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The Newfoundland Cash Notes.
As the 19th Century drew to a close, the colony of Newfoundland was hampered by a large denominational gap in her circulating currency. When the two Newfoundland banks - the Commercial Bank of Newfoundland and the Union Bank of Newfoundland - went under in 1895, they took with them their lowest-denomination bank note, the $2. Their crash also forced the demise of the Newfoundland $2 gold coin since the banks' place was taken by Canadian institutions who successfully insisted that the Newfoundland dollar be brought into line with the Canadian. Until this time, the Newfoundland dollar was about 1½% dearer, a gold sovereign worth only $4.80 Nfld against $4.86 2/3 Can. Now too heavy, the gold coin was withdrawn - or traded at its bullion value of something like $2.03. The above meant that between the Newfoundland silver 50-cent piece and the lowest denomination bank note of $5, the smallest denomination Canada allowed them to issue, there was a "circulation hole". The Newfoundland government did its best to alleviate this problem within its legal powers by the creation of the "Cash Notes".
By the turn of the century, the main reason for government expenditure in areas away from the capital region of St. John's was for public works - the building, maintainance and repair of roads, bridges and government wharves. Each departmental division on the Island was headed by a "Road Superintendant" (although he is given the somewhat more elaborate title of "Chairman, Board of Commissioners" on the notes). Until this time, the Department of Public Works had voted a set sum annually for their requirements, broke it down into divisional sums and shipped the latter in cash to the Superintendant by mail. It may be seen that there were great dangers in this method yet its alternative under the existing conditions - payment by cheque - was almost a non-starter. Away from St. John's there were no banks and merchants would understandably be reluctant to cash such cheques unless most of it was spent in their store. What the government needed was "safe cash", preferably short-lived - and thus the "Cash Notes" were born. Although the first did not appear until 1901, the legislation for them was passed in 1899. The first issue appeared in every year 1901-9 inclusive and generally, all were alike in appearance, being text flanked by denomination counter, all in black. Only the appropriate year was printed in red. All notes were uniface. Finished notes had three signatures: typed to the right and never changing was that of the Minister of Public Works, George W. Gushue; typed to the left was that of the Secretary (George W. Mews - 1901-2; James Harris - 1903-4; M.T. Knight - 1905-9); at lower center was the manuscript signature of the Chairman and this varied with the year and division where the notes were issued. Since no note was valid unless handsigned by the man who was actually Road Superintendant at the actual time of being paid out, it was felt that such notes were safe being sent by mail. There were five denominations issued each year and while the issue figures are given below, they correspond only roughly with availability today. Generally speaking, the lowest denominations are the easiest to come by, the upper ones very difficult. Year 40¢ 50¢ 80¢ $1 $5 1901 45,000 54,755 47,500 27,000 6,200 1902 17,500 15,000 65,000 50,000 5,000 1903 5,000 5,000 60,000 50,000 8,200 1904 5,000 5,000 59,896 57,500 8,000 1905 5,000 5,000 13,000 100,000 15,000 1906 1,990 2,000 4,994 49,992 25,000 1907 2,000 2,000 5,000 50,000 25,000 1908 2,000 2,000 5,000 50,000 25,000 1909 200 1,200 400 50,000 5,000 Each year, the sum appropriated for public works to be paid out by these notes was deposited in a special account in The Bank of Montreal in St. John's , the government bank. While in circulation, the notes were legal tender in the Island but as soon as any were returned to a government office or the Bank of Montreal, they were retired and not paid out again. The printers of the notes, the American Bank Note Company of New York, even provided the government with a listing of each year's notes by denomination and serial number so that they could be ticked off as withdrawn, thus making it known exactly how many and which notes were still outstanding. Generally speaking, most had returned within a few months and in the next year those withdrawn were destroyed by burning in the government's presence. This first issue accounted for $1,384,578.00 face value in all. Not a whole lot remains unaccounted for. In 1909, the government decided to broaden the scope of the Cash Notes beyond the needs of Public Works to all departments, in particular to the "Permanent and Casual Poor Services of the Colony" (i.e., welfare payments). The necessary legislation was passed in Newfoundland on 22 March, 1910 and approved by the British government on 16 July. This time, as an added convenience for government accounting practice, they were dated as fiscal years (April 1 to April 1?).
