[citation needed] The Newfoundland decimal coinage corresponded exactly to the dollar unit that was used in another British colony in South America.

Coins of the Newfoundland dollar continue to be legal tender in all of Canada,[2] as are banknotes.

The Department of Public Works introduced government cash notes in 1901 in denominations of 40, 50 and 80 cents, 1 and 5 dollars.

That opened up the opportunity for a one-way arbitrage market with the United States.

This brought economic pressure on Newfoundland as its gold reserves started to diminish.

[3] This was followed by legislation in the spring of 1932, which amended the Currency Act to prohibit the export of gold without a permit.

Banknotes became legal tender, and notes were no longer convertible into gold.