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Nova Scotia and the Doubloon.
By 1812, Britain had been at war with Napoleon's France for many years, at times standing almost alone. Victory was far from assured; defeat a distinct possibility. The best card Britain held was her navy, especially after Trafalgar in 1805 when she acquired - if not command of the seas - at least a fair freedom of movement. It was the British navy that made Halifax important in the years before 1812, being the western terminus of the Atlantic Squadron and the northern terminus of the Caribbean fleet. After 1812, the port became immeasurably more important still.
With Britain at war and the continent under her blockade, the U.S. was waxing fat on war profits, especially the eastern states. There was a constant demand for materiél by the British, prices were good and payment was usually in hard currency. This despite the fact that there was some U.S./British friction, especially as concerned British highhandedness on the high seas where American ships were sometimes stopped, searched and seamen impressed. The British practiced "German citizenship" whereby anyone born a British subject was one for life, no matter that he had taken up citizenship in another country such as the U.S. Their desperate need for trained bodies belowdecks sometimes caused even these hazy boundaries to be crossed and eventually proved to be the cause of war.
New England and the states on the Atlantic seaboard never wanted war, despite the provocation. Profits were good and their geographical position made them vulnerable to British arms. But in the "west" (generally Michigan through Kentucky at the time), feeling was much different. Profits weren't much; geography offered protection and just to the north was a whole part of a continent thinly peopled, lightly defended and, in the case of the Canadiens , believed to be ready to throw off the "British yoke". All this while the British armies were fighting for their lives in Europe; there wasn't going to be much help for Canada . Thus the "War Hawks" constantly pushed for war.
Politics gave them their chance in 1812. With James Madison heading for his second-term election, his nomination as presidential candidate could be stopped by the War Hawks of the west. As the price of this nomination, Madison and most of the eastern U.S. reluctantly declared war on Britain in June. The east was furious - to the extent that there were calls in Boston and New York for secession from the Union . Abruptly, all direct trade with Britain came to an end; the coast was blockaded and many American businesses went bankrupt.
But desperation concentrates the mind wonderfully and despite the state of war, trade between Britain and the U.S. continued, practically all of it funneled through the port of Halifax and while it was "smuggling", it was legalized with both sides turning a blind eye or issuing safe conduct passes. On what is now the New Brunswick / Maine border, there was no war, although both sides cheerfully outfitted privateer vessels to prey on one another's shipping on the high seas.
Although this "smuggling/trade" was conducted at many places on the border, the bulk was through the formerly tiny fishing village of Eastport in what was to be Maine (at the time it was part of Massachusetts ). Located hardly more than a stone's throw from the British-claimed island of Campobello , it was ideally situated as an entrepôt in the trade and soon grew to be a rich, bustling town during the war. Of course, between two warring powers, there can be none of the usual methods of major payment such as cheques, bills of exchange and the like. Since entire cargoes were involved on a cash-and-carry basis, convenience dictated demand for high-value gold coin and in this case, that coin was the gold 8-escudo "doubloon" of the Spanish-American colonies.
This coin and its 1-, 2- and 4-escudo fractions had been coined in tremendous quantities by the various mints of Mexico, Chile, Colombia, Bolivia and Peru - and even Spain itself - for many years. In the form of Mexican "cobs", for centuries . All were essentially the same in design, weight and fineness, differing only in the mintmarks. Its downside was that it had a odd value in Halifax Currency: £3.12s per doubloon before the war. The Brazilian gold "joe" (actually a 12,800-reis piece) had a more convenient value of an even £4 Halifax due to its greater weight but it was much scarcer in commerce than the doubloon. The same was true of the U.S. $10, valued at 50s Halifax . But no matter: it simply transpired that cargoes were priced in "doubloons" and the conversion to U.S. dollars or Halifax Currency done afterward.
. Nearly all of this trade in both directions passed through the the warehouses and wharves of the Halifax merchants who waxed so rich as to be called the "nabobs". One of their number, Enos Collins, with a small fleet of privateers as well, became the richest man in Canada .
