What was the Purpose of the Nova Scotia “N.S.” Overprint on Canada’s Third Issue Bill Stamps?
What was the Purpose of the Nova Scotia “N.S.” Overprint on Canada’s Third Issue Bill Stamps? Figure 1. 1869 time draft made at Liverpool, Nova Scotia, for $50 “American Gold,” drawn on party in Bangor, Maine, bearing Canada 3¢ Third Issue bill stamp with “N.S.” overprintand U.S. 5¢ Inland Exchange. Shown here are three time drafts made between 1869 and 1872 in in Boston. The former, made May 29, 1872, for $1600 in gold, bearsNova Scotia, drawn on parties in the U.S. As such they were subject Canada 50¢ “N.S.” overprint plus unoverprinted 5¢ and 3¢ bill stamps,first to Canada’s tax on promissory notes, drafts and bills of exchange; and on reverse U.S. Third Issue 70¢ and Second Issue 10¢. The latter,then upon acceptance in the U.S. to the same tax as domestic time made August 22, 1872, for $1800 in gold, bears 40¢, 10¢ and 5¢ billdrafts. The handwritten draft shown in Figure 1, made September 9, stamps, now all unoverprinted, and alongside U.S. Third Issue 70¢1869, by B. J. Johnson & Co. at Liverpool for $50 “American Gold” and Second Issue 20¢.and drawn on Palmer & Johnson in Bangor, Maine, bears a Canada Other considerations aside, these usages of the U.S. Third Issue 70¢3¢ Third Issue bill stamp with “N.S.” overprint and a U.S. 5¢ Inland are extraordinary. Some 15 years ago only one document bearing thisExchange, the latter tied by “PAID MERCHANTS BANK BOSTON” stamp had been recorded (Mahler, 1995). That total has now climbedembossed handstamp. The drafts shown in Figures 2 and 3 were to eight, but these remain underappreciated rarities.both drawn by Gilbert Sanderson at Yarmouth on George W. Hunter
Figure 2. May 1872 time draft for $1600bearing Canada Third Issue 50¢ “N.S.” overprint plus unoverprinted 5¢ and 3¢, and on reverse U.S.Third Issue 70¢ and Second Issue 10¢. Figure 3. August 1872 time draft for $1800 bearing CanadaThird Issue 40¢, 10¢ and 5¢, and U.S.Third Issue 70¢ and Second Issue 20¢. The U.S. taxes here were assessed at the Inland Exchange rate of Thanks to the internet and its search engines, the answers were5¢ per $100, in effect since August 1, 1864; they were correctly paid readily forthcoming. Before committing them to print I searchedon all three drafts. But how were the Canadian taxes assessed? What the philatelic literature to determine if they had already appearedwas the purpose of the “N.S.” overprints, and what rules governed elsewhere. The result was a mixed bag. Most articles dealt with thetheir use? characteristics of the overprint and of possible forgeries, without
explaining or even considering why it had been used. To his credit, Dominion Bill TaxesMacDonald (1972) at least confessed, The question posed in the final sentence of the 1894 article is easily answered. The “N.S.” overprint did not appear on Canada’s First and Why it was felt necessary to overprint the Canadian Second Issue bill stamps because they were used only in the Province bill issue for the province of Nova Scotia, I have no idea. of Canada, comprised of Canada East and Canada West, previously Possibly the rugged individualism of Howe and Woodgate named Lower Canada and Upper Canada, soon to be renamed still survived and demanded that the provincial revenue be Quebec and Ontario. The Third Issue stamps, in contrast, were used separate and easily definable. throughout the newly-formed Dominion of Canada, which included the maritime provinces of New Brunswick and Nova Scotia as well as “N.S.” Overprint a Currency Control Device Quebec and Ontario. The Dominion came into being July 1, 1867;1 Lehr (1986) reported the discovery of an early answer in the 1894 legislation extending the bill stamp taxes of the Province of Canadainaugural issue of The Canadian Philatelic Journal: to the new Dominion was passed December 21, 1867, to take effect It has been a matter of curiosity among revenue collectors February 1, 1868; and the use of Third Issue stamps appears to have why the last issue of Canadian Bill stamps were surcharged coincided with the onset of the new taxes.2 N.S. in use in Nova Scotia, as the currency was apparently The enabling legislation, “An Act to impose duties on Promissory the same. This surcharging must have been done by Notes and Bills of Exchange” (31 Victoria 1867, Ch. IX), imposed the departmental order only, as there is no trace of it in the following taxes: orders of Council or in the Dominion Acts. The idea was Amount Tax this, there was a difference of 2⅔ percent between Canadian Less than $25 Exempt & Nova Scotia currency, that is $1 in Canada was worth $25.00 1¢ $1.03⅔ In Nova Scotia. It will be seen that there would be Above $25 to $50 2¢ a good opening for defrauding the revenue by the Canadian Above $50 to $100 3¢ merchants and others buying their bill stamps in Nova Above $100 Scotia. After being in use for a comparatively short time the Made singly 3¢ per $100 or fraction thereof currency was straightened out to agree with the Canadian, Made in duplicate 2¢ per $100 or fraction thereof and the necessity for surcharging done away with, their Made in two or more parts 1¢ per $100 or fraction thereof use being limited to only one province and for such period of time has made them quote rare, especially the 7, 8, 30, The following Section delineated the duty payable in Nova Scotia: 40 and 50 cents, and the 1, 2, 3 dollar stamps. 