign in a manner 40 Colonel dc Salabcrry. so I'-lorious to tlic I^ritish ill Aet. 41> subsequent to the passing of tlie " Act to facilitate tlie circulation of i^'-iny bills," and until the same exceeded, on the whole, the sum of two hundred and fift\' thousand pounds, and wliich now remain unpaid and unsatisfied, to receive out of or from any monies that there may be in the hands of the Receiver-General in this province, or from any monies that may here- after come into his hands, arisin 22J-2 I'«ii" cent, discount, has been altogether saved upon the sum now in circulation, and what further loss the public must have sustained by the exchange, but for the relief afforded by this paper medium, it is not i)ossil)Ie to calculate, no doubt it would have lieen enormous ; another advantage not to be overlooked, is the facility with which army iiills hive been conveyed to the m>)st remote parts of this extensive command, to meet the exigencies of the service al an inconsiderable expense and risk, whereas the transport of specie would have been attended with danger, delay and heavy cost, besides which, the enemy has been deprived of his booty in two instances in his predatory incursions into Upper Canada, by the facility with which the contents of the military chests at York and Fort George were destroyed, williout any loss to the public. In explanation of this circumstance it is necessary to ol)serve that as the army bills do not become cash by the system adopted, until they are issued and dated, and the numbers of the bills having been Arwjf Bill Office, 57 kept by the accountants, they were replaced from the army bill office, or a similar amount in lieu thereof. UnderstandincT that another bill is in progress in the Trovincial Lei^islatare now in session, extendin' Gen'. (Signed) J. Halk, Dep.- Paymaster Gen'. (Signed) NoAH Frker, Military Secretary. 'I\ \\' 58 Extension of Circulation Opposed. The bill referred to in the foregoing report as in progress in the Provincial Parliament was thrown out in the Upper House ; and I find a letter in the Quebec Gazette of the 31st March, 181 5, respecting its rejec- tion, headed : Army Bills. The tate of the new Army Bills Act, lately passel by the House of Assembly and rejected by the legislative council, having excited public curiosity, we are happy in being enabled by a correspondent, to gratify our readers with the following observations on that interesting subject. The Act of 1814. authorised tlie issue of army bills w\-) to the 1st day of February, 1815, to an amount not exceeding ;i^i,5oo,ooo currency at any one time in circulation. This Act remains in full force in respect to all bills issued within the above limits, and will continue in force until the end of live years, counting from August 1812, and by the monthly returns from the army bill office laid before the legislature, it appears, that the above sum of ^^ 1,500,000 was amply sufficient for the public service in both ])rovinces, the largest amount stated to be in circulation at any period during the last year being only about ;^I,205,000. At the time this Act was jiassed, the public were suffering for want of small money ; a clause was therefore inserted, requiring that, of the amount so to be issued, a sum not less than ^^200,000 nor more than ;^5(30, 000, should be issued in small bills bearing no interest — and at the same time, to guard against the pernicious effects of a superabundance of small bills in circulation, a proviso was wisely added, entitling the holders of such l)ills, "to demaml and receive at the army bills office, on demand, army bills of $50 and upwards, bearing interest for the amount of all such bills." This proviso is still in force but was wholly omitted in the new bill. Immediately after the passing of this Act on the 17th of March, 1814, the issie of small bills commenced, and was continued through the summer and fall, and by the end of November, it would appear the circulation of both Provinces was more than fully supplied, for early in the following month we find by the monthly returns, that the public began for the first time to avail themselves of the above proviso, by bringing in small bills in exchange for large ones. Accordingly it ti Extension of Circiilatuvi Opposed. 59 appears, that between tlie i2lhof Deceml)er, 1S14, and 31st of January, 1S15, no less than ^^43,925 was issued in large notes bearing interest, in exchange for small ones. As there is no reason to suppose that government excee led the limits prescribed by the Act, here is plain proof that even half a million in small notes was more than sufficient for the circulation of both Provinces, seeing that in a!)