The subsidiary or token coins in use are five, ten, twenty-five and fifty cent pieces, all silver, and one cent, bronze. The total amount of silver coined and put into circulation in Canada (including $95,000 old coinage of New Bruns wick) y to 31 Dec. 1915 is $19,848,323 and of bronze 1,212,933. Silver of the face value of $1,259,7 0 has been withdrawn for recoinage, and it is estimated that the amount now in circulation is from one-third to one-half of the total coined.
The history of the paper obligations of the Dominion government really begins before Confederation, when in 1866 the legislature of the province of Canada sanctioned an issue of notes to an amount not exceeding ,000,000. At Confederation this issue, amount ing to $3,113,700, together with $605,859.12 issued by Nova Scotia, was assumed by the Dominion, and the ((Dominion Notes' system was thus inaugurated. In 1868 provision was made for securing by specie the note issue up to $5,000,000 and 25 per cent of any excess, the balance up to the limit of $8,000,000 to be covered by provincial or Dominion debentures. In 1870 the issue limit was raised to $9,000,000, secured by 20 per cent of specie and 80 per cent of debentures, with authority to increase to any amount, providing the excess above $9,000, 000 was covered by specie. In 1872 it was pro vided that only 35 per cent of this excess need to be so covered, while in 1875 it was enacted that for any issue between $9,000,000 and $12, 000,000 specie to the extent of 50 per cent must be held, any excess above $12,000,000 being en tirely covered by specie. In 1880 the issue was raised to $20,000,000 to be covered to the ex tent of at least 15 per cent by gold, an addi tional 10 per cent by gold or Dominion secu rities guaranteed by the Imperial government and the remaining 75 per cent by ordinary Dominion securities. The issue might exceed $20,000,000 to any extent provided the whole of any excess was covered by gold. In 1903 an issue of $30,000,000 was authorized, secured as to not less than 15 per cent by gold, and another 10 per cent by gold or guaranteed debentures. Any notes_ issued in excess of $30,000,000 were to be secured by gold.
Immediately after the outbreak of war in 1914 the Act (5 George V, Chap. 4) now in force was passed, its main provisions being as follows: "Dominion notes may be issued and outstanding at any time to any amount, and such notes shall be a legal tender m every part of Canada except at the offices at which they are redeemable".
"Dominion notes shall be of such denominational values as the Governor in Council determines, and shall be in such form, and signed by such persons, two in number, as the Minister directs".
"Dominion notes shall be redeemable in go. on pres entation at branch offices established, or at banks with which arrangements are made for the redemption thereof as hereinafter provided". • "The Minister of Finance shall always hold as security for the redemption of Dominion notes up to and including fifty million dollars, issued and outstanding at any one time, an amount equal to not less than twenty-five per centum of the amount of such notes in gold" "As security for the redemption of Dominion notes issued in excess of fifty million dollars, the Minister shag hold an amount in gold equal to such excess".
"The Governor in Council may establish branch offices of the Department of Finance at Toronto, Montreal, Hali fax, Saint John, Winnipeg, Victoria, Charlottetown, Regina and Calgary, for the redemption of Dominion notes, or may make arrangements with a chartered bank at any of the said places for the redemption thereof".
A very large proportion of the large notes in circulation is held by the chartered banks for reserve purposes, and also as a medium in which to make their daily settlements with each other. A special form of note has therefore been issued, negotiable only betweep banks, and of no value except to a bank. This materially lessens the risk of loss by robbery when large amounts are being carried from one bank to another, or at any other time. Of the notes in circulation as above $148,258,500 were the special notes for the banks, while of the total issue of $183,248,986 the banks held $160,291,577, leaving only $22,957,409 in the hands of the public.
To comply with the provisions of the Act, the Minister of Finance should have held on 31 March 1917, as security for the note issue, gold or securities deposited by the banks under 5 Geo. V, Sec. 4, Subsec. 2 (see CANADA — BANKING SYSTEM) as follows: Up to and including $50,000,000, 25 per cent. $12,500,000 $50,000,000 to $183,248,986, dollar for dollar. 133,248,986 Legal requirements $145,748,956 Of this total $113,110,154 was in gold.
Immediately following the outbreak of the European War, redemption in specie of Dominion notes was suspended, the necessary instructions being given by the Minister of Finance on 4 Aug. 1914. These instructions were approved by an order in council dated 10 August and given full' legal confirmation by an Act (5 Geo. V, Chap. 3) passed on 22 August. Under the authority of this Act, the redemption in specie of Dominion notes is still (31 Dec. 1917) suspended, and the •suspension will doubtless continue until the end of the war.
In recent years the following amounts of Dominion notes (including a petty of old provincial notes) were outstanding: Legal tender in Canada is: (1) Full legal tender. (a) Any Canadian gold coins struck under the authority of the Currency Act of 1910. (b) The British sov ereign, and any divisions or multiples thereof, at $4.8635 to the f. (c) Gold coins of the United States of five, ten and twenty dollars each, at their face value. (d) Notes of the Dominion government, redeemable in specie on presentation (redemption suspended since 4 Aug. 1914).
(2) Limited legal tender. (a) Silver coin age of Canada up to $10. (b) Bronze coinage of Canada, up to 25 cents.
(3) Potential legal tender. Any foreign gold coin, at rates to be fixed by proclamation.
F. C. JEst Colonial Bank, London; Formerly Secretary The Canadian Bank of Commerce.