7. Provided, that as regards any Promissory Note, Draft We cannot see why this was not noticed before when the or Bill of Exchange on which the duty is payable in Nova first & second issue was in use. Scotia; the amount on which the duty is payable under This explanation is substantially correct, but leaves unanswered this Act, and the amount of such duty, shall be reckonedquestions. As Lehr noted, “The two figures quoted obviously should in the currency of that Province, and the stamped paperboth be either 2⅔ or 3⅔ to interrelate. The 3⅔ cents difference quoted and stamps to be used there shall be marked according,represents a 3.54% difference. In any case this lead represents the and shall not be used in any other part of Canada.first printed explanation of the purpose of the N.S. overprint. It shouldallow Nova Scotia or Revenue scholars a means to explore this further.” 1. The Canadian equivalent of July 4, 1776, in the U.S., commemorated each As clarification has apparently never been forthcoming in print, let July 1 as Confederation Day. In the present context it is worth noting that Novaus proceed, praying forbearance by Canadian readers for occasional Scotians were overwhelmingly opposed to confederation.forays into elemental history or geography necessary for my own 2. Ryan (1994), Ryan and Woike (2000). Recorded usages prior to February 1,understanding. 1868, were evidently back-dated.
Here is the authorization for the “N.S.” overprint that the anonymous like the first thirteen, but a still-fledgling frontier colonyauthor of 1894 could not find, and the underlying justification: the being re-settled by British subjects, predominantly fromcurrency of Nova Scotia differed in value from that used in the rest New England. Little Nova Scotia was nonetheless home toof the Dominion. a disproportionately large Royal Navy base and later an Nova Scotia currency was in fact worth 2⅔% less than Canadian; entire regiment of the British Army intended specifically toin its most compact form, the relationship between the two was that enforce loyalty to the Crown, so the British government had75¢ Nova Scotia currency was worth 73¢ Canadian. Without the “N.S.” a military influence in Nova Scotia unparalleled in the otheroverprints and the prohibition against their use outside Nova Scotia, colonies. And Nova Scotia was not connected contiguouslyit would have been possible to start with 73¢ Canadian, convert it to the settled regions of the other colonies. …into 75¢ Nova Scotian and buy 75¢ in stamps there, depriving the Nor did Nova Scotia have well-developed overland connections with thegovernment of 2¢. On a large scale the potential loss was considered rest of Canada. It is an “almost-island” connected to the mainland bysufficient to elicit the preventive measures taken. an isthmus only some 15 miles wide (Figure 4), and for decades the Differing Currencies Explained sea was its only highway; this heightened the importance of commerce How did it happen that the value of the two currencies differed? In with Britain.the Province of Canada, the British gold sovereign had been rated3 in1842 at one pound, four shillings, and four pence in local currency,while the U.S. $10 gold eagle was valued at two pounds, ten shillings.The Currency Act of 1853 confirmed these ratings, and set theCanadian dollar at par with the U.S. dollar. It follows that the sovereignwas rated at C$4.86⅔.4 If this seems a bit arbitrary, an essentiallyequivalent calculation can be based on the gold content of the coins. In Nova Scotia, though, the sovereign was rated higher, at $5. Thiswas perhaps in part a matter of convenience; it certainly simplifiedcalculations. A more fundamental explanation is that Nova Scotiahad particularly strong ties to Great Britain. As summarized by Smith(2005), By the time of the Revolution, Nova Scotia [“the 14th Colony”] was not an established, developed commonwealth3. “Until the middle of the nineteenth century, each British colony in NorthAmerica regulated the use of currency in its own jurisdiction. Although pounds,shillings, and pence (the currency system used in Great Britain) were used forbookkeeping (i.e., as the unit of account), each colony decided for itself the value,or “rating,” of a wide variety of coins used in transactions or to settle debts.These included not only English and French coins, but also coins from Portugal,Spain, and the Spanish colonies in Latin America—notably Mexico, Peru, andColombia. Once rated, coins became legal tender.” (Powell, 2005)4. The sovereign, though it bore no denomination, had a nominal value of onepound sterling. There are 20 shillings in a pound, 12 pence in a shilling. The $10gold eagle was equivalent to 600 pence local currency and the sovereign to 292pence, or $(2920/600) = $4.86⅔. Figure 4.
