On 4th December, 1911, Sir Edward Clouston resigned the position of general manager and was succeeded by Mr. H.V. Meredith.
Other banks followed the establishment of the Montreal Bank.
Next year, 1818, a company of Quebec merchants organized the Quebec Bank. On March 17th the articles were ratified and on the 18th the books were opened for subscriptions to the stock. On September 16, 1822, the Royal assent was given to the bill incorporating this second bank. Less than two months after the Quebec Bank’s articles were signed a company of “speculative Americans attracted to Canada by the prosperity of the war period,” entered into articles of association under the name of Bank of Canada. This bank was formed in Montreal to compete with the Montreal Bank. It started with a capital of £300,000 as against the Montreal Bank’s capital of £250,000 and the Quebec Bank’s capital of £150,000. Royal assent was given to its bill of incorporation on September 16, 1822, the same day as the Quebec Bank’s bill was signed.
The charters of these two banks followed the lines of the charter of the Montreal Bank. The Bank of Canada passed out of existence in a few years.
These were the first three chartered banks to be started in British North America. Upper Canada was not far behind in the matter of organizing a bank. The Bank of Upper Canada got its charter in 1821. In 1820, the Bank of New Brunswick was incorporated; in 1825 the Halifax Banking Company started as a private bank; in 1832 the Bank of Nova Scotia was chartered. Soon several other banks were started in Upper and Lower Canada and in the Maritime Provinces.[2]
In 1837 the banks experienced very stormy weather. There was a great panic in the United States followed by general suspension of specie payments. Also business in Canada was completely disorganized by the rebellion. In May, 1837, the Lower Canada banks suspended specie payments. In the Upper Province the banks continued to meet their liabilities in specie until March of the next year. Specie payments were resumed in the United States and in Lower Canada in June, 1838; but in November another outbreak in the Lower Province necessitated a second suspension. Finally, payments were resumed in Lower Canada in June, 1839, and in Upper Canada four months later. That represents the last occasion on which the Canadian banks have suspended specie payments. For seventy-three years they have stood up, in fair weather and foul, meeting all demands in specie or its equivalent. The American banks have suspended generally on four or five occasions since 1837.
Of the banks now having head offices in Montreal the Bank of British North America is the next to appear on the scene. This institution was formed in 1836 by “British capitalists interested in the prosperity and commerce of the North American colonies,” to quote from “The Canadian Banking System,” by R.M. Breckenridge. The nominal capital was £1,000,000 sterling; and £690,000 of the capital paid up and utilized in the business of the bank in America. The connections of the British Bank were in both Upper and Lower Canada, New Brunswick, Nova Scotia, and Newfoundland. The bank was obliged to procure legislation from each province or colony. This legislation or authorization was secured in 1837 and 1838.
Doctor Breckenridge mentions that the Nova Scotia Act recites that the bank had introduced into that province the system of cash credits and of allowing interest on deposits, usually known as the Scotch system of banking. As it was difficult to operate the bank under authority of so many different provincial statutes, the directors secured a Royal Charter in 1840. In granting it, the British Government stipulated that the capital of £1,000,000 should be fully paid up and that no notes under one pound currency should be issued. This charter also limited the liability of the stockholders to the amount of their subscriptions. The Bank of British North America thus had a wider territorial scope than any of the other banks in Canada. It gradually increased its power and influence; and in 1867, when the Commercial Bank was about to fail, we find that the Bank of Montreal and the British were regarded as the two big, strong banks of the metropolis, able to bolster up the crippled institution if they found it advisable to put forth their strength.
SPECIMENS OF MONTREAL’S BANKS
