Historical Sketch

The Portuguese navigator José Álvarez Faguendes was the first European to land on the two islands in 1520, but the first claim was made by France a couple of years later. No colonization attempt was made until the 18th century, the islands were frequented by Basque and Breton fishermen. After the Seven Years' War, France had lost all North American possession, except for Saint-Pierre and Miquelon which could be kept in exchange for British fishing rights. The islands still changed hands between Britain and France several times until in 1816, they were finally made a French colony. After World War II, the colonial status was changed into an overseas territory, which was confirmed by referendum in 1958. The constitutional status within the French state was changed to an overseas department in 1976 and overseas territorial collectivity in 1985 and 2003.

Monetary History Overview

In 1840, French accounting was introduced in Saint-Pierre and Miquelon but French money remained scarce so that in 1873 US and Latin American gold and silver coins became admitted for payments to public offices. A local commercial bank began issuing paper money in 1895 which circulated until the 1920s although it was not strictly legal tender as the bank did not have an issuing privilege. After the German invasion of France most of the colonies fell under the authority of the government-in-exile. In 1942, the paper money of the Bank of France was outlawed and replaced by notes issued by "Free France". As Saint-Pierre and Miquelon were so small, they received money issued for French Equatorial Africa. After the Second World War, France decoupled the monetary system of its colonies from the mainland. Two currency areas were created, for Africa and the Pacific area. Saint-Pierre and Miquelon, belonging geographically to neither, was attached to the African currency area, creating the Saint-Pierre and Miquelon CFA Franc (wherein CFA stood for "French colonies in Africa"). The CFA Franc did follow only partly the subsequent devaluation of the French Franc, therefore appreciated against the metropolitan currency. Only in November 1949, after the French Franc had stabilized, the CFA Franc repegged to the metropolitan currency. Overprinted banknotes for French Equatorial African continued to be issued in Saint-Pierre and Miquelon, just two subsidiary coins were produced for the small colony. After the French currency reform of December 1958, the Saint-Pierre and Miquelon notes were overprinted with additonal denominations in French New Francs, but CFA Franc remained the currency unit. In 1972 finally, France decided to introduce the French metropolitan currency system in Saint-Pierre and Miquelon. The CFA Franc was demonetized until year end.

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