CHAMBRE DE COMMERCE FRANCAISE DE MONTREAL

There is also at present the “Chambre de Commerce Française de Montreal” for the promotion of trade by merchants of France settled here. It was originally proposed at a meeting in Montreal of French traders on May 27, 1886, by M.G. Dubail, the Consul General of France, and on June 26th of that year the projected constitution was received for approval. Since then its purpose of intercommunication and trade relations with France have been sustained under its presidents.

OTHER BODIES

There is also a Federation of the Chambers of Commerce of the Province of Quebec with its offices in this city and among the many mercantile bodies now promoting the trade and industries of Montreal may be mentioned the Montreal branch of the “Canadian Manufacturers’ Association,” the “Montreal Stock Exchange,” the “Montreal Mining Exchange,” the “Canadian Mining Institute,” the “Builders’ Exchange,” the “Corn Exchange Association,” the “Montreal Business Men’s League,” the “Association Immobiliére of Montreal,” the “Milk Shippers’ Association,” the “Wholesale Grocers’ Guild,” the “Wholesale Dry Goods Association,” the “Metal and Hardware Association,” the “Wholesale Hardware League,” the “Montreal Lumber Association,” the “Montreal Produce Merchants’ Association,” the “Retail Merchants’ Association of Canada,” with its office of the Provincial Board for the Province of Quebec at Montreal, the Province of Quebec Association of Architects, the “Licensed Victuallers’ Association,” the “Federation of Licensed Wine and Spirit Dealers of the Province of Quebec,” the “Dominion Association of Chartered Accounts,” the “Canadian Bankers’ Association,” with numerous other trade organizations, all cooperating and making for the commercial growth of Montreal and Canada.2 To all these may be applied in their degree the words of tribute spoken at the Board of Trade building in 1908 by the Governor General Earl Grey:

CHAIRMEN OF COMMITTEE OF TRADE, MONTREAL

From Its Inception in 1822 to 1841 When It Was Changed into the Montreal Board of Trade

PRESIDENTS OF MONTREAL BOARD OF TRADE

SECRETARIES

NOTE

PRESIDENTS OF LA CHAMBRE DE COMMERCE

1887

PRESIDENTS OF LA CHAMBRE DE COMMERCE FRANCAISE

THE CENSUS RETURNS OF 1912 ON MONTREAL’S MANUFACTURES

The Industries of Montreal City (Not Greater Montreal); the Capital Invested, Output, Hands Employed and Wages and Salaries Paid.

THE MANUFACTURES OF GREATER MONTREAL

FOOTNOTES:

CHAPTER XXXVII

THE RISE AND DEVELOPMENT OF THE BANKS OF MONTREAL1

As Montreal has been for many years the financial center of the country, a considerable part of Canada’s banking history is contained in the story of the formation and growth of the city’s representative banks.

It is well known that there was no joint stock bank existent in British North America one hundred years ago.

The first attempt was not made in Canada until 1792 when, after the conclusion of the Revolutionary war, Montreal’s commercial importance was increased through the settlement of the United Empire Loyalists in Upper Canada.

Until the Loyalists came, there were only a few scattered military posts in Upper Canada. The new settlers began to clear the land and grow crops. Then, as now, the greater part of the produce exported by the provinces was sent to England; and the greater part of the imports came from the American colonies. The imports came by the Lake Champlain routes. So Montreal handled the inceased exports and imports caused by the settling of the Western province.

In connection with this trade, and with the other business of the city, banking operations were required. These were transacted by the English merchants. They took money on deposit, made advances, and issued due bills which served as currency.

All the writers dealing with this period of Montreal’s history lay much stress on the troubles caused by the lack of circulating medium. It should be remembered that the habitants in Lower Canada had suffered great losses from the issues of paper money during the French régime. Their experience with this paper money caused them to hoard gold and silver and to distrust paper promises to pay. Their attitude towards the first bank notes is said to have had a considerable influence in making the banks hold strong reserves against issues of notes. The currency of the country then consisted largely of French, Spanish and Portuguese gold coins.

In his “Early History of Canadian Banking,” Professor Shortt has shown that banking in Canada represented the development of ideas emanating from Alexander Hamilton, the great American statesman. In 1791 the first Bank of the United States was formed, on a plan constructed by Hamilton. This bank performed very valuable services for the young Republic; and it contributed most importantly to the development of industry and trade. But it was a private concern; and in its work of caring for the business of the country, it committed the crime of earning satisfactory profits for its proprietors. Even in that early day “the people” exhibited a strong propensity for putting out of business any public corporation which had the temerity to earn good profits in serving them. In the case of the Bank of the United States, its end was probably hastened by the fact that the greater part of its capital stock had been purchased by investors in England. At any rate, in 1811, after twenty years of operation, its affairs were liquidated.

