Title

Chapter 3

Identifier

http://www.nflibrary.ca/nfplindex/show.asp?b=1&ref=oo&id=297970

page

54-82

Bibliographic Citation

The War of 1812 / James Stevenson.

10168087

The War of 1812 / James Stevenson.

Type

Text

extracted text

Treaty of Peace.

CHAPTER III.
Americans prepare to continue the war—Treaty of peace—Report on
Army Bills in circulation—Bills lost or destroyed „Z'0000—Final
close of the Army Bill Office.
,

55

readiness for immediate service, a corps of ninety
thousand five hundred men.
In anticipation of a prolonged state of warfare, for
which the Americans were preparing, the committee
upon the army bills, report to the House of Assembly
on Friday the 17th of February, 1815, that it is expedient to renew the provisions of the two Acts with
some modifications, and to increase the amount of
army bills which may be in circulation to 4 2,000,000
currency ; and the house having concurred, a bill was
read the first time—second reading fixed for Monday
the loth. On that day the bill was read again, and
referred to a general 'committee for discussion on
Wednesday the 22nd, when some progress was made :
the bill to be further discussed on Friday the 24th.
On Monday the 27th, the committee report the
amendments, and the house having concurred, it is
ordered that the bill, thus amended, be engrossed.
On Tuesday the 2 8th, the bill, as amended, for facilitating the circulation of army bills, was read a third
ti me, and passed the House of Assembly. But the
bill was thrown out in the Upper House for reasons
which shall presently appear.
On the 1st March, 1815, however, a message was
received from His Excellency the Governor-in-Chief,
acquainting the House of the Ratification of the
Treaty of Peace. This was the Peace of Ghent,
concluded between Great Britain and the United
States, made substantially on the status quo ante
bellum, and signed on the 24th December, 1814.
-

The Americans contemplated, with no little apprehension, the pacification of Europe which followed
the defeat of Napoleon at Leipsic and his subsequent
exile to Elba. They once thought that there would
be no difficulty in annexing Canada, that the war,
for them, would be a mere promenade ; but instead
of annexing Canada, Canada annexed the whole territory of Michigan, and administered its civil Government. And now that peace in Europe had apparently
been restored and had set free the veterans of the
British army for other service, the Americans considered that they had just cause for apprehension.
The President at once communicated with several
Governors of States. In July, 1814, he wrote :
" Great Britain will now have a large disposable force,
both naval and military, and with it, the means of
giving the war in America a character of new and
increased activity and extent ; " and as a measure of
precaution he deems it advisable to strengthen themselves, and the line of the Atlantic, and invites the
executive of certain states to organize, and hold in

56

' Army Bills in Circulation.

Army Bill Office.

In the Canadian Archives there is the following report
respecting the working of the Army Bill Act, showing
the amount of bills in circulation in February, 1815.
Copy of report re amount of army bills in circulation in Febuary, 1815, together with the report of the
board upon the subject.
" Quebec, 19th February, 1815.
" We, the undersigned, having assembled at Your Excellency's desire
for the purpose of considering the subject of army bills in circulation,
and having had reference to the several representations your Excellency
has made to His Nlajesty's Government thereon, we have great satisfaction in stating that all the beneficial effects of the measure which
' have from time to time been anticipated by Your Excellency, have
been fully realized ; in illustration of which the following calculations
are submitted. At present there are about Z800,000 in circulation in
bills bearing interest, bring a total of Z1,300,000 ; the interest annually
upon the ‘80o,oco at 6 per cent is £48,000, deduct paid by the province £15,000, leaving a balance of ,433,000, which is the total interest
paid from the army extraordinaries for the use of £1,300,000, being a
trifle more than per cent per annum--into this, calculation may
also be taken to show the advantage derived by the public, that the
loss upon exchange which has fluctuated from 2 2 to 22 ,4 per 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.possible to
calculate, no doubt it would have been enormous ; another advantage
not to be overlooked, is the facility with which army hills have been
conveyed to the most remote parts of this extensive command, to meet
the exigencies of the service at 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, without any loss to the
public. In explanation of this circumstance it is necessary to observe
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
3

.

1-

57

kept by the accountants, they were replaced from the army bill office,
or a similar amount in lieu thereof.
Understanding that another bill is in progress in the Provincial
Legislature now in session, extending the provisions of the former
Army Bill Acts, by which a further sum of ‘500,000 in bills not bearing interest may be issued, which, added to the £1,300,000 at present
in circulation, will make a total of ‘1,8o0,000, reducing thereby the
interest paid the government for the use of this gross sum to a little
more than per cent. per annum.
The total expense of the army bill office establishment for the last
year, amounted to about ,44,000, £2,500 of which is defrayed by the
Province, and the remaining ,41,500 from the military chest. In all
probability, this excess of £1,500 will be more thin covered by the
accidental loss of army bills, which, from the large amount in circulation, cannot fail of being very considerable.
In August 1817, it is provided by the first Army Bill Act that the
province will no longer pay interest upon army bills that the holders
may demand specie for them, and that the Governor may at any time
previous to that period, call in and redeem with specie the army bills
in circulation ; it is for the consideration of Your Excellency, how far
it may he expedient to suggest to His Majesty's government to avail
itself of any favorable circumstance of furnishing specie for this purpose
upon advantageous terms in the course of the ensuing two years, to
provide for the redemption of these bills, without waiting the expiration
of the period prescribed by the Act.
These suggestions and calculations are submitted for your Excellency's
consideration, but the inferences we have drawn will be rendered more
conclusive when the state of public affairs will be known with more
certainty, when the Army Bill Act shall have passed, when Your
Excellency shall have received on the 27th inst. the periodical report
of the commissioners for fixing the rate of exchange, and the next
monthly account of the amount of hills in circulation from the director
of the army bill office.
W. H. RoBtxsoN,
(Signed)
(Signed)

J. HALE, Corny Gen'.

(Signed)

Dep.- Paymaster Gent.
4
NOAH FREER,
Military Secretary.

Extension of Circulation Opposed.

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, 1815, respecting its rejection, headed :

appears, that between the 12th of December, 1814, and 31st of January,
1815, no less than £43,9 2 5 was issued in large notes bearing interest,

58

ARMY BILLS.