()at ten months no less than ^'44,000 worth of them were brought back in exchange for large bills, exclusive of what were paid in during that period for bills of exchange. Tiie i)re>umplion therefore is, that a smaller sum would have been ciuite sufficient during the war, and that a still smaller sum might suffice during ])eace. Here it may be proper to remark, tlial the operation of the above proviso had the in )st salutary effect, l)y counteracting any excessive issue of small bills, and to this circumstance, in conjunction with the management of the exchange commissioners, may fairly be attril)Uted the high and unprecedented degree of credit in which the paper hath hitherto been so ha[)pily maintained. With this experience before our eyes, the object of the framcrs and advocates of the w^w army bid is altogether inconceivable. It began by extending the authority to issue armv bills to an amount not exceed- ing ^2,000,000 at any one time in circulation. This extension was surely unnecessary in a time of peace ; seeing that the former limits afforded more than sufficient for tlie public service, even during war. But this was not the principal objection to the bill. In a subsequent clau->e it was enacted, that of the amount so to be issued, a sum not less than one million should be issued in small notes, bearing no interest, and the wise proviso in the former Act, for con- verting small notes into large ones, was entirely omitted. Tiiis extra- ordinary clause having passed in the Assembly, and the bill arrived at the third reading, a rider was proposed and agreed to, in that House, authorising tlie Commander of the forces, at any time, to buy up with ca«h, the whole or any part of the army bills bearing interest, whenever he might think proper. In this shape the liill made its appearance in tlie l>egislative Council, where, luckily, the members were too well acquainted with the subject to suffer its dangerous imperfections to escape their notice. The words "not less than one million" were the first that struck their attention. Hy that clause as it originally stood, government might 60 Ilxtension of Circulation Opposed. have issued the whole two million in small notes, at same time that they were authorized by the rider to buy up all the large ones. But a com- munication having taken place i)etween the two houses, it was agreed to consider the words " iu)t less" as a clerical error, and to substitute in their stead the words '• not exceeding " which was accordingly done in a ])rivate way by the two speakers, etc. This was considerable im- provement to the clause, but it was liable to insurmountable objections, for want of the old proviso so often menlioneil, to relieve the circulation from superfluous sm.ill notes there being no other mode of redemption provided than that of bills of exchange on London, which are only wanted by a very small portion of iiie community, and therefore, the issue of small notes to the extent of one million, must inevitably have produced a depreciation, seeing by the experience of last ye;ir, while the war expenditure was going on to its full extent, that even half a millitm was too much. Mad the Legislative Council been at liberty to amend this bill, by inserting the old proviso for converting the supeifluous small bills into large ones, everything would have found its level by means of that salutary check, and all might have gone well — but unfor- tunately, this all along had been considered (very erroneously) as a money bill, which the Upper House must not touch, and therefore they had no other option than to pass it or reject it. We do not pretend to give any report of the debates in council on this subject, but we understand it was very fully discussed during several sittings, and that finally the members were unanimous in rejecting the bill, as being the safer of the two alternatives. The introduction of this paper currency, at the commencement of the late war with the United States, as the substitute for specie, at a time when there was very little specie in the country, and when the public service could not have been carried on without it, was certainly a seasonable and judicious experiment, and its unprecedented success has not only been a great pecuniary saving to Great Britain, but it has also contributed in no small degree to the preservation of these Provinces. The credit of this paper ought, therefore, to be considered as an object of the first importance and carefully supported to the last, being a most valuable resource, to be again resorted to by government on future occasions in case of need. Mistaken notions of economy in attempting to save the interest by buying up the large bills and making Extension of Circulation Opposed. 