In 1792, the year after the Bank of the United States was formed, an attempt was made to launch the “Canada Banking Company,” which was to receive deposits, issue notes, discount bills and keep cash accounts with customers. Professor Shortt says the idea of the bank is supposed to have been originated and worked up by Montreal merchants. The official notice in the Quebec Gazette is signed by Phyn, Ellice & Inglis, a London firm, and by Todd, McGill & Company, and Forsyth, Richardson & Company—Montreal merchants, who were customers of the London firm. The Canada Banking Company was to have its head office in Montreal and branches at Quebec and other places. The two Montreal firms here referred to had a large share of the trade with the Upper Canada settlers.

This scheme fell through. Mr. James Stevenson says in his work that the promoters succeeded in forming a private bank of deposit; and in Sir Edmund Walker’s book it is stated that the company did issue notes, but they doubtless had a very limited use.

Upon the failure of this project, the Montreal merchants proceeded to develop and extend the business of private banking carried on by them in connection with wholesale trade. They gave credit for supplies, issued due bills, accepted orders drawn by one party on another, etc.

In 1808, while the first Bank of the United States was still in active business, steps were taken to organize the “Canada Bank.” A bill was introduced in the Legislature providing for a capital of £250,000 currency ($1,000,000), the shares being of the denomination of £25 currency ($100). This bank was promoted by a combination of citizens of Montreal and Quebec. It was to have twenty-four directors, twelve from Montreal and twelve from Quebec. Although the Legislature rejected this bill, it was printed at the time of introduction. Professor Shortt states that he had the opportunity of examining it and comparing it with the charter of the Bank of the United States.

“Allowing,” he says, “for the necessary changes required to adapt the American charter to Canadian conditions, the bill reproduces in a very literal manner every essential feature of the American Act.” The bank provided for in the bill was naturally on a smaller scale than that of the United States. Then he gives in parallel columns the full number of articles, sixteen in each case, applying to the Canadian bank and the American bank. On perusing them it is quite easy to see that the idea or plan was taken bodily from the United States and changed only so much as to make it applicable to Canada’s position.

This new banking scheme formed the subject of much discussion, in the Legislature and outside of it, for several years. The big merchants of Montreal and Quebec had not abandoned their plan, and were no doubt working for its accomplishment when in 1812 war broke out between the United States and Great Britain. The war served to put an end for the time to the projects for a new bank. The various writers dealing with this stage of Canada’s history appear to agree in their statements that the maintenance of considerable bodies of British troops in Canada served to make business prosperous for the producers and merchants. The troops consumed large quantities of produce, which was purchased by the Home Government at famine prices. Consequently, exports of produce tended to decline. One authority says that about the only exports passing down the St. Lawrence at this time were bills of exchange.

During the war the currency troubles were largely removed, too, through the issue of the army bills. These bills were issued at first in denominations of $25 and upwards bearing interest and in the denomination of $4 not bearing interest. Afterwards bills of the denominations of one, two, three, five, eight, ten, twelve, sixteen and twenty dollars were added to the non-interest bearing issues. The large interest-bearing bills could be converted into small bills not bearing interest; and the small bills could be converted into large bills subject to interest. The rate of interest was 4 pence per £100 per day. Bills were redeemed at the option of the commander in cash or bills on London at thirty days’ sight at the current rate of exchange.

While these army bills were in circulation there was plenty of currency available for carrying on the country’s business. The total outstanding on March 27th, 1815, was £1,249,996. After the close of the war, the issues were rapidly redeemed. A year later, in April, the outstandings had been reduced to £197,974. At the end of 1820, all bills had been retired. Their cancellation brought back the currency troubles in an aggravated form; and the merchants and citizens redoubled their efforts to secure authorization of a bank which would transact, deposit exchange, and discount business, and issue notes to serve as circulating medium.

Even before the army bills were withdrawn and cancelled, the agitation for a bank was renewed. Early in 1815 a motion was introduced in the Lower Canada Legislature to resolve the House into a committee of the whole to consider the establishment of a bank. This came to nothing. At the next session sundry Montreal merchants petitioned for incorporation as a bank. The dissolution of the House on 28th February, 1816, put an end to the bill which was framed to give effect to this plan. It was put in again when the new House assembled; but before it could be passed the House was prorogued. Then, to quote Professor Shortt, “The merchants of Montreal, who had been chiefly interested in the attempts to get a bank charter, feeling, no doubt, that the sympathy of the business community was with them, and that it would be a pity to lose another year with no more certainty of success, * * * decided to start the bank without a charter. Accordingly, on May 19, 1817, the articles of association of the Montreal Bank were adopted, and the corporation proceeded to organize.”

The founders of the bank had their articles of association published in The Montreal Herald, May 22, 1817. Our authority states that he was not able to discover any copy of The Herald for that date. But he found that the Quebec Gazette, exactly one week later, on May 29th, copied from The Herald an editorial item commenting on the new enterprise thus: