The diversity of notes and coins in circulation was frustrating, making simple transactions complex. In a letter to the Acadian Recorder in 1820, an irate citizen in Halifax complained that when he bought vegetables costing six pence in the market using a £1 Nova Scotian Treasury note, his change amounted to 93 separate items, including 8 paper notes from four different merchants or groups (ranging in value from 5 shillings to 7 1/2 pence), one silver piece, and 84 copper coins. The letter ended "For God’s sake, gentlemen, let us get back our DOLLARS”.
As noted earlier, pounds, shillings, and pence were used as the unit of account in the British colonies of North America up until the middle of the nineteenth century. Given the scarcity of British coins, however, and the prevalence and wide acceptance of Spanish silver dollars, it became increasingly difficult to maintain a currency system based on sterling. The introduction of the U.S. dollar (modelled on the Spanish dollar) in the United States in 1792, together with growing trade and financial links between Upper and Lower Canada and the United States during the first half of the nineteenth century, also favoured the use of dollars. The same was true for the colonies of Vancouver Island and British Columbia on the west coast, with the preponderance of their trade being with San Francisco during the late 1850s and early 1860s.
(United States, half-dollar, 1827
During the early 1800s, the American half-dollar was imported by Canadian banks and used widely in Upper and Lower Canada. Workers on the Rideau Canal were paid with these pieces.)
(William IV half-crown, 1836
This is an example of British coinage used in the mid-nineteenth century. A half-crown was worth 2 shillings and 6 pence, or 50 cents.)
Canadian bank notes, denominated in dollars, were also widely accepted and circulated freely in the United States. Had Canada adopted the sterling standard, this circulation would have been lost, to the detriment of Canadian banks.
Origin of "Dollar” and "Pound”
The word "dollar” originates from the German word thaler, the name given to a silver coin first minted in Joachimsthal, Bohemia in 1519. "Cent” comes from the Latin centum, meaning hundred. The origin of the dollar sign "$” is obscure but is widely believed to have been derived from a symbol denoting Spanish pesos. "Pound” and its symbol "£” come from the Latin libra, the value of a troy pound of silver. "Shilling” is believed to come from the old Scandinavian word skilling, meaning division. Its symbol "s.” refers to the Latin solidus, a Roman coin. "Pence,” or pennies, comes from the Old English word pennige. Its symbol "d.” refers to the denarius, another Roman coin. Before decimalization, one pound was equal to 20 shillings, with one shilling equal to 12 pence.
The widespread use and popularity of the dollar, combined with the potential cost of shifting to a sterling standard, stymied efforts by the imperial authorities in British North America to establish a common monetary system throughout the British Empire based on pounds, shillings, and pence. The British authorities believed that
an empire-wide common currency would strengthen economic and political ties. In a letter to Sir James Kempt, the Governor General, dated 6 February 1830, which was subsequently tabled in the House of Assembly of Lower Canada, Sir Randolph Routh, the Commissary General of the British forces in the Canadas, stated,
The British Government have in view the political tendency of this introduction of English money into the Colonies. A similarity of coinage produces reciprocal habits and feelings, and is a new chain and attachment in the intercourse of two nations.
Despite such pressure from the British Government, local custom and practices dominated. There was also a first-mover problem. While Nova Scotia was willing to adopt sterling, it would do so only if neighbouring colonies did so as well. Colonial co-operation was, however, not forthcoming.
Adam Shortt noted,
To the eye of pure reason the scheme [a common imperial currency] was faultless. Even official minds trembled on the verge of sentiment in contemplation of its vast imperial possibilities. But, unfortunately, the shield had another side, the colonial, from which it excited little enthusiasm. Hence, in the course of the official attempts to put the ideal in practice, it encountered the most unlooked for obstacles and caused no little bitterness.