Early European settlers in Canada, primarily French and English, were faced with the same difficulties as those in what became the United States. No local sources of silver or gold were discovered, so alternative sources of wealth had to be developed in order to encourage new settlers. European demand for beaver pelts became the catalyst for permanent settlement in Canada. The fur trade was profitable for over two centuries and was a major factor in French, English and Native American relations in the region.
Early Canadian settlers relied on furs and other commodities as money, supplemented with whatever coinage was available through trade, including tokens and counterfeit issues from the American colonies. The first coins struck for Canada were silver 5 and 15 sol pieces produced by France in 1670. These were followed by copper coins in 1717 of 6 and 12 deniers, and later 9 deniers. English-speaking Canada was left to its own resources.
Modern Canadian coinage began with provincial tokens in the 1820s issued by banks in Upper (primarily English speaking) and Lower (primarily French speaking) Canada. Regular coinage was first issued in 1858 by the provinces of New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland – all struck by the Royal Mint in dollar and cent denominations. The coins featured Queen Victoria on the obverse and the denomination on the reverse. Under the Dominion of Canada, a united coinage was struck for the first time in 1870. A branch of the Royal Mint was established in Ottawa in 1908, which became the Royal Canadian Mint in 1931.
The earliest Canadian paper currency was in the form of playing cards issued by the Governor General of New France during the 1680s. The system collapsed in the 1690s, leaving private promissory notes known as “bons” (for bon pour – “good for”). Emergency notes issued by the British military during the War of 1812 were widely accepted due to their gold backing and were followed by notes issued by Canadian private banks.
The first Canadian dollar notes were issued by the Montreal Bank in 1817, beginning a chartered banknote period lasting until 1944. Many early private notes were issued with dual denominations in dollars and pounds sterling, but the dollar eventually became standard on all Canadian money. Colonial notes were issued by provincial governments from 1841 until the formation of the Dominion of Canada in 1867. Dominion notes were the first Canadian national paper currency and were replaced by Bank of Canada notes in 1935 that are still in use today.
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