61 excessive issues of small ones, if carried into practice, would be fraught with most dangerous consequences, and ought always to be resisted, for when depreciation begins, there is no knowing to what extent it may go, and the credit of the paper once lost will be remembered for a century to come, and render it impossible again to resume the system with any success. Finding by experience that this paper is so advantageous to Great Britain, while at the same time it affords accommodation to .noneyed men in this colony, some well-informed persons are of opinion, thit it would be good policy to continue the system in peace as well as in war, and have expressed their surprise that no steps were taken after the rejection of the New Army Bill Act, to introduce a short bill, to authorize a further issue of army bills for a limited time, under the Act of 1814, which it is supposed would have met with no opposition in either house, the provisions of that Act having been found by expe- rience to answer every desirable purpose. And we confess we are much inclined to this opinion, when we reflect that Great Britain has no money lying idle -that on the contrary, she is paying many millions annually for the interest of what she owes as a nation, and that she cannot send specie or anything else to this country, without adding so much, in some shape or other, to her national debt. It is true, the legal interest in England is only 57, , while here it is 67,. But it must at^ame time be recollected, that ail our paper serves as a substitute for specie, that only about two-third^ of what is at present in circulation bears interest, an.l that the Province contributes ^15,000 per annum towards that interest. To this must be added the advance of money in England (equal to perhaps six or eight mouths interest) and the ordinary expenses of purchasing and sending out the specie-and it must also be recollected that specie as a circulating medium, freiiuenily finds its way into the neighbouring States, and therefore recpures a frequent supply to keep up the requisite quantity, while, on the con- trary, our piper remains at home, and requires only a judicious regu- lation of the rate of exchange, and due precaution against forgery to keep it in full credit. Further to illustrate these oljservations, we have only to present our readers with the following statement in round numbers, which, by the returns from the army bill office, cannot be very far from the truth. Suppose ^[,200,000 in army bills at present in circulation. Of ff i! !- 1^. 62 Extension of Circulation Opposed. which /"Soo.ooo Ijcais iiilt-icsl at 67,, /"4S,0i)0, and ^"400,000 bearing no interest, being small i)ills, ;^l,200,ooo. Deduct so much paid l)y the Province /"i 5,000, balance of interest (being only 23^7o "" ^1,200,000), — ,1^33,000. Suppose bullion at the mint prices, arid that Great ISritaiii were to purchase and send out specie for the redemption of all these army bills, the expenses in freigiit on /"r, 200,000 cannot be less than i/^7oi say /"i8,ooo, one year's interest on ;^l, 200,000 @ 57o'/6o.ooo-Z'78,ooo. Deduct the foregoing balance of interest /io33»ooo Loss to Great iJritain by senear interest — still we are of opinion that they would be atlvanlageous to Great Britain, particularly when it is considered, that without them, we should require an annual supply of specie to a certain extent, to keep up the requisite quantity for circulation. Expense of sending out ^!,2GG,ooo in specie as above stated, including one year's interest .... ;^78,ooo ^'1,200,000 in army bills, all bearing 6/0 interest. ^^72, 000 Deduct so much paid by the Province 15,000 57,000 15alance saved to Great Britain, supposing that all our l)dls bore interest 21,000 Again we may ask where can Great Britain obtain a cheaper loan ? N.B. What is meant by the "advance of money" is the difference between the time when money would be paid in England for the purchase of specie to send here, and the time at which bills drawn here for the public service get home and become due, which, in the ordinary course, is found on an average to be six or eight months — and the interest for that time is of course so much more to be added in favour of our army bills, which are only issued when they are wanted, and Great Britain is so much more the gainer. It would be easy to piove that at least half a million has been saved to Great Britain in one way or other, by means of our army bills up to this date. — Quebec, 24th March, 1815. A moil Jit of Army Bills in Circulation. ('»'') The following statements relating to the circulation of the army bills, copied from official documents in the Canadian Archives Bureau, will prove inter- esting to professional bankers. Circulation of Army Hills. ^^^,^, ^^^^^ Office, 24th April, 1S15. Account of tiik A.mouni' of Army Bn.i.s in Cikculation. Balance of army bills remaining in circulation the 2']\.