Early Canadian banking system

The early Canadian banking system (British North America and New France until 1763; then renamed Upper and Lower Canada) was regulated entirely by the colonial government.

Primitive forms of banking emerged early in the colonial period to solve the drain of wealth caused by the application of mercantilist theory.

However, the massive drain of wealth from New France to Europe resulting from mercantilist trade policies made it impossible to back card money with gold bullion.

The card system collapsed in the 1690s, causing long-term suspicion of paper money on the part of the French settlers.

These were issued to a limited extent by French merchants, who, lacking in any other form of currency, were forced to create their own, and who consequently became the first Canadian bankers.

Bons persisted as the most common type of currency until 1812, along with the English pound, American and Spanish coinage, and the Halifax standard.

Unlike the card money used in the late 17th century, army bills could be and were in fact exchanged for gold coin once the war had ended.