DoC 25¢ Fractional Notes
|Shinplasters where the first notes issued under the authority of the Dominion of Canada, the predecessor to the Bank of Canada, which was formed a few months after Confederation (1867).|
At the time of the American Civil War, U.S. silver coin became depreciated by 5 percent relative to gold. The situation caused American silver, mostly of the 25-cent and 50-cent denominations, to pour into Canada, where it was still received at full face value. Banks and post offices would not accept these coins, so retailers sold them at a discount to brokers, who in turn made a living by selling the depreciated silver back to manufacturers and buyers of grain and cattle. Thus the cycle repeated and the "American silver nuisance" resulted in hardship to farmers, merchants and factory workers who had no choice but to accept their losses.
The Government of Canada devised a three-pronged attack:
|buy up the American silver at a discount and export it|
|Replace American coins with the first silver coins for the Dominion of Canada|
|Temporarily use 25-cent paper notes to provide change while the coins were being minted|
These tactics proved to be successful. Enough American silver was returned to New York to saturate the markets there, and the remainder was shipped to England as bullion. The fractional notes, however, became popular with the public and persisted in circulation for the next 65 years.
|Many attribute the expression "shinplaster" to the use of fractional U.S. notes by soldiers of the Revolutionary War period to prevent their boots from chafing.|