\\ March, 1815.... ^1,249.996 5 Dkddct : — So much redeemed by bills of exchange on London since the 27th March, 1815, viz. : — In large bills ^ 43 '5 In small bills 3-594 5 ^' 3.63S o 175 four dollar bills, worn out, have been redeemed with specie since last report 175 o 459 one dollar bills, rendered useless by wear, have also been redeemed since last report 1 14 15 The following bills have been redeemed at, and received from the military chest at Montreal, viz. : — 19,463 bills at 4 dollars. ... . ;!<,'l9,463 o 56,354 bills at I dollar . 14.088 10 33,551 10 117 bills at 10 dollars^ 137 105 81 308 5 (( .< 2 Of the new issue of small bills rendered useless by wear, or otherwise, have been redeemed between the 27th March and 24th April, 1815.. . Balance of army bills remaining in circulation the 24th April, 1815 ^^1,211,857 2,640 dollars 660 o ^38,139 5 To the Commissioners for fixing the rate of exchange, &c. &c. &c. (Signed) James Green, Director. ¥■ 'i ^ ^ G4 Amount of An/ty JUils in Circulation. Circulalion of Aimy IJills. AkMV IJii.i, Ol'i'iCK, 2211(1 May, 1815. Account ok iiir. Amount of Aumy Uii.i.s in Circulation. Balance of army bills remaining; in ciroulaiion the 24tli April, 1815 ^"i, 21 1,857 o Deduci' :— So much redeemed by bills of exchange on London since the 24th A[)ril, 1S15, vi/. : - In lai-ije bills /^ 831 5 In sm ill bills 2,932 5 ^"3,763 10 150 four dollar bills, worn out, have been redeemed with specie since last report 150 o 70S one dollar bills, rendered nseles-. l)y wear, have also been redeemed since last report. . . 177 o 64 bills at 10 dollars' 58 " " 5 no " " 3 209 " " 2 619 " " I Affidavit before the Judges. . . I Of the new is>ue of small l)ills remlered useless by wear, or r otherwise, have been redeemeil between the 24th A|)iil and 22nd May, 1815 574 10 ^4/^65 2,298 dollan Halance of army bills remaining in circulation the 22nd May, 18 1 5 ^1,207,192 o To the Commissioners for fixing the rate of exchange, iJtc. iS:c. (S:c. (Signed) James Green, Director. Amount of Antiy Bills in Circulation. G.' Circulation of Army Bills. Army Bill Office, 19th June, 1815. Account of the Amount of Army Biils in Circulation. Balance of army bills remaining in circulation the 22n(l May, 1815 ^1,207,192 o Deduct : — So much redeemed by bills of exchange on London since the 22nd May, 1815, viz. : — In large bills ;Cl3.SI2 10 Four dollar bills worn out have been re- redeemed with sp^^cie since last report One dollar bills rendered useless by wear have also been redeemed since last report. . . 30 Bills at 10 dollars^ Of the new issue of small bills rendered useless by wear, or ^ otherwise, have been redeemed between the 22nd May and 19th June, 18 1 5 594 dollars^ Balance of army bills remaining in circulation the 19th June, 1815 ;ii, 193.531 o 8 •• " 5 (( 26 " " 3 .t 79 " " 2 ii 18 " " I f exchange, &c. iVc. &c. (Signed) James Green, Director. E WT. 66 Amount of Army Bills in Circulation. Circulation of Army Bills. Army Bili, Office. nth September, 1815. Account of the Amount of Army Bills in Circulation. Balance of army bills remaining in circulation the 14th August, 1815 £ 628,792 15 Deduct:— So much redeemed by bills of exchange on London since the 14th August, 1815, viz. : — In large bills ;^75.I25 o In small bills 240 o ;^I22,365 o 976 four dollar bills, worn out, have been redeemed with specie since last report 4294 one dollar bills, rendered useless by vv^ear, have also been redeemed since last report . --Bills at ID dollars^ (S 1 ( 976 O 1,073 10 5 Affidavits before the Judges 6 '* 6 dollars Of the new issue of small bills rendered useless by wear, or otherwise, have been redeemed between the 14th August and I I th Se pt ember, 1815 Affidavit I 10 ,^124,416 o Balance of army bills remaining in circulation the llth September, 1815 ;^ 504,376 15 To the Commissioners for fixing the rate of exchange &c. &c. &c. (Signed) James Green, Director. r, 1815. LATION. 