On June 30th, 1864, the Province of Canada passed an Act to Impose Duties on Promissory Notes and Bills of Exchange. In August of that year, the Bill Stamp Act came into force. The amount of tax paid was to be identified by attaching bill stamps equivalent to the amount of the tax to each pertinent document and then cancelling each stamp across its face by signature of the instrument's creator or recipient.
Penalty for neglecting to affix stamps or for willfully writing or stamping a false date thereon, was $100.
In 1865 the American Bank Note Co. was awarded the contract to produce a new set of bill stamps replacing the earlier First Bill Stamp Issue of 1864. The Second Bill Stamp Issue, as it has come to be known, was of a much higher quality then its predecessor and depicted the portrait of Queen Victoria as used on an earlier 1860 one cent Nova Scotia postage stamp. These stamps were replaced in 1868 with the Third Bill Stamp Issue of Queen Victoria in Widow Weeds.