Canada's Playing Card Money

A historical parabola on inflation and deficit spending


Scarcity of coins in the French colony

Metallic coins were hard to find in Canada. People hoarded the coins and paid in hides. Part of what we call today "Canada" was french until 1763. The king of France used to send a Governor that administered the colony with some civil servants and soldiers. Trade within the community was limited because of the scarcity of means of exchange, namely, coins. Earlier trappers used hides as money, but the people that came from France regretted the so practical metallic money used in their country. The problem was that, as in other colonies, metallic coins had a tendency to leave the colony very soon or disappear. People, in accordance with Gresham's Law, hoarded these rare coins, not willing to give them away to pay for goods unless forced to do so ; furthermore, if they wanted to buy manufactured products from France, they had to pay in coins. Thus often coins sent at great expenses left Canada by the same boat on which they came. All kinds of things were tried to retain the coins on the colony's territory, but none succeeded.



Why not just print money ?

The Governor finds a solution...


The boat that brings the troop's pay is late. The Governor decide to issue fiat money, using playing cards. A break occurred in 1685. The annual boat that brought goods (including a load of metallic coins) from France usually came in the Summer, but this year he only reached Canada in January. The coins were meant to pay the troops, and thus the soldiers had waited for 8 months ! The Governor, having tried everything possible, like feeding the soldiers on credit, letting them work for peasants...) decided to requisition all decks of playing cards in the colony. He then had each card cut in quarters, wrote a monetary value on each, signed and stamped them. Then he let it be known that these cards had to be accepted in payment for anything that was for sale in the colony, without any raise in prices. The soldiers were paid with these cards, and the merchants wily-nilly accepted. When the boat arrived each and every card was exchanged at par against metallic coins in a week.This was an emergency solution, and had worked fine. All the card were destroyed after the conversion, and life returned to normal.



It worked so well the first time

Oh well, we forgot human nature...


The Governor use this trick every year, issuing more and more cards each time. But the problem was recurrent, and soon the story began all over again, and repeated itself year after year, notwithstanding the "strong disapproval" of the King. Sometimes paper was used instead of playing cards (which had become hard to find), and this system could have given Canada an efficient monetary system, were it not for the excessive emissions. After 1690, the card emission had become annual. Around 1706 the exchange of cards against coins was already random, the King being less generous with this colony that brought him so little. Several years of arrears grew, and cards exchanged at a third of their nominal value, when merchants accepted them altogether ! Emissions multiplied, leading to a 400% inflation in 1713. After several unsuccessful attempts to convert the outstanding cards in real values, the governor almost stopped the emissions of new cards. French Canada began to suffocate by lack of money (as a mean of exchange, not as standing for resources). People tried to cope with credit, bills of exchange and other IOU's. In fact money was so badly needed that in 1729 merchants sent a petition to the king to reintroduce the playing card money. He accepted and the cycle began again, leading to strong inflation and ultimately loss of trust in paper money, especially in 1755 during the 7 years war against the English. Inflation and fear of repudiation of any form of paper money became chronic. Peasants refused to sell their goods for anything other than metallic coins, shopkeepers raised their prices every week. Metallic coins still disappeared, as people hoarded them to protect them from requisition from the government who needed them to buy grain.The playing card money was over.


Recto and verso of one of the later cards

"... For the sum of 50 pounds ..."


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