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The 1937 Series was the second series of banknotes of the Canadian dollar issued by the Bank of Canada. The banknotes were issued into circulation on 19 July 1937, at which time the Bank of Canada began gradually removing banknotes from the 1935 Series from circulation. The $1000 banknote was issued several years later, as it was primarily used by chartered banks, who had a sufficient supply of the 1935 Series $1000 banknote.
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This was the first series of bilingual Canadian banknotes, as the 1935 Series was a dual-language series with French banknotes issued in Quebec and English banknotes issued in the rest of Canada. This series was created because of the introduction of the Bank of Canada Act, which required Canadian banknotes to be bilingual. In this series, English was always on the left.
With the exception of the $50 and $1000 notes, the colours introduced to the notes on this series remain to this day (or until they were no longer produced).
Background
In the House of Commons on 2 June 1936, Conservative member of parliament Thomas Langton Church protested against the requirement of bilingual banknotes in the Bank of Canada Act, stating there was no authority for it in the British North America Act, and that it had not been an issue during the 1935 federal election. He favoured printing dual-language banknotes (distinct English and French banknotes) as had been done for the 1935 Series. Other conservative members of the 18th Canadian Parliament, such as Robert Smeaton White, supported the Liberal Party of Canada majority government of William Lyon Mackenzie King to print bilingual banknotes.
The death of George V on 20 January 1936 was another factor for the Bank of Canada to introduce a new series of banknotes. It created designs for new banknotes incorporating the portrait of Edward VIII, but when he abdicated on 11 December 1936 in order to marry Wallis Simpson, the Bank of Canada rushed to prepare new designs. These used portraits of King George VI, who ascended the throne on 11 December 1936.
Printing
Engravings of the banknotes were created and subsequently transferred to steel rollers by rocking the rollers back and forth over the engraved die. After being hardened, the design was transferred to a master printing plate, which for the 1937 Series contained 24 copies of the engraved image. This process is known as siderography. The original plates, dies, and rolls for this series were destroyed by the Canadian Bank Note Company (CBN) after the modified version of the series was created in 1938.
The Canadian Bank Note Company printed the $1, $20, $50, $100, and $1000 banknotes, and the British American Bank Note Company printed the $2, $5, and $10 banknotes.
Legacy
Ultimately, the "production of bilingual notes was widely endorsed by parliamentarians and by the public".
Because the colour of the $5 banknote was changed to blue, the Bank of Canada "recalled and cancelled 3,644,000" of the 1935 series blue $2 banknotes to avoid confusion. The $2 banknotes were rarely used in Western Canada as that denomination had "never been popular" there since its use in the 1920s as the standard price for a prostitute along the "notorious River Street hotel strip" in Moose Jaw, earning it the nickname Moose Jaw money. This denomination would be shunned by many in Western Canada until the 1990s, when $2 banknotes of the Birds of Canada series became increasingly accepted.
By 1940, C$495,946,232 worth of banknotes were in circulation, of which C$379,000,000 was held by the public and the remainder by chartered banks. This reflected an increase of C$95,000,000 in 1940 and C$109,000,000 in 1941. Most denominations had a static circulation pattern, with increasing scarcity for successively larger denominations. The $2 banknote, however, had no discernable pattern of use, fluctuating from abundance to scarcity. In January and February 1949, for example, Montreal and Toronto experienced large spikes (also referred to as "jags") in the use of $2 banknotes for financial transactions, and as the spike subsided over two weeks, another one appeared in Ottawa. The Bank of Canada made an official statement about the phenomenon, for which it could provide no explanation, stating that the $2 banknotes "come like migratory birds and disappear like the lemmings".
A memorandum written by Donald Gordon, Deputy Governor of the Bank of Canada, stated a preference to produce a new series of banknotes every five years to "obstruct any attempt at wholesale counterfeiting", but the plan was abandoned because of World War II.