Historical Sketch

Christopher Columbus discovered the island for the Europeans in 1493. The French Company of the American Islands and French West India Company began colonizing Guadeloupe in 1635 until it passed to the French state in 1674. During the Seven Years' War in the 18th century and again in the 1810s, Guadeloupe got occupied by the British but was handed back afterwards. In 1946, colonial status was abolished, and Guadeloupe was transformed into a French overseas department, since 2000 it is organized as separate overseas region.

Monetary History Overview

When the French colonization of the Caribbean began in the 17th century, French accounting was applied in all possessions in America, and French coins were current. The scarcity of specie quickly led to an overvaluation, and as a consequence, the 1672 currency law created the French Colonial Livre as a distinct unit of account at 75% of the metropolitan French Livre (of Tours). In 1726, the ratio was lowered to 67%. The scarcity, even absence, of French coinage led to a dominance of the Spanish Dollar and other trade coins that flew in from the Spanish possessions. Commodities like timber (Guyana) or rum, as well as money substitutes made of paper, even playing cards, were also accepted in payment transactions. Occasional subsidiary coins were issued for several colonies. During the British-French war in the Caribbean, the Colonial Livre began to diverge in the three main possessions, such that in Guadeloupe and Martinique its value was one sixth lower than in Guyana (and the valuation on the two islands was also slightly different).

In 1826, Guadeloupe and Martinique abolished the Colonial Livre and changed to the Franc accounting, more than 30 years after the metropolitan currency reform. There was no material change to the monetary situation. In 1851, the Bank of Guadeloupe was founded to subsidise local settlers after the abolition of slavery. In 1874, it became a full colonial bank and obtained the privilege to issue paper money. The Guadeloupe Franc was identical to the metropolitan one, convertibility was, however, restricted. In both 1855 and 1884, the local government had to issue state cash notes to overcome the money shortage. In 1903 and 1921, metallic emergency tokens were issued for the same purpose. After mainland France had been occupied by Germany in 1940, the Caribbean possessions remained under control of the exiled government in Brazzaville (Congo). It decided to change the colonial monetary order. In 1942, the Central Bank of Overseas France (originally "of Free France") began operations and took over the issuing privilege from the Bank of Guadeloupe. This remained so after the French liberation and the transformation of the colony into an overseas department in 1946.

In December 1958, metropolitan France carried out a currency reform. In the Caribbean, first a common issuing institute for all territories began operations in 1959. The currency switchover was done in January 1963. Like in mainland France, two zeros were cut, and the Caribbean (New) Franc got introduced with identical banknotes being used in Guyana, Guadeloupe and Martinique. In 1974 finally, France decided to abolish the different currencies for its overseas departments. On New Year 1975, the Bank of France took over the issuance privilege and introduced metropolitan money everywhere. The local paper money was withdrawn within three months.

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