“To give additional credit to this paper”: the Lower Canada Army Bills and provisioning the state during the War of 1812

This article seeks to provide insight into the history and acceptance of paper money within British North America by examining the state money issued by Lower Canada’s civil government and the British Army during the War of 1812. Prior to the war, British North America was suffering from a specie shortage that was further exacerbated by the need for significant expenditure increases to provision the state with the resources it needed for its war effort. In response, colonial authorities issued the Army Bills, a paper money that was backed by acceptance in paying public debts and duties while also possessing qualities that adhered to metalist principles. To many observers surprise, the money successfully circulated and was accepted by Lower Canada’s colonists, who beforehand had largely been perceived by colonial officials as distrusting of paper money. This research argues that the state’s acceptance of Army Bills for discharging public debts, particularly merchant duties, ensured that the money would provide the colonial government with the fiscal flexibility it needed to conduct its war effort. This provision, in addition to measures like legal tender laws protecting its use in private transactions, also supported its successful circulation within the colonial economy during the war.