The fate of the new Army Bills Act, lately passed 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 the issue of army bills up to the 1st day
of February, 1815, to an amount not exceeding ‘1,500,000 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 five 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 provinces, the largest amount stated to be in
circulation at any period during the last year being only about
.4. 1,205000.
At the time this Act was passed, 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
‘50o,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 bills, "to demand 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 issue 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

59

in exchange for small ones. As there is no reason to suppose that
government exceeded 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 about 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. The presumption therefore is, that a smaller sum
would have been quite sufficient during the war, and that a still smaller
sum might suffice during peace.
Here it may be proper to remark, that the operation of the above
proviso had the most salutary effect, by counteracting any excessive
issue of small bills, and to this circumstance, in conjunction with the
management of the exchange commissioners, may fairly he attributed
the high and unprecedented degree of credit in which the paper hath
hitherto been so happily maintained.
With this experience before our eyes, the object of the framers and
advocates of the new army bill is altogether inconceivable. It began
by extending the authority to issue army bills to an amount not exceeding £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 the public service, even during war.
But this was not the principal objection to the bill.
In a subsequent clause 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 converting small notes into large ones, was entirely omitted. This extraordinary 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 the Commander of the forces, at any time, to buy up with
cash, the whole or any part of the army bills bearing interest, whenever
he might think proper.
In this shape the bill made its appearance in the Legislative 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 tit! first that struck
their attention. By that clause as it originally stood, government might

60

Extension 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 between the two houses. it was agreed
to consider the words " not less " as a clerical error, and to substitute
in their stead the words " not exceeding " which was accordingly done
in a private way by the two speakers, etc. This was considerable improvement to the clause, but it was liable to insurmountable objections,
for want of the old proviso so often mentioned, to relieve the circulation
from superfluous small 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 the 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 year, while the
war expenditure was going on to its full extent, that even half a million
was too much. Had the Legislative Council been at liberty to amend
this bill, by inserting the old proviso for converting the superfluous
small bills into large ones, everything would have found its level by
means of that salutary check, and all might have gone well—but unfortunately, 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 moneyed
men in this colony, some well-informed persons are of opinion, that 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 pro visions of that Act having been found by experience 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 5 / , while here it is 67 . But it must
at same time be recollected, that all our paper serves as a substitute for
specie, that only about two-thirds of what is at present in circulation
bears interest, and that the Province contributes ,415,000 per annum
towards that interest. To this must be added the advance of money
in England (equal to perhaps six or eight months interest) and the
ordinary expenses of purchasing and sending out the specie—and it
must also be recollected that specie as a circulating medium, frequently
finds its way into the neighbouring States, and therefore requires a
frequent supply to keep up the requisite quantity, while, on the contrary, our paper remains at home, and requires only a judicious regulation of the rate of exchange, and due precaution against forgery to
keep it in full credit.
0

0

0

Further to illustrate these observations, 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 fpm the truth.
Suppose £1,200,000 in army bills at present in circulation. Qf

Extension of Circulation Opposed.

Amount of Army Bills in Circulation.

which 4800,000 bears interest at 61, £48,000, and 4400,000 bearing
no interest, being small bills, £1,200,000. Deduct so much paid by
the Province 415,000, balance of interest (being only 23/.7 on
41,200,000),-433,000. Suppose bullion at the mint prices, and that
Great Britain were to purchase and send out specie for the redemption
of all these army bills, the expenses in freight on £1,200,000 cannot
be less than I' / , say £18,000, one year's interest on £1,200,000

The following statements relating to the circulation
of the army bills, copied from official documents in
the Canadian Archives Bureau, will prove interesting to professional bankers.

62

1

0

0

Circulation of Army Bills.

ARMY BILL OFFICE,

°

24th April, 1815.

0

@ 57 , .4'60,000—.4 78,00 .
.

63

0

.............. 433,00o
Deduct the foregoing balance of interest
Loss to Great Britain by sending out specie exclusive of the
risk and advance of money .................................................................. • 445,000
Thus it appears that Great Britain gets a substitute for specie in
Canada to the amount of £1,200,000, for which she pays 24'7 per
0

annum, and that it would cost her at least £45,000 to replace that
substitute with specie !
Where can Great Britain get so advantageous a loan?
But even supposing the whole of our army bills were to bear interest
—still we are of opinion that they would be advantageous 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 £1,200,000 in specie as above
.................................. . £78,000
stated, including one year's interest
£1,200,000 in army bills, all bearing 61 interest.472,000
57,000
Deduct so much paid by the Province ....................... 15,000
Balance saved to Great Britain, supposing that all our bills
...... 21,000
bore interest
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 prove 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.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

Balance of army bills remaining in circulation the 27th
March, 1815 ..................................................................................

41,249,996 5

DEDUCT :—
So much redeemed by bills of exchange on London
since the 27th March, 1815, viz.:—
In large bills
..... • •..4 43
5
In small bills .................................. 3.594 5
3,638 0
.

1

.4
175 four dollar bills, worn out, have been
redeemed with specie since last report
............ 175 0
459 one dollar bills, rendered useless by
.

wear, have also been redeemed since last
report ....................................................................
The following bills have been redeemed at,
and received from the military chest at
Montreal, viz.:19,463 bills at 4 dollars ........... £19,463 0

114 5
1

56,354 bills at r dollar, . ......... 14,088 10 33,551 10
117 hills at to dollars Of the new issue of
137 " " 5 "
small bills rendered

105 " " 3 "
" " 2 "
308 " " I "

useless by wear, or
otherwise, have been
redeemed between
the 27th March and
2,640 dollars J 24th April, 1815_

66o 0 438,139 '5

Balance of army bills remaining in circulation the 24th
April, 1815 ..................................................................... ..
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

Z1,211,857 o

(Signed) JAMES GREEN,

Director.

64

Amount of Army Bills in Circulation.

Amount of Army Bills in Circulation.

Circulation of Army Bills.

Circulation of Army Bills.
ARMY BILL OFFICE,
22nd May, 1815.

ARMY BILL OFFICE,

19th June, 1815.
ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

Balance of army bills remaining in circulation the 22nd
May, 1815 ................................................................................ .41,207, 192 0

Balance of army bills remaining in circulation the 24th
April, 1815 .................................................................................. ‘1,211,857

DEDUCT :—

DEDUCT :-

So much redeemed by bills of exchange on London
since the 22nd May, 1815, viz. :—
In large bills
............ £13,512 to
Four dollar bills worn out have been reredeemed with specie since last report ..........
One dollar bills rendered useless by wear
have also been redeemed since last report ....

So much redeemed by bills of exchange on London
since the 24th April, 1815, viz.:—
831 5
.....
In large bills.
In small bills ....................................... 2,932 5
£3,763 to
150 four dollar bills, worn out, have been
........150 0
redeemed with specie since last report
708 one dollar bills, rendered useless by wear,
........ 177 0
have also been redeemed since last report

3o Bills at to dollars
8 If di 5"

26

64 bills at to dollars'
58 " " 5 "
Ito " " 3
209 " " 2
619 " "
Affidavit
before the
Judges...

"
"
"

"

"

"

3

id
di
792

Of the new issue of
small bills rendered
useless by wear, or
otherwise, have been
redeemed between the
24th April and 22nd
May, 1815 .....

18 " "
Affidavit
before the
Judges...

di

"

<<

Of the new issue of
small bills rendered
useless by wear, or
otherwise, have been
redeemed between
the 22nd May and
19th June, 1815.. .

148 to

£13,661 0

Balance of army bills remaining in circulation the t9th
June, 1815
....................... .

1,193,531 0

594 dollars
574 10

£4,665

0

2,298 dollars
Balance of army bills remaining in circulation the 22nd
May, 1815. .................................................................................. £1,207,192 0
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

65

(Signed) JAMES GREEN,
Director.

To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

E

(Signed) JAMES GREEN,
Director.

Amount of Army Bills in Circulation.

66

Amount of Army Bills in Circulation.

67

Circulation of Army Bills.

Circulation of Army Bills.
ARMY BILL OFFICE.
I Ith September, 1815.

ARMY BILL OFFICE,
9th October, 1815.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

Balance of army bills remaining in circulation the t4th
August, 1815 .................................................................................. £ 628,792 15

Balance of army bills remaining in circulation the 11th
September, 1815 .............................................................................
£504.376 15
No large or ten dollar bills issued since 11th
September, 1815.

DEDUCT : —
So much redeemed by bills of exchange on London
since the 14th August, 1815, viz. :—
In large bills .................................. £75,125 0
47,240 0
.
In small bills.... ...
£122,365 0

DEDUCT :—
So much redeemed by bills of exchange on London since

the 11th September, 1815, viz.:—
In large bills .................................... £43,331 5
In small bills. .................................. 25,649 0 £ 68,980 5
.

976 four dollar bills, worn out, have been
........... 976 0
redeemed with specie since last report
4294 one dollar bills, rendered useless by
wear, have also been redeemed since last
report
........ 1,073 10
—Bills at to dollars
.. 44 5CC
3..
It

44

CC

46

2

44
CC

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
1th September,
1815 Affidavit

Balance of army bills remaining in circulation the 9th
October, 1815.

.............................................. L434,990 15

To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.
1 10 £124,416 0
—

Balance of army bills remaining in circulation the 1tth
..................................................... 504,376 15
September, 1815
To the Commissioners
for fixing the rate of exchange
&c. &c. &c.

240 four dollar bills, worn out, have been
redeemed with specie since last report
........... 240 0
663 one dollar bills, rendered useless by
wear, have also been redeemed since last
report
165 15 69,386 0

(Signed) JAMES GREEN,
Director.

(Signed) JAMES GREEN,
Director.

68

Army Bills Redeemed.

Amount of Army 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 .................................................................................... 4434,990 1 5
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.:—
.. 4'6,943 15
In large bills
In small bills. ................................ 10,695 10
427,639 5
94 four dollar bills, worn out, have been
.............. 94 0
redeemed with specie since last report
426 one dollar hills, rendered useless by
wear, have also been redeemed since last
106 to
..
report

27,839 15

Balance of army bills remaining in circulation the 6th
............................................................ 4407,151 0
November, 1815
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

(Signed) JAMES GREEN,
Director.

69

General abstract of statements shewing the manner in which the sum
of 488,962 to. currency, imprested to me by warrants from His
Excellency Sir George Prevost, and His Excellency Sir Gordon
Drummond, between the 11th October, 1814 and 24th August, 1815,
has been appropriated.
A. Statement of one dollar bills redeemed between the 13th
September, 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-in-Chief
and Commander of the forces
.............................. 416,029 5
B. Statement of four dollar bills redeemed within the above
period, and reported to the Commissary-General.. ....... 14,381 0
C. Statement of bills of 1o, 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 reported to the Commissary-General as above.....
8,879 0
D. Statement showing how the sum of 448,962 to. currency, has been appropriated, which I received for the
purpose of exchanging small notes with bills bearing
interest of 400, too and 50 dollars each. ....................... 48,962 to
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 military Secretary's letter, dated Head Quarters, Montreal,
10
16th November, 1814
39
‘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 to

Errors excepted.
Army Bill Office,
22nd Nov., 1815.

(Signed) JAMES GREEN,
Director.

7o

Army Bills in Circulation.

Army Bills in Circulation.

MEMO.—Letter from James Green, Director, dated 18th December,
1815, asking for further warrant for 410,000 currency, to pay interest
on army bills.
Report of Circulation, 1st January, 1816, gives balance in circulation
December,
8
4th
1815, £39 6 ,77 0; from which deduct bills redeemed
to 1st January, £65,281 15 ; leaving a balance in circulation 1st Jan. ,
1816, of 4331,496 15.
Report of Circulation, 29th January, 1816, says, balance in circulation 1st January, 1816 , 433 1 ,49 6 15 ; from which deduct 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 circulation 29th January, £301,283 15 ; deduct bills redeemed, 421,563 15 ;
leaving a balance of 4279,720 0.
Report of Circulation, 25th March, 1816, says, from balance 26th
February, deduct in bills redeemed, 436,970 to ; leaving balance of

Circulation of Army Bills.
ARMY BILL OFFICE,

4th December, 1815.
ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.
Balance of army bills remaining in circulation the 6th
November, 1815..
.................................................................. £407,151
• 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, 1815, viz :In large bills ........................................... 41,187 IO
In small bills... ................................ 4,582 15

£5,770

5

So much redeemed by specie, commencing
the 24th November, 1815.
In large bills ............................................ £3,318 15
In small bills.....
........ 801 15 44,120 10
174 four dollar bills, worn out, have been re........
deemed with specie since last report.
174 0
1231 one dollar bills, rendered useless by wear,
........
307 15.. £10,372 10
have also been redeemed since last report
Balance of army bills remaining in circulation
............................................
the 4th December, 1815
£396.778
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

(Signed) JAMES GREEN,
Director.

71

10

‘ 2 4 2 ,749 10.
Report of Circulation, 22nd April, 18,6, says, from balance 25th
March, deduct in bills redeemed, 416,678 ; leaving a balance of
4226,071 10.
Report of Circulation, 20th May, 1816, says, from balance in circulation 22nd April, 1816, deduct in bills redeemed, 428,096 15; leaving
a balance of 4197,974 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. Wood, Com.-Genl., dated 8th
October, 1818, to Major Bowles, Mil. Secretary, he states 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, 1818, I find that the
rate at which the dollar was issued to the troops was 4s. 8d.
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, ,8,8, I find that
the date of closing the army bill office was enlarged to the 1st April,
1819.

72 .4 9,000 Lost or Destroyed—Consequent Gain.

Rate of Exchange in 1815.

-

NOTE.—Letter from James Green, Director, asking for continuan
of army bill office to 1st August, 1820, as it had been accurately ascertained that there remained to the Crown a saving of nine thousand
pounds and upwards on bills 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 with other public offices similarly situ ted. (Date
of letter, 19th May, 1819.)
Office continued to six months after 1st August, 1819, by sanction of
War Department (Treasury Chambers).
MEMO.—Grand total of the number of army bills issued, viz.:—

a

. Bills

at 400 dollars each ................ 5, 500. • • .‘550,000
"
" .. • . . • 34,606.... 865.150
" " 5 0"
" - • • • • • • 63.914 • • • 798,9 2 5
"
"
92,726.... 579,537 I0
25
" " 100

.

