Chartered Banknotes in Canada

By Ian Brimble

Canadian banknotes are highly sought after both by Canadian and international collectors.  We have a rich variety of opportunities to collect both common and exceptionally rare Canadian banknotes since there is a significant lineage of banknotes in Canada, which, compared to many nations, has a relatively short history.  However, despite not having produced banknotes for as long as many nations, there are many varieties within the history of Canadian banknotes which makes collecting banknotes an exciting part of the numismatic community. 

 

An interesting fact is that our earliest notes (in what is now Canada), were made using the backs of playing cards.  These notes were made more as a promissory note of payment and have become highly collectible by paper money collectors.  This card money is some of the earliest examples of paper money in Canada (see figure A).  This example was recently sold at auction for nearly $1800. 

Beyond these promissory playing cards, during the early days of Canadian history under European rule, banknotes were initially produced by chartered banks or by merchants and not by the government.  Banks, and to some degree merchants, in some ways, were better positioned to offer paper currency as it was backed by gold and silver assets held by the various charter banks and institutions of the day.  As a result, many chartered banks within Canada produced banknotes; some of these institutions would be long lasting and would acquire other smaller banks and some were quite short lived.  In addition, some of these banks were regional and some were provincial in nature and would go on to become some of the institutions that we are familiar with in today’s banking system. 

 

The earliest chartered notes are believed to date back to the late 1700’s and were produced in Lower Canada in Montreal and Quebec City.  Later, Upper Canada would see the first production of notes shortly after the War of 1812.  Through the middle and late 1800s, the chartered banking system in Canada grew significantly, and as a direct result, produced some of the most highly sought after Chartered banknotes. 

 

Many of the banknotes that are most prized by advanced collectors are those of little known institutions that would go on to produce very few notes over a very short period of time.  As a product of supply and demand, the fewer known remaining examples, the higher the value of those examples.  Recently, this banknote from the Commercial Bank of Windsor, produced in 1871, came onto the market and was available for purchase through auction.  The note pictured below (Figure B) is the only one of its kind known to exist to this day.  This example sold in June of 2024 for close to $30,000.

Despite some chartered banknotes fetching large bids at auction, most notes on the market today are affordable and highly collectible.  As an example, the series of notes produced by the bank of Toronto from 1887 until 1929 were produced on yellow paper.  This is quite unique in the banknote world and is very popular amongst collectors.  See Figure C

Throughout the time of the production of chartered banknotes by banks and other institutions, the government of Canada often sought to limit their production, seeking to assert control over the paper money system within Canada.  These government initiatives happened on several occasions through the late 1800s and early 1900s.  Eventually the government of Canada restricted the production of $1 and $2 notes so that they could be produced under the title “Dominion of Canada”.  As seen below the first Dominion of Canada note came into production in 1870.  Interestingly, one of the first notes produced was a 25-cent bill as this had significant purchasing power at that time. 

In the early 1900s chartered bank notes continued to be produced in denominations of $5, $10 and $20, while dominion notes were produced in values of $4 and lower.  This remained the case until 1935 when the Bank of Canada fully took over the production of paper currency, issuing their first full set of banknotes. At this time (and only this time) both an English and a French set were issued in all denominations.  By 1937, new production of Canadian currency was bilingual. Figure E pictured below illustrates the first English $20 note featuring the young Princess Elizabeth.  This is a highly sought after note as it is challenging to acquire in good condition.  Even more rare due to limited production is Figure F below; the French $20 note which recently sold at auction in circulated condition for $3400

By the mid-1950s chartered banks had lost the legal right to issue their own paper currency and the full currency system in Canada was managed by the Bank of Canada.  If you believe you have a rare banknote or would like an opinion on your banknote collection please reach us at willowcoin.com