Title

Chapter 1

Identifier

http://www.nflibrary.ca/nfplindex/show.asp?b=1&ref=oo&id=297965

page

1-23

Bibliographic Citation

The War of 1812 / James Stevenson.

10168087

The War of 1812 / James Stevenson.

Type

Text

extracted text

THE WAR OF 1812
IN CONNECTION WITH

THE

LHC
971.034
S847

WAR OF 1812
IN CONNECTION WITH

THE ARMY BILL ACT

BY

JAMES STEVENSON
GENERAL MANAGER OF THE QUEBEC BANK

MONTREAL

W. FOSTER BROWN CO., PUBLISHERS
1892.

PREFACE.
Some years ago I delivered a Lecture before The

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 proceed 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,

14th March, 1892.

62 108

CONTENTS.
CHAPTER I.
Declaration of War—Embargo—Meeting of Provincial Parliament—
Introduction of the Act—Legal tender coins—Price of gold—
Capture of Detroit—Death of General Brock.
CHAPTER II.
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 III.
Americans prepare to continue the war—Treaty of peace— Report
on Army Bills in circulation—Bills lost or destroyed, £90o0—Final
close of the Army Bill Office.

THE

CIRCULATION OF THE ARMY BILLS
WITH SOME

REMARKS UPON THE WAR OF

1812.

CHAPTER I.
Declaration of War—Embargo on Goods—Meeting of Provincial
Parliament—Introduction of the Act—Legal tender coins—Capture
of Detroit—Death of General Brock.

The American declaration of war was received in
Quebec on Monday, the 29th June, 1812. On the
3oth, 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 or 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.

9

Declaration of War.

Meeting of Provincial Parliament.

A militia general order was issued by the AdjutantGeneral, F. Vassal de Monviel, from the headquarters
in Montreal on the 6th July, ordering the battalions
of militia throughout the Province to hold themselves
in readiness to be embodied, and to march on the
shortest notice to such points as the safety of the
Province might require. In Quebec the militia of
the city mounted guard in company with the regular
troops, and each battalion continued to furnish a proportion 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 Brock, Governor of Upper
Canada, from his headquarters, Fort George, on the
22nd July, announcing the invasion of the Province
by the Americans, with the intention, he said, of conquering Canada and restoring it to the Empire of
France. "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 16th July, a temporary embargo was laid
upon all goods, wares, moneys, merchandise and commodities 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,

save such as were actually loaded or loading, and
which were bound for any port in the United Kingdom, or any of the colonies in America or the West
Indies. The Provincial Parliament met on the same
day, and His Excellency Sir George Prevost alluded
in his speech to the fruitless endeavours of His
Majesty for the preservation of peace ; to his implicit
confidence in the loyalty of his subjects ; to their
attachment to his person ; and to their ardent love for
the true interests of their country. He observed
with concern that the necessary establishments of the
militia forces and the operations of the approaching
campaign, would be attended with considerable
expense ; but he relied implicitly upon their wisdom
and public spirit for such supplies as the circumstances
and exigencies of the affairs of the Province would
be found to require.
Loyal responses were made by the Legislative
Council and House of Assembly on the i8th, the
latter expressing itself prepared to grant such supplies
as the exigencies of affairs might require.
The people 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 the fortresses 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

8

Militia Muster.

Army Bill Act.

of about 2,000 men in the Lower, 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 assembled on the 16th July, 1812, 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 provided as follows :
First. That His Excellency the Governor, as Commander 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 twentyfive dollars each and upwards should bear interest at
the rate of fourpence per centum per diem, upon or

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 payment thereof in cash or in bills of exchange as aforesaid, 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 CommissaryGeneral, 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 superintendent of the army bill office to the CommissaryGeneral. 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 number 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

10

11

Army Bill Act.

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 His Excellency as Commander
of the Forces, to such person or persons, as he by
such warrants shall see fit to direct such payments
to be made. Tenth. That the current rate of exchange should be established on oath once in every
fortnight by five persons, to be named by His Excellency, and publicly notified before any army bills
whatever shall be issued. Eleventh. Makes provision
for the cancellation of defaced army bills, and the reissue 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 bath 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 Legislature 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 circulation 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,

customs, taxes and revenues of the Province, and in
preference to all other claims and demands whatsoever, 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 ReceiverGeneral or any collector or receiver up to the respective days whereupon such bill or bills shall be so
paid ; Provided always that every such Receiver-

12

13

Army Bill Act.

