An Inspection of Canada's Dominion Note Issue as a Currency Board-Like Regime

Evan Adamo
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Evan Adamo: The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

No 26, Studies in Applied Economics from The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise

Abstract: Before the Bank of Canada's establishment in 1935, Canada's government monopolized the issuance of certain notes via the “Dominion note issue” from 1867 to 1934. Some prior accounts on the subject and period exist, such as C.A. Curtis' Statistical Contributions to Canadian Economic History (1931) and Georg Rich's The Cross of Gold (1988). However, no previous account presents the note issuance statistics in high-frequency, machine-readable form suitable for further quantitative analysis. We examine to what extent Canada's Dominion note issue operated as a currency board or quasi?currency board system, using statistical tests based on its monthly balance sheet and analysis of legislation during the time period. An analysis of the Dominion notes balance sheet, along with other factors to be explained further, reveals that for part of its existence, the Dominion note issuance functioned as a currency-board like system. We provide a companion spreadsheet workbook, which makes the Dominion monthly balance sheet data available in machine?readable form, and a summary table of legislation related to the Dominion note issue for further analysis of the period.

Keywords: Canada; Dominion notes; currency board; monetary regime (search for similar items in EconPapers)
JEL-codes: N11 N12 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2015-01
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