In March, 1814, Paris fell to the Allies and so far as the British were concerned, the war with Napoleon was over and they could now send their armies against the U.S. One of the earlier moves was the occupation of eastern Maine which was accomplished quickly and with only enough resistence by the various small military garrisons as to forestall court martial after the war. It had to be one of history's most amicable occupations, the general population still unforgiving of the U.S. federal government for involving them in a war they didn't want and then leaving them exposed and unprotected. For the rest of war, the whole occupation zone became a trade area, U.S. goods easily and legally flowing to eastern Maine , there to meet the British trade in an area conceived to be belonging to them. The area was returned to the U.S. by treaty signed Christmas Eve, 1814.
But during the war, Nova Scotia was still a British colony , albeit a momentarily rich one. Coin such as the doubloon tended to flow to Britain where it was receivable strictly according to its bullion weight. In an attempt to retain the doubloon, the merchants agreed to overvalue it in terms of the other coin, raising its value to £3. 17s. 6d in 1812, an overvaluation of about 5s.6d when compared to the British guinea. Since the army and provincial government both agreed to accept them at this new, higher value, it became nearly universal. Perhaps we should note: the "provincial government" and merchants were essentially one and the same.
Because they were , the doubloon failed to be devalued to its true value of £3.11s.10d (in relation to most other coin) after the war, the wealth of the "nabobs" comprised of it. Following Gresham 's Law, this overvalued coin was retained while all else fled and although there was still a "Halifax Currency", it was mostly now a fiction with virtually all the silver and gold (except for the doubloon) gone from circulation. What there was was a currency based on the doubloon, which evolved into a "Nova Scotia Currency".
In fact the rout of the dollar and other coins became complete as of 8 March 1819 when the merchants/government raised the value of the doubloon still further: to an even £4 Nova Scotia Currency. So long as true Halifax Currency was being used, it stood at a relation of 9/10th sterling - which is to say, sterling was worth 111.11% Halifax . With this new move, the exchange rate was closer to 124%, putting the province completely at odds with the currencies of its neighbours, all of whom were using Halifax Currency or the U.S. currency on which it was based. Even British gold was not seen. At the same meeting, it was agreed to raise the value of the sovereign to £1.2s.6d so it would be in line but for some reason it was never done.
Nova Scotia . "Provincial Note", 1823. Known dated 1817-23.
Thus it came to pass by 1819/20 that Nova Scotia circulation came to consist of (1) numerous copper halfpenny tokens, sometimes done up in "dollar" (120 pieces) or "half-dollar" (60 pieces) rolls - many times short in the count and occasionally argued that they were "cents" with only 100 to the dollar; (2) the place of the silver taken by a flood of small private fractional notes of values from 6d to a dollar with no way of telling how good their backing and (3) £4 doubloons and its fractions. There were also Province of Nova Scotia notes for £1, 2 and 5 - with no indication as to the type of currency in which it would paid (but it would be Doubloon/Nova Scotia). In 1820, there was a government issue of Treasury Notes for 5- and 10-shillings to fill in part of currency hole - and these were payable "either in gold or province notes". (Oddly, no genuine notes of this issue appear to have survived; just counterfeits of which that shown below is an example).
Throughout the 1820s and into the '30s, the currency of Nova Scotia remained in flux, especially when the British ordered that all her colonies use sterling coin at par - an impossibility and widely disregarded in the rest of Canada who continued to use the old Halifax rate of 5s currency per Spanish or U.S. silver dollar. By 1829, the refusal of British officials and suppliers to accept doubloons at more than £3 14s 7½d had driven its value down and caused Provincial notes to also be discounted to the same extent.
By 1836, the British had given up trying to impose her coin on Canada - but, oddly, it was just at this time that Nova Scotia began to adopt it wholesale. Since the sterling: N.S. currency exchange rate was close to 25%, it came to pass that the British sovereign (therefore the pound) was valued at 25s N.S., making the shilling 15d and the sixpence 7½d N.S. This at least allowed an influx of needed minor coin and when Nova Scotia adopted decimal currency at the end of 1860, the pound sovereign was valued at 5 of Nova Scotia 's new dollars. This still put her out of step with New Brunswick and the Province of Canada where the former Halifax Currency gave a valuation of $4.86 2/3 per pound sterling. After Confederation, the Nova Scotia currency had to be brought into line with the rest of the country (July 1, 1871) by converting at the rate of 75¢ N.S. = 73¢ Can. After some 60 years, a common currency again prevailed.
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