Funding the building of Canada

The invention of the telegraph revolutionized long distance communication, providing the means to connect a vast and growing nation. In 1847, Bank of Montreal funded Canada’s first telegraph service, linking Canada West and Canada East. It was the beginning of Canada’s telecommunications industry.

As Canada’s first bank, our transit number is 001.

Turning the first sod at the site of the British Newfoundland Corp (BRINCO) hydro project at Churchill Falls, Labrador, Newfoundland.

Churchill Falls

Bank of Montreal took the lead in financing massive hydroelectric projects, such as Churchill Falls in the late 1960s and La Grande at James Bay in the late 1970s. At the time, these projects involved the largest credit facilities ever offered to any company, public or private, in the world.

 

Shaping the banking industry

In 1822, the bank was granted a charter under the name Bank of Montreal. It not only changed the bank’s official name, but also its status from a private to a public company. The charter also imposed legally-enforceable obligations on the bank’s directors.

Banking crimes

Of the 20 clauses in the Bank of Montreal Charter, four are devoted to banking crimes: embezzlement, theft, counterfeiting and forgery. The first three were punishable by death “without benefit of clergy.”

A commentator remarked that these laws were evidently framed not only to exact an extreme penalty in this world, but also to deprive the perpetrator of their chance of forgiveness in the next.

Appointed fiscal agent of Canada

In the late 1850s, economic depression put pressure not only on a number of Canada’s financial institutions, but on the financial position of the Province of Canada itself. Bank of Montreal, which had remained sound throughout the crisis, was appointed fiscal agent of Canada on January 1, 1864. For the next 3½ years, bank advances helped meet the government’s obligations during a critical period in Canadian history.

The Montreal Bank was successful from the beginning. Just five months after opening its doors for business, the directors were able to declare an initial dividend of 3%.

BMO and Canada’s Central Bank

The emergence of the Bank of Canada as the country’s central bank was a key moment in twentieth-century banking history. Canada was one of the last major North Atlantic countries to establish a central bank, since the need for one was hotly contested up until the mid-1930s. In other words: the banking system worked, so what was there to fix? As Canada’s first and most senior bank, as well as the government’s banker for decades, Bank of Montreal was a key protagonist in the debate, helping to ensure that existing institutions and systems that had served Canada well continued to do so.

Shares in the Montreal Bank were among the first to be issued in Canada and played an important role in the nation’s emerging economy. Along with other bank and financial stocks, they helped to create an early securities market in Canada and a more sophisticated financial system of trade and exchange. The development of the Montreal and Toronto Stock Exchanges were the result.

 

Canadian currency

To provide some local colour and distinction, the Montreal Bank’s one-dollar bill issued in 1817 featured a picture of one of the city’s most modern buildings – the prison.

1858: The official currency of Canada

The Canadian dollar didn’t become the official currency of the united province of Canada until 1858.

Throughout the 19th century, and until 1942 when our last $5 note went into circulation, Bank of Montreal was Canada’s most prominent issuer of banknotes. While they were part of everyday life after 1817, each note was a finely crafted work of art.

In the late nineteenth century, Bank of Montreal and other banks regularly featured images of their senior officers on their notes.

Early bank notes issued by the Montreal Bank were individually signed and numbered by the president or an officer.

 

The pioneers

John Molson

John Molson, founder of Canada’s Molson brewery, served as President of Bank of Montreal between 1826 and 1830. In 1853, the family established the Molsons Bank, which merged with Bank of Montreal in 1925.

 

Why Montreal?

While Toronto is Canada’s commercial capital today, 200 years ago, enterprising merchants, importers and traders converged on Montreal for business. The year Bank of Montreal opened its doors, Toronto (then called York) was still a thickly forested settlement that served as an outpost for the lumber and fur trades.

The road between Montreal and Toronto was little more than a rutted track through a primeval forest. According to one traveller of the day, the road “should have been included by Dante as the highway to Pandemonium, for none can be more decidedly infernal.”

1892: A.H. Buchanan

A.H. Buchanan, the first branch manager in Nelson, British Columbia, was said to have walked 80 km from Northport, Washington across the Canada-US border in snow shoes in 1892. In his pockets was the necessary capital to start the branch: $11.50.

1887: Campbell Sweeny

In 1887, less than three months after Vancouver welcomed its first transcontinental passenger train, Campbell Sweeny arrived at the Canadian Pacific’s new western terminal from Halifax. His assignment was to open a branch of the Bank of Montreal in Vancouver – the first permanent bank in B.C. He soon set out to establish branches in the more remote parts of the province. His adventures bringing a banking service to miners in the booming Kootenay district are legendary. He became a director of a number of companies and a founding member of the Vancouver Board of Trade. In 1890 he spearheaded a committee that established the Vancouver Club and served on the board of governors for the University of British Columbia.

Norman Wait Harris

Norman Wait Harris, founder of Chicago’s Harris Bank (which later became BMO Harris Bank) established the security firm of Norman W. Harris & Company in 1882. Harris found success by striking into the retail securities market, embracing new methods of promotion and advertising.

Norman Harris put securities on a new, more public foundation. As our historian in Chicago remarks, “He believed that the existence and value of good [securities] should be made known to all potential buyers” in a time when public notices for such investments were rare or even considered unsavoury. The Harris Bank’s success in subsequent decades was in part a testament to the strong philosophical and managerial foundations set by its founder.

A visually rich tribute to Canada’s first bank, A Vision Greater than Themselves: The Making of the Bank of Montreal, 1817-2017 by Laurence B. Mussio tells the compelling story of the bank from its origins to present day.

Visit the McGill Queen’s University Press site
to order your copy.

BMO is a presenting sponsor of the Montréal en Histoires project, celebrating the 375th anniversary of Montreal and BMO’s bicentennial. The sponsorship includes a variety of technology-driven projects and a mobile app.

Visit the Montréal en Histoires site to learn more.


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