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In 1862, the American Civil War began to affect currency in the United States. As the finances of the Union government deteriorated, U.S. banks suspended the convertibility of their notes into gold, and the government suspended the right to convert U.S. Treasury notes (government-issued paper money) into gold. Shortly afterwards, the U.S. Congress authorized the government to issue non-convertible legal tender currency, which became popularly known as "greenbacks.” While little was said officially regarding the future convertibility of greenbacks into gold, it was widely assumed that convertibility would be restored when the war was won (Willard et al. 1995). Trading in the greenback vis-à-vis gold commenced in mid-January 1862 in New York and continued with only one short interruption until the United States returned to the gold standard on 1 January 1879.
1854-1914 | Views: 1310 | Added by: gogoshvab | Date: 2010-02-18


 
From 1 August 1854 when the Currency Act was proclaimed, until the outbreak of World War I in 1914, the Province of Canada, and subsequently the Dominion of Canada, was continuously on a gold standard. Under this standard, the value of the Canadian dollar was fixed in terms of gold and was convertible upon demand. It was also valued at par with the U.S. dollar, with a British sovereign valued at Can$4.8666. As noted earlier, both U.S. and British gold coins were legal tender in Canada.
1854-1914 | Views: 915 | Added by: gogoshvab | Date: 2010-02-18