Dollar Distribution and the Bank of Canada

 Canadian dollar distribution is tied up with public demand, which is tied up with the Bank of Canada, which is tied up with the Mint, and all three of them tied together. It is therefore necessary to know something about the Bank of Canada and the manner in which it functions.

Creation of the present institution began in 1934, but the first issue of notes was made in 1935. Since the dollars and the new type of notes came in the same year, it makes a date convenient and easy to remember. Chartered bank currency was gradually withdrawn and finally terminated at the end of 1949.

The Bank of Canada has three main functions. Firstly, it acts as the fiscal agent of the Government of Canada with respect to the management of the public debt. Secondly, it issues notes payable to the bearer on demand; that is, puts out paper currency. Thirdly, it maintains reserves as security for outstanding notes and deposit liabilities, the major portion of such reserves being provided by the Canadian chartered banks.

The Bank of Canada does not engage in the ordinary banking activities, services of this kind being provided by the chartered banks. It occupies the position of a central bank which exercises control over the chartered banks and the monetary system in general. Finally, it maintains branches or agencies which extend throughout the Dominion. It is a bank which acts for banks. These things being true, the Bank of Canada is very much the same thing as the Federal Reserve of the United States. It argues much for the stability of the Canadian banking system that bank failures have been few and far between.

Until I knew better, I assumed that the Mint Reports on dollars of the first series (1935-1939) would show how they were distributed among the various provinces. Greatly to my chagrin, such was not the case. As a result of this, we have some rather curtailed statistics on this point. The absence of such figures being noted, letters were directed to the Bank of Canada and the Mint, but they proved of no avail. Both agencies informed me that they had no figures of such kind.

 Although of necessity I begin with second series dollars, figures for coinage distributed begin with 1941. It will always be a mystery to me why they were not used from the first. It must be said that they are not the only lacking figures. However, as the Mint Reports go on, they gradually get better and give more information.

One minor source of trouble, until I got used to it, centres about the difference between St. John and St. John's. St. John, in the Province of New Brunswick, is the largest city, and is not the capital, Fredericton having that honor. None of the three small provinces ( New Brunswick, Nova Scotia, Prince Edward Island) are as well known as they should be. St. John's is both the capital of Newfoundland and the largest city in the province. Whether she wanted them or not, probably not, Newfoundland could have been issued no dollars until she became a part of the Dominion in 1949.

Generally speaking, but not invariably, the largest city in any given province is the one to which the dollars will be sent and is usually the capital. However, Edmonton is larger than Calgary, is the provincial capital, but does not receive the dollars. Quebec City, the capital of Quebec, is overshadowed by much larger Montreal, and the latter is the dollar recipient. In the case of British Columbia, Victoria is the capital, but the dollars go to her big sister Vancouver. Ontario is the only province boasting two dollar centres, having both Ottawa and Toronto. This is easily explained as all coins are shipped by the mint in Ottawa to the various branches of the Bank of Canada. Branches are located in St. John's, Newfoundland; Halifax, Nova Scotia; Charlottetown, Prince Edward Island; St. John, New Brunswick; Montreal, Quebec; Toronto and Ottawa, Ontario; Winnipeg, Manitoba; Regina, Saskatchewan; Calgary, Alberta; Vancouver, British Columbia. Coins are only shipped as requested by the branches and are not allocated according to population, or by the head office.

Ontario is the hub province of the Dominion and being adjacent to Quebec doubtless helps buttress her dominating position. The well known Sudbury Range, the world's big nickel producer, is in Ontario and the province also leads in gold and silver with Quebec not too far behind. The population of the Dominion is further centred upon the two provinces. It should then be no matter of surprise that Toronto  and Montreal get most of the dollars.

Previous mention has been made of the fact that the issue of dollars is based upon public demand. Had the first issue of the coins proved unpopular, or been given an apathetic reception, there is some reason to suppose that they might have been discontinued. But they did prove popular and therefore the coinage continued. The Mint responds to the requests of the Bank of Canada and this agency in turn responds to the requests of the chartered banks.  

Newfoundland's very low figure of dollar demand indicates that she neither uses nor cares a great deal about the coins. Her low population figure is another factor, the same being true of Prince Edward Island.

Ottawa shows one peculiarity in her dollar figures which makes her very nearly unique, the same thing being true of Toronto twice and of Halifax once. Since the dollars are put out in bags of 100, they are naturally called for in the same way; that is, by hundreds. For example, it would be highly absurd for Regina to request 21,023 dollars. Therefore, in the great majority of cases, any given figure will end in three zeros. Ottawa is different in the fact that she has six odd numbers and but two of her total which end in three zeros. We may surmise from this that she gets the dollars that are left over after other requests have been met. An undetermined number of dollars, always small, remain in the Mint as a carryover and the same is true of the other denominations.

Despite the fact that they are missing, it is possible to arrive at a fair idea concerning the figures for the dollars of the first series. This may be done by taking the figures for the first five years of the second series and then applying the percentages which they show to those of the first. Admittedly, my submitted figures are not the best, but they should be not too far short of the truth.

The total number of 2,429,432 dollars for the first series (1935-39) is not very large. The figure of 909,210 (1945-1948) for the second five years of the second series is small and indicates that there was a decided interest in a great many things other than the dollars. The figures for both groups that are compared include one commemorative. Reasonable enough is the supposition that the intervention of the second World War did something to discourage interest. My estimate of the missing years, included among the tables of this category, makes no attempt at a year by year guess, something that would clearly be impossible.

We may suppose that Charlottetown requested the dollars of 1935 and we shall give her 4,000 of them whether she likes it or not. Surely the anniversary of His Majesty would not find her so wanting in spirit as to wish none of them.

More interesting perhaps than any of the regular figures is the sundry persons item, referred to a number of times previously. It is interesting because it is a clear reflection of public interest and makes possible a forecast of the future. Its fluctuations are not too great and are readily understandable.

Well to realize at all times is the treacherous nature of statistics. When used to prove a case of any kind they should often be subjected to a scrutiny of particular care. Indeed, statistics lend themselves to many purposes and can easily be used in such a way as to lead to highly erroneous conclusion.

British Columbia requested an unprecedented number of dollars in 1958 and it is perfectly obvious why she did so. To suppose on the strength of one such figure that she would keep on doing the same thing would argue a painful lack of good sense. Her 1959 request is quite likely to be a small one. On the other hand, with plenty of statistical evidence before us, we can easily predict what will be true of Charlottetown and St. John's.

Calgary made a request for the totem pole dollars of such size as to be wholly out of line with those of other years. Why? The best supposition would be something to the effect that Alberta takes a sympathetic interest in her sister province that others more remote from her would not feel.

On the strength of the actually known and published figures in the Mint Reports, Vancouver is only topped by Toronto in the total number of dollars received, a thing which we have no reason to believe really true. This is only another illustration of the misleading character of incomplete statistics.

Had enquiry about the matter been made from the very beginning, we should have had the dollar distribution for the first series. Unfortunately, nobody cared a great deal at that time and so we simply don't have them. To me at least, it is a matter of sincere regret.

Dollar distribution outside the Dominion is not quite the mystery that it might appear. On the basis of logic, Canada should have more dollar collectors than the United States and yet I am very much inclined to doubt it. Not too many collectors are found in the Deep South of the United States. Yet there is one small group of Canadian dollar collectors in Key West, Florida, the southernmost part of the Union. Naturally enough, the border states have the dollar enthusiasts in greatest number. A reasonable supposition would be that England has third place. And after England would be Australia, New Zealand, and South Africa. An occasional collector of the dollars can be found outside the countries mentioned.  


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