Sylvain Leduc: A progress report on the economy
The views expressed in this speech are those of the speaker and not the view of the BIS.
Introduction
I am very happy to be here in Quebec City. People come from all over to visit this city, not only for its beauty, its fine dining and its hospitality, but also for its historical significance to North America. There is a lesser-known anecdote from this region that I quite like because it teaches us a lesson on monetary policy that is still relevant today.
In 1685, as New France faced a shortage of coins, Jacques de Meulles—the intendant of the colony—decided to use playing cards as paper money by writing a value on them. And when I say “playing cards,” I really do mean cards like the ones we use to play hearts or bridge. I would say that gives a whole new meaning to the phrase “play money.”
These playing cards were the first form of paper money distributed in North America. Although this series of cards was repurchased only three months later, it marked the beginning of a tradition that would last more than half a century.2 So why did people agree to get paid in playing cards? Because they trusted the authorities would manage them rigorously.
While monetary policy has changed dramatically over the past 300 years, one thing remains the same: trust is key. Today, this trust is buttressed by explaining—in a way that is transparent—what the Bank of Canada is doing and why. I would like to thank the Association des économistes québécois and CFA Québec for allowing me to do that here today.