10

.

„ CC

5,C

"

14

4

t

3.,

"i

CC

4C

214

„

I

14

42,793,612 10

127,600.....4-319,000

CC

72,000. . .

E et

90,000

64,000 ...........48,000
....................... 106,500.............53,250
165,000............. 41,250 £551,500
.......................

Bills redeemed with at 4 dollars 52,131....
52,131
specie only ........... at I dollar. 179,000 ......... 44,750
Total

0

96,881 0

73

exchange for bills on London at 3o days sight.
Neither can I find any quotation in the newspapers
of the day, save one in the Quebec Gazette of the
14th September, 1815, under the head of " money,"
which is as follows :
" For sale at par, for cash ; a few government bills
of £300 and ''Ioo sterling, at thirty days on London.
Apply to the Editor."
The pacification of Europe had effected a great
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 operations 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 :

£3,441,993 to
COMMISSARY–GENERAL'S OFFICE,

NOTE.—Army bill office is ordered to be continued to 1st August,

1820. 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 his hands to pay interest, namely, £819 13s. 7d. currency,
at the rate of 5s. currency to the dollar.

From the 1st of January, 1815, to the 23rd November, 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

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 day 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 negotiation, 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

75

Premium on Specie.

Rate of Exchange for Bills on London.

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 having 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 events in Europe, I beg to submit to His Excellency whether Mr. Wybault should not be directed to procure specie for
the government bills in his possession upon the best terms he can effect
the negociation ; receiving in payment American bank notes and then
exchanging them for specie, making the real exchange upon the bills,
and charging the premium upon the specie in his account of disbursements, 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,

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

Your most obedient humble servant,
To

MAJOR 0. FOSTER,

(Signed) W. H.

Military Secretary.

ROBINSON,

Comy.-Genl.

[From Canadian Archives, Series C 331, page 98.]

COPY OF LETTER RE BRINGING SPECIE INTO COUNTRY.
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 the Naval Storekeeper ; with the assistance of which I
have directed to be shipped on board H.M.S. Bulwark L'30,000 consigned to Mr. Robinson.
I think it right to apprise you of our poverty, that you may not place

my power.

I have the honour to be, Sir,
Your most obedient humble servant,
(Signed) J. C.

SHERBROOKE,

Lt.-General.

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 excitement over his escape ; and the consequent certainty
of war had a depressing effect upon the rate of
exchange. Bills on the Treasury were quoted at
12% discount. But Waterloo brought peace. Bills
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 1815,
and continued at from 2% to 3% discount, till the
17th of April, 181§, 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 Ic• % to 12%; but a correspondent
in Halifax of the Quebec Gazette, enlightens the
public on the subject. The letter is dated 7th
October, 1815, 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 speculation in this place. A person, unacquainted with
the mode of transacting business in New York, would

76

Price of Gold in England.

naturally infer that specie of some kind was the
equivalent, and at the quoted Premium ; but their
insolvent Bank paper is the payment—whichpaper
is at a discount of 14
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
r sending on hard coin at a discount."
The price of gold in England from January, 1816,
to June 9th of the same year, did not average over
4
,4-4. . is. 6d. currency, the mint price as I have before
stated being
3 17s. Io d. per ounce ; and from
June to January 1817, the average for currency was
4 3 19s. The Bank of England, however, did not 1
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 exceeded 2s. 6d. during the last years, i.e. from 1817
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, 5815, by His Excellency Sir Gordon
Drummond, Commanding His Majesty's Forces, and Administrator-inChief 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.

77

time to time to be issued from the army bill office, established for 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 Bills heretofore issued, and at present in circulation, are
called in, to be redeemed in cash, at the said Army Bill Office, in the
said City of Quebec; and that all Interest upon such Bills as aforesaid,
shall cease from and after the fourteenth day next after the date of
these presents. Of all which the Officers of His Majesty's Government, and generally all to whom these presents shall come, or may in
any wise concern, are hereby required to take notice and govern themselves accordingly.

On the 2oth 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 of 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,

79

Meeting of Parliament.

Conclusion.

facilitate similar arrangements hereafter, should the
Public interests ever require a renewal of them."
At the Provincial Parliament held at Quebec on
the 15th of January, 1817, 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 1st August, 1812, was repealed.
And it was provided that the Army Bill Office
should be continued for a limited period beyond the
1st of August, 1817, for the purposes of calling in
and cancelling and paying all Army Bills that might
remain in circulation after the 1st 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 Bill Office as it may be found necessary
to continue in the service till the 1st of August, 1818,
for the purposes aforesaid.
But the date of closing was enlarged to the 1st of
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 1812, 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

Britain the Canadas, and, in conjunction with Napoleon, to extinguish its maritime power and Colonial

78

Empire." *
I have now the pleasure of stating that I am indebted to Mr. George Bethune of the branch of the
Quebec Bank in Ottawa, for important information on
the subject of this paper, which he obtained in the
Archives Bureau at Ottawa ; and to the kindness
of Mr. Douglas Brymner of that office, in directing
him to records relating to operations under the Act.
* Alison's History.

MONTREAL:
WITNESS" PRINTING

HOUSE

NOTE.
Since the issue of a certain number of copies of
my sketch of The War of 1812 in connection with the
Army Bill Act, I have been favored by my friend,
Mr. Cyrille Tessier, President of The Literary and
Historical Society of Quebec, with two specimens of
Army Bills : one for Ten dollars, and another for
Twenty-five dollars. A fac-simile of each is now
appended to some spare copies, which I held in
reserve, of the above work. I regret that I omitted
to provide them for the previous issue.
JAMES STEVENSON.

A. •7r)0,,

25 D• ARMY BILL. 25 P

Twenty-five Dollars.

Vingt-c* q Piastres.

Arm', Bill Office ctebec. Issued /1

.s.

rri

';:!.eff The Bearer
_ __ __ ..he reoo f Is entitled to receive ou Demand,
De
at the A k isa Y
yEzr Ck the Sum of
.
,( ; f 1 ZUI tntp:t.TiDt )11 oltatz.
in Govornment ZfiTS tf etchimgc, at Thrrty Days Sight, at
03 detrd
ere

131_ 7M
,

sli.,,A1

1 1.

2

t.

BILL

e

.

4.‘tam j,
4 , ..1,,,A the Rate of Exchange as fixed by Authati ty,or in
mu! itcj,
CA S
FI, at the option of the Commander of theForcts
i3(13.1
with the 3utegt5t, of Oita Fartitzns' inr Day, on the same,
p_pvt',.,4i
15

:7 '.

11/4-

4,?(Ird
u.1 ma
atm
eft 1

/tu 4

ItP,su,

By Command f His Excellency
The COMMANDER OF T
FORCES.

7

EN•Er.rD,

0

kr

J1
CAR-BIER.

D ECTOR

REGISTERED

it. the Office of the M I iirmtv

XX EMI.

SETFETA RV.

r A ViA,



Treaty of Peace.

CHAPTER III.
Americans prepare to continue the war—Treaty of peace—Report on
Army Bills in circulation—Bills lost or destroyed „Z'0000—Final
close of the Army Bill Office.
,

55

readiness for immediate service, a corps of ninety
thousand five hundred men.
In anticipation of a prolonged state of warfare, for
which the Americans were preparing, the committee
upon the army bills, report to the House of Assembly
on Friday the 17th of February, 1815, that it is expedient to renew the provisions of the two Acts with
some modifications, and to increase the amount of
army bills which may be in circulation to 4 2,000,000
currency ; and the house having concurred, a bill was
read the first time—second reading fixed for Monday
the loth. On that day the bill was read again, and
referred to a general 'committee for discussion on
Wednesday the 22nd, when some progress was made :
the bill to be further discussed on Friday the 24th.
On Monday the 27th, the committee report the
amendments, and the house having concurred, it is
ordered that the bill, thus amended, be engrossed.
On Tuesday the 2 8th, the bill, as amended, for facilitating the circulation of army bills, was read a third
ti me, and passed the House of Assembly. But the
bill was thrown out in the Upper House for reasons
which shall presently appear.
On the 1st March, 1815, however, a message was
received from His Excellency the Governor-in-Chief,
acquainting the House of the Ratification of the
Treaty of Peace. This was the Peace of Ghent,
concluded between Great Britain and the United
States, made substantially on the status quo ante
bellum, and signed on the 24th December, 1814.
-

The Americans contemplated, with no little apprehension, the pacification of Europe which followed
the defeat of Napoleon at Leipsic and his subsequent
exile to Elba. They once thought that there would
be no difficulty in annexing Canada, that the war,
for them, would be a mere promenade ; but instead
of annexing Canada, Canada annexed the whole territory of Michigan, and administered its civil Government. And now that peace in Europe had apparently
been restored and had set free the veterans of the
British army for other service, the Americans considered that they had just cause for apprehension.
The President at once communicated with several
Governors of States. In July, 1814, he wrote :
" Great Britain will now have a large disposable force,
both naval and military, and with it, the means of
giving the war in America a character of new and
increased activity and extent ; " and as a measure of
precaution he deems it advisable to strengthen themselves, and the line of the Atlantic, and invites the
executive of certain states to organize, and hold in

56

' Army Bills in Circulation.

Army Bill Office.

In the Canadian Archives there is the following report
respecting the working of the Army Bill Act, showing
the amount of bills in circulation in February, 1815.
Copy of report re amount of army bills in circulation in Febuary, 1815, together with the report of the
board upon the subject.
" Quebec, 19th February, 1815.
" We, the undersigned, having assembled at Your Excellency's desire
for the purpose of considering the subject of army bills in circulation,
and having had reference to the several representations your Excellency
has made to His Nlajesty's Government thereon, we have great satisfaction in stating that all the beneficial effects of the measure which
' have from time to time been anticipated by Your Excellency, have
been fully realized ; in illustration of which the following calculations
are submitted. At present there are about Z800,000 in circulation in
bills bearing interest, bring a total of Z1,300,000 ; the interest annually
upon the ‘80o,oco at 6 per cent is £48,000, deduct paid by the province £15,000, leaving a balance of ,433,000, which is the total interest
paid from the army extraordinaries for the use of £1,300,000, being a
trifle more than per cent per annum--into this, calculation may
also be taken to show the advantage derived by the public, that the
loss upon exchange which has fluctuated from 2 2 to 22 ,4 per 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.possible to
calculate, no doubt it would have been enormous ; another advantage
not to be overlooked, is the facility with which army hills have been
conveyed to the most remote parts of this extensive command, to meet
the exigencies of the service at 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, without any loss to the
public. In explanation of this circumstance it is necessary to observe
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
3

.

1-

57

kept by the accountants, they were replaced from the army bill office,
or a similar amount in lieu thereof.
Understanding that another bill is in progress in the Provincial
Legislature now in session, extending the provisions of the former
Army Bill Acts, by which a further sum of ‘500,000 in bills not bearing interest may be issued, which, added to the £1,300,000 at present
in circulation, will make a total of ‘1,8o0,000, reducing thereby the
interest paid the government for the use of this gross sum to a little
more than per cent. per annum.
The total expense of the army bill office establishment for the last
year, amounted to about ,44,000, £2,500 of which is defrayed by the
Province, and the remaining ,41,500 from the military chest. In all
probability, this excess of £1,500 will be more thin covered by the
accidental loss of army bills, which, from the large amount in circulation, cannot fail of being very considerable.
In August 1817, it is provided by the first Army Bill Act that the
province will no longer pay interest upon army bills that the holders
may demand specie for them, and that the Governor may at any time
previous to that period, call in and redeem with specie the army bills
in circulation ; it is for the consideration of Your Excellency, how far
it may he expedient to suggest to His Majesty's government to avail
itself of any favorable circumstance of furnishing specie for this purpose
upon advantageous terms in the course of the ensuing two years, to
provide for the redemption of these bills, without waiting the expiration
of the period prescribed by the Act.
These suggestions and calculations are submitted for your Excellency's
consideration, but the inferences we have drawn will be rendered more
conclusive when the state of public affairs will be known with more
certainty, when the Army Bill Act shall have passed, when Your
Excellency shall have received on the 27th inst. the periodical report
of the commissioners for fixing the rate of exchange, and the next
monthly account of the amount of hills in circulation from the director
of the army bill office.
W. H. RoBtxsoN,
(Signed)
(Signed)

J. HALE, Corny Gen'.

(Signed)

Dep.- Paymaster Gent.
4
NOAH FREER,
Military Secretary.

Extension of Circulation Opposed.

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, 1815, respecting its rejection, headed :

appears, that between the 12th of December, 1814, and 31st of January,
1815, no less than £43,9 2 5 was issued in large notes bearing interest,

58

ARMY BILLS.