28,792 15 !4,4i6 o 4.376 IS Amount of Army Bills in Circulation. C7 Circulation of Army Bills. Army Bill Office, 9th October, 18 15. Account of the Amount of Army Bills in Circulation. Balance of army bills remaining in circulation the nth September, 181 5 ^504.37615 No large or ten dollar bills issued since nth September, 181 5. Deduct : — So much redeemed by bills of exchange on London since the nth September, 1815, viz. : — ^" '-'^'■K^ l^*"s ^43.331 5 In small bills 25,649 o ^68,980 5 240 four dollar bills, worn out, have been redeemed with specie since last report 240 o 663 one dollar bills, rendered useless by wear, have also been redeemed since last '■^P°''t 165 15 69,386 o Balance of army bills remaining in circulation the 9th ^^'^''"'■' '^^5 ;^434.99oi5 To the Commissioners . (Signed) James Green, for fixing the rate of exchange. Director, &c. &c. &c. Director. ' V t ■ i' ' i' 68 Amount of Armj/ Bills in Circulation. Circulation of Army Bills. Army Bill Office, 6th November, 1815. Account of the Amount of Army Bills in Circulation. Balance of army bills remaining in circulation the 9th October, 1815 A34.990 15 No large or ten dollar bills since that date Deduct : — So much redeemed by bills of exchange on London since the 9th October, 1815, viz.: — In large bills ;i^' 6, 943 15 In small bills 10,695 'O ;^27,639 5 94 foi'r dollar bills, worn out, have been redeemed with specie since last report 94 o 426 one dollar bills, rendered useless by wear, have also l)een redeemed since last report 106 10 27,839 15 Balance of army bills remaining in circulation the 6lh November, 1815 ;^407,ISI o To the Commissioners (Signed) James Green, for fixing the rate of exchange. Director. &c. &c. &c. Army Bills Redeemed. 69 815. )N. 90 15 J9 15 51 o or. General abstract of statements shewing the manner in which the sum of ;(^8S,962 10. currency, imprested to me by warrants from His Excellency Sir George Prevost, and His Excellency Sir Gordon Drummond, between the nth October, 1814 and 24th August, 1S15, has been appropriated. A. Statement of one dollar bills redeemed between the 13th Septeml)er, 1814, and 6th November, 1815 inclusive, your reports transmitted to the Commissary-General from time to time, in conformity to instructions from His Excellency Sir George Prevost, Governor-iu-Chief and Commander of the forces ;i^l 6,029 5 B. Statement of four dollar bills redeemed within the above period, and reported to the Commissary-General 14,381 O C. Statement of bills of 10, 5, 3, 2 and I dollars, of the last emission, rendered useless by wear, or otherwise, which have been redeemed within the same period, and re- ported to the Commissary-General as above. . , 8,879 o "D. Statement showing how the sum of ;,^48,962 10. cur- rency, has been a])propriated, which I received for the purpose of exchanging small notes with bills bearing interest of 400, 100 and 50 dollars each 48,962 10 E. Statement showing the number of counterfeit bills which were discovered in the military chest at Quebec and redeemed by me with specie, paid to John Hale, Esq., Deputy Paymaster-General, pursuant to the mili- tary Secretary's letter, dated Head Quarters, Montreal, i6th November, 1814 39 10 ^88.291 5 Balance remaining in my hands on the 6th November, 1815, for the purpose of daily changing small notes of the above description 617 5 ^88,908 10 Errors excepted. Army Bill Office, 22nd Nov., 1815. (Signed) James Green, Director. 70 Army Bills in Circulation. Circulation of Army Bills. Army Bill Office, 4th December, 181 5. Account of the Amount of Akmy Bills in Circulation. Balance of army bills remaining in circulation the 6th November, 1815 ^^407, 15 1 o No issue of large or ten dollar bills since that date Deduct : — So much redeemed by bills of exchange on London since the 6th November, 18 1 5, viz : — In large bills ;,^i,i8^lo In small bills. . . 4,582 15 ;^5,77o 5 So much redeemed by specie, commencing the 24th November, 1815. In large bills ;^3.3l8 IS In small bills, .. 801 15^^4,120 10 174 four dollar bills, worn out, have been re- deemed with specie since last report.. ........ 174 o 1231 one dollar bills, rendered useless by wear, have also been redeemed since last report 307 15 ^^10,372 10 Balance of army bills remaining in circulation the 4th December, 1815 ;^396.778 10. To the Commissioners (Signed) James Green, for fixing the rate of exchange, Director. &c. &c. &c. . Army Bills in Circulation. 71 N. ! lO \ lO r. Memo.— Letter from James Green, Director, dated l8th December, 1815, asking for further warrant for ^10,000 currency, to pay interest on army bills. Report of Circulation, ist January, 1S16. gives balance in circulation 4th December, 1815, ;{;396,778 o; from which deduct bills redeemed to 1st January, ^65,281 15 ; leaving a balance in circulation 1st Jan., 1816, of;^33i,496 15- Report of Circulation, 29th January, 1S16, says, balance in circula- tion 1st January, 1816, ;^33i,496 15 ; f'o»" ^^''li'^^i ^'^duct bills redeemed to 29th January, 1816, ^30,213 ; leaving a balance of army bills remaining in circulation the 29th January, 1816, of ^^301, 283 15. Report of Circulation, 26th February, 1816, says, balance in circula- tion 29th January, ^301,283 15 ; deduct bills redeemed, £^\,^^^ 15 5 leaving a balance of ^279,720 o. Report of Circulation, 25th March, 1816, says, from balance 26th February, deduct in bills redeemed, ^36,970 10 ; leaving balance of ;^242,749 10. , , , Report of Circulation, 22nd April, 1S16, says, from balance 25th March, deduct in bills redec neJ, ^16,678; leaving a balance of ;{'226,07I 10. Report of Circulation, 20th May, 181 6, says, from balance in circu- lation 22nd April, 1816, deduct in bills redeemed, ^28,096 15; leaving a balance of ^197,974 15. Memo.— From a letter signed James Jackson, dated 3rd June, 1816, to Lt.-Col. Fulton, I see that the value of a silver shilling at that time was 25 coppers. Note. — In a letter from Geo. Wcod, Com.-Genl., dated 8th October, 1818, to Major Bowles, Mil. Secretary, he slates that during the summer of 1818, the rate of exchange for public bills was at par, while private bills had uniformly been below par, from one to three per cent., the demand for public bills having been very large. Note.— From a letter dated 9th December, 18 18, I End that the rate at which the dollar was issued to the troops was 4s. 8 1. Note.— From a proclamation issued by His Grace Charles Duke of Richmond, Lennox and Aubigny, Commander of the forces in Canada and British North America, dated 17th December, 1S18, I find that the date of closing the army bill office was enlarged to the ist April, 1819. T 72 £g,ooo Lost or Destroyed — Consequent Gain. Note. — Letter from James Green, Director, asking for continuance of army bill office to 1st August, 1820, as it had i)een accurately ascer- tained that there remained to the Crown a saving of nine thousand pounds and upiuards oit hills lost or destroyed to that amount, and he wished to have time to carry the affairs of that office to a satisfactory close, as was usual witii other pat)ltc offi:es similarly situated. (Date of letter, 19th May, 18 19.) Office continued to six months after 1st August, 1819, by sanction of War Department (Treasury Chambers). Memo. — Grand total of the numl)er of army bills issued, viz. : — Bills at 400 dollars each ....... 5,500. . . .;i^550,ooo " " lOD «' " 34.605 ... 865.150 " "50 " " 63914... 798,925 " " 25 " "...... 92,726 ... 579-537 'o /2,793,6i2 10 " " 10 " " ....... .127,600. .. .;{^3I9,003 " " 5 " "....... 72,000.. . 90,000 " " 3 •* " 64,030 ... 48,000 " " 2 " " 106,500 53-250 " " I " " 165,000.... 41,250 ;^55i. 500 o Bills redeemed with ) at 4 dollars 52,131 ... 52,131 specie only ) at r dollar. 179,000 . . . 44,750 96,881 o 'iolal ^3.441,993 10 Note. — Army bill office is or^lered to l)e continued to ist August, 1S20. Army bill office is ordered to be c >ntinued to 24th December, 1820. From a letter, dated Treasury Chambers, 23rd October, 1820, the army bill office was finally closed 24th December, 1820, Mr. Green paying into the hands of Commissary-General Wood the balance remaining in hi^ hands to pay interest, namely, ;^8i9 133. 7d. currency, at the rate of 5s. currency to the dollar. From the i.st of Januaiy, 181 5, to the 23rd Novem- ber, when notice was given of the intention of the government to redeem the army bills in circulation, there is no official notice respecting the rate of Rate of Exdiangc in i8r^. < •> exchange for bills on London at 30 days sight. Neither can I find any quotation in the newspapers of the day, save one in tlie Quebec Gazette of the 14th September, 181 5, under the head of "money," which is as follows : " For sale at par, for cash ; a few government bills of ;^300 and ^100 sterling, at thirty days on London. Apply to the Editor." The pacification of Europe had effected a L,reat change in the value of bills drawn on the treasury in London. As the demand for such bills appears to have been limited in Canada, resort was had to the Boston and New York markets. The following correspondence, however, shows that financial opera- tions in the United States, for the purpose of procuring specie to meet the exigencies of the public service in Canada, were attended with no little difficulty. The Commissary-General writes to the Military Secretary as follows : Commissary-General's Office, Quebec, 15th May, 1815. Sir, I have the honour to report to you, for the information of His Excellency the Lt. -General Commanding, that I have this clay received letters from Dy. Asst. Corny. -General Wybault, dated New York, the 3rd inst., in which he states, on the subject of his mission, that exchange at that place is at 4 per cent, discount, and that as the banks to the southward of Massachusetts have not yet commenced paying out specie, it is at a premium of four p. cent, at New York, making a loss of 8 per cent, on negociation, and it appears there would be the same loss at Boston. Mr. Wybault regrets that he is directed to sell bills for specie, as that will betray the secret of his mission. The first bill he attempts 74 Premium on Specie. ¥.