Small Puzzles Solved 1. On and after the first day of July, in the present year According to the tax table, the draft shown in Figure 1, for $50 of our Lord one thousand eight hundred and seventy-one,American gold, if made anywhere else in the Dominion, would have the currency of the Province of Nova Scotia shall be thebeen taxed at 2¢. In Nova Scotia, though, the law required “the amount same as that of the Provinces of Quebec, Ontario, and Newon which the duty is payable … shall be reckoned in the currency of Brunswick, in all of which one currency, of the uniformthat Province”; since US$50 was equivalent to NS$51.33, this bumped value hereinafter mentioned, has been and is now used.the tax to 3¢. Recall that Section 7 of the 1867 stamp Act stipulated that in Nova Similar considerations explain the 2¢ tax on a draft described Scotia “the amount on which the duty is payable under this Act, andpreviously (Mahler, 1999) involving the same parties, made April 4, the amount of such duty, shall be reckoned in the currency of that1870, for $25 gold; elsewhere the tax would have been only 1¢, but in Province.” After July 1, 1871, “the currency of that Province” was theNova Scotia it was 2¢. This draft is doubly extraordinary in that the Dominion currency. But what of the further stipulation in Section 75¢ U.S. tax was paid with a bisected 10¢ stamp. that “stamps to be used there shall be marked according, and shall not be used in any other part of Canada”? The need for marked stamps “N.S.” Overprints Obsolete July 1, 1871 had been eliminated, but the requirement to mark and use them was Nova Scotia retained its own currency until July 1, 1871, the not directly addressed. This dilemma appears to have been resolvedeffective date of the Dominion’s Uniform Currency Act passed April by the final sentence of the Uniform Currency Act, a blanket provision11, 1871, which established that the denominations of Canadian repealing “all other Acts and parts of Acts inconsistent with this Act.”currency would be dollars, cents, and mills, and fixed the dollar’s The requirement to specially mark stamps for use in Nova Scotia, onvalue by rating the British sovereign at C$4.86⅔ and the U.S. $10 gold account of the now-abolished currency previously used there, waseagle at C$10—the same rates established in the 1853 Currency Act. clearly inconsistent with the Uniform Currency Act. An earlier version of this Act (31 Victoria 1868, Ch. XLV), proposedsoon after establishment of the stamp taxes but never passed, had “N.S.” Overprints after July 1, 1871specifically repealed Section 7 of the stamp Act, quoted above, which After July 1, 1871, use of the “N.S.” overprints was no longergoverned stamp duties in Nova Scotia: required, but is occasionally observed. Figure 5 shows a first of 13. The seventh section of the Act of the Parliament of exchange for $2500, from a set of three made January 26, 1872, Canada passed in the present session and intitled: An Act by Dennis & Doane of Yarmouth, drawn on George Hunter & Co. of to impose Duties on Promissory Notes and Bills of Exchange, Boston. The 1¢ per $100 rate for bills made in sets of three or more was shall be repealed as regards Promissory Notes, Drafts and paid by 5¢ “N.S.” and unoverprinted Third Issue 20¢. On the reverse Bills of Exchange made, drawn or accepted in Nova Scotia are U.S. Third Issue $1 and Second Issue 25¢. Figure 2 shows the 50¢ upon or after the said [blank] day of [blank] 1868, and the “N.S.” used on May 29, 1872, together with unoverprinted 5¢ and 3¢. amount on which duty is payable under the said Act upon The overprinted stamps in the hands of the public after July 1, such Promissory Notes, Drafts or Bills of Exchange shall be 1871, were presumably simply used up over the ensuing months. This reckoned in the currency of Canada as hereby established, would have constituted a small loss of revenue for the government, as shall also any penalty incurred under the said Act in since they had been purchased with the depreciated Nova Scotia Nova Scotia on and after the