The Canada Bank.

 

Oddly, we are unsure today whether or not the first bank in Canada actually was that. Standard references give the nod to "The Canada Bank", supposedly founded in Montreal in 1792. What we do know is that there was definitely the attempt to do so.

The Quebec Gazette of 9 August 1792 (and for several editions thereafter) contained a proclamation by which this new bank was to be established in Montreal . Despite the name that appears on some of the "remainder notes", the correct name was "The Canada Banking Company", the principals of which were three firms: Phyn, Ellice & Inglis; Todd, McGill & Co.,; and Forsyth, Richardson & Co. Their original proposal was dated in London on 31 March 1792 , the bank's purposes: (a) receive deposits of cash, (b) issue notes in exchange for such deposits, (c) discount bills and notes of hand and (d) facilitate business by keeping cash accounts with those who chose to use the bank for their receipts and payments.

The three firms were actually of British origin and sometimes tightly linked by dual partnerships and even marriage. All were merchant firms with interests in America and all were represented there by agents, junior partners, younger sons and the like. Of course, "American interests" meant involvement with the fur trade either as participants or financiers thereof. Phyn-Ellice, for instance, turned a good shilling just before the American Revolution by being able to sell their bills of exchange at a premium in New York while buying at the usual rate in London . But, like many merchants in America , the agencies of these firms were habitually involved in "bank-like" activities as part of their business, discounting bills and the like. During the Revolution, the agencies mostly retired to Montreal on British soil but afterwards, continued to do business with the Americans.

That there was a need for such an institution in Canada , there is no doubt. Banks are vehicles of investment, even to seemingly conjure money out of the air at times, and the Canadas - Lower and Upper - were starved for investment. There was money in Lower Canada but much of it resided under the hearthstones of the Canadiens who were more concerned with guarding against future hard times than increasing wealth. With the lessons of the old Regime paper and the more recent "Continentals" of the Americans behind them, they could scarcely be expected to react otherwise. And Upper Canada - right on the frontier - had little, native or otherwise. Foreign investment, synonymous with British, was largely directed at the new United States where returns were much better.

But following the proclamations of intent, we hear no more of the Canada Bank. Seemingly it just died a-borning. And we only guess as to why this was so. Probably it was the fact that the principals behind the Bank were individually financing rival fur companies. Phyn, Ellis & Inglis were in part financing MacTavish, Frobisher & Co., the main contractors supplying the Northwest Company. Meanwhile, Forsyth, Richardson & Co. were backing the rival XY Company while Todd, McGill & Co. had become leaders of the Southwest Group, another splinter group. Simon MacTavish, no mean businessman, soon made himself sole contractor for supplies, sales and accounts of the Northwest Company and, in fact, was in London in 1792, possibly setting up his own financing for this takeover. It may well be that he viewed the Canada Banking Company and its Canada Bank as part supporters of the Northwest Company rivals - and now no longer needed even for his own purposes. Such was his influence in Canada - and probably Britain as well - that a few well-placed words may have doomed the proposed Bank from the start. Whether he did or not, the Bank literally fades from history.

 

All that remains to mark their passing appears to be a few banknotes - usually remainders - "open-denominated" in Pounds and Shillings. That shown above is one such for such "Pounds/ Piastres" as would have been desired. So far as we know, the "Pounds" are only known as remainders, measure 20 x 12 cm, on watermarked paper, with the imprint "Albby Sc., London ". A Pound was 4 Dollars, each rated at 5 shillings.

Were all notes remainders, we could with confidence assume that the bank never opened at all. But such is not the case: a few of the corresponding "Shilling" notes purport to have been actually issued - or at least everything is filled in. One such example is that shown below, having been auctioned not too long ago from the giant John Ford Collection. The "Shilling" notes are somewhat smaller, measuring 11.2 x 8.2 cm, with the wording somewhat different, being in the name of the "Canada Banking Compy."

 

The note is for "Five" shillings (and again "Pour 5 Chelins"), the serial number being 6484, the two fives and number entered in red ink. The signature is of "John Lilly Junior", the date entered as "'10th' day of 'August' 179'2'", both in what was originally black ink. In support of its being genuine, the use of the two color inks was entirely in keeping with such notes of this era as is the style of handwriting. Although still highly legible, both the red and black inks are faded, the latter the expected brown.

However, this is not the only one. In a 1970 article by William McDonald in the Canadian Paper Money Society Journal, another is shown, presumably from the author's collection. It is the twin to the above in every way save that the serial number is 6477. Both notes are in high condition, numismatically grading possibly VF - which is to say essentially UNCs that have been stored somewhere for two centuries with only indifferent care being paid to their preservation.

Now the objections: First of all, the closeness of the serial numbers is almost miraculous if the notes had actually circulated, being but 7 apart. Secondly, such notes were normally issued singly as required - or, at most, several made up for the expected use of a single day - but both these notes are dated 10th August, just one day after the original proclamation, and it seems hard to believe that nearly 6500 notes would have been required at once. Third, none of these notes exist as "dogs", giving evidence of circulation. These, and the remainders, are all of fairly high condition. Lastly, we can find no information on one "John Lilly Junior".

These notes are sometimes used as evidence to "prove" that the Canada Bank did operate if just for a short time; the high serial numbers seem to indicate otherwise.

So what are they? Genuine? Or did someone fill in a remainder sheet close to the date indicated and pass these as a fraud? If so, why are they essentially UNC? Did someone merely practice his penmanship as a lark with no larcenous intent and merely dump them in a drawer?

So far they remain an enigma of Canadian numismatics.

Wayne Jacobs is a numismatic expert. Currently secretary and editor of the "Mid-Island Coin Club Numismatic Journal"of Nanaimo, Vancouver Island , British Columbia, he is the award winning author of numerous articles. The MICC journal are hosted here: MICC webpages Copyright 2006 Wayne Jacobs. This article may be reprinted freely for non commercial purpose only if the resource box is left intact, linking back to us.