■■ vs to sell, and the knowledge that he has bills for sale, will at once reduce the price, as it will naturally be supposed he requires a very large sum ; besides, as there will be a premium on the specie, the discount on the bills, if paid for in specie, will appear much higher than the current rate, which, for obvious reasons, ought not to be the case ; under these circumstances, and considering our extreme distress for money, not Hving a thousand pounds in the Canadas, without a chance of being relieved by an importation from England to any great extent, in consequence of the reports we have lately received through the press of extraordinary event? in Europe, I beg to submit to His Excel- lency whether Mr. Wybault should not be directed to procure specie for the government bills in liis possession upon the best terms he can effect the negociation ; receiving in payment American bank notes and then exchanging them for specie, making tlie real exchange upon the bills, and charging the premium upon the specie in his account of disburse- ments, with expenses of transportation and other charges generally attending the transaction. I trust you will be pleased to lay this letter before His Excellency, that I may be honoured with his commands as early as possible. I have the honor to be. Sir, Your most obedient humble servant, To Major O. Foster, (.Signed) W. H. Robinson, Military Secretary. Corny. -Genl. [From Canadian Archives, Series C 331, page 98.] Copy of Lktter re Bringing Specie into Country. Iti Halifax, 9th June, 1815. Sir, Finding that Commissary-General Robinson had written to the Deputy Commissary-General here, representing the very pressing demand for specie in the Canadas, I have made every exertion to afford you a supply, which I could not have been able to do but by obtaining a loan rom he Naval Storekeeper; with the assistance of which I have directetl to be shipped on board H.M.S. Bulwark ;^30,ooo con- signed to Mr. Robinson. I think it right to apprise you of our poverty, that you may not place Rate of Exduingc for Bills on London. 75 too much reliance on supplies from hence. At the same time I shall always be willing to make every exertion to afford you all the aid in my power. I have the honour to be, Sir, Your most obedient humble servant, (Signed) J. C. SHERliROOKE, I^t.-(jeneral. Those letters were written after the news of the escape of Napoleon from Elba had reached this side of the Atlantic. All Europe was astir with excite- ment over his escape ; and the consequent certainty of war had a depressint:^ effect upon the rate of exchange. Bills on the Treasury were quoted at I2y discount. But Waterloo broucrht peace. Bills /o '^ '• on London rose in value ; and the discount on 30 days sight bills was reduced to 1% to 2/^ in Boston, at which rate it stood in October 181 5, and continued at from 2% to 3% discount, till the 17th of April, 1 8 16, when a temporary increase in the rate occurred. The quotations in New York for Bills on London were rather misleading. They were quoted at a premium of from 10 % to 12% ; but a correspondent in Halifax of the Quebec Gazette, enlightens the public on the subject. The letter is dated 7th October, 181 5, and is headed Bills of Exchange. " By the late arrivals from New York, we observe that Exchange on England is quoted at a Premium of from 10 to 12%, which causes much more specu- lation in this place. A person, unacquainted with the mode of transacting business in New York, would 76 Price of Gold in England. i^fi lit naturally infer that specie of some kind was the equivalent, and at the quoted Premium ; but their insolvent Bank paper is the payment — which paper is at a discount of 14% for silver or gold, conse- quently Bills on England, which are nominally at 10 to 12/^ Premium, may be bought in New York by sending on hard coin at a discount." The price of gold in England from January, 1816, to June 9th of the same )'ear, did not average over £df. IS. 6d. currency, the mint price as I have before stated being £1 17s. lo^d. per ounce; and from June to January 1817, the average for currency was £'i^ 19s. The Bank of England, however, did not resume specie payments till 1823 ; but the difference between the price of gold in the currency of the country, and the mint price per ounce, seldom ex- ceeded 2s. 6d, during the last years, i.e. from 18 17 to 1823. A plentiful supply of specie appears to have reached the Treasury in Quebec at last ; for in November it was announced