19"] Canadian Metallic Currency 245 



These changes very materially affected all military and other contracts. 

 The British shilling now being the cheapest legal tender in Upper Canada, 

 soon displaced practically all other coins. 



Though the Home Government did not disallow the Act of 1836, 

 which had only four years to run, it had so little confidence in the Can- 

 adian views on money matters that the Governor was required to reserve 

 any further measures dealing with the currency. 



The general situation brought to the attention of the better informed 

 Canadians the fact that Canada, being dependent upon foreign coins 

 for its medium of exchange, was liable at any time to lose its currency 

 through an adverse balance of exchange with England or the United States. 

 To over-rate the coins proved only a very temporary expedient as prices 

 rapidly adjusted themselves to the new rates, and the coinage flowed off 

 once more. It was proposed by the more intelligent business men to 

 have a regular Canadian currency which would not be admissible in 

 other countries at its face value, and would therefore serve no other 

 purposes than that of a medium of exchange. This was of course the 

 ultimate remedy and was eventually realized in the present Canadian 

 silver and copper coinage. Still it is surprising to find how long it 

 took to get this simple and obvious remedy into operation. 



Upper and Lower Canada had drifted further apart with every change 

 in their currency laws. The dollar alone remained common to both, at 

 the rating of 5s. but no one was compelled to pay in dollars. In Lower 

 Canada payments were made as far as possible in French coins, and in 

 Upper Canada in English shillings. As a result exchanges between the 

 provinces were at varying ratios of discount, and in both exchange on 

 New York was always at a premium. The business of the Canadian 

 provinces was certainly suffering from the unfortunate condition of the 

 currency. 



Amid all the conflicting arguments and proposals of the period, on 

 two points the leading financial men were agreed, namely, that there 

 should be a special coinage for the British North American colonies, and 

 that the basis and denomination of that coinage should be the same as in 

 the case of the new American gold and silver coinage. These views were 

 endorsed by the Governor-General, Sir John Colborne, and Sir George 

 Arthur, Lieut.-Governor of Upper Canada. 



An Act was passed by the Legislature of Upper Canada with the 

 object of bringing the currency of the provinces into closer relation with 

 that of the United States. The special Council of Lower Canada also 

 passed an Ordinance to improve the currency situation in that province, 

 but both measures were disallowed by the Home Government. The 

 reasons given were sound enough from a British point of view, and 



