(Phoenix Fire Insurance, receipt, 1812
Because of the multiple currency systems in North America at the beginning of the nineteenth century, businesspeople had to clearly define the system of account that they were using. This receipt was made out in "Halifax currency,” under which 5 shillings were worth 1 dollar.)
One rating that became particularly important in British North America was the Halifax rating. Named after the city of Halifax, where it was first used, this rating was given legal standing by an act of the first Nova Scotia House of Assembly in 1758. This rating used pounds, shillings, and pence (£, s., and d.) as the unit of account and valued one Spanish (or colonial Spanish) silver dollar weighing 420 grains (385 grains of pure silver23) at 5 shillings, local currency. This valuation of the Spanish dollar was to be used in settling debts. In effect, the Spanish dollar became legal tender in Nova Scotia.
Although the British imperial authorities apparently overturned the legislation in 1762, the Halifax rating remained in common use in Nova Scotia and was later adopted in Quebec by the British authorities after the Seven Years’ War, as well as in New Brunswick and Prince Edward Island.
In contrast, following the U.S. War of Independence, Upper Canada used the York rating, as did merchants in Montréal, for a time. This rating had originally been established in New York and was brought to Upper Canada by Loyalist immigrants. In York currency, one Spanish dollar was valued at 8 shillings.
In 1796, parallel legislation in both Upper and Lower Canada led to the adoption of the Halifax rating of 5 shillings to the dollar in both colonies, although ratings of other coins continued to differ to the inconvenience of trade between Upper and Lower Canada. Notwithstanding this legislation, the York rating remained in use in Upper Canada. In 1821, the legislature reaffirmed the colony’s adoption of the Halifax rating and provided sanctions against the use of the old York rating. Nonetheless, there were reports of its continued use in rural areas until the unification of Upper and Lower Canadain 1841.
The lack of a standard currency, and the wide variety of ratings given to the many coins in general circulation in the colonies, undoubtedly hindered trade, and was a major source of economic inefficiency. But the prevalence of the practice suggests significant countervailing forces. These included the weight of custom, as well as the varying trade links among the colonies and with Great Britain. In addition, the implementation of a common rating would likely have led to winners and losers, as well as to deflation in those colonies required to reduce their ratings.