Arnzy Bill Act.

General, collectors and receivers as aforesaid, shall be
accountable for the interest on every such bill, so by
them or either of them 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 proclamation 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

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 legislature, 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.

14

15

16

Army Bill Act.

,

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 procure to be exported or otherwise carried out of this
province, any gold, silver or copper coin of any description 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, prosecuted, 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 of or applied.
XVI. Refers to action against the exporter of

Army Bill Act.

17

specie or bullion as follows : And be it further
enacted that every person whatever, who, during
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 he 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,
silver 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 £io, 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

Army Bill Act.

18

of the Receiver-General and to be accounted for to
the Crown.
XX. Refers to limitations of action. At the close
of the session, on the 1st 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 them 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,

The Coins Current in Canada.

19

tions, twenty-five dollars; fifty dollars, one hundred
dollars and four hundred dollars ; signed 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 consisted 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,
French 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

Circulation of Army Bills.

The Coins Current in Canada.
NAMES OF COINS.

Canada
Weighing. Currency.
Dwts. Grains. £ s. d.

The British guinea ........................................................... 5
.................................. 18
The Johannes of Portugal.
The Moidore of Portugal .................................................. 6
The Four Pistole piece of Spain .................................... 17
........ 5
The French Louis d'or coined before 1793.
The American Eagle... .................................................. ti

1 34
4o0
1 to o
18
3 14 o
4 o 18 0
2 10 0
6
6

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 :
Canada
Currency.

The Spanish dollar at ........................................................................... • Z*0 5 0
The British Crown .................................................................................. o 5 6
o56
The French Crown or piece of 6 livres Tournois....
The French piece of 4 livres, 10 sols ................................................ 0 4 2
Canada
Currency.

The British shilling. ............................................................................. £0 I I
oI
.
.•.
The French piece of 24 sols Tournois.
010
............ ° ... N.. ........
Pistareen.....
The French piece of 36 sols Tournois ............................................. 0 I 8

A similar Act was passed by the Parliament of
Upper Canada on the 3rd of June, 1796.
Great inconvenience was experienced in consequence 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 currency was introduced, which proved of essential

21

service, not only in meeting the exigencies of the
public service, but in facilitating commercial transactions. The measure proved, in practice, a complete
success. Bills of the denominations $25, $50, Sioo
and $400 were not re-issued. They bore interest, as
provided for in the Act, $400, fourpence per diem,
$ioo, one penny per diem, $50, one halfpenny per
diem, and $25, one farthing per diem, being substantially 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
1812, and during the war, that the army bills circulated 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 3o days was just 12o 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 settlement 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.

22

Rate of Exchange.

The current rate of exchange for bills on London
at 3o days sight was established once in every fortnight, by a committee of five persons named by His
Excellency.
The rate of exchange for bills on London, in consequence of the suspension of specie payments by the
Bank of England, which took place in 1797, and which
lasted till 1823, was very low. This subject, however,
has to be considered in connection with the price of
gold in England.
The mint price of an ounce of Standard gold is L3
17s. io%d., being one-twelfth part of L46 14s. 6d. the
value set upon a pound weight of gold.
During the Napoleonic wars, the price of gold in
5s. currency ;
England per ounce rose, in 1800 to
in 1809 to L4.tIs.; in 1810 to L4 .19s.; and in 1812,
when Napoleon was in the zenith of his power, to
L 5. 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. Conat that
L
sequently, a bill at 3o days sight for ioo,
sterling, equal to $356.46 in
rate, yielded only
specie. In 1812 - Ioo sterling in gold in England
was worth £120 4s. 9d. ; in 1813, £ioo sterling in
gold was worth £122.18s. currency of Great Britain.
It has to be borne in mind that the dollar in gold
of 1812, was of greater value than the dollar in gold

I

The War.

23

of the present day .on account of its greater weight
and fineness. It required only $4.57 to constitute
the par of the pound sterling in 1812 ; whereas it
t7 requires $4.86X to constitute the par now, being
c, over the ninth or old par of Queen Anne. In
9127
other words, the American eagle of 1792 contained
247% grains of fine gold—the American eagle of
1837 contains only 232.2 grains of fine gold. There
h been no change since that year in the quality or
has
weight of the American eagle.
In the early part of August 1812, the war, both by
land and sea, began to assume its proper character.
The American General, Hull, with a strong force,
crossed from Detroit to the Canadian shore on the
12th 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 30o regulars, 40o 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 U
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