said day. currency, but the aggregate loss was probably small. Incidentally, the 50¢ “N.S.” shown in Figure 2 constitutes an interesting variation on This would have neatly rescinded the requirement for use of the this theme; on the one hand, it represents a payment of only 48.9¢,“N.S.” overprints. The Uniform Currency Act of 1871, though, made or if rounded up, 49¢; however, the tax was only 48¢, but 58¢ inno direct mention of stamp duties, and instead made the “N.S.” stamps were affixed, suggesting that the 50¢ was mistaken for a 40¢;overprints obsolete only in indirect and roundabout fashion. It began on balance, the government gained 9¢!by abolishing the separate currency of Nova Scotia:
Figure 5. January 1872 first of exchange for $2500 bearing 5¢ “N.S.”overprint plusunoverprinted 20¢. U.S. Third Issue $1 and Second Issue 25¢ are on the reverse. What of the “N.S.” overprints still unsold as of July 1, 1871? Were the same purpose as the “N.S.” used here—to restrict stamp sales to athey retired and perhaps destroyed? Or did an economical government given region whose currency differed in value from that of other regions,continue to sell them? The latter seems unlikely. Another first of thereby preventing loss of revenue via exploitation of those differingexchange of Dennis & Doane drawn on Hunter & Co. in Boston, made values. Exact parallels are the Chinese overprints of 1915–33 for theJune 24, 1872, for $2000 bears two Third Issue 9¢ and a 2¢, all provinces of Manchuria, Szechuan and Yunnan, in each of which theunoverprinted, along with U.S. $1 Foreign Exchange. The draft shown currency was depreciated relative to that elsewhere. A variation on thein Figure 3, made August 22, 1872, again bears all unoverprinted theme occurred with the various “B” (for Bluefields) and “C” (for CaboThird Issue bill stamps. Hopefully Canadian specialists can provide Gracias a Dios) overprints used on stamps of circa 1910 for those twoevidence bearing on this question. regions on Nicaragua’s Atlantic coast, where rich silver mines had led to a silver-backed peso with double the value of the paper-backed Postal Analogs of the “N.S.” Overprints peso used elsewhere. In this case the overprints prevented the flow In occasional scenarios far removed in time and place from 1860s of cheaply-bought stamps into, not out of, the regions denoted by theNova Scotia, postal administrations would create overprints to serve overprints. Other examples can no doubted be cited.
ReferencesAnonymous. The Canadian Philatelic Journal 1894 January 1:2.Lehr, James. Nova Scotia Bill Stamps. B.N.A. Topics 1986 September–October 43(5):20.MacDonald, J. J. Nova Scotia’s Revenue Overprint. B.N.A. Topics 1972 August 29(7):168–9.Mahler, Michael. Reconstructing Four Fabulous Finds. 1. The Danford Knowlton Find. The American Revenuer 1995 September 49 (8):210–27.Mahler, Michael. A Catalog of United States Revenue-Stamped Documents of the Civil War Era by Type and Tax Rate. Rockford, IA: American Revenue Association, 1999, pp. 122–3.McLachlan, Robert Wallace. Annals of the Nova Scotian Currency. In: Proceedings and Transactions of the Royal Society of Canada for the Year 1892. Ottawa: John Durie & Sons; Montreal: J. Foster Brown & Co.; London: J. Quaritch, 1893, pp. 33–68.Powell, James. A History of the Canadian Dollar. http://www.bankofcanada.ca/en/dollar_book/, 2005.Ryan, C. D. and M. E. Woike. A Doubly Interesting Document. Canadian Revenue Newsletter 2000 December 33:2–3.Ryan, C. D. The Nature of, and the Circumstances Concerning the Printing of Canada’s First Issue of Bill Stamps. Appendix B: The End of the Second Issue and the Beginning of the Third. Canadian Revenue Newsletter 1994 November-December 7:8–9.Smith, Andrew W. What was the 14th Colony? http://the14thcolony.blogspot.com/2005/03/what-is-14th-colony.html, 2005.Statutes of the Dominion of Canada. An Act to impose duties on Promissory Notes and Bills of Exchange. 31 Victoria 1867, Ch. IX.———. An Act respecting the currency. 31 Victoria 1868, Ch. XLV. For comments: firstname.lastname@example.org