The fate of the new Army Bills Act, lately passed 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 the issue of army bills up to the 1st day
of February, 1815, to an amount not exceeding ‘1,500,000 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 five 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 provinces, the largest amount stated to be in
circulation at any period during the last year being only about
.4. 1,205000.
At the time this Act was passed, 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
‘50o,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 bills, "to demand 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 issue 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

59

in exchange for small ones. As there is no reason to suppose that
government exceeded 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 about 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. The presumption therefore is, that a smaller sum
would have been quite sufficient during the war, and that a still smaller
sum might suffice during peace.
Here it may be proper to remark, that the operation of the above
proviso had the most salutary effect, by counteracting any excessive
issue of small bills, and to this circumstance, in conjunction with the
management of the exchange commissioners, may fairly he attributed
the high and unprecedented degree of credit in which the paper hath
hitherto been so happily maintained.
With this experience before our eyes, the object of the framers and
advocates of the new army bill is altogether inconceivable. It began
by extending the authority to issue army bills to an amount not exceeding £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 the public service, even during war.
But this was not the principal objection to the bill.
In a subsequent clause 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 converting small notes into large ones, was entirely omitted. This extraordinary 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 the Commander of the forces, at any time, to buy up with
cash, the whole or any part of the army bills bearing interest, whenever
he might think proper.
In this shape the bill made its appearance in the Legislative 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 tit! first that struck
their attention. By that clause as it originally stood, government might

60

Extension 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 between the two houses. it was agreed
to consider the words " not less " as a clerical error, and to substitute
in their stead the words " not exceeding " which was accordingly done
in a private way by the two speakers, etc. This was considerable improvement to the clause, but it was liable to insurmountable objections,
for want of the old proviso so often mentioned, to relieve the circulation
from superfluous small 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 the 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 year, while the
war expenditure was going on to its full extent, that even half a million
was too much. Had the Legislative Council been at liberty to amend
this bill, by inserting the old proviso for converting the superfluous
small bills into large ones, everything would have found its level by
means of that salutary check, and all might have gone well—but unfortunately, 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 moneyed
men in this colony, some well-informed persons are of opinion, that 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 pro visions of that Act having been found by experience 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 5 / , while here it is 67 . But it must
at same time be recollected, that all our paper serves as a substitute for
specie, that only about two-thirds of what is at present in circulation
bears interest, and that the Province contributes ,415,000 per annum
towards that interest. To this must be added the advance of money
in England (equal to perhaps six or eight months interest) and the
ordinary expenses of purchasing and sending out the specie—and it
must also be recollected that specie as a circulating medium, frequently
finds its way into the neighbouring States, and therefore requires a
frequent supply to keep up the requisite quantity, while, on the contrary, our paper remains at home, and requires only a judicious regulation of the rate of exchange, and due precaution against forgery to
keep it in full credit.
0

0

0

Further to illustrate these observations, 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 fpm the truth.
Suppose £1,200,000 in army bills at present in circulation. Qf

Extension of Circulation Opposed.

Amount of Army Bills in Circulation.

which 4800,000 bears interest at 61, £48,000, and 4400,000 bearing
no interest, being small bills, £1,200,000. Deduct so much paid by
the Province 415,000, balance of interest (being only 23/.7 on
41,200,000),-433,000. Suppose bullion at the mint prices, and that
Great Britain were to purchase and send out specie for the redemption
of all these army bills, the expenses in freight on £1,200,000 cannot
be less than I' / , say £18,000, one year's interest on £1,200,000

The following statements relating to the circulation
of the army bills, copied from official documents in
the Canadian Archives Bureau, will prove interesting to professional bankers.

62

1

0

0

Circulation of Army Bills.

ARMY BILL OFFICE,

°

24th April, 1815.

0

@ 57 , .4'60,000—.4 78,00 .
.

63

0

.............. 433,00o
Deduct the foregoing balance of interest
Loss to Great Britain by sending out specie exclusive of the
risk and advance of money .................................................................. • 445,000
Thus it appears that Great Britain gets a substitute for specie in
Canada to the amount of £1,200,000, for which she pays 24'7 per
0

annum, and that it would cost her at least £45,000 to replace that
substitute with specie !
Where can Great Britain get so advantageous a loan?
But even supposing the whole of our army bills were to bear interest
—still we are of opinion that they would be advantageous 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 £1,200,000 in specie as above
.................................. . £78,000
stated, including one year's interest
£1,200,000 in army bills, all bearing 61 interest.472,000
57,000
Deduct so much paid by the Province ....................... 15,000
Balance saved to Great Britain, supposing that all our bills
...... 21,000
bore interest
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 prove 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.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

Balance of army bills remaining in circulation the 27th
March, 1815 ..................................................................................

41,249,996 5

DEDUCT :—
So much redeemed by bills of exchange on London
since the 27th March, 1815, viz.:—
In large bills
..... • •..4 43
5
In small bills .................................. 3.594 5
3,638 0
.

1

.4
175 four dollar bills, worn out, have been
redeemed with specie since last report
............ 175 0
459 one dollar bills, rendered useless by
.

wear, have also been redeemed since last
report ....................................................................
The following bills have been redeemed at,
and received from the military chest at
Montreal, viz.:19,463 bills at 4 dollars ........... £19,463 0

114 5
1

56,354 bills at r dollar, . ......... 14,088 10 33,551 10
117 hills at to dollars Of the new issue of
137 " " 5 "
small bills rendered

105 " " 3 "
" " 2 "
308 " " I "

useless by wear, or
otherwise, have been
redeemed between
the 27th March and
2,640 dollars J 24th April, 1815_

66o 0 438,139 '5

Balance of army bills remaining in circulation the 24th
April, 1815 ..................................................................... ..
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

Z1,211,857 o

(Signed) JAMES GREEN,

Director.

64

Amount of Army Bills in Circulation.

Amount of Army Bills in Circulation.

Circulation of Army Bills.

Circulation of Army Bills.
ARMY BILL OFFICE,
22nd May, 1815.

ARMY BILL OFFICE,

19th June, 1815.
ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

Balance of army bills remaining in circulation the 22nd
May, 1815 ................................................................................ .41,207, 192 0

Balance of army bills remaining in circulation the 24th
April, 1815 .................................................................................. ‘1,211,857

DEDUCT :—

DEDUCT :-

So much redeemed by bills of exchange on London
since the 22nd May, 1815, viz. :—
In large bills
............ £13,512 to
Four dollar bills worn out have been reredeemed with specie since last report ..........
One dollar bills rendered useless by wear
have also been redeemed since last report ....

So much redeemed by bills of exchange on London
since the 24th April, 1815, viz.:—
831 5
.....
In large bills.
In small bills ....................................... 2,932 5
£3,763 to
150 four dollar bills, worn out, have been
........150 0
redeemed with specie since last report
708 one dollar bills, rendered useless by wear,
........ 177 0
have also been redeemed since last report

3o Bills at to dollars
8 If di 5"

26

64 bills at to dollars'
58 " " 5 "
Ito " " 3
209 " " 2
619 " "
Affidavit
before the
Judges...

"
"
"

"

"

"

3

id
di
792

Of the new issue of
small bills rendered
useless by wear, or
otherwise, have been
redeemed between the
24th April and 22nd
May, 1815 .....

18 " "
Affidavit
before the
Judges...

di

"

<<

Of the new issue of
small bills rendered
useless by wear, or
otherwise, have been
redeemed between
the 22nd May and
19th June, 1815.. .

148 to

£13,661 0

Balance of army bills remaining in circulation the t9th
June, 1815
....................... .

1,193,531 0

594 dollars
574 10

£4,665

0

2,298 dollars
Balance of army bills remaining in circulation the 22nd
May, 1815. .................................................................................. £1,207,192 0
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

65

(Signed) JAMES GREEN,
Director.

To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

E

(Signed) JAMES GREEN,
Director.

Amount of Army Bills in Circulation.

66

Amount of Army Bills in Circulation.

67

Circulation of Army Bills.

Circulation of Army Bills.
ARMY BILL OFFICE.
I Ith September, 1815.

ARMY BILL OFFICE,
9th October, 1815.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.

Balance of army bills remaining in circulation the t4th
August, 1815 .................................................................................. £ 628,792 15

Balance of army bills remaining in circulation the 11th
September, 1815 .............................................................................
£504.376 15
No large or ten dollar bills issued since 11th
September, 1815.

DEDUCT : —
So much redeemed by bills of exchange on London
since the 14th August, 1815, viz. :—
In large bills .................................. £75,125 0
47,240 0
.
In small bills.... ...
£122,365 0

DEDUCT :—
So much redeemed by bills of exchange on London since

the 11th September, 1815, viz.:—
In large bills .................................... £43,331 5
In small bills. .................................. 25,649 0 £ 68,980 5
.

976 four dollar bills, worn out, have been
........... 976 0
redeemed with specie since last report
4294 one dollar bills, rendered useless by
wear, have also been redeemed since last
report
........ 1,073 10
—Bills at to dollars
.. 44 5CC
3..
It

44

CC

46

2

44
CC

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
1th September,
1815 Affidavit

Balance of army bills remaining in circulation the 9th
October, 1815.

.............................................. L434,990 15

To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.
1 10 £124,416 0
—

Balance of army bills remaining in circulation the 1tth
..................................................... 504,376 15
September, 1815
To the Commissioners
for fixing the rate of exchange
&c. &c. &c.

240 four dollar bills, worn out, have been
redeemed with specie since last report
........... 240 0
663 one dollar bills, rendered useless by
wear, have also been redeemed since last
report
165 15 69,386 0

(Signed) JAMES GREEN,
Director.

(Signed) JAMES GREEN,
Director.

68

Army Bills Redeemed.

Amount of Army 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 .................................................................................... 4434,990 1 5
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.:—
.. 4'6,943 15
In large bills
In small bills. ................................ 10,695 10
427,639 5
94 four dollar bills, worn out, have been
.............. 94 0
redeemed with specie since last report
426 one dollar hills, rendered useless by
wear, have also been redeemed since last
106 to
..
report

27,839 15

Balance of army bills remaining in circulation the 6th
............................................................ 4407,151 0
November, 1815
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

(Signed) JAMES GREEN,
Director.

69

General abstract of statements shewing the manner in which the sum
of 488,962 to. currency, imprested to me by warrants from His
Excellency Sir George Prevost, and His Excellency Sir Gordon
Drummond, between the 11th October, 1814 and 24th August, 1815,
has been appropriated.
A. Statement of one dollar bills redeemed between the 13th
September, 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-in-Chief
and Commander of the forces
.............................. 416,029 5
B. Statement of four dollar bills redeemed within the above
period, and reported to the Commissary-General.. ....... 14,381 0
C. Statement of bills of 1o, 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 reported to the Commissary-General as above.....
8,879 0
D. Statement showing how the sum of 448,962 to. currency, has been appropriated, which I received for the
purpose of exchanging small notes with bills bearing
interest of 400, too and 50 dollars each. ....................... 48,962 to
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 military Secretary's letter, dated Head Quarters, Montreal,
10
16th November, 1814
39
‘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 to

Errors excepted.
Army Bill Office,
22nd Nov., 1815.

(Signed) JAMES GREEN,
Director.

7o

Army Bills in Circulation.

Army Bills in Circulation.

MEMO.—Letter from James Green, Director, dated 18th December,
1815, asking for further warrant for 410,000 currency, to pay interest
on army bills.
Report of Circulation, 1st January, 1816, gives balance in circulation
December,
8
4th
1815, £39 6 ,77 0; from which deduct bills redeemed
to 1st January, £65,281 15 ; leaving a balance in circulation 1st Jan. ,
1816, of 4331,496 15.
Report of Circulation, 29th January, 1816, says, balance in circulation 1st January, 1816 , 433 1 ,49 6 15 ; from which deduct 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 circulation 29th January, £301,283 15 ; deduct bills redeemed, 421,563 15 ;
leaving a balance of 4279,720 0.
Report of Circulation, 25th March, 1816, says, from balance 26th
February, deduct in bills redeemed, 436,970 to ; leaving balance of

Circulation of Army Bills.
ARMY BILL OFFICE,

4th December, 1815.
ACCOUNT OF THE AMOUNT OF ARMY BILLS IN CIRCULATION.
Balance of army bills remaining in circulation the 6th
November, 1815..
.................................................................. £407,151
• 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, 1815, viz :In large bills ........................................... 41,187 IO
In small bills... ................................ 4,582 15

£5,770

5

So much redeemed by specie, commencing
the 24th November, 1815.
In large bills ............................................ £3,318 15
In small bills.....
........ 801 15 44,120 10
174 four dollar bills, worn out, have been re........
deemed with specie since last report.
174 0
1231 one dollar bills, rendered useless by wear,
........
307 15.. £10,372 10
have also been redeemed since last report
Balance of army bills remaining in circulation
............................................
the 4th December, 1815
£396.778
To the Commissioners
for fixing the rate of exchange,
&c. &c. &c.

(Signed) JAMES GREEN,
Director.

71

10

‘ 2 4 2 ,749 10.
Report of Circulation, 22nd April, 18,6, says, from balance 25th
March, deduct in bills redeemed, 416,678 ; leaving a balance of
4226,071 10.
Report of Circulation, 20th May, 1816, says, from balance in circulation 22nd April, 1816, deduct in bills redeemed, 428,096 15; leaving
a balance of 4197,974 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. Wood, Com.-Genl., dated 8th
October, 1818, to Major Bowles, Mil. Secretary, he states 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, 1818, I find that the
rate at which the dollar was issued to the troops was 4s. 8d.
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, ,8,8, I find that
the date of closing the army bill office was enlarged to the 1st April,
1819.

72 .4 9,000 Lost or Destroyed—Consequent Gain.

Rate of Exchange in 1815.

-

NOTE.—Letter from James Green, Director, asking for continuan
of army bill office to 1st August, 1820, as it had been accurately ascertained that there remained to the Crown a saving of nine thousand
pounds and upwards on bills 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 with other public offices similarly situ ted. (Date
of letter, 19th May, 1819.)
Office continued to six months after 1st August, 1819, by sanction of
War Department (Treasury Chambers).
MEMO.—Grand total of the number of army bills issued, viz.:—

a

. Bills

at 400 dollars each ................ 5, 500. • • .‘550,000
"
" .. • . . • 34,606.... 865.150
" " 5 0"
" - • • • • • • 63.914 • • • 798,9 2 5
"
"
92,726.... 579,537 I0
25
" " 100

.

10

.

„ CC

5,C

"

14

4

t

3.,

"i

CC

4C

214

„

I

14

42,793,612 10

127,600.....4-319,000

CC

72,000. . .

E et

90,000

64,000 ...........48,000
....................... 106,500.............53,250
165,000............. 41,250 £551,500
.......................

Bills redeemed with at 4 dollars 52,131....
52,131
specie only ........... at I dollar. 179,000 ......... 44,750
Total

0

96,881 0

73

exchange for bills on London at 3o days sight.
Neither can I find any quotation in the newspapers
of the day, save one in the Quebec Gazette of the
14th September, 1815, under the head of " money,"
which is as follows :
" For sale at par, for cash ; a few government bills
of £300 and ''Ioo sterling, at thirty days on London.
Apply to the Editor."
The pacification of Europe had effected a great
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 operations 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 :

£3,441,993 to
COMMISSARY–GENERAL'S OFFICE,

NOTE.—Army bill office is ordered to be continued to 1st August,

1820. 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 his hands to pay interest, namely, £819 13s. 7d. currency,
at the rate of 5s. currency to the dollar.

From the 1st of January, 1815, to the 23rd November, 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

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 day 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 negotiation, 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

75

Premium on Specie.

Rate of Exchange for Bills on London.

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 having 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 events in Europe, I beg to submit to His Excellency whether Mr. Wybault should not be directed to procure specie for
the government bills in his possession upon the best terms he can effect
the negociation ; receiving in payment American bank notes and then
exchanging them for specie, making the real exchange upon the bills,
and charging the premium upon the specie in his account of disbursements, 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,

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

Your most obedient humble servant,
To

MAJOR 0. FOSTER,

(Signed) W. H.

Military Secretary.

ROBINSON,

Comy.-Genl.

[From Canadian Archives, Series C 331, page 98.]

COPY OF LETTER RE BRINGING SPECIE INTO COUNTRY.
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 the Naval Storekeeper ; with the assistance of which I
have directed to be shipped on board H.M.S. Bulwark L'30,000 consigned to Mr. Robinson.
I think it right to apprise you of our poverty, that you may not place

my power.

I have the honour to be, Sir,
Your most obedient humble servant,
(Signed) J. C.

SHERBROOKE,

Lt.-General.

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 excitement over his escape ; and the consequent certainty
of war had a depressing effect upon the rate of
exchange. Bills on the Treasury were quoted at
12% discount. But Waterloo brought peace. Bills
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 1815,
and continued at from 2% to 3% discount, till the
17th of April, 181§, 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 Ic• % to 12%; but a correspondent
in Halifax of the Quebec Gazette, enlightens the
public on the subject. The letter is dated 7th
October, 1815, 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 speculation in this place. A person, unacquainted with
the mode of transacting business in New York, would

76

Price of Gold in England.

naturally infer that specie of some kind was the
equivalent, and at the quoted Premium ; but their
insolvent Bank paper is the payment—whichpaper
is at a discount of 14
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
r sending on hard coin at a discount."
The price of gold in England from January, 1816,
to June 9th of the same year, did not average over
4
,4-4. . is. 6d. currency, the mint price as I have before
stated being
3 17s. Io d. per ounce ; and from
June to January 1817, the average for currency was
4 3 19s. The Bank of England, however, did not 1
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 exceeded 2s. 6d. during the last years, i.e. from 1817
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, 5815, by His Excellency Sir Gordon
Drummond, Commanding His Majesty's Forces, and Administrator-inChief 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.

77

time to time to be issued from the army bill office, established for 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 Bills heretofore issued, and at present in circulation, are
called in, to be redeemed in cash, at the said Army Bill Office, in the
said City of Quebec; and that all Interest upon such Bills as aforesaid,
shall cease from and after the fourteenth day next after the date of
these presents. Of all which the Officers of His Majesty's Government, and generally all to whom these presents shall come, or may in
any wise concern, are hereby required to take notice and govern themselves accordingly.

On the 2oth 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 of 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,

79

Meeting of Parliament.

Conclusion.

facilitate similar arrangements hereafter, should the
Public interests ever require a renewal of them."
At the Provincial Parliament held at Quebec on
the 15th of January, 1817, 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 1st August, 1812, was repealed.
And it was provided that the Army Bill Office
should be continued for a limited period beyond the
1st of August, 1817, for the purposes of calling in
and cancelling and paying all Army Bills that might
remain in circulation after the 1st 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 Bill Office as it may be found necessary
to continue in the service till the 1st of August, 1818,
for the purposes aforesaid.
But the date of closing was enlarged to the 1st of
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 1812, 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

Britain the Canadas, and, in conjunction with Napoleon, to extinguish its maritime power and Colonial

78

Empire." *
I have now the pleasure of stating that I am indebted to Mr. George Bethune of the branch of the
Quebec Bank in Ottawa, for important information on
the subject of this paper, which he obtained in the
Archives Bureau at Ottawa ; and to the kindness
of Mr. Douglas Brymner of that office, in directing
him to records relating to operations under the Act.
* Alison's History.

MONTREAL:
WITNESS" PRINTING

HOUSE

NOTE.
Since the issue of a certain number of copies of
my sketch of The War of 1812 in connection with the
Army Bill Act, I have been favored by my friend,
Mr. Cyrille Tessier, President of The Literary and
Historical Society of Quebec, with two specimens of
Army Bills : one for Ten dollars, and another for
Twenty-five dollars. A fac-simile of each is now
appended to some spare copies, which I held in
reserve, of the above work. I regret that I omitted
to provide them for the previous issue.
JAMES STEVENSON.

A. •7r)0,,

25 D• ARMY BILL. 25 P

Twenty-five Dollars.

Vingt-c* q Piastres.

Arm', Bill Office ctebec. Issued /1

.s.

rri

';:!.eff The Bearer
_ __ __ ..he reoo f Is entitled to receive ou Demand,
De
at the A k isa Y
yEzr Ck the Sum of
.
,( ; f 1 ZUI tntp:t.TiDt )11 oltatz.
in Govornment ZfiTS tf etchimgc, at Thrrty Days Sight, at
03 detrd
ere

131_ 7M
,

sli.,,A1

1 1.

2

t.

BILL

e

.

4.‘tam j,
4 , ..1,,,A the Rate of Exchange as fixed by Authati ty,or in
mu! itcj,
CA S
FI, at the option of the Commander of theForcts
i3(13.1
with the 3utegt5t, of Oita Fartitzns' inr Day, on the same,
p_pvt',.,4i
15

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By Command f His Excellency
The COMMANDER OF T
FORCES.

7

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CAR-BIER.

D ECTOR

REGISTERED

it. the Office of the M I iirmtv

XX EMI.

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