The producers of these notes became Whitehead Morris & Co. of London and all denominations were similar insofar as all showed the same waterfalls vignette and all had the text, counters and vignette in black. Unlike the previous issue, however, all these notes had their separate underlays of colour tints, usually with one colour at lower center flanked by another in different colour. The backs certainly were different: whereas the Cash Notes of 1901-9 had plain backs, those of this new issue each had elaborate lathework designs with two to four different colour tints. The printers claimed that this made them almost impossible to be photographed and this may be true; certainly they're difficult to reproduce even today. The tints were: Denomination Face Back 25¢ Dull rose Blue center flanked by deep gold 50¢ Dull rose Green center flanked by dull rose $1.00 Green Dull rose red $2.00 Yellow Light orange brown $5.00 Blue lwr ctr; pale dull rose top Dull rose flanked by light green flanked by dull red Since these notes were actually issued by the Department of Finance, the manuscript countersignature was eliminated. All notes carry the engraved signatures of M.P. Cashin, Minister of Finance, to the left and R. Watson, Colonial Secretary, to the right. Since there were some changes made in the following year, perhaps we should designate the issue of 1910-11 as "Series 2a". In this fiscal year there were issued: 25¢ (10,000); 50¢ (7,000); $1.00 (56,000); $2.00 (10,000) and $5.00 (37,000). All were on rather thick paper and, as the illustration shows, lacked the denominational numeral in the upper right counter - which would have facilitated counting. Both of these "defects" were complained of - as well as the charge that the tints ran following prolonged wetting. In the following year, the first two changes were addressed while the last proved to be unfounded - or at least any worse than any coloured bank note.
Before the government actually issued the modified Cash Notes in 1911-12, considerable thought was given to issuing permanent Cash Notes that would form a constant circulating medium. The proposal went so far as to having Whitehead, Morris & Co. making a couple of mockups shown above. The project for permanent Cash Notes was abandoned, the official reasons given in a letter from Auditor General H.C. Berteau to Colonial Secretary R. Watson - even though they seem a bit thin: danger of counterfeiting; difficulty in registering and re-registering(?); difficulty is separating among the various departments, etc. The real reason is obvious enough: Unlike the Dominion of Canada who could issue notes with only a 20 or 25% backing in gold or British government securities, a colony like Newfoundland could do so only with a backing of face-for-face. For an issue like that proposed, the Island would have to deposit in the Bank of Montreal funds equal to its total face value and with the proposal to make it legal tender for an indefinite period, more could be issued only by depositing yet further funds. On paper, these funds would sit in the vaults of the Bank of Montreal awaiting such time as the notes were to be redeemed; in practice, these funds would become part of the Bank's general revenues, able (and certainly ) to be paid out as loans and investments at interest. Yet only the principal would be paid back, perhaps years hence. As well, being legal tender, these Cash Notes would enable the Bank to issue yet more of its own notes to an equal amount when redeemed in BofM notes, constituting full backing for them. In other words, the Cash Notes would also become transmuted into BofM notes. It would have been an excellent deal for the Bank; not so good for Newfoundland . Therefore the project was abandoned and yearly Cash Notes resumed.
Shown above is a second 25¢ Cash Note of 1912-13 but representing all those that appeared 1911-12 to 1913-14 - and are therefore of "Series 2b". Its main difference is in the inclusion of the numeral in the upper right counter. As well, they were printed on thinnner paper and the denomination (in this case: "25 CENTS") appears in the lower face tint. All denominations are the same to the end, save for the year. At this time, the printers struck a deal with Newfoundland by printing a lot of the notes ahead of time and, at ordering time, requiring the sheets only to pass through the letterpress for the application of the year in red. In this way, Newfoundland 's cost per note dropped from 1½d to 1¼d. The First World War also saw the demise of these notes. Although the rules were that the notes on hand of the previous year were to be destroyed after March 31, those of 1913-14 continued to be paid out until 15 December. Thereafter, no more were issued and from 1915 to 1919, an amount of roughly $4,500 was kept on the books for those still to be redeemed. The redemption fund was discontinued in the 1920 budget; presumably the government felt that no more were likely to be presented. Throughout the War, the Newfoundland economy limped along with a lot of silver coin (about which the banks constantly complained), slightly fleshed out with bank notes and cheques. Even the Newfoundland Treasury Notes of 1920 were a sort of emergency issue, necessary when the high price of silver pushed bullion value at or past face of the coins, causing their temporary disappearance. "Series 2b" had three issues which were: Year 25¢ 50¢ $1.00 $2.00 $5.00 1911-12 8,000 20,700 73,000 29,000 35,000 1912-13 20,750 81,250 171,700 22,000 25,800 1913-14 12,000 20,000 44,000 19,500 15,800 Again, number issued have little bearing on relative rarity today. In general, the 25- and 50-cent denominations are the most easily found; $2 and $5 notes are quite rare.
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May 2007Norton I, Emperor of the United States Mackenzie River Bicentennial Dollar, 1989 The 'Ancient Coiner' Plaquette
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