To follow the evolution of a currency is to follow the evolution of a country. The history of currency in Canada, much like the history of settling in Canada, begins with indigenous roots, is infused with different European influences, and the end result is a singular system that unifies us – from coast to coast to coast.
The Wampum 1600’s-1800’s
Wampum belts consisted of tubular shell beads of white and dark purple. The beads were polished, cleaned, and moulded to be strung together. Each bead varied in exact size but was around 2 inches.
Indigenous Canadians had a barter system for goods well before the arrival of Europeans. It valued furs, copper and precious metal-made objects. While the wampum has become a symbol of indigenous currency, it was not used as a monetary system until European contact. Originally, wampum belts were special objects with various uses and traditions among the different bands. In the Iroquois nation, they were ceremoniously presented to warriors. In the Great Lakes region, the mid-Atlantic region, they were used as a memory aid by storytellers. Across many bands, wampum belts were exchanged as gifts and to mark treaties. It was likely in this way that European settlers first received and began to use wampum belts.
With the introduction of European technology and tools, as well as the higher demand for a sophisticated currency system, colonists began mass-producing wampum in workshops by the mid-1800’s.
New France’s Playing Cards (1685-1686)
Due to the lack of French and Spanish coins, New France issued the first paper money in the form of playing cards. The governor cut and signed each playing card and playing-card money was issued in 1685. This was introduced as a necessity – New France needed to pay for the Seven Years War and pay civil servants, clerks, and suppliers with money that New France did not have but was promised by France. Cardholders would be able to exchange their cards for cash when a French ship arrived – though these were often late or did not arrive at all. Due to rampant inflation and confusion, the card system was ended a year later in 1686.
US dollars and Spanish coins were commonly traded in the early days of Canada. To date, US dollars are still widely available in Canada and many shops and businesses have cash registers with USD settings to easily accept US dollars.
Spanish silver was especially common in Newfoundland. Before joining the Confederacy, the Newfoundland dollar was more a descendant of the Spanish dollar, than the pound sterling. Since its basis for comparison was the Spanish dollar, the Newfoundland dollar was valued slightly higher than the Canadian dollar. Although the Newfoundland dollar did decimalize in 1865, Newfoundland did not join Canada until 1949.
The Canadian Pound (1841-1858)
Circulating alongside wampum belts was the Canadian pound. Adopted in 1841, it was equal to the US dollar (which could also be found floating around). However, the Canadian pound was short-lived. In 1857, after much debate, the decision was made to adopt the decimal system and the Canadian dollar debuted in 1858. The decision to decimalize currency was largely due to increased trade with the US. Before joining the Dominion of Canada, British Columbia, New Brunswick, PEI, Newfoundland, and Nova Scotia also decimalized their currency.
Similar to the pound sterling, the Canadian pound was subdivided into 20 shillings, each worth 12 pence. In Lower Canada, the sous was also used and was worth half a penny.
The Canadian Dollar (1858-present)
Not all of the coins we know now were introduced with the adoption of the Canadian dollar. First came the dime, entering circulation in 1858. It was followed by the quarter, which debuted in 1870. The Royal Canadian Mint began issuing the first Canadian-minted coins in 1908. The penny was introduced in 1920, and the nickel in 1922. The loonie was first minted in 1987 and was followed by the toonie in 1996 – both eventually replacing $1 and $2 banknotes. Most recently, the penny was taken out of circulation in 2012.
Canadian banknotes began circulating in 1858 with $1 bills. By 1887, $2, $50, $500, and $1,000 bills were in circulation. $20 bills weren’t added until 1934.
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