Canada and Newfoundland

by Frank G. Carpenter

In the relations between the banks and the government, the Canadian Bankers’ Association plays an important part. It has a semi-official status, in that it was incorporated by special act of Parliament, and is recognized as the joint representative of all the chartered banks. It establishes clearing houses, supervises the issues of bank notes, and manages the central gold reserves. The chief executive officers of the Association are frequently consulted by the government on financial questions.

During my stay in Montreal I had an interview with Sir Frederick Williams-Taylor, president of the Association and general manager of the Bank of Montreal, the oldest and largest financial institution in Canada. In the Dominion, the chief executive of a bank is called the manager. While the president occupies an important position as chairman of the board of directors, he has not the same relation to the daily transaction of business as is usually the case with us. Canada’s banks are likewise distinguished for the long service of the men in charge of their affairs. At the Bank of Montreal, for example, the president and manager have put in, between them, nearly one hundred years with the one institution. In all the banks, as a rule, the men in authority have risen from the ranks to their present positions.

The Bank of Montreal is one of the great banks of the world. It was founded more than one hundred years ago, about the time that James Monroe was beginning his first term as President of the United States. In those days, there was still fresh in the minds of the Canadians knowledge of disastrous financial methods that had been common in both the American colonies and Canada. In the time of the French, for example, one of the governors, not receiving funds expected from home, cut playing cards into small pieces, and wrote thereon the government’s promises to pay. These he distributed among his unpaid soldiers, and “card money,” as it was called, continued to circulate for a great many years. Our own colony of Massachusetts, learning of this easy method of “making” money, produced a similar currency which later led to the phrase “not worth a continental.” Even after banks were established in Canada, their notes had different values in various parts of the country.

The home of the Bank of Montreal in St. James Street faces the old Place d’Armes, a large square where formerly stood the stockade built for protection against the Indians. Now it is the centre of the financial district of Montreal, and, indeed, of all Canada. Of the total capital of Canada’s banks, considerably more than half is held by institutions having their main offices in this city.

When I went to call upon Sir Frederick, I passed through a doorway supported by huge Corinthian pillars. Once inside, I found a banking room larger than any I have ever seen in the United States. Its great size, and the rows of counters and wicket windows reminded me somewhat of the New York railroad stations and their batteries of ticket offices. The roof, more than one hundred feet above the floor, is supported by columns of black granite from Vermont, each as big around as a flour barrel and as bright as polished jet. The building has not the shine and new look of some of our great banks, but everything about it is stately, and the servants are as imposing as those of the Bank of England. A sleek, black-haired attendant, who looked like Jerry Cruncher, wearing a blue suit trimmed with red and a bright red vest with brass buttons, ushered me into Sir Frederick’s office.

In speaking about Canadian banking, Sir Frederick said:

“By means of our branches in all parts of Canada we have our hand on the pulse of the whole country. Every one of the great banks receives constantly from its own representatives accurate information of the state of business in his locality. We do not have to depend upon friendly correspondents or outside agencies, but know promptly and at first hand just what is going on. In this way we can always anticipate the needs of a particular section, and act accordingly. We can see the signs of any trouble ahead, and adopt measures to prevent disaster. The managers of our branches are responsible directly to us, and are therefore not likely to be influenced so much by purely local considerations as might be the case under a different system. On the other hand, it is our practice to include in our board of directors men who reside in western and central Canada, and are therefore in close touch with conditions in those sections.”

“With such sources of information,” I said, “you should be in a position to judge of the condition of Canada as a whole. I wish you would tell me, Sir Frederick, just how you see her situation?”

“Canada is suffering from three great disadvantages,” he replied. “I don’t wish to emphasize our troubles, but there is no country without them, and we have our share, just as does the United States. Our handicaps are the high cost of living, high taxation, and loss of population.”

“But is Canada losing population?” I asked.