that the army bills would be redeemed in cash. The following is the announcement : — PROCLAMATION. On the 23rd November, 181 5, hy His Excellency Sir Gordon Drummond, Commanding His Majesty's Forces, and Administrator-in- Chief of the Governments of Upper and Lower Canada. Whereas, heretofore, for the purposes of maintaining the means of circulation and answering the exigencies of the public service, His Excellency Sir George Prevost, Baronet, then Commanding His Majesty's Forces in British North America, did make and prepare a number of bills denominated army bills, and caused the same from Redemption in Specie of Army Bills. I i time to time to be issued from the army bill office, established fi)r that purpose at the City of (Quebec, agreeably to the provisions of the several acts made for the purpose of facilitating the circulation of army bills: And whereas, in and by the said acts, it is, amongst other things, enacted, that all interest upon such army bills shall cease from and after the fourteenth day, next after the day on which the same, by any proclamation or other public requisition by the Commander of His Majesty's forces for the time being, shall be called in, to be redeemed in cash : I have, therefore, thought fit to issue this Proclamation, and hereby do signify and make known, to all whom it may concern, that all Army Hills heretofore issued, and at present in circulation, are called in, to be redeemed in cash, at the said Army Hill Office, in the said City of Quebec; and that all Interest upon such Hills as aforesaid, shall cease from and after the fourteenth day next after the date of these presents. Of all which the Officers of Ilis Majesty's Govern- ment, and generally all to whom these presents shall come, or may in any wise concern, are hereby required to take notice and govern them- selves accordingly. On the 20th of December, 1815, His Excellency Sir Gordon Drummond called Parliament together for the Despatch of business; and in his Speech from the Throne, he alluded to the army bills as follows : — " You have had the satisfaction ot seeing that the Executive Government has completely redeemed its pledge to the Public, by calling in and paying in cash the army bills which were in circulation." To which the House replies : — "We have seen with great satisfaction, that the Executive Government has completely redeemed its pledge to the Public, by calling in and paying in Cash the Army Bills which were in circulation, A measure which exemplifies, in a most striking manner, the national good faith, and which will, we trust, 78 Meeting of Pariiaineut. facilitate similar arrangements hereafter, should the Public interests ever recjuire a renewal of them." At the Provincial Parliament held at Quebec on the 15th of January, 1 8 17, the Fifteenth section of the original Act prohibiting the exportation of specie and bullion from the Province, for a period of five years from the ist August, 18 12, was repealed. And it was provided that the Army Bill Office should be continued for a limited period beyond the 1st of August, 1 817, for the purposes of calling in and cancelling and paying all Army l^ills that might remain in circulation after the ist of August ; and that it should be lawful for the Governor to issue his warrant for a sum not exceeding seven hundred and fifty pounds currency, for the payment of such officers in the Army l^ill Office as it may be found necessary to continue in the service till the ist of August, 1818, for the purposes aforesaid. But the date of closing was enlarged to the 1st ot April, 1819 ; and further to the 24th December, 1820, when the Army Bill Office was finally closed. This ends my exposition of the Army Bill Act, by means of which the exigencies of the public service were provided for during the war of 181 2, a war which was entered upon by the British with the greatest reluctance ; but which was forced upon them by the Americans, with the ostensible object of establishing the principle that the Flag covers the merchandise, and the right of search for seamen who have deserted is inadmissible ; but really, " to wrest from Great Coiic/iisioii. 71) l^ritaiii tlic C.'inatlas, and, in cotijunctioti witli Napo- leon, to extinguish its nuiritinic power and Colonial Empire." * I have now the pleasure of statint^ that I am in- debted to Mr. Georf^e Rethune of the branch of the Quebec Hank in Ottawa, for important information on the subject of this paper, which he obtained in the Archives Ikireau at Ottawa ; and to the kindness of Mr. Douglas Brymner of that office, in directing him to records relating to o[)erations under the Act. * Alison's History. MONTREAL: ■Witness" trinting House