The Bank of Montreal opened for business in Montreal, Quebec, printing its own currency. As the country grew, the Bank prospered, launching branches across Canada.
The government of Upper and Lower Canada in the early 1800s could not be convinced. There was no need for a banking system since the people were using currency from several nations. British pounds, Spanish doubloons, pieces of eight from Portugal and American dollars were the currency. A bank would not be a wise investment, they thought. It would not likely survive in such a small colony; the population was too small and widely-spread across the wilds of Ontario and Quebec. The people were not well-heeled. But a group of businessmen disagreed with the government’s negative position.
Using their own funds, nine men collected £25,000 ($125,000) and under “articles of association,” began operation of the Bank of Montreal. They issued stock worth £250,000 to incorporate the first bank in Canada in 1817, said the New York Times in a 1917 article on the 100th anniversary of the Bank of Montreal. The Bank opened for business in a small inauspicious house on St. Paul Street in the city of Montreal to serve a population of approximately 20,000 citizens.
Bank of Montreal issued its own bank notes
Since there was no government currency, the Bank produced its own notes in the back room. Plates engraved in Hartford, Connecticut for the paper money, displayed vignettes of local scenes in Montreal streets,” including the local Montreal prison. The Bank printed its own notes for decades, retiring their issue in 1866. On its centennial anniversary, the Bank of Montreal held $250 million in deposits.
Mere months later, the first branches of the new bank were launched in Kingston and Quebec City. As the Bank expanded business across the provinces, it used the stagecoach operators to move money and papers between branches, beginning with runs between Montreal and Kingston. Two competing banks opened in the same year, the Bank of Quebec and the Bank of Canada (not related to the country’s central bank).
Within two years of establishment, the Bank moved to a new location, one more befitting its position of influence and grand stature. The building at Rue St-Jacques had (and still has) Roman columns inside and out, a huge interior with vaulted, intricate ceilings and dark, luxurious wood for the long row of wickets and counters. The Bank presented a form of affluence and prosperity that was not often seen in that era.
Requirements to be met under the banking Charter
Though the Bank had requested a Charter for operation from the government in 1818, the official Charter was not awarded until four years later in 1822. Using the United States banking structure as a guide for the new Canadian system, certain stipulations for operation had to be met under the Charter. Here are a few of the requirements noted by The Quebec History Encyclopedia:
- The directors had to be British citizens and under some conditions, were jointly and individually liable.
- No shareholder could have more than 20 votes and shares were valued at £50 each.
- The Bank could issue and hold mortgages but could not lend on those mortgages or purchase mortgages. It could issue bank notes, deal in gold and silver bullion, and could sue and be sued as a corporation.
- Shareholders were to be given an annual return. (In its first 100 years, the Bank was prosperous enough to make good on the dividend every year but two. Customers began receiving interest on bank deposits in 1834, when a competing bank began the practice.)
The Bank of Montreal issued provincial notes
Government affiliations permitted the Bank of Montreal to become the single issuer of provincial notes, a distinct advantage over the other banks during Canada’s confederation in 1867 and beyond.
The Bank of Montreal now has a value of over $365 billion in assets and employs more than 36,000 people. In its long and flourishing history, the Bank facilitated the uniting of the country, supporting national projects such as the building of the transcontinental railway and the settlement of Canada. Many of the older branches retain their beautiful architecture, featuring the “symbols of an age gone by, when successful corporations would signal their prosperity and importance by creating ornate cut stone and sculptures,” according to MyTravelGuide.com.
 |
 |
 |
