Last updated on May 2nd, 2024 at 03:31 pm
Last Updated on May 2, 2024 Posted by Colonial Acres Coins
The Bank of Montreal stands as the Canadian colonies’ first successful creation of standardized currency. In Canada, paper money revolutionized commerce and trade by allowing for a transparent and efficient way to measure the value of goods and services. Read more below about the history of the barter system, why the Bank of Montreal was created, and how Colonial Acres helps collectors build an even more unique portfolio of historical currency.
The Barter System and Its Limitations
During the days of European explorers’ first contact with the Indigenous tribes of Canada, and during their interactions with other international explorers, commerce was accomplished through a system of trading goods in kind, or bartering. The colony of Montreal had no formal currency of its own. Consequently, businessmen from France, England, America, or even Mexico would attempt to use their own coin or paper money to make purchases.
This became problematic, though, because it was famously impossible to determine exchange rates or guarantee fairness for both parties. Between USD, francs, shillings, Hudson’s Bay tokens, and pesos, there was little way to know whether you were getting a good deal or swindled. There was also no reliable way to provide down payments on shipments of goods.
For example, in the 1700s, one French trader named Francois Bigot tried to account for a missing grain shipment by signing several playing cards, claiming that they were worth coin or paper money, and forcing the colonists to accept these as money. As you can imagine, the barter system caused resentment and unpredictability.
How the Royal Canadian Mint Solved the Problem
In response to these challenges, in 1817, nine prominent investors came together in Montreal and decided to create a single place to issue paper money, secure savings deposits from customers, offer loans, and provide foreign exchange services. This way, instead of individual parties having to evaluate the cost of each bartered item, or attempt to guess how many shillings equals a franc, customers could use the Bank of Montreal’s paper money to conduct business.
This was a success. By 1822, two other groups of investors followed the Bank of Montreal, creating both the Bank of New Brunswick and the Bank of Upper Canada. With more formal institutions in operation, customers could compete for better prices, and enjoy more efficiency of trade. The more banking locations that became available, the more confident traders became that they could anticipate being able to exchange and deposit currency during their travels.
In fact, the Bank of Montreal became so successful that by 1870, it was able to open branch locations outside of Canada in high-population areas such as New York, Boston, and London. Its prowess and independence gained it the ability to fully cut ties with its colonial forebears in Europe.
Colonial Acres Helps Collectors Add Unique Banknotes to Your Collection
Purchasing elements of unique Canada paper money connects you with history and adds legitimate and attractive showpieces to your collection. Consider our Legacy Certified $10 Dodds-Gordon note from 1931, or the BCS Certified Taylor-Meredith $10 note from 1914. Some of our timeless items have typed signatures, while others have imperfections that demonstrate their age and authenticity.
Many of our Canada paper money items have limited supply, often with only one piece in stock at any given time. Peruse our website. If you like what you see, make your purchasing decision today, because